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Policy Dialogue
The public sector in times of economic crisis: what impact on growth and people’s well-being?






EVENT
Tuesday, 14 May 2013







The current crisis is also a crisis of citizens’ trust and confidence in public institutions as the policy of austerity hits growth, said Romain Wolff, president of the European Confederation of Independent Trade Unions (CESI).

Citizens feel that they have borne the pain of a crisis for which they are not responsible, Wolff argued. Moreover, they are paying several times over in the form of higher taxes, bank bailouts, country bailouts and job losses, he said.

Public services are a different kind of workplace: public-sector workers don’t align with other workers when in dispute with their employer – instead, they recruit the help of their clients, said Carlos Carrion-Crespo, a public sector specialist at the International Labour Organisation (ILO).

Moreover, public-sector workers tend to identify with their employers and with the quality of the service they’re delivering, said Crespo. All this explains why there are laws governing public-sector labour relations, he added.

Jean-Paul Tricart, Head of Unit for Social Dialogue at DG Employment, Social Affairs and Equal Opportunities, European Commission, said the public sector had clearly been targeted as a key sector for adjustment during the crisis. He argued that this is partly because it is easier for governments to take action regarding the public sector, and partly because such action has an immediate impact on public finances at a time when the priority is fiscal consolidation.

Tricart said the cuts had been made with limited social dialogue, adding that in the public sector, we’re seeing centralised collective bargaining and top-down representation – something of a new dynamic in industrial relations. The private sector, on the other hand, has been decentralising, he added.

The crisis has been with us for a while now, said Hans Martens, Chief Executive of the European Policy Centre, warning that we’re set for a difficult future and that the current difficulties may possibly persist for a generation.

The EU’s working-age population (15-64) is falling, thereby reducing the number of people paying into the social security system. Meanwhile the 65+ population is doubling. The evolving dependency ratio is a major issue, raising the question of who is going to pay for all this, Martens warned.

He argued that reform is needed, but conceded that it would be politically difficult to achieve. The baby boomers brought Europe up to such a high level that public services have become acquired rights in Europe – meaning that interest groups everywhere will speak up against reforms, the EPC Chief Executive said.



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