MercoPress. South Atlantic News Agency

Labour Organization warns “Euro zone extreme policies could produce extreme reactions”

Somavia current austerity measures are building up a social debt that will also have to be paid

Extreme policies to tackle the crisis in the Euro zone could produce extreme reactions, the outgoing Director-General of the International Labour Organization (ILO), Juan Somavia, told the delegates to the 101st International Labour Conference (ilo.org/ilc) that opened in Geneva on Wednesday 30 May.

“Giving confidence exclusively to financial operators while losing the trust of people not only deepens the vicious downward economic spiral but also opens the way to extreme solutions”, warned Somavía.

Current measures have not been successful in reducing public debt, yet they are building up a social debt that will also have to be paid. The ILO chief said that the European countries that have been subject to the strictest conditions as part of crisis rescue packages are back-sliding on the very ILO core values on which the region used to be a leader.

“The austerity-only course to fiscal consolidation is leading to economic stagnation, job loss, reduced protection, and huge human costs, undermining those social values which Europe pioneered” added Mr Somavia.

He cautioned against the weakening of the tradition of dialogue between governments, employers and workers in Europe, as “it is precisely with social dialogue that we can get out of the crisis, through productive investments in sustainable enterprises that can increase jobs, consumer demand and fiscal revenues at the same time”.

The ILO head called for “socially responsible fiscal consolidation”, and said that the ILO 2009 Global Jobs Pact is a basis for such a balanced response.

The Pact was adopted by the ILO in 2009 as a response to the 2007/8 global economic crisis, and offers a range of crisis response initiatives that countries can adapt to their specific needs and situation. These measures include retaining persons in employment, sustaining enterprises, and accelerating employment creation and jobs recovery, all combined with social protection, especially for the most vulnerable.

“We are at a turning point where crisis brings the opportunity to change course. I see a critical role for the ILO in capturing the opportunities that lie ahead”, said Mr Somavia.