‘Unemployment, The Cuts and the EU’ ~ by John Foster of the Scottish Campaign against Euro-Federalism


Brussels and the European Union may seem far removed from the British government’s attack on public services, employment and welfare benefits. 

But there is a link, a very close one, and to understand it we have to go back to the Single European Act of 1986 and the Maastricht Treaty of 1992.

These two pieces of legislation were at least in part drafted by the British Conservative governments of the time and laid out legally binding requirements for the achievement of economic union in Europe.

These were entirely neo-liberal in their assumptions: they required the free movement of capital, labour, commodities and service provision across the EU and an end to all state intervention that might hinder such movement.

Such ‘freedom’ might sound a good thing: But for working people it is not.

'EU - Stop Neoliberalism!' march

It means cutting away all the securities that have been won over the past century to prevent a return to a ‘law of the jungle’ labour market allowing employers to impose unbridled levels of exploitation.

Successive pieces of legislation have resulted, each one worse than its predecessor.

The first was the Stability and Growth Pact of 1992.

This limited the amount a government could borrow in one year to 3 per cent of its overall output – so that when an economy went into recession a government could not borrow to stimulate the economy through investment. Instead, unemployment became the regulator: higher unemployment would force down wages and give employers the profit incentive for renewed investment.

Through the 1990s there were a series of directives that did away with public ownership of utilities and industries. Governments were required to break up state ‘monopolies’ and introduce competition to railways, road transport, gas, electricity, telecommunications and postal services.

Then the pace quickened.

The Lisbon Programme of 2000 required governments to introduce National Reform Programmes (Britain’s can be read on the Treasury website) which reported annually on steps taken to create a ‘competitive’ flexible labour market – targeting particularly benefit levels (‘disincentives to work’), pension levels and retirement ages (‘early exit from employment’ in EU argon).

The updated Lisbon Programme of 2005 tightened requirements further and the Services Directive of 2007 sought to open all services to privatisation and to enhance cross-border labour mobility.

The big push came with the financial crisis.

Debtor states were obliged to cut wages (in some cases by up to 25 per cent), reduce pensions and lash welfare payments.

New regulations on Economic Governance were introduced in 2011 that oblige governments to take active steps to end employment contracts and collective bargaining agreements that prevent labour market flexibility.

In March 2012 the Stability, Coordination and Governance Treaty was signed. This cuts government borrowing right down to 0.5 per cent of output (the same month that EU unemployment rose above 24 million) and demands that national debt be reduced by the equivalent of 3 to 4 per cent of national output a year.

This will mean permanent austerity across Europe.

It is for these reasons that the Scottish Trade Union Congress this year supported a renegotiation of Britain’s relationship to the EU to take us outside the regulations of the Single European Act. It is also why the voters of France and Greece have so resoundingly rejected governments associated with these policies. You can find out more on these issues from the websites of the Campaign against Euro-Federalism (www.scaef.org) or Trade Unionists against the EU Constitution (www.tuaeuc.org).


‘Black holes of stellar mass are expected to form when very massive stars collapse at the end of their life cycle. After a black hole has formed it can continue to grow by absorbing mass from its surroundings.’ (Wikipedia)

Scottish Unemployed Workers Network

2 thoughts on “‘Unemployment, The Cuts and the EU’ ~ by John Foster of the Scottish Campaign against Euro-Federalism

  1. Humanity2012 says:

    I Opposed the Maastricht Treaty a Betrayal upon the UK by the ” Conservatives ”

    I have Suspected the Stability and Growth Pact has a Lot to Answer For

    The Supine Ignorance of the Great British Public has been Beyond Feckless
    and they have Behaved like Pavlovian Dogs

    The EU Corruption Scandal of late 1998/1999 was and is an Outrage against Decency

    Scrap the European Union and all the Privilege and Luxury that it Offers Politicians

    They are the Scroungers

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