UNI Europa has sent a letter to the European Commission, the European Supervisory Authorities and the European Central Bank outlining steps to revive a healthy European economy in the aftermath of the Covid-19 crisis.
“This is a decisive moment for the European economy. The Covid-19 crisis has the potential to cause a lasting economic recession. However, it can also provide the opportunity to ensure that the world of finance actually plays its fundamental role in revitalising the real economy. Let’s get it right this time; we simply cannot afford to lose another decade to the failures of corporate greed,” explained Oliver Roethig, Regional Secretary of UNI Europa.
The letter highlights the need to seize the opportunity at hand to reorient the finance sector through legislating true sustainability. Throughout the service sector, European workers are experiencing the consequences of aggressive venture capital funds in which aim to deteriorate working conditions as a key part of their business models. Within the finance sector itself, some employers are using the crisis as an opportunity to lay off their own workers.
“We’re seeing that some financial institutions are using the Covid-19 crisis as an excuse to restructure. In the aftermath of the 2008 crisis, we saw a direct correlation between lay-offs and the exclusion of millions of customers from financial services. The finance sector itself cannot be allowed to only serve the rich. We must ensure that in the situation we are facing, crucial financial services are available to as many as possible,” said Oliver Roethig.
While share buy-backs have been temporarily frozen by the European Central Bank, the letter highlights the need for a longer-term approach. Share buy-backs describes the practice of corporations buying their own shares, artificially inflating their market value. There is a clear incentive for this type of behaviour as executive bonusses are associated to share prices. Meanwhile, the crisis revealed that many of these same corporations have very fragile reserves as they called for bailouts very early on in the crisis.
“Share buy-backs are excessive market manipulations used to artificially inflate the market value of shares at the best of times. That in this time of crisis, bailout money could be used to line the pockets of share-holders and beef up top management bonusses, is deeply wrong and ought to be made illegal,” said Oliver Roethig.
The letter also calls for action to prevent financial speculation linked to the current crisis, to include national social partners in national reconstruction plans and to ensure a level playing field for financial institutions across the EU.
Read the letter here: