Thursday, January 26, 2012


The weather was not very supportive to the demonstrators who wanted to support the ETUC in its call to the European leaders to listen more to the European Trade Unions.
 European Trade Unions have been busy looking for an answer to the European crisis, as I noticed yesterday during a poor visited demonstration and a well organized press conference in Brussels. As European Trade Union Confederation it is of course hard to organize a demonstration in the streets of Brussels but if you do so, then you'd better do well or it could have a reverse result. Better no tiger at all than a paper tiger to paraphrase a Chinese proverb.

During the press conference ETUC general secretary Bernadette Segolene noted that due to the euro crisis an economic recession threatens. She rejects the unilateral approach of the European Council and Commission to the national debt reduction through spending cuts and more cuts. She opposes the new European treaty, with its strict rules for national budgets.

ETUC directives together with ETUC Secretary General Bernadette Ségol in the middle in front of the building of the European Council in Brussels.
TUC leader Brendan Barber cannot imagine himself that with these new rules in the hand Brussels can interfere within collective bargaining and labour conditions just to maintain the national budget balance. He is happy that his Prime Minister Cameron does not want to participate in the new European treaty, but unfortunately he does so with wrong arguments of protecting London City as global financial market. Hence, the TUC solidarity with the rest of Europe.

His colleague Bernard Thibault of the CGT French thinks the same way. He argues that the new Treaty has not been established by democratic rule. One did not listen to the unions. Ségol tells us the story that the Italian government has proposed to the unions to have a social dialogue by email. If this sets the tone for the next few years, then it does not look good for the future of the social dialogue. The ETUC therefore wants to make a wake up call for politicians for it becomes too late and the cuts cause an economic recession resulting in more unemployment that is already so high, especially among young people. Therefore, employment should be given priority over cuts.

ETUC secretary general Bernadette Ségol speaks with the press in the streets of Brussels on 25th of January
The ETUC calls on the European Union to invest in a sustainable economy, quality jobs, social justice, and to combat social inequality and poverty. It insists in a special effort for young workers who already are victims of the European crisis.

Employment should have a higher priority than state debt reduction to reassure the financial markets. But where will the money come from for jobs? If you do not reassure the financial markets, you can forget to get their money unless you want to abolish the free market for capital but this was not discussed.

So what should be done? It will be no coincidence that the representative of the German DGB presented a "four point program for change in Europe":
1. The European Central Bank ECB should be the Stability and Rescue Anchor ie the Lender of Last Resort. The Eurozone would become a transfer area or in trade union terms, a community of solidarity.
2. Agreement on cyclical fiscal policies and social justice. A higher debt is covered by higher taxes for major capital assets based on the principle that strong shoulders should bear the heaviest burdens.
3. Forward a comprehensive program, a "New Deal" for Europe to invest in future-oriented sustainable industry, particularly in the energy sector, services and education. The DGB proposes two models for funding. Anyone with a capacity of over € 500,000 (married over € 1 million) sets off 3% of its assets available for an interest-free period of 10 years and then get the money back, or it is given indefinitely. The money is managed by the European Investment bank.
4. Effective regulation of financial markets (banking and insurance) to guarantee long term stability of these institutions and their ability to absorb losses in equity.

In order to increase pressure on the politicians, the ETUC leaders decided to have a European Action Day on February 29, the day before the meeting of the European Council. The goal is that a social paragraph will be added to the new EU treaty. "Balanced budget are necessary but austerity alone exacerbates imbalances. A policy of stimulation of the economy through investments should be the solution of choice", says the ETUC.

Saturday, January 21, 2012


The heavily critized Hungarian Prime Minister Viktor Orban came on wednesday 18yh of January to Brussels to discuss his policy with the European Commission and to explain it to the members of the European Parliament.
Since the Fidesz party won the absolute majority in Parliament at the parliament elections in 2010 and therefore drove the leftist socialist out of power, political controverses are sharpening between the Government of Prime Minister Victor Orban and the leftist opposition.The opposition claims that the Orban government is becoming more and more an authoritarian government, destroying democratic values, trying to censor the media, threatening the independence of judges and the national central bank. The European Commission decided to launch accelerated infringement proceedings against Hungary over the independence of its central bank and data protection authorities as well as over measures affecting the judiciary.

Prime Minster Victor Orban came last Wednesday to Brussels to discuss these matters with the European Commission and toexplain to the European Parliament his Government policies. Socialist leader Hannes Swoboda supported the critics of the opposition in Hungary. In contrast, leader Joseph Daul of the Christian Democratic oriented European People’s Party expressed his confidence in Victor Orban. 

On Trade Union level there are also different opinions. ETUC General Secretary Bernadette Ségol stated that ‘The European Union cannot put up with the attacks made by Viktor Orban on media pluralism, the independence of the justice system and all the democratic counter-powers. We need to act to ensure that the fundamental rights guaranteed by the EU are fully respected. The initiatives taken by President Barroso must be bolstered. This so-called economic patriotism will only lead to forcing the country into a nationalistic and populist direction that must be condemned as being harmful to workers and citizens’.

On the other side speaks President Ilmre Palkovics of the Hungarian trade union confederation Munkastancsok in favor of the Government. On my request he wrote the following comment on what is going on in Hungary. As you will see, his opinion is more worker’s oriented.

President Imre Palkovics of the Hungarian Trade Union Confederation Munkastanoscok (left) talking to former ETUC secretary general John Monks.


The past two decades or so brought about a disappointing reality vis-a-vis the expectations of the Hungarian society at large. A few people became incredibly rich, but the majority live in dispair, poverty, degrading existential security, many  lost  their jobs, health, homes, or faith in the future.

Huge profits, low wages.

            The background of disappointment is that the West promised to help, but accomplished the expropriation of the country instead: state property has been privatized into the hands of mainly Western investors. The share of foreign ownership has become determining, both in the real economy and in the financial sector. The profits made in Hungary were systematically fleeing the country, having been boosted by the owners not paying fair wages to the employees as well as by state subsidies and tax holidays lavished at the multinationals. Compare: the investors’ profit rates in the past 20 years went up by an average of 21%, while the mean earnings rate by a meagre 0.7%. Consequently, the real value of the wages in 2012 is equal to that of 30 years ago.
            Hence, the economic activity in Hungary failed to provide the resources needed for a normal functioning of the society at the level of the state and of individual life. There followed another means of plundering the country: that of the debt yoke, inflicted on both the state and the population.

Neo-Liberal Globalisation leads to colonization

            The above economic and social phenomena are present not only in Hungary. As is now obvious, it goes about a thoroughly designed and tested model. The initiators of globalization, the neoliberal market forces and powers have used methods of capital outsourcing and colonization to fleece the Latin American continent, Central and Eastern Europe, now Europe’s southern states, Ireland, and it’ll go on.
            In spite of the fact that the „irrational rationalism” of fundamentalist neoliberal markets admittedly failed, and became untenable in 2008, the global moneysucking pumps are still fully operational.
            In what does the Hungarian situation differ from other countries?
            It goes without saying, the ransacked society in other regions, too, suffers because of the depleted resources.

Worker’s interests versus International Capital interests

Hungarians were lucky to have elected a politician, a statesman, who is determined to serve not only the global interests of money. Over two thirds of citizens voted for a policy of slowing down the rate of the country’s plundering and is determined to see that policy implemented by their prime minister. He is expected to make it clear to international investors, that Hungarians are not willing to hand over all fruit of their work. We would like to protect our modest means of living, at least those that the previous socialist governments of Mr Gyurcsány and Mr Bajnai (who enjoy the West’s high esteem for now obvious reasons) had no time to deliver to the markets.
            The government of Viktor Orbán made an earnest effort by levying taxes on banks and multinational companies, retaining parts of their extra profits. This was inevitable in order to raise the billions required for the servicing of the mushrooming interest on state debt. As a follow-up, 13 corporations, operational in this country, lodged a complaint against the Hungarian government already in 2010.
            For many of us it is clear now, that over the democratically elected national governments there is a genuine power structure of those who have not been elected and aren’t controlled by anyone. Viktor Orbán and the Hungarian government dared to challenge that power, and stepped over the line marked for small countries having no economic or military might. He personally, his government and Hungary as a whole have now been made a target of retaliation.

Democratic values versus international interests.

            The arsenal of the strike includes blemishing us in the face of international public opinion for destroying „the delicate equilibrium of checks and balances”. Let us see: did those checks and balances restrain in the past 20 years anyone, apart from masses of cheap labour? Apart from those, who were methodically conned and fooled by the sycophant „free” media?
            Western democracy discredits itself, when it allows the European Central Bank to decide what remuneration Hungary should pay to the governor (who has been known for ducking taxation by rescuing his private capital to offshore havens) of its national bank, an institution „independent” only of serving Hungary’s interests!
            Our prime minister is labeled „dictatorial”, because he lived up to his democratic mandate, obtained as a result of free elections, to have the parliament confirm our sovereignty by adopting a basic law capable of being a safeguard of national interests. Hungary was the last of the former socialist countries to do away with a Stalinist constitution!
            „Populist!”, goes the chorus led by the New York Times, which readily sticks the label to every politician who serves collective interests instead of individual ones. Had Orbán maintained the policy of subservience to global market interests, there’d be no hysteria, no concerted attack against Hungary, unleashed last year by the media.
            This is the sin, then, of the freely elected Hungarian prime minister and government. Even the erection in Budapest of a monument to Ronald Reagan, father of  global rule, wasn’t enough to placate the wrath, provoked by  Hungarians wishing to have the neoconservative economic model work for them, too, instead of delivering its total yield to the empire.

The political battle goes on

            The irony of the situation is, that the leftist-liberal opposition  - which was a disaster while in office for eight successive years that only brought the „need for austerity” to the country – feel triumphant again. The old good times are back, there is a Master again - the Brussels commission and the US ambassador, replacing the soviet communists -,  so they can flock there and betray a government trying to defend the interests of the nation. The „leftist forces” and the liberals who even failed to make it to the parliament in the 2010 elections, are now „worried”, because it turns out that Hungarians are aware of their national interests!
            Global media come handy to the opposition in its campaign to convince us, that it is good, if we submit again to the depletion-causing instructions of the IMF, the encashment institute of international investors.
            An uneven battle is being escalated, the financial empire has deployed its full arsenal against Viktor Orbán, in order to confuse, estrange and turn against him the now supportive social strata, all those he tries to save from being definitively locked in the cage of debt slavery.

For to the common good.

Bringing down the Hungarian government is so urgent for the profit machinery and the media not because the country’s market is so important, but because of the role model it might become for other captive nations. Inadvertently, a comparison with 1956 comes to mind: then, too, Hungarians wanted to extricate themselves away from the strangulating embrace of another empire. Then, too, there was a complicity among the big powers which allowed the freedom fight to bleed.
            But there is a vestige of hope now: the ruling new-enlightenment project is in trouble, because its founding fathers can only think in terms of individuals. An empire of individuals has pushed the entire world economy and modern civilization into their worst crisis. This empire can’t hope for a lease on life as long as the soviet empire had following the defeat of the 1956 Hungarian revolution!
            We support our prime minister and government for their courageous endeavour to step out of the rank of cover-up democracies, and hope that public opinion in other Western nation states will heed to our arguments.17.01.2012. Budapest

Imre Palkovics

(Munkástanácsok- National Confederation of Workers’Councils)

Thursday, January 12, 2012


These days you can ask yourself if the EU and the Euro will still exist in the year 2050. The question is if the EU and the Eurowill  still exist, how it will be organized. Will the EU countries come more together and make one economy or will there still be as many economies as there are countries?
CNN informs that The global research department of HSBC Bank has released a report predicting the rise and fall of the world’s economies in the next 40 years. It will be of no surprise that the world’s top economy in 2050 will be China, followed by the United States. Since China’s reforms in the 1980s, economists have said it’s not a question of if, but when, China’s collective economic might will top the U.S.

But among the smaller, developing nations, there are several surprises by HSBC prognosticators:
- By 2050, the Philippines will leapfrog 27 places to become the world’s 16th largest economy.
-Peru’s economy, growing by 5.5% each year, jumping 20 places to 26th place – ahead of Iran, Columbia and Switzerland. Other strong performers will be Egypt (up 15 places to 20th), Nigeria (up nine places to 37th), Turkey (up six spots to 12th), Malaysia (up 17 to 21st) and the Ukraine (up 19 to 45th).
- Japan’s working population will contract by a world-top 37% in 2050 – yet HSBC economists predict it will still be toward the top performing economies, dropping only one spot to the 4th largest economy. India will jump ahead of Japan to 3rd on the list.
- The big loser in the next 40 years will be advanced economies in Europe, HSBC predicts, who will see their place in the economic pecking order erode as working population dwindles and developing economies climb. Only five European nations will be in the top 20, compared to eight today.  Biggest drop will be felt northern Europe: Denmark to 56th ( -29), Norway to 48th ( -22), Sweden to 38th (-20) and  Finland to 57th (-19).

HSBC 2050 list of top economies (change in rank from 2010)
1) China   (+2)
2) U.S.     (-1)
3) India     (+5)
4) Japan   (-2)
5) Germany (-1)
6)  UK      (-1)
7) Brazil    (+2)
8) Mexico (+5)
9) France (-3)
10)  Canada (same)
11)  Italy      (-4)
12)  Turkey (+6)
13)  S. Korea (-2)
14)  Spain    (-2)
15)  Russia (+2)
16)  Philippines (+27)
17)  Indonesia (+4)
18)   Australia (-2)
19)  Argentina (2)
20)  Egypt (+15)
21)  Malaysia (+17)
22)  Saudi Arabia (+1)
23)  Thailand (+6)
24)  Netherlands (-9)
25)  Poland (-1)
26)  Peru     (+20)
27)  Iran      (+7)
28)  Colombia (+12
29)  Switzerland (-9)
30)  Pakistan (+14)

“If we step away from the cyclicality, there are two ways economies can grow; either add more people to the production line via growth in the working population, or make each individual more productive,” the report says.

In other words, demographics – the size of your working population – along with the opportunities to flex that muscle help determine long-term economic trends. Big factors on the back half of that equation: Education opportunities, democratic governments or strong rule of law (a caveat that explains China and Saudi Arabia’s high placement).

“We openly admit that behind these projections we assume governments build on their recent progress and remain solely focused on increasing the living standards for their populations,” the report says. “Of course, this maybe an overly glossy way of viewing the world.”
Chief factors that may derail economies moving forward, the report says: War, energy consumption constraints, climate change, and growing barriers to population movement across borders.

Friday, January 6, 2012


Antoinette Sayeh, Director of the IMF's Africa Deparment
Antoinette Sayeh, Director of the IMF’s African Department published on the site of the IMF an interesting article on Africa titled ‘ The Quality of Growth’. She starts with the observation that “Sub - Saharan Africa has had a great start to the 21st century—at least that’s what the numbers show. Year after year the region has racked up solid economic growth, even when the global economy was anything but sound. Low-income countries have done particularly well. Not only have average per capita incomes mounted steadily, but inflation has generally been tamed, debt pruned, and opportunities for foreign trade and investment opened up.”

But general statistics can be misleading especially when it concerns the poor people. The question is always if they get a share of the growing cake. Economic growth is a start but goes it together with some kind of income distribution? To determine if the fruits of economic growth goes also to the most vulnerable people in the region, the IMF “looked at detailed survey information on household activities and characteristics in six fairly typical lower-income countries in sub-Saharan Africa. The sample is of course rather small—and it didn’t include any major oil exporters or fragile states—but it gives an insight into how changes in the standard of living of the poor correlate with each country’s growth and into the factors that lifted poor people in these countries, as measured by their consumption.”

To promote employment for young Togolese workers the trade union founded a cooperative that helps them to become a mototaxista.
The survey learned that there “was a solid rise in average living standards of relatively poor households in each of the four higher-growth countries in our sample—Ghana, Mozambique, Tanzania, and Uganda—during the early 2000s. In contrast, poor households in Cameroon and Zambia—the two slowest-growing countries—fared less well in terms of changes in their consumption levels.”

Other results of the survey are that “ the poorest 25 percent of households consumed more when economic growth per capita was higher” and “when consumption of the poorest 25 percent of households rose, the number of people in absolute poverty fell. In other words, poor households did share in the benefits of growth. Furthermore, we know that among fast-growing countries in general, those that grow the fastest tend to see headcount poverty fall the most. Countries in our sample where the poorest 25 percent of the population did particularly well also showed sharp improvements in agricultural employment, especially in rural areas. So agricultural incomes seem to play an important role in making growth more inclusive.”

The Director of the IMF African Department concludes that “economic growth is critical to raising the quality of life for the poorest in society. But it’s equally clear that growth alone is not enough. Economic growth must generate the right sort of employment and, over the longer term, solid gains in education and human capital accumulation. For young people, in particular, school plus experience is essential for true inclusion in society.”

Another project sponsored by the Togolese trade union is a cooperative that helps women to become hairdressers.
Sayeh believes that in the short term there are two ways to raise the living standards of the poor. “The first is through income-generating opportunities in agriculture, from which most poor households derive their livelihood—for example, by promoting more productive farming methods (use of fertilizers, seeds) and building the appropriate infrastructure (roads, electrification, irrigation). Second, economic assistance must be targeted to the most vulnerable households."

Economic growth is the basic condition to make better the life of the poor and vulnerable people but it is not enough. Next is employment followed by a more equal distribution of income and welfare. State and government should play a vital role on both fields. Trade unions in rural, sub-urban and urban areas have a lot of first hand experience how to deal with employment and employers and have ideas about the distribution of income and welfare. Therefore they should be consulted by governments and other institutions about what kind of economic assistance to which groups in societies should be directed and how the distribution of income and welfare should be organized.