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After a fruitful meeting with the Americans for Financial Reform, I briefly met Richard Trumka, the newly elected President of AFL CIO – the largest federation of trade unions in North America – and delivered a speech at a meeting with the ITUC. Here is the message I conveyed to our American friends:

The outcome of the upcoming G20 summit will be judged on what it can do to create jobs. Whether we take our cues from the OECD’s warnings, from top mainstream economists, or simply from observation, the unfolding menace to our economies is one: the financial crisis has been transformed into a jobs crisis.

This makes talk of an ill-thought "exit strategy" all the more dangerous. We must be honest: we are not confronted with a U-turn into growth simply because some journalists choose to talk about "green shoots". Unemployment remains alarmingly high. If we are to avert the prospect of seeing the number of unemployed climb even higher, we must remain firm. This is no time for pulling back from stimulus and investment.

If our economies were to plunge into a protracted slowdown, there is no telling when we would emerge and at what cost for our societies. One thing is for certain: we do not need an "exit strategy" from the stimulus packages – we need an "entry strategy" for the labour market. The primary goal for the G20 should be a commitment to creating sustainable jobs.

Afterall, it is also a matter of fairness, and justice. We will not allow workers to pay for this crisis twice: first by bailing out banks, and then by suffering cuts in public services and social protection.

The second commitment therefore, should be to ensure a decent life for workers as we come out of the crisis.

Finally, we must insist on proceeding all together. In an interconnected globe, a decision by some countries to go another way would spell trouble for everyone.

Of course, the G20 summit will also be about reforming our financial systems. The purpose of these reforms should be to avoid another such financial crisis in the future.

Industry lobbyists and the media are announcing that finance is ‘back in business’.

But finance shouldn’t go back to business as usual. In the absence of reform, even more crippling crises may develop in the years to come.

It is time to say openly that as things stand, finance just doesn’t work. Not without consumer protection, to protect families and their homes. Not without regulation of bonuses and renumeration, to protect our economies from short-termism and excessive risk-taking. Not without strong direct supervision of banks, hedge funds and private equity to prevent speculation and the reckless behaviour that brought us to where we are today.

It is time for brave measures that can ensure that financial services serve the real economy, such as a financial transaction tax. We are well-prepared for it, with a comprehensive study: a 0.05% share of financial transactions would allow for fair burden sharing and would by itself finance thousands of new jobs.

Posted by Poul Nyrup Rasmussen

President Barack Obama is still strong and very convincing when he talks. He is sending a clear message as when I saw him during his inauguration in Washington.

Yesterday, during Bill Clinton’s global initiative conference, his message was again very clear and firm. Nobody can do it alone. We must cooperate. And permit ourselves to create more jobs, to make it sustainable, to unite climate policy and smart green growth. That is why Europe must support the US president during the G20 here in Pittsburgh. When Obama talks about the necessity for sustainable growth and new jobs, we should make a clear new common commitment. We must support him from the European side. On behalf of the PES, I fully agree with him.

That is why the European governments should abstain from pulling back their financial packages and stimulus. We do not need an exit strategy to be implemented now. The risk for further increase in unemployment would be alarming. What we need is an entry strategy for the labour market, for the millions of unemployed people.

His second message was on financial reforms. We must also here be united, to create a new fundamental set of rules to limit greediness, irresponsibility, shadow banking asset stripping of our companies, tax avoidance. This has to be done in strong cooperation on both sides of the Atlantic. When I look at the lobbyists in Europe, especially hedge funds and private equity managers, I am only confirmed in the necessity of a strong progressive cooperation between the PES and Europe and our American labour unions and democrats.

Reading the papers over here, listening to the debates, I wish so much that we could help the president and all progressives in the US in their struggle for the health care reform. In a sense, this has to be done in our common interest but also as a new step forward on the road to change: Climate, energy, jobs and financial reforms. We must go on telling the American middle class that this health care reform will not increase but lower their health costs and that they will have a better society.

 

Posted by Poul Nyrup Rasmussen

José Manuel Barroso sent European Parliament political groups his five year programme last week in his bid to be re-elected Commission President for a second term. This is in the run-up to tomorrow’s hearings in the Parliament where he will try to convince MEPs that he’s the right person to lead Europe in these times of crisis.

But on the evidence of his programme, Barroso has stumbled on the first hurdle. A close analysis shows that 95% of its statements and proposals are taken from old Commission initiatives. It is business as usual, with no European vision on how to tackle the massive challenges we’re facing.

We’re facing a historic economic crisis: eight million people have already lost their jobs and 30 million Europeans could be unemployed by 2011. But Barroso thinks we can continue as before, with an outdated recovery plan and no new European initiatives. There’s no commitment to an ambitious, new strategy to fight mass unemployment for our citizens. There’s no vision of how to avert a catastrophic decline in Europe’s prospects and living standards for years to come.

Where is his vision for a new economic paradigm to replace the mistaken policies of the past?

What we do in the next five years will be the difference between success and failure for the entire European project and – I fear – the future welfare of our societies. Europe’s citizens deserve better than business as usual.

We need real commitments and leadership now, not the same old warm words. Barroso has his work cut out tomorrow.

Read PES President assessment of José Manuel Barroso’s programme pdf

Posted by Poul Nyrup Rasmussen