Two-way Pressure On G20: Who Should Pay?
- June 26th, 2010
- Posted by 7thmin
COMMENTARY: “Who should pay out the deficits, following the financial crash of 2008?†is a keynote question for the G20 international economic summit this weekend, in Canada.
After billion-dollar government bail-outs of errant banks, protesting workers, right now in France and Italy, say it should not be them.
The incoming head of the international trades union movement, Australian Sharon Burrow, has added in a warning that the deficit cutting will stymie economic growth.
LINES OF BATTLE
Loose lines of battle were drawn up on the eve of the Group of Twenty meeting in Canada:-
Governments in Europe, mostly operating on a conservative ideological base, have opted to make radical reductions in government spending; cutting into deficits much aggravated when the finance sector went bad.
Reductions, or a freeze in public service pay, and pensions, conjure up nostrums of the 1930s:- While companies came under pressure, jobs evaporated in the private sector, and state revenues fell, it was considered to-be-expected that public sector workers should take cuts as well.
Demand was affected; the Great Depression got worse.
The United States this time has lined up on the side of caution against excessive cutting, out of concern about the same kind of back-lash impact against recovery from recession.
REGULATORY LINES
Some agreement had emerged before the start of proceedings on a need for new regulatory frameworks for business and finance; a somewhat delayed response to the drive for wild markets, born of ideology, of the last forty years.
Main features of it would include: mandatory reserve funds proposed by the European Union, for banks to bail out banks, where needed, instead of governments; American legislation towards regulation imposing surveillance and financial responsibility on credit ratings agencies; and also controls to bring-in, under the regulatory umbrella, hedge funds and off-market selling of derivatives.
PICKET LINES
Demonstrations in France and in Italy, where they have accompanied a general strike, have seen greater numbers aroused by the moves against wages and public sector employment.
Fresh protests are planned in Greece, where the parliament has yet to confirm the national austerity plan. (See EUAustralia; “€750-billion pledge …â€, 11.5.10; Greece’s milestone …, 24.4.10).
The new General Secretary of the Brussels-based International Trade Union Confederation, Sharon Burrow, has announced that the union movement would be lobbying delegates to the G20 summit, and backing protests there outside the venue, against the austerity programs.
“The impact on demand seen in Europe will affect every country right across the worldâ€, she told Radio Australia (26.6.10).
The union movement’s goal would be a “much more equitable, and stable, world economyâ€.
Burrow will end her term as President of the Australian Council of Trade Unions on 30.6.10, to take over at the ITUF, which claims 176 million members in 156 countries.
See Sharon Burrow on You Tube, “Sharon Burrow (ACTU, Australia & ITUC) …â€, 31.3.09, 2 mins. http://www.dailymotion.com/video/x9f57x_sharon-burrow-actu-australia-ituc-t_news, (26.6.10).
POLITICAL FOOTNOTE
Another Australian union presence will be noted at the G20.
Heading the Australian delegation is the country’s Treasurer and newly installed Deputy Prime Minister, Wayne Swan.
Swan is much identified with the large, right-of-centre Australian Workers Union faction within the Labor Party, instrumental in last week’s deposing of the former Prime Minister, Kevin Rudd.
Seen as failing to follow through on key policy undertakings Rudd had been failing in opinion polls in the lead-up to elections this year; the then Deputy Prime Minister, Julia Gillard (picture), who has replaced him, is the country’s first female head of government, (incidentally sworn in by the first vice-regal head of state – the Governor General Quentin Bryce – picture).
Pictures
ACTU, Australian Museum, QG