Saturday

25th May 2019

Opinion

Attack on labour: The Belgian showcase

  • The commission wants Belgium to introduce major structural reforms by 2014 (Photo: O Palsson)

The European Commission’s threat to fine Belgium may look absurd, but it’s actually worse. It’s a showcase for an attack on social rights.

On Wednesday (29 May) the commission released its recommendations for member states’ economic and budgetary policies, opening the crucial phase of this year’s 'European Semester'. And this year, it is increasing the pressure considerably to make member states implement reforms, not least of labour markets.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

Economic affairs commissioner Olli Rehn seems eager to test just how far the relatively new rules on “economic governance” can reach, and when it comes to attacking labour rights, Belgium has been deemed the test-case.

In the days preceding the commission's launch of its recommendations, there were rumours in the Belgian press that the country would be fined for its breach of the rules on member states’ deficit. Had that happened, the fine could have been as much as €780 million. In the end, the commission opted for a different solution: delay the fine until 2014 unless the Belgian government makes deep spending cuts and introduces severe “structural reforms”.

It is possible the commission felt it would be difficult to fine Belgium, while at the same time giving a longer leash to France and the Netherlands, both of which are faring no better than Belgium in terms of deficits.

In fact, a comparison between the Netherlands and Belgium makes the attack on Belgium look absurd.

Both countries were subjected to the “excessive deficit procedure” – the first step of the EU correction procedure - in late 2009. They were both asked to reduce the deficit by the same pace, and judging by 2012, their deficits are the same.

So why the separate treatment? The commission is clearly fond of the promises made by the Netherlands. Here, it will be made easier to fire people, and the maximum unemployment benefit term will be shortened. Belgium is less willing to engage in this kind of reform, and has presented a programme with different tools.

Olli Rehn and his staff have targeted the Belgian wage setting system for years now, but have not been listened to. This might explain why on the commission’s website Belgium is asked to “fundamentally reform” its “wage norm mechanism”, and at Wednesday’s press conference Rehn highlighted wage setting reform as key.

It is not that the Belgian government has not introduced cuts. Cuts have been deep, and financial markets are actually happy with Belgium. It is not even that the Belgian government is sparing labour. Not long ago, a government imposed freeze on wages brought tens of thousands to the streets. But in principle, a system of automatic adjustment of wages to prices still exists, and is a major nuisance in the eyes of the commission.

Over the past years, it has become EU policy to make wages adjust to “competitiveness”, and with a low wage development in countries such as Germany, Belgium is under political pressure. At the press conference, commission president Barroso stressed once again that the rules are not there to make Germany “less competitive”, but to make others adjust to low German wages.

There’s nothing new or groundbreaking about that.

The EU has drifted towards frontal attacks on collective bargaining and wage setting for years, with the warm support of the powerful business lobby in Brussels. And a recent Belgian complaint to the commission about German wages led to no more than a polite reply from the commission that indeed there is a problem.

What is new is that now the commission is testing the powers it has acquired over the past years to push wage-setting in member states, and Belgium has been singled out to be the guinea pig.

This is not because the commission has discovered the panacea of economic recovery. In terms of solving the crisis, there is no reason to believe attacking wages will do the trick.

On paper, Greece has indeed improved its competitiveness, as wages have been brought down dramatically, but there is no sign of improvement. In fact, the attack on Greek wages is more likely to have led to a weakening of the overall economy.

Why should the commission interfere in wage-setting?

But the worst part is not that it’s bad crisis economics, but that the commission has the nerve to interfere in wage-setting at all.

Setting wages is not like setting the price of a candy bar or a tractor, but is linked to right of wage earners to be part of the bargain – they too can determine at what “price” their labour can be sold.

For a century, the trade union movement has fought for that democratic right, and against the idea that labour be considered a random parameter to be adjusted downwards by employers, or bureaucrats for that matter. It is a field where fundamental rights are at play, and interfering could roll back the successes of decades of social struggle.

The commission is well aware of the stakes, and it is playing a politically motivated game. The numbers around member states’ deficits, growth levels or bond prices aren’t even the issue: the issue here is whether the commission can roll back social rights.

Barred from directly attacking wages by treaty, the commission is using every possible back door to do it anyway. The trade union movement in Europe should acknowledge this, and use all means at their disposal to put its foot down. This year. Before the Belgian showcase is rolled out across Europe.

The writer is a researcher with Corporate Europe Observatory, a campaign group looking into the financial lobby in Brussels and the democracy aspects of the eurocrisis.

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

Belgians face toughest tax burden in EU

Belgians are the highest taxed workers in the EU and have to wait until 6 August before their wages stop going into the taxman's pocket.

EU sanctions regime cannot be an 'EU Magnitsky Act'

The debate about the choice of name should not boil down to a political muscle show against Hungary, which opposes the reference to Magnitsky because of its political relations with the Russian government.

Voter turnout will decide Europe's fate

European voter turnout is in deep crisis. Since the early 2000s, the share of voters in national elections has fallen to 66 percent on average, which means that the birthplace of democracy now ranks below average globally.

News in Brief

  1. UK's May announces June 7 resignation date
  2. Ireland votes for EU election and divorce referendum
  3. Report: May to announce resignation plan on Friday
  4. Leading politicians: time for EU to have female leaders
  5. Poll: Finland's Green party to surge in EU elections
  6. High demand for postal voting in Denmark
  7. Some EU citizens turned away at UK polling stations
  8. Switzerland unlikely to sign draft EU deal

Press freedom and the EU elections

We are campaigning for the next European Commission to appoint a commissioner with a clear mandate to take on the challenge of the protection of freedom, independence and diversity of journalism.

Stakeholders' Highlights

  1. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  2. Nordic Council of MinistersEducation gets refugees into work
  3. Counter BalanceSign the petition to help reform the EU’s Bank
  4. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  5. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  6. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  7. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  8. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  9. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  10. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  11. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  12. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year

Latest News

  1. EU election results to trigger top jobs scramble This WEEK
  2. Don't tell the Dutch - but Timmermans 'won'
  3. EU says goodbye to May with 'respect'
  4. Strache scandal: how big a hit will Austrian far-right take?
  5. Italy train row exposes competing views of EU
  6. Dutch socialists on top in first EP election exit poll
  7. No usage data kept for EU parliament's 'Citizens' App'
  8. EU sanctions regime cannot be an 'EU Magnitsky Act'

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic commitment to driving global gender equality
  2. International Partnership for Human RightsMeet your defender: Rasul Jafarov leading human rights defender from Azerbaijan
  3. UNICEFUNICEF Hosts MEPs in Jordan Ahead of Brussels Conference on the Future of Syria
  4. Nordic Council of MinistersNordic talks on parental leave at the UN
  5. International Partnership for Human RightsTrial of Chechen prisoner of conscience and human rights activist Oyub Titiev continues.
  6. Nordic Council of MinistersNordic food policy inspires India to be a sustainable superpower
  7. Nordic Council of MinistersMilestone for Nordic-Baltic e-ID
  8. Counter BalanceEU bank urged to free itself from fossil fuels and take climate leadership
  9. Intercultural Dialogue PlatformRoundtable: Muslim Heresy and the Politics of Human Rights, Dr. Matthew J. Nelson
  10. Platform for Peace and JusticeTurkey suffering from the lack of the rule of law
  11. UNESDASoft Drinks Europe welcomes Tim Brett as its new president
  12. Nordic Council of MinistersNordic ministers take the lead in combatting climate change

Join EUobserver

Support quality EU news

Join us