International Trade Union Confederation – Congress | Prime Minister’s message

PRIME MINISTER’S PRESS OFFICE
June 21, 2010
Thank you very much. Dear friends, dear esteemed panel, first of all I would like to convey my greetings to my friend Guy Ryder, General Secretary of the International Trade Union Confederation, as well as to President Sharon Burrow, and to all of you who are gathered today in Vancouver, Canada, deputy secretaries and regional secretaries.

Canada is a country that has a special meaning to me, as I spent some of the formative years of my life, as my family found refuge there during the dictatorship in Greece.

Let me also convey to you the greetings of participants to the Council Meeting of the Socialist International, which I am presiding over and which started today in New York City.

What is asked of us today – and it is crucial in light of the upcoming decisions of the G20 – is to show we have the political will and mentality to protect the welfare of our citizens in this distraught and imbalanced global economic system, which currently creates a great deal of wealth, and yet so much of it is often unequally distributed or associated with great injustices in many societies.

The current system has so far protected the interests of the few, and not the many; it is one that abused rather than nurtured the environment.

And we are living in a paradox, because today we, mankind, have the power to make this world a different place, the world more just. We have developed great powers, i.e. financial powers, technological powers, media powers, digital powers, nuclear power, know-how and expertise.

But what use are we making of these powers? Are we using them to make poverty history? We certainly could. We could stop global warming. We could provide decent education and work to all. We could protect gender equality. We could promote the green economy. We could integrate migrants and refugees into our societies. We could stop pandemics. Yet we fail to do so.

And this is a deeply democratic question. Who has the power? Who controls this vast wealth of power that we, the people, have created? How is it used? How is it harnessed? Who does it serve?

This is a democratic question and unfortunately the answer is that today such powers and means are controlled by the few, not the many.

And as Guy Ryder will tell you because I have talked to him, wealth generated by labor today in our world is at the levels of the 1930s.

This is not only a question of standards of living. Because when wealth and power lie in the hands of the few, they not only foster inequality but also lead to a political situation where politics itself can be held captive because of our very own institutions, our democratic institutions, which are often held captive by vested interests, be it through lobbying or corruption or the media.

So we need to humanize globalization. We need to humanize globalization, or otherwise we will be moving into the politics of populism, fundamentalisms, xenophobia, conflict, fear, and fear yet again, as well as barbarism.

So what is asked of us today, whilst dealing with an economic environment going through a crisis of values and principles, is to work collectively to ensure a prosperous and socially equitable system, one that stimulates the economy, guarantees full-time employment, ensures there is social welfare for those at work and those in pension and provides a future for our youth premised on education and adhering to solidarity values.

But we also need to create a new model for development, i.e. green development to protect our planet and have a viable economy.

We also need to strengthen our democratic institutions. This is where representation, involvement and participation come in to make sure the voice of every citizen is heard and respected.

This is quite a task. And we can only manage this task, which I am very committed to, if we all work in synergy. We may have differing ideologies, and I know in the trade unions there are many members from different parties, or even independent, but we still can work in synergy in a constructive manner, sharing or at least debating about our common goals, in order to have wider consensus, a fair and just environment for workers, their families, men and women at work, both the young and the old.

But before I conclude my speech let me just say a few words regarding my own experience and what I have learned over the past few months as well as what Greece has learned.

Yes, Greece has its share of responsibility for the crisis. We are not trying to scapegoat anybody but we were a weak link in a system which had its problems. It was a global system and a global crisis, a financial crisis, an environmental crisis, a food crisis, an energy crisis.

What I have learned is that if we work together to come up with global solutions, we then have choices. For there are choices and nothing is inevitable. Choices we make must be made counting on a set of values, and our values are very clear. We talk about democracy, stronger democratic institutions, representation, transparency, collective bargaining. We talk about equity and justice. We talk about a green economy.

Another point which I very much felt to my skin and we all grasped in Greece, as we watched the markets and the spreads go up and down every day, is that the markets are not rational. They can be led on by a sort of mob psychology: either a mob psychology of euphoria which was the case with the bubble before 2008 or a crowd psychology of fear which we experienced after the 2008 crisis and again recently in Greece.

We felt that since, as we were introducing one package of measures after another so as to cut our deficit, cut our debt, make our economy more viable, the markets were still not responding. They continued to attack and they remained suspicious.

That is why we needed intervention, intervention in the markets.

And that is what happened. In fact, a European support system, with the help of the IMF, however slowly it might have been established but still quite fast for a European institution, was set up. It was accompanied by our declared commitment to proceed with decisive, often painful decisions, actions and packages to cut public expenditure, increase revenue, curtail bureaucracy, money wasted and corruption.

So markets are impatient and they have become risk-averse. They can also dangerously undermine logical, important, consistent, credible political decisions which we take as we govern our countries.

And here is another conclusion: our markets are quicker, much quicker than our democratic institutions. Even more so, if you go to Wall Street and see computers make decisions using mathematical models impacting on lives around the world.

So humanization, humanizing our economies and our global system is not simply a symbolic word. It means we have to put in place regulations and systems so that we can work like human beings, so that we can work not with opaque, non-transparent models, but so that models would serve us.

This brings me to a debate frequently held between conservatives and liberals, or right and left-wing parties, about whether one should choose the market over the government or vice versa. May I state that I am neither pro or against either the markets or governments but I want to see – and this is my personal point of view–markets regulated so that they serve the people and governments of transparency to also serve the people.

I’m suggesting this because we did have a problem in Greece. We did have a problem in how our government worked.

But luckily Greece is on track. We have made difficult decisions. We have already reduced, in the first six months, 40% of our deficit compared to last year. And we will remain on track.

But I don’t want to get into the details of the Greek situation. I do want to say one more thing which I believe is very relevant for your discussion.

I’ve been reading the press around the world and it seems to be claiming that Greece is an example. They say: “You see Greece. They are paying for their lavish welfare system. That’s their problem.” They are wrong. We did not have a lavish welfare system.

Yes, we are a country with problems; we are basically a country which is one of the richer countries in the world but was mismanaged.

The welfare system was not what caused our debt. It was the mismanaged economy. It was the previous conservative government, a conservative government which created a big government, which in turn created a big public sector, albeit one which did not serve the people. It did not serve the average man or woman in the street; it rather favored big interests.

And we have seen this happen in other countries, even in the United States with its previous government.

In fact, the problem with Greece was a problem of governance, of democratic governance. And I think this is important because if you have corruption, patronage networks – which we are not proud of and we are changing – then it is a question of governance. It is a question of being accountable to our citizens, making sure that the money they are paying is used for their interests, the public interest, goes to welfare, the economy, the real economy, and not simply to special interests that often hold our political systems captive. And this is a question of equity also.

One final point, on sovereign debt: although governments intervened last year and the year before to help save the banks and to stimulate the economy to avoid a recession, now they are deemed as risky by the markets. But why is that?

Certainly we must rethink our economic model, consider consumerism in the developed countries and our way of life: we need a more viable model.

But is the welfare system to blame? Was it the welfare system that created the sovereign debt?

I would suggest that first there are many countries that do have welfare systems and they are still very competitive, because this is what it all comes down to. Are we competitive? Are the developed countries competitive?

Let us have a look at the Nordic countries; there is also Canada, there is Australia. They all have welfare systems but they are also very competitive.

So I don’t believe the welfare system is to blame.

Second, why are we not competitive, why so many of our countries fail to be competitive? Well, I’ll give you one reason. Though I am very happy that there is more wealth in the emerging markets and things are getting better there, one reason is that among them there are many that are more competitive because they have very low wages. They are more competitive because there are huge inequalities. They are more competitive because they have no welfare system. They are more competitive because they is no collective bargaining. They are more competitive because they can easily degrade their environment, which gives them short-term competitiveness but no long-term sustainability.

So there are some societies that are even managed as corporations, which are competitive, yet not democratic.

But is this the model we want to aspire to? Do we want to make this a race to the bottom to become competitive?

Or is it we – and I am speaking for my party, the socialists, labor parties, who raise standards around the world, in both the emerging and the developing countries, so that the wealth goes to the many, and that we have real wealth distribution and a level-playing field where we can all be, yes indeed, more competitive. Yet, there should be no race to the bottom; it is not the answer.

At this point may I mention that as we speak I am here in New York in the ILO HQ. I wish to support your call for action and coordinated policies, for governments working closely with multilateral institutions, for adherence to the Millennium Development Goals, for a balanced economic toolbox that ensures supervision of the financial services sector.

And also citizen-focused policies and healthy economies premised on green development.

At this time of a global financial crisis, it is certain that trade unions are faced with a harder task. They are needed, more than ever, to protect and guarantee workers’ rights.

Because unfortunately what we notice is that there are many who are making decisions around the world, exploiting the pressure this crisis created to undermine, or even do away, the social acquis built on years of struggles within democratic societies and because we allowed for social pacts.

Dear friends in Vancouver, addressing you from the ILO HQ in New York, I wish to emphasize that to us secure employment alone is not enough. We want to promote the ‘decent work’ agenda. This is a common fight and our common goal. And it is certainly a positive development that the G20 are willing to listen to some of the ILO’s suggestions. It is important that the ILO be there at that summit.

Just a few days before the G20 summit in Toronto, let us communicate a clear message: workers’ rights are interwoven with green development and a balanced economic system where financial services serve our citizens, and not self-serving pursuits.

I would also agree, and we did talk about this just a few days ago in the context of the European Union, that we need to promote the idea of imposing a financial transaction tax on the markets, as a means of generating revenue, alleviating pressures exerted on the taxpayers, alleviating pressures on national budgets, but also a means of combating speculation.

This could be a very important tax. Because we estimate that with the financial transaction tax at 0.05%, in Europe alone, we could raise approximately 240 billion euro. That is 240 billion euro for generating growth and jobs, 240 billion euro for a green economy and the transformation of our economies, 240 billion euro that can go to the developing nations.

So we can fight poverty as well as turn economies into more competitive and viable ones.

I am also happy that the coalition of trade unions and NGOs around the world broadly support this measure.

So dear friends, yes, we may be parties and you are trade unions, but I think there can be many areas where we can work together. That will be my message. This is my message to you, and I’d like to communicate the same message to our Socialist International meeting here, in New York, today and tomorrow, to promote our common vision of economically and socially sound but also environmentally responsible policies, our common vision for a just society where social partners do have a pivotal role to play.

Here is to a fruitful discussion during your sessions in Vancouver, to a collective, constructive dialogue, which will ensure workers’ rights within a balanced economic system and a fair and just world order.

I wish you the best of success. Thank you; thank you very much.