[stop-imf] Trade unions slam IMF attack on labor rights in Europe

[Robert Weissman]

INTERNATIONAL CONFEDERATION OF FREE TRADE UNIONS (ICFTU)

ICFTU Online...
019/030204

Trade unions slam IMF attack on labour rights

Brussels, 3rd February: In response to an International Monetary Fund
(IMF) report, the world's largest trade union organisation, the
International Confederation of Free Trade Unions (ICFTU) has prepared,
jointly with other organisations, a detailed rebuttal of the paper and
is demanding a response from the international financial institution.

Joined by European and other international trade unionists, the ICFTU
slams the report for its attack on the European social model. The IMF
paper 'Unemployment and labour market institutions: why reforms pay off'
(included as a chapter in the April 2003 World Economic Outlook
publication) is criticised for its ideological bias, as reflected by its
selective reading of evidence, while paying scant attention to the
reality of European labour markets. Highly polemic in its content and
poorly substantiated in its analysis, the IMF report concludes that
European countries could greatly reduce unemployment simply by adopting
US-style labour market and competition rules and implies that European
countries should follow the US example of offering much weaker legal and
social protection to their workers. High-level IMF spokespersons have
publicly called on European governments to adopt policies based on this
flawed report.

John Monks, General Secretary of the European Trade Union Confederation,
made the following statement: "It is hugely disappointing but not
surprising that the IMF has swallowed wholesale the conservative view
that the European Social Model is out of date. The American way is
certainly not the only way and certainly not the best way of running
economies. Europe with its welfare states, collective bargaining and
public services and in some countries high employment levels has much to
teach the USA about equality and civilised cities. It does not have to apol=
ogise."

In a letter (http://www.icftu.org/displaydocument.asp?Index=3D991218936)
addressed to IMF's Managing Director, Horst K=F6hler, trade unionists
raise key concerns with the report including its flawed methodology,
which leads the IMF to the highly implausible conclusion that
unemployment would drop sharply were Europe to mimic the US model of
labour market institutions. The trade union movement is presenting two
papers (http://www.icftu.org/displaydocument.asp?Index=3D991218603) which
provide detailed demonstrations of the serious faults in the IMF's
economic analyses.

ICFTU General Secretary Guy Ryder stated that "The IMF report fails to
recognise the vital importance of strong labour market institutions and
their key role in some of the world's most successful economies. The IMF
must reconsider its position of calling for massive labour market deregulat=
ion."

The IMF's report on European labour markets dangerously ignores the huge
benefits reaped from labour market institutions and the important role
of trade unions in Europe, claiming instead that higher levels of
unionisation are an obstacle to employment and growth. Trade unionists
point out that this claim is in direct contrast to the institution's
earlier statements that trade unions and the IMF share common objectives
of economic growth and poverty reduction. However its inclusion in this
report leads the European trade movement to fear that were governments
follow the paper's recommendations, with its strong attachment to
neo-liberal economic theory, serious implications could result for the
livelihoods of millions of workers across Europe.

The ICFTU represents over 151 million workers in 233 affiliated
organisations in 152 countries and territories. ICFTU is also a member
of Global Unions: http://www.global-unions.org

For more information, please contact the ICFTU Press Department on +32 2
224 0206 or +32 476 621 018.