STRASBOURG (ILO News) – The Director-General of the International Labour Organization, Mr. Juan Somavia, said the time has come to “place the real economy in the driver’s seat of the global economy, with a financial system at its service”.
“This means putting productive investment in the real economy at the heart of policymaking; an enabling environment for sustainable enterprises; and less availability of unproductive and risky financial products”, Mr. Somavia told members of the European Parliament during an address in Strasbourg.
“Within the European Union, you are facing major employment and social challenges, of working poverty, precarious work, low pay, social exclusion, long term unemployment. When employment is in tatters, our families and communities suffer”, he said.
The ILO Director-General said it was time to recover the trust of people, especially the younger generations, and to address the rising inequalities, not only in terms of income and wealth, but also in terms of education, health, housing and access to credit. Dealing with short-term challenges requires fiscal consolidation that is socially responsible.
He particularly underlined that crises should not be taken as an excuse to weaken basic labour rights and the application of ratified ILO conventions. Mr. Somavia cited the example of Greece, where unions have submitted information to the ILO on alleged violations of its conventions, adding that the ILO’s tripartite members had asked him to send a high-level mission to Greece.
Mr. Somavia said a new mindset was needed to create the type of policies that will lead towards more efficient patterns of growth and more decent work. These include switching to income-led patterns of growth, making full employment a key macroeconomic priority, focusing on small enterprises, promoting social dialogue, the autonomy of collective bargaining and a better link between wages and productivity, respecting labour standards, and creating a social protection floor for all.
He said all these policies must be underpinned by a coherent rules-based international system: “Today in the United Nations system, there are three key policy-making organizations – WTO on trade, IMF on finance and the ILO on labour markets. The rules and standards developed by each one need to be applied in a coherent manner. This is not the case today.”
Mr. Somavia said the upcoming G20 leaders meeting in Cannes presented a unique opportunity for leaders to reconnect with the real economy and their decisions adopted two years ago in Pittsburgh, when they set the objective of “putting quality work at the heart of the recovery”.
Mr. Somavia said the ILO and EU were cooperating on child labour, labour migration, trade and employment, but said in other areas increased cooperation would be beneficial. In this respect, Mr. Somavia referred to the recommendation of the European Policy Crisis Committee on closer cooperation between the ILO, the EU and the IMF in financial assistance programmes.
“Cooperation between the EU and the ILO can also be beneficial to your member countries struggling to overcome deep economic and financial crises leading to severe austerity measures and conditionalities”, he said.