|Participants at the KGZE Conference 2012 with on the second row on the right EO/WOW President Guenther Trausnitz.|
From June 21-24 the KGZE Conference on trade union cooperation in Europe was held in the city of Brünn, Czech Republic. The theme of the conference was "Europe and the debt crisis". 58 participants from 15 countries discussed the implications of the state debts for the social system and the labour market. The debt crisis has become a crucial test for the EU. The economic performance of individual European countries has diminished significantly and the number of unemployed rises fast (10,6% or about 25 million persons). In particular young people are facing a lack of jobs and therefore future prospects. Despite the fact that young people are educated and willing to work, some states struggle with youth unemployment of 50% or more.
Austerity programs lead to massive impoverishment of broad sections of the population. With confidence in politics decreasing, purchasing power declining and fewer investments, Europe seems to slide deeper and deeper into crisis.
By bursting the economic bubble the European Monetary Union was plunged into a structural crisis. With the European fiscal pact or officially called the Treaty on Stability, Coordination and Governance in the Economic - and Monetary Union, the EU wants to counterattack the crisis. The aim is a common budget, a common fiscal policy, a common guarantee for the debt of the countries of the EU. Together with the European Economic - and Monetary Union the fiscal pact would complete the European Economic Area.
It's not enough to provide permanently money for an ailing area without measures to initiate recovery. The financial and banking sector must be reformed with clear and transparent rules so that speculative excesses and dubious practices will be stopped. How appropriate the bailout of the Banks may have been, downsizing the financial and banking sector is essential.
1. A strict separation between commercial and investment banking must be made. The risk must be clearly visible and if necessary restricted.
2. Accounting rules should be more transparent and rigorous.
3. A meaningful insolvency law for banks must be introduced. It must be ensured that banks can be "handled" without putting states under financial stress.
4. In the long term, the financial sector should pay back the money that has been spent by the State in order to overcome the crisis.
5. If banks are supported, the state or the international community should exercise relevant owner rights.
6. Total assets should not exceed certain limits related to the GDP.
These are the main requirements for a new regulatory framework, which brings back the financial and banking system to its original function as savings and loan system.
Source: INITIATIVE, 37 JHG, NR. 165.
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