EU leaders grapple with job losses as unrest grows

20th March 2009, Comments 0 comments

Under pressure to do more to help their economies, the EU is seeking a common front ahead of a key London summit in April.

Brussels -- Calls were growing Thursday for a coordinated European strategy to safeguard jobs, with French workers going on strike as EU leaders met for a summit dominated by the economic crisis.

EU Commission head Jose Manuel Barroso and Czech Prime Minister Mirek Topolanek, whose country holds the EU's rotating presidency, met with European social partners ahead of the full EU summit to discuss the problems.

"All our measures are intended to limit the negative impact on workers, employers and on all citizens and to restore confidence," said Barroso. "Together, we have to redouble our efforts to protect and create jobs, whilst rejecting protectionism, which, in the long-term, does not protect anyone."

Under pressure to do more to help their economies, the EU is seeking a common front ahead of a key London summit April 2 of developed and emerging economies in the Group of 20.

However the pre-summit message from many European capitals was that 400 billion euros (520 billion dollars) worth of stimulus measures -- including automatic stabilizers such as increased unemployment benefit pay outs -- should be allowed to do its work before any more grand gestures are made.

The "social summit" that Topolanek and Barroso attended agreed to launch a consultation process to prepare an EU summit in Prague on May 7 dedicated to the unemployment and social problems.

Thursday's day of protest in France disrupted air and rail transport, reflecting anger across the 27 EU nations at rising job losses and factory closures as a deepening recession threatens to last well into next year.

Britain on Wednesday announced unemployment crashing through the two million mark for the first time since the Labour government came to power in 1997.

The European Trade Union Confederation (ETUC) called on the EU leaders to show real leadership to prevent the crisis from unfolding further.

"We need European leadership to provide member states with the financial means to fight the crisis and its social consequences," warned ETUC general secretary John Monks.

Spanish Secretary of State for European Affairs Diego Lopez Garrido admitted that in dealing with the economic crisis, including bailing out banks and introducing stimulus packages, "the EU has so far not paid too much attention to social policy."

Some 4.5 million Europeans risk losing their jobs this year due to the increasingly severe recession, according to the BusinessEurope employers association.

While no new economic pump-priming moves are on the cards at the EU summit, leaders could consider making a further 10 billion euros in emergency loans available to struggling non-euro zone members, an EU presidency official said.

They leaders were also to discuss a five-billion-euro package, mainly for energy supply initiatives, though differences remained over that.

"The social action is a bit the poor relation in the European relaunch plans," said, Jean Pisani-Ferry, director of the Brussels-based Breugel think-tank.

French Unions and left-wing parties were hoping to draw more than a million people into the streets to demand a boost to wages and greater economic protection, with some 200 rallies planned across France.

Among the worst hit sectors in Europe is the car industry.

The demand for new cars is collapsing as consumers struggle to get credit and worry about their jobs, leaving the industry with massive overcapacity.

Germany's Daimler auto group last week announced 18,000 job cuts at its German truck plants for several months. A day earlier Swedish carmaker Saab said it would cut 750 of its 4,100 jobs in Sweden.

The European Automobile Manufacturer's Association has called on European governments to increase liquidity, cut vehicle taxes and stimulate demand for fleet renewals.


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