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E. Wörtz

Between the 12th and 16th of April the Euro-Mediterranean Partnership Conference on Economic Development, Industrial Relations and the role of Trade Unions took place in Stuttgart. It was a joint project of its initiator, the European Trade Union Confederation (ETUC), the International Confederation of Free Trade Unions (ICFTU), the German Trade Union Confederation (DGB) and the Friedrich-Ebert-Stiftung (FES). Funding was generously given by the European Union (EU). The conference brought together 24 trade-unionists from 10 EURO-MED partner-countries and 25 unionists from 8 EU-countries. Its goal was the formulation of joint strategies for trade unions in the face of increased political interaction and economic restructuring in the wake of the Euro-Mediterranean Partnership accords. In this context the underdeveloped social dimension of the Euro-Mediterranean Partnership was deplored and possible steps for an improvement were discussed. As a necessary precondition for such an improvement, increased participation of trade unions and other civil society groups in policy formulation was identified. According demands were supposed to be brought forward to the political representatives who were attending the EU-Mediterranean-summit of Foreign Ministers in Stuttgart at the same time. Highlights were the launching of the European-Mediterranean Trade Union Forum that is expected to increase cooperation between the member unions and the elaboration of a joint resolution that was finally handed over to the German Assistant Foreign Minister Mr. Ludger Volmer at a specially arranged meeting.

At the conference, there was a well-balanced mixture of speeches and panel-discussions and the participation of the audience was vivid. Mr. Emilio Gabalio, the general secretary of the ETUC, underlined the commitment of his organization to a tightened cooperation in the Euro-Mediterranean region and the high interest of the German trade

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union movement towards this issue was expressed by the participation of Mr. Ernst Breit, vice-president of the Friedrich-Ebert-Stiftung and former President of the German Trade Union Confederation (DGB), and Mr. Herbert Mai, President of the German union for public service, transport and communication (ÖTV). On the following pages, a summary of the proceedings of the conference is given. To allow a deeper understanding of the current problems of trade unions in the Southern Mediterranean Countries, overviews of the economic setting and the structure and history of the trade unions in the region are given first. Afterwards the opinions of the participants towards sensitive issues like privatization and austerity measures are outlined. Last, the prospects and problems of future trade union cooperation are dealt with.

The Economic Setting

As Eckart Wörtz of the University of Erlangen-Nuremberg pointed out in his lecture, nearly all countries of the Southern Mediterranean area implemented policies of an import substituting industrialization (ISI) in the fifties and sixties of this century, by which they are considerably influenced until today. In a way, it is not possible to understand the current economic and social problems without understanding the structures that were established at that time: A more diversified economic structure and a rudimentary welfare state developed, while the one-sided economic structure that had resulted from the integration in an European dominated world economy and which revolved around the export of raw materials and the import of manufactures changed gradually. During the seventies the development strategy of ISI showed increasing signs of crisis: The protected industries were not efficient compared to world market standards and were not able to generate the foreign exchange that was needed for the imports of their investment goods. A problem that finally resulted in rising deficits of the budget and the balance of payments. For a while, those symptoms were overcome by an increasing indebtedness,

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but finally cumulated into debt crises during the eighties. Since then, the economies of the Southern Mediterranean Countries have been characterized by worsening social conditions and politics of structural adjustment, not unlike other countries in the Third World, but also comparable in some aspects to neo-liberal processes of restructuring in the Northern industrial countries.

Andrea Amato, the President of the Mediterranean Institute, outlined the worsening social and economic conditions by examining three basic indicators: employment, poverty and social public expenses. There have been growing rates of unemployment, reaching up to 30% in some countries. Especially young people who entered the labor market for the first time and women were affected by this employment crisis and had to look for alternatives in the expanding informal sector that often offers lower wages and does not have social insurance schemes. The employment crisis is mainly linked to two processes: Firstly, economic growth did not keep pace with demographic growth. This trend is likely to continue, although there was a fall in fertility rates, there will be a rising workforce for years to come (between 15 and 25 years, depending on the country). Secondly, the policies of economic restructuring reduced the job opportunities in the formal sector, i. e. in state and private enterprises alike. This trend is likely to continue too in the near future, as restructuring policies like privatization and austerity measures intensified in the nineties and the pressure on local enterprises to rationalize production processes will rise in the wake of the Euromed-accords that demand an liberalization of exchange with the European Union. Furthermore, the countries of the Southern Mediterranean are characterized by a growing polarization of society and increasing phenomena of poverty, even in cases where they did show a per capita income growth. One reason for increased poverty were reductions in public social expenses (e.g. education, health, housing, social insurance) that especially affected vulnerable segments of the population like children and elderly people. Many of these indispensable services have become more expensive or diminished severely in quality while there was the emergence of a dual pri-

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vate infrastructure (hospitals, schools, etc.) which is unaffordable for lower-income groups. As the receipts of the public balance will face a decrease due to the progressive abatement of custom duties in view of the creation of the Free Trade Area with the EU in 2010, the trend of social expense reduction is likely to continue in the future. If one does not want to bow to the economic logic of exclusion of vast parts of the population with an ensuing rise of social unrest, new development strategies have to be invented, Mr. Amato demanded, that center on employment creation while not regarding it as a mere offshoot of growth. Although he acknowledged that the regulating capacities of national governments have narrowed due to globalization and external restraints, he also pointed to a lacking will of the EU-administration to implement alternative policies that differ from the World Bank-orthodoxy of economic liberalization. For the time being, he identified a strengthening and cooperation of trade unions and NGOs of the Mediterranean Partner Countries as a kind of "muddling through-solution" in order to bring forward demands for changes of the orthodox policies vis-à-vis the political and economic power centers.

The History and Structure of Trade Unions in the Southern Mediterranean

Some contributors like Eckart Wörtz or Rachid Khedim from Algeria pointed to the fact that the trade unions in the Southern Mediterranean are deeply rooted in the economic and political structures that developed in the wake of national independence and the implementation of ISI-policies in the fifties and sixties. Often they have close corporatist relations with the state and are engaged actively in the administration of the welfare state that was introduced at that time. They mostly have organization rates between 20 and 30% of the working population and are predominantly organized in big companies which are often state owned and flourished under ISI-policies. But these companies have a declining importance nowadays in the overall economy due to the emergence of new economic sectors in the field of

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services which constitutes a considerable problem for the unions. Furthermore there is a regional concentration in big industrial centers like Istanbul, Izmir, Damascus, Cairo or Alexandria. The industrial unions and their members can be quite active but there are also unions in the service sector which are more like administrative institutions. The members of the private sector often constitute only a minority, and the unions are virtually absent in the rapidly expanding informal sector and the free trade zones. One problem is also the low degree of unionization in multinational companies, a problem that was specifically addressed by Mr. Jameel Shamsat from Jordan.

The basic problem nowadays is that corporatist trade unions that have been part of a specific development model and its welfare system are meeting the crisis of this very development model. The former sectoral solidarity between workers, management and administration for a place at the sun within the corporatist mechanisms of defining supply, production and wages becomes fragile. It is gradually replaced by the more narrow interests of firms that have to exist on their own within a more and more liberalized environment, thereby defining their production targets, supply lines, wage schemes and so on. Workers can be part of this firm solidarity within the framework of alliances for the improvement of productivity, as they have an interest in the market success of their firm and the stability of their jobs. But if the demands of productivity are imposing too heavy burdens upon them in the form of lowered wages and dismissals, that can lead to a kind of class solidarity against the owners and the management.

Thus, the influence of the trade unions is declining due to the change in the economic structure but it is also cut back by the state which does not need the once mobilized workers to the same extent like it has needed them in the heyday of ISI. There can be legal restrictions of union activities and sometimes an increasing co-optation of upper union cadres by the state is observable that can lead to a considerable estrangement of the grass-root organisation and to the emergence of wild-cat strikes.

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The "sensitive" issues: Privatization, enhanced importance of tripartite bodies, Euro-mediterranean Partnership and Economic Liberalization

Against the background of the economic crisis and the situation of trade unions within it, possible strategies for joint union actions in case of sensitive issues were discussed. Beside considerable consensus on basic points and common experiences there were also areas of discontent that were addressed openly. In an introductory lecture, Eddy Laurijssen of the ICFTU outlined an assessment of restructuring developments and privatization measures in general, thereby not refusing them outrightly but pointing to some major problems trade unions are facing when it comes to such processes. A serious problem for the unions is that many of newly created jobs in the private sector are either in small establishments or in the field of services, where it is normally quite difficult for unions to organize workers. Additionally, those jobs are often not well paid and have limited social insurance schemes. At the same time, the public sector also ceased to be a safe haven for the workers as real wages have diminished and employment policies have become more and more restrictive even for qualified workers. Mr. Laurijssen condemned the often observable tendency to contain trade union activities and worker participation schemes in privatized enterprises and pointed to the importance to enforce the application of labor law standards. In this regard he specifically addressed European governments and investors in the Southern Mediterranean Countries not to engage in strategies of social dumping but to guarantee and to develop social standards like occupational health and safety and social funds for development in poorer countries. Privatization was not rejected in general by him, but he stressed the importance of a well-balanced process, characterized by evaluation, control, transparency and involvement of the workers, particularly when it comes to the question of labor law standards. He discarded irrational and often over-hurried processes of privatization that have been taking place and pleaded instead for a mixed economy, where the state maintains its responsibility for basic services and for

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projects where the profitability is rather in the long run like infrastructure, education, public transport and health. This view was shared by many of the contributors (Mr. Borg and Mr. Gutajar/ Malta, Mr. Azali/Egypt, Mr. Khedim/Algeria) who stressed the continuing importance of state activities in these sectors, while they did not oppose privatization generally in the case of state enterprises if the process is well-balanced. In this context, Mr. Amami Mongi of the Union Syndicale des Travailleurs du Maghreb Arabe (USTMA) laid particular stress on the importance of the enforcement of labor law standards, be it in public or in private enterprises. Others, like Yildirim Koc of the Türk-Ish, rejected privatization in general because of its negative impacts on workers' right and working conditions.

Another important issue was the development of tripartite bodies which are promoting social dialogue and are trying to resolve problems between employers, trade unions and the state. As trade unions in the region often have been closely linked to a corporatist administrative framework with paternalistic mechanisms of fixing wages and working conditions, the development of such institutions will be of considerable importance in an environment of more flexible and liberalized labor markets. Daniel Vaughan dealt in a lecture with the development of tripartite bodies in the countries of Central and Eastern Europe (CEE). On the one hand he identified a clear improvement to the unilateral decision taking of communist regimes by the institutionalization of tripartite bodies on the national level. An institutionalization that is quite exceptional compared to Western Europe, where formal tripartism is rarely found and social dialogue at the national level generally takes place in a more informal way.

On the other hand the existence of the tripartite bodies in the CEE-Countries is rather formal. Often they do little more than hiding the continuing domination of the state. To a certain extent they represent an attempt by the state to consolidate its position in the national industrial relations system. The formal democratization by the imple-

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mentation of tripartite bodies becomes even more questionable when they are assessed with regard to social and economic trends. The appalling fall of real wages (30-80%, varying from country to country), the cutting down of social expenditure, the decline in trade union membership and the emergence of privatizations and a "wild capitalism" on the firm level limited the impact of agreements reached at in the centralized tripartite bodies. This is especially true as there are no intermediary levels concerning industries and regions: The written agreements have thus often been mere ink on paper. Mr. Vaughan accordingly judged the current effectiveness of tripartite bodies in CEE-countries rather negatively, he even asked if they are part of a strategy by the state, because it needs the support of the social partners in order to implement restrictive economic policies. Nevertheless he pleaded for a renewal of such bodies by decentralization and enhancing independence of the state. Naturally, in such a case the trade unions would have to work towards a strengthened position towards the employers which is hard to gain under precarious economic conditions.

In the following discussions the role of tripartite bodies in different countries was debated. Andreas Matsas described the tripartite system in Southern Cyprus as a well functioning mechanism, which has found a cordial way to solve matters between the involved parties while guaranteeing basic rights for the trade unions, like the right of workers to found a union, the right of collective bargaining and the right to strike. Recently an Economic Advisory Committee and a Price Control Committee were established on the national level that deal with a great variety of social and economic issues. Reuben Goldberg from Israel explained that until the seventies the role of the state and the national trade union, the Histadrut, as employers was very important. Thus, no need for tripartite bodies was felt, while in the seventies new high-tech branches emerged that paid good salaries and had a low degree of unionization. Now in the nineties the work in tripartite bodies could gain fresh importance due to the impact of economic restructuring like a growing segmentation of the labor market

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with an increasing number of low-wage jobs, migration of foreign workers and an increasing role of the private sector and the free trade zones. Atef Saed from the Palestinian Territories basically welcomed the proposal that Israeli and Palestinian trade unions should work together to establish trade union activities in the free-zones, but also pointed to the structural weakness of the tripartite parties in Palestine due to the Israeli occupation, as workers, entrepreneurs and the administrative authorities alike face considerable restrictions in various ways. Yuecel Top of the Turkish DISK pointed to the problem that an increasing number of workers is working in the informal sector and is not reachable via tripartite policies. Thus, new kinds of union policies in this respect have to be invented. Mr. Nihad Elmas from Northern Cyprus said that the current debate there revolves mainly around the retirement schemes. He proposed not to put exaggerated hopes on the effectiveness of tripartite bodies as they can also work against the benefits of workers if the position of unions within them is weak.

Economic liberalization in the wake of the accords of the Euro-mediterranean Partnership that should finally lead to the establishment of a Free Trade Zone with the EU by the year 2010 raised considerable worries on the part of the participants from the Southern Mediterranean countries. Fouad Benseddik from Morocco spoke of an unequal partnership, while Europe negotiated the respective agreements as a single unity and had a favorable bargaining position, the southern countries were dealt with individually and their position was much weaker. The agreements reached contain considerable risks for the southern countries: They have to open up their markets for manufactured goods thereby threatening many of their national industries, whereas the European market remains closed for them in the case of sensitive agricultural products. In this context Mr. Azali from Egypt uttered the fear that the EU could treat the southern countries as mere markets while not caring for the development of their productive facilities. Yildirim Koc from Turkey added that the Euro-mediterranean Partnership is seen by many as a kind of neo-colonialism because of its questionable economic impact on the

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southern countries. Mr. Benseddik also criticized the missing social and cultural dimension of the Euro-mediterranean Partnership which is one reason for its low acceptance among the population in the southern countries. While the EU is preoccupied with economic and security issues, it does little for an improvement in the case of health, education, tripartite issues, NGOs and trade unions. In the end the impression loomed large that the EU is mostly interested in providing favorable conditions for its firms and in containing migration and the activities of political Islam. One also has to point to potential areas of discontent between trade unions in the North and South concerning the Euro-mediterranean Partnership and the liberalization of economic exchange. Workers in the North could benefit for example from an opening up of the southern markets in terms of job security, on the other hand increased foreign direct investment and social dumping in the southern countries could lead to a move of labor intensive industries to the south thereby raising the suspicions of workers in the North and their unions.

Towards a closer cooperation of unions

All in all a considerable consensus in the analysis of trade unions and the problems that they are facing during processes of economic restructuring was reached. Privatization and economic liberalization were mostly not discharged outrightly, but clear-cut limits to it were demanded and active participation of the people and the trade unions in control and surveillance of the restructuring processes must be guaranteed. For that reason trade unions have to increase their cooperation and form a strong united force that is able to counterbalance the negative impacts of neo-liberal adjustment policies and phenomena of "wild capitalism" on the firm-level. Angel Presa from Spain pointed out, as capital becomes more and more internationalized in the times of globalization, the workers and the trade unions have to increase their international cooperation as well. In this context special attention was drawn to the missing social and cultural dimension in

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the Euro-mediterranean Partnership and the necessity to act as a pressure group to bring forward such a dimension. Optimism concerning a greater participation of civil society groups and trade unions were to some extent dampened by Jacques Giraudon of the European Commission. On the one hand he principally acknowledged the importance of these groups in constantly reflecting and correcting the Euro-mediterranean Partnership and affirmed the necessity to support them in order to integrate them into the political process. On the other hand he pointed out that such a participation can have its weaknesses in excessive pluralism and decentralization and has to be regulated accordingly. Furthermore, he stressed the sovereign right of every government of the partner countries to decide on the extent of the social dialogue within its boundaries. Correspondingly, one task of the trade unions would probably be to work with solidarity towards a favorable regulation of its efforts at increased participation and not to eschew disputes, especially when it comes to the violation of union rights in some partner countries.

In order to increase trade union cooperation the idea was raised to implement a social and economic council on the European level that could give assistance to the social and economic councils in the Southern Mediterranean Partner Countries in order to strengthen their position. On the other hand the implementation of a local information network for the coordination of the trade unions in the Southern Mediterranean was proposed by Atef Saed from the Palestinian Territories. That idea was also expressed by Cinzia del Rio from Italy. She deplored the low level of south-south trade union cooperation and said that it was primarily the responsibility of the regional unions to work towards such an cooperation. She also expressed her hope for a clearer and unified standing of the unions concerning basic rights and their relations vis-à-vis their local states. Furthermore she demanded a tighter surveillance of economic and social projects and a deepened elaboration of union politics.

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The conference led to two main results: Firstly, a joint resolution that outlined the basic common concerns of the trade unions of the Partner Countries was discussed and elaborated. And secondly, the launching of the European-Mediterranean Trade Union Forum was decided. It will start working from the 1 of September 1999.

The resolution concentrated on the following basic points:

  1. enforcement of cooperation between trade-unions and between trade unions and other societal actors like NGOs in the Euro-mediterranean Partner Countries, in order to press for the realization of a missing social dimension in the partnership process.
  2. respect for the economic interests of the southern partner countries which are afraid of being dealt with as mere extension of the European market without being given a real chance to develop their productive potentials.
  3. respect for fundamental workers rights as laid down in the ILO declaration N° 98, namely the freedom of association, the right to collective bargaining and the right to strike. This is of particular interest in free trade zones, cross-border zones and multinational corporations in case there are attempts at violating such rights.
  4. special programs for the creation of employment for two groups that are especially affected by the labor market crisis: young people and women.
  5. refusal of over-hurried privatizations and demand for a continued engagement of the state in basic services and the build-up of infrastructure (e.g. water, energy, transport, environment).
  6. integration of the trade unions in the partnership process at all levels and increased importance of tripartite bodies.
  7. enforcement of basic human rights and democracy in order to facilitate genuine participation of the people.

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The launching of the "European-Mediterranean Trade Union Forum" is probably a very important step towards improving trade union cooperation in the region, towards planning joint or sub-regional projects and towards pushing forward the demands made in the joint resolution. It is organized by the ETUC and the ICFTU in cooperation with the ICATU (International Confederation of Arab Trade Unions) and the Union Syndicale des Travailleurs du Maghreb Arabe (USTMA). Due attention has been paid to an equal representation of southern and northern countries; the coordination committee that supports the informal and flexible framework of the forum will be constituted by eight members from each side and will meet at least once a year. It remains to be hoped for that the work in this new institutional body will consolidate and will bear fruit to further tightening of union cooperation.

All in all the conference can be deemed a success. It was the first of its kind where trade unionist of the northern and southern partner countries had the opportunity to exchange their views and bring forward joint strategies for future cooperation - a cooperation that is badly needed at a time where the interests of workers and vulnerable groups of society are severely threatened by ongoing processes of economic restructuring and an often missing political will to intervene on behalf of them.

© Friedrich Ebert Stiftung | technical support | net edition fes-library | März 2000

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