Dpa Insight EU news service interviews ILO Director General elect Guy Ryder

The news service 'Dpa Insight EU' interviewed Guy Ryder on the occasion of the European Commission 'Jobs for Europe' conference in Brussels on 6-7 September 2012.

Statement | Brussels | 11 September 2012

"ILO chief Ryder warns of 'polarisation' risk in the EU"

By Fernando Heller, dpa

The main problem in the EU is unemployment, according to the director general of the UN's International Labour Organisation (ILO), Guy Ryder. Politicians, he says, need to put the creation of jobs at the center of the debate. The main problem in the EU is unemployment, according to the director general of the UN's International Labour Organisation (ILO), Guy Ryder. Politicians, he says, need to put the creation of jobs at the center of the debate.

Brussels (dpa Insight EU) - Without decisive action, the EU runs the risk of social division and polarisation between the "good" pupils, like Germany, and countries like Greece which is under the strict supervision of the international troika, warns the International Labour Organization (ILO) Director General, Guy Ryder. Ryder, a 56-year-old Briton who is a former general secretary of the International Trade Union Confederation (ITUC), spoke in an interview with dpa Insight EU in Brussels.

dpa: Is the debate between austerity and stimulus in the EU the right one?

Ryder: "This is a matter of the outmost importance to everybody in Europe and certainly to the ILO, but it doesn't necessarily make sense to position the debate as if there were a straightforward choice between austerity and growth and stimulus. What we have to do is to work in a different way than what has been done so far: towards a necessary reduction of deficits and a restoration of public finances, but in a context which also helps to promote both growth and jobs. There are alternatives. There needs to be a change of direction to give greater emphasis today towards a generation of growth and jobs. There is a need to have a change of course but
nobody can ignore or deny the need to get public finances in order. As Mr (President of the European Council Herman) Van Rompuy has said himself, these are two sides of the same coin. But we have to make the move together rather than in opposite directions".

dpa: What strategy is needed to solve the problem of youth unemployment, in particular in countries like Spain or Greece?

Ryder: "The youth unemployment situation that applies to Europe is dramatically bad, but it is worth remembering that this is a worldwide problem. Wherever you look, the problem of getting young people into work is a drama. I'm always reminded of the case of China. You think that unemployment is maybe not a problem in China
with its very strong growth, but the Chinese government places a top priority in getting the 27 million young people coming into the job market every year ... There are nearly 8 million young people in the EU who are not in jobs and are not in education and training either. There runs a risk of a very serious marginalisation problem.
Classically the level of youth unemployment runs (in the EU) at double the overall rate, so if we are talking about 11 to 12 per cent unemployment generally in the EU, the situation for youth is twice as serious with figures around 21 to 22 per cent. In countries like Spain and Greece you are over the 50 per cent mark. This situation is
not sustainable, it can not and must not be allowed to continue for any length of time.

dpa: Then, how can the EU curb that trend?

Ryder: "The first thing is to put youth employment at the very top of the policy agenda and I think more and more European policy makers, EU leaders are doing just that, and then secondly you have to design effective policies to make a difference. My view and the view which the ILO expressed in the past, and a view which is gaining currency and influence in the EU as well, is that you need something called a "youth guarantee". You need a guarantee that young people who find themselves out of a job for a certain period of time - and the shorter the better - are given a guarantee that they can either get job experience, or be put into further training and further education. That is the first step. Does that sound unrealistic? Well, experience shows it is not unrealistic. There are many examples, some countries, including in Europe, have activated this type of policy and have made it work, for example Sweden, Finland and Austria. The second point to be made is not only that this policy is realistic, it is affordable as well. The overall estimates that the ILO has done show that you can put into action this type of universal guarantee for youth ... this can be done if the political will is there even in difficult financial circumstances we can do this, and I believe we should be doing it".

dpa: In its last report (August 31, 2012) the ILO warned of a "catastrophic" rise in unemployment in the EU if Greece were to leave the eurozone (Greek-exit, or "Grexit").

Ryder: "We would like to see Greece remain part of the euro community but it seems quite clear from the projections that the ILO has done that should Greece exit the eurozone there would be significant and negative employment consequences across the eurozone. For example, unemployment in Spain would rise to 27,7 per cent (from the current 25 per cent) But this is not about one or two countries, this is not only about Spain or Greece. Our estimates would be that across the eurozone, in its entirety, were Greece to fall out to the eurozone, you could see unemployment in the eurozone go up to the 13 per cent mark overall. The case of Spain is serious but Germany, which is doing pretty well in its employment performance right now, would also suffer very badly from a departure of Greece. Our projections show unemployment in Germany going over 11,3 per cent by 2014 were Greece to exit. And in the even worse scenario, a complete euro break-up, that could take unemployment figures well into double digits in the EU and unemployment in the eurozone in general over the 17 per cent mark. Nobody should underestimate the employment and social consequences of "Grexit" or euro break-up not only for the country directly involved but right across the eurozone and the EU".

dpa: Can Germany be "the" example for the rest of Europe?

Ryder: "Many countries in Europe now would like to have the unemployment levels and the growth levels that Germany is recording. To that extent Germany stands as an example. The German experience is being particularly positive in two things, and they are interconnected. Firstly is the fact that over the long term, in difficult moments, in better moments, social dialogue has proved very robust and very effective. There is a high degree of trust, a high degree of cooperation between  government, policy makers, trade unions and employees and that means that were there are tough decisions to be taken, it is possible to build consensus. People are ready to make concessions, to make efforts in full confidence that in the future there would be a payback on that. I think that has been the German experience.

Secondly, and absolutely linked to that, is the fact that Germany has very strong labour market institutions. You have processes, you have organisations which really give focus and importance to labor issues. They are not really in place in every other country. If I make the comparison, and it is the most extreme comparison, there is no social dialogue in Greece. The process of social dialogue broke under the stress of the crisis. I think it is urgent to try to rebuild some type of basis for social dialogue in Greece because labour market institutions become marginalised in the process of adjustments through the "troika". I do not say that the German example is applicable easily or immediately in other countries, but there is a lot to learn from it".

dpa: Is there a risk of division in a two speed Europe, a social break-up in the EU?

Ryder: "Yes, there is a real risk of division and polarisation in Europe. It is a risk that we need to work together to prevent it from becoming a reality. We know that there are real problems within the eurozone, within the EU, we understand this well. There are competitive differentials and this needs to be adressed. We need to address the problems of the much-needed reform in the south of Europe in particular ... in a way that this does not become a risk, or even present a probability, of a further drifting apart of different parts of Europe in the future. I could subscribe to European Commission President Barroso's vision, about the need for balance to reform. Reform is necessary, and (we need) to accompany it with efforts to really boost growth and jobs. That is the path toward bringing Europe back together, both in terms of reducing inequality and averting polarisation. It takes the right policies, but it also takes political will and political vision. There is no higher priority than jobs for the EU. The question then becomes how we work together to give that priority a real implementation?"

Source: dpa
Copyright: dpa