The ETUC's role in the EU's new economic and monetary architecture

Abstract

The trade union debate about EMU is moving on: the issue is no longer why or how, but what to do with it once we've got it. For the ETUC the answer is clear: convergence and stability are not ends but means of achieving better jobs and living standards. To try to ensure that this will be the case, the ETUC will have to influence the other post-EMU players: the European Central Bank, which will be responsible for monetary policy, and the economic authority(ies) which will be responsible for budgetary policy. Initial discussions with the "bankers" have been promising, but who is to be the 'champion' of the real economy of jobs, investment and growth? EcoFin with its mantra of 'stability oriented policies' has seemed to be more central bankist than the central bankers. Perhaps this has partly reflected the lost national room for manoeuvre that market-driven integration produced, but EMU, with its convergence and its stability, and with its new institutional possibilities - including the Employment Chapter and the Euro X Council - will create new opportunities for active macroeconomic management. A first test of the post-EMU architecture is already upon us - the Asian crisis. No one wants to talk this up, but nor do we want the European recovery to be aborted, unnecessarily, again. We therefore need to monitor demand and not just supply conditions in the European economy so that we can act swiftly, on a coordinated basis, if demand looks like falling below 3-3.5 per cent in real terms or 5-5.5 per cent in nominal terms. These are the levels of growth required to put unemployment on to a firmly downward path. In terms of recent history the figures may appear high, but we've got a lot of leeway to make up - and EMU is giving us the potential to do it. To repeat, that's what EMU, and the sacrifices made to achieve it, has all been about.