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Politicians and unions tackling in the face of an unprecedented crisis - Economic Policy

Politicians and unions tackling in the face of an unprecedented crisis – Economic Policy

Responding to the emergency of winter, channeling anger at inflation, but also and above all preserving the cohesion of society: this is the delicate mission of those who are on the front line to respond to the current disarray.

Does the political world respond sufficiently to the growing social discontent, disparate and fragmented? Do the unions channel anger, do they represent a high enough barrier against the risk of slippage or the threat of social setbacks? The answers are nuanced, but the observation of all the interlocutors contacted by us is the same: never has the situation been so complex due to the severity of the shocks, but also the disparity of the realities experienced, both by citizens only by companies. Politicians and unions are tackling as best they can, to keep society afloat and preserve a cracked cohesion like never before. “In Belgium, there is a social protection framework superior to other European countries, in particular thanks to the automatic indexation of wages which attenuates the impact of inflation on purchasing power, begins Pascal Delwit, political scientist at the ULB. Nevertheless, there is an undeniable shock! The weight of energy is not entirely reflected. And between inflation above the European standard and a low interest rate on savings , there is still a significant loss of purchasing power.” Especially since wage indexation does not occur for everyone at the same time: a large number of workers will not be indexed for the first time until January 2023. Are political aid measures up to it? These are, above all, patches to help get the hang of it. “We are in a Belgian practice: we do not add too much structural to the economic situation, underlines the political scientist. The answers are aid or reductions in monthly or quarterly charges. For two reasons. First, there is no idea very clear where we are going. This caution is all the greater since this must be done in coordination with the work of the European Commission, itself slowed down because of the divisions. Secondly, it is a government to seven parties, all the discussions are difficult and lead to the lowest common denominator. And we have to work in a context where the debt in relation to GDP is quite high. We can’t do everything, even if inflation will eat a part of the debt.” “The government is struggling with the disparity of situations and the feelings of citizens, continues Min Reuchamps, political scientist at UCLouvain. Aid to cope with rising energy costs has been deemed insufficient by many, but a study by the National Bank has shown that some of these end up in savings accounts.This prompts some to argue that we must dare to raise the issue of tax, so that some contribute more to help others .” The political scientist adds: “Citizens have contradictory demands. They express a need for protection from the State… but with less and less desire to contribute to it. more radical approach, a change of system. The short-term political response to successive crises is already not simple, but it is even more complex in the long term.” Beyond checks, reduced VAT or temporarily suspended social security contributions, isn’t there precisely a way for this long term? Doesn’t it go through the tax reform announced since the beginning of the legislature? Yes, but… “Officially, there is a dynamic of reflection on the tax reform of the Minister of Finance, Vincent Van Peteghem, explains Pascal Delwit. But nobody believes in a tax reform at the end of a legislature, it seems to me. I am all the more dubious as there are major disagreements between partners. The current reflection seems to come more from the will of his party, the CD&V, to show that he has woken up and let it work.” In fact, there is also long-term work to be done in terms of energy, both to guarantee the mix of the future and to relieve citizens’ wallets. The Prime Minister, Alexander De Croo (Open Vld), announced that we would pass “five to ten difficult winters”. “In terms of energy consumption, it is essential to change the paradigm, insists the ULB political scientist. However, governments – this does not only concern the federal government – are lagging behind. Measures are nevertheless necessary, in order to to achieve more rational consumption. For example, the reduction of speed on highways, but also the insulation of buildings or the development of renewables. Another necessity is a more structural vision of the relationship between the federal government and energy suppliers. I’m not saying that the sector should be nationalized, but we need a stronger affirmation from the Belgian authorities, with a clearer vision.” “Society must change its hard drive and politicians must support this change, agrees Min Reuchamps. But for that, they too must change their hard drive. greater desire to act within them than within other pressure groups. On the social level, it is difficult to provide a collective response to increasingly disparate individual situations. One could think of something like a universal, but that goes against this society which is becoming more and more individualized.” Beyond automatic indexation, the wage dynamic is also the next firebrand awaiting the federal government, due to an expected failure of social consultation. The risk of absolute wage moderation indeed poisons the climate… even if it is partly justified. “It is unacceptable to have wages blocked, excluding indexation, for a long period, claims Thierry Bodson, president of the FGTB. If we do not modify the law of 1996 (which regulates wage moderation by ensuring neighboring countries, Editor’s note), it could even be more: we risk blockages until 2028. This would be all the more likely to arouse anger since, moreover, we know that some in the majority or at the FEB would like to touch the mechanism of wage indexation.” “The current government majority has settled in by clearly stating that it would not modify the 1996 law, analyzes Jean Faniel, director general of the Center for socio-political research and information (Crisp). a balance, linked to the fact that we would not touch the automatic indexation of salaries either. However, things changed when the government took this decision, this autumn, aimed at minimizing the cost of this indexation for companies via a temporary abolition of employer contributions. This will have an undeniable impact on competitiveness, and therefore on the wage standard. The unions have reason to be unhappy.” “When we take measures to reduce expenses for two quarters, it is not nothing, agrees Marie-Hélène Ska, secretary general of the CSC. This represents around one billion euros and we grant this as much to Total and to the bancassurances, whose earnings are reaching record levels, than to the butcher or the baker who can no longer take it. This is emblematic: the 1996 law is maintained, but it is considered that this reduction in social security contributions will have no impact on the wage standard. However, this improves competitiveness, all the same! We are above ground…” However, beyond the mobilization of this November 9, the unions see more than a frontal opposition on a symbolic folder. “This is the first time that we have led a mobilization that is not against companies or against an unacceptable government decision, underlines Marie-Hélène Ska. We are expressing our concern in the face of a difficult and extremely unequal situation. Our role is to don’t shout out loud. We are the first to say that the answers to the current crisis are not simple. And we know that it is wrong to say that nothing has been done.” The CSC general secretary acknowledges that the unions are channeling the current anger. But their mission goes deeper: “Beyond that, our big challenge is to ensure that everyone stays on board, which is far from obvious. Because what is new in the current crisis is the fact that it affects people very differently, so it’s not just a question of average income, I can work in the same company, earn the same, but have a different family situation, dependents, be owner or not, having benefited from support to insulate the house or install photovoltaic panels… What creates a lot of anxiety in the population is that no one really feels protected anymore.” A finding that goes back to one of her long-standing concerns: “Thousands of people are now in complete dropout, often young people, recalls Marie-Hélène Ska. The great risk of periods like these is that these people just slip off the radar. They are sometimes looked at with indifference, sometimes with disgust. We will never accept this state of affairs.” So, yes, we need more tax justice! “A profound change is needed, it’s obvious, continues the trade unionist. With the covid epidemic and the current crisis, everyone has become aware that the role of the State is more important than ever. The mythology of the ‘Fiscal stop’ is a dead end because it reduces the state’s ability to act. Yes, we need more state, better state.” The universal allowance, however, arouses little enthusiasm for him: “We are more cautious on this subject: how to finance these 500 or 600 euros of base? And then certain social advantages could be threatened. At the CSC, we are more in a logic redistribution”. For the unions, as we can see, the struggle continues. Because the current issue is democratic, they claim. “The interest of interprofessional organizations like ours is to have demands for the entire world of work, to avoid corporatism and to establish real solidarity, insists Thierry Bodson. We avoid “Invoking simple solutions. Tax cuts are fine, but we are here to remind you that there is another major issue behind this: the financing of social security.” “The big risk is that there is no longer a collective, but a set of individualities, concludes Marie-Hélène Ska. The consequence would be that everyone creates a fantasy world, as we already see in a large number of European countries. This is a major danger for our democracies. And it must be recognized that the current government, despite its difficulties, is not in denial. I dare not imagine what that would have been with the 2014 government.”

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