Transfer stimulates dialogue between the European trade union movement and the academic and research community. It contributes research findings on issues of strategic relevance for trade unions, in particular with regard to developments at the European level. Transfer publishes original peer-reviewed research on issues such as new developments in industrial relations, social policy, and labour market developments.
Volume 17 Issue 3, August 2011
The financial crisis, together with the ensuing recession and debt crisis, originated in the inadequate management practices of banks and other financial institutions. Managers within the deregulated financial sector failed to monitor the products being sold and the sales techniques being used by their employees. On both sides of the Atlantic the initial response of states was to introduce enormous rescue and recovery packages aimed at guaranteeing the survival of major financial institutions and stimulating macroeconomic demand to counter the recession. In Europe these policies were underpinned by a concerted European response going beyond EU Treaty obligations. The nature of the initial policy response led some to suggest that they were witnessing a return to a Keynesian policy agenda, reliant on state intervention. However, this view soon dissipated when it became apparent that the cost of the state-funded rescue packages for the financial sector was to be met by public sector austerity. The impact of the crises in Greece and Ireland amplified a wide-ranging political demand for retrenchment, reinforced at the European level. While it remains to be seen whether the mechanisms agreed by the European Union for combating fiscal crises are sufficiently robust to protect the euro’s long-term future, the thrust of the recently agreed (March 2011) Euro-plus pact as well as the European Commission’s proposals to enhance and reinforce economic governance to be adopted by the European Council in June 2011 suggest that European-level economic governance will be restrictive and leave little room for further developing a more coherent European social dimension. This is illustrated by the pressure put for instance on Irish politicians to cut minimum wages as a condition of the Irish rescue package.