Trade unions to IFIs: Time to reverse three years of destructive austerity

The international trade union movement urges the International Monetary Fund and the World Bank, which are holding their annual meetings in Washington this weekend (Washington, 11-13 October), to reverse the harmful austerity and deregulatory policies that have contributed to a new global downturn and continued high joblessness.

The urgency of the need to change course was made evident by the IMF’s updated economic forecasts made public on Tuesday, in which the Fund stated its expectation that the sudden slowdown in several large emerging economies will last several years and put the global economy on a substantially lower growth path than before the 2008-2009 crisis. IMF forecasters’ statement that growth may return to most of Europe in 2014 because the “Troika” has relaxed its fiscal deficit targets should put an end once and for all the mistaken belief that the austerity and deregulation policies of the past three years have been good for growth.

Sharan Burrow, General Secretary of the ITUC, stated, “It is high time for the IMF to stop its promotion of destructive austerity programmes and the dismantling of workers’ protection that have been central features of its lending programmes and policy advice in Europe. We are pleased that the Fund finally seems to acknowledge what unions have been saying about austerity, but it should also end its efforts to reduce protections for vulnerable workers and dismantle collective bargaining institutions.”

Concerning President Jim Yong Kim’s plans for a reorganisation of the World Bank Group, Sharan Burrow stated, “We are pleased to see the World Bank announce its intention to pay greater attention to the employment and distributional impact of its policies. Trade unions want to see both the Bank and the IMF place decent work at the centre of their policy objectives. The Bank should play a much more active role than it has in helping workers make the transition from informal to formal employment and in supporting the UN’s Social Protection Floor initiative.”

The ITUC’s general secretary also encouraged that World Bank “to follow up on its forward-looking research on the devastating impact of climate change and help to mobilise the investments necessary for a just transition to a low-carbon future.”

A detailed statement submitted by the ITUC and its Global Unions partners to the annual meetings of the IMF and World Bank is available in English, French, Spanish and German