The European Trade Union Confederation (ETUC) is concerned about cuts in public spending that will accompany the use of the new mechanism to support eurozone countries. The ETUC recognises the “progress” achieved by EU finance ministers, who worked out a process for supporting countries having difficulty raising funds, but considers its terms “too tough”. “The price to be paid for safeguarding the single currency and the banking sector from speculators will be very high,” it warns in a statement, published on 11 May.

The EU states agreed a rescue plan of up to 750 billion euro for the eurozone countries in order to stem a financial crisis. “There is a clear risk that countries which need the support will have to implement drastic cuts in public expenditure, which are likely to push the economy into prolonged recession with serious resulting rises in unemployment,” fear the unions. “Again, workers are likely to bear the costs of the crisis,” adds the trade union organisation.

“Declaring war on the speculators is welcome. But Europe now risks being regarded like the International Monetary Fund was in Latin America for many years – an agent which promotes financial stability but ignores growth, jobs and welfare,” commented ETUC General Secretary John Monks.