Global trade unions call for stronger regulations of financial sector

By Victor Ahiuma-Young
INTERNATIONAL Trade Union Confederation, ITUC, umbrella body for Trade unions across the globe, has called for stricter regulation of the financial sector, saying   momentum for substantial financial regulatory reform seemed to have weakened.

ITUC which has Nigeria Labour Congress, NLC and Trade Union Congress of Nigeria, TUC, warned that  the planned by some countries to exit rapidly from fiscal stimulus policies “has significant implications for employment growth.

The global trade unions body at its meeting in Vancouver, Canada, Thursday, debated  the state of the world economy and the global employment crisis and posited that regulation of the financial sector had serious weakened.

A statement by the ITUC secretariat, said leaders of some important internal organizations that participated in the debate also expressed similar concerns as canvassed by delegates.

Speaking, Helen Clark, Administrator of the United Nations Development Programme and former New Zealand Prime Minister, echoed the concern expressed by many Congress delegates that the momentum for substantial financial regulatory reform seemed to have weakened and that the plans of some countries to exit rapidly from fiscal stimulus policies “has significant implications for employment growth”.

According to Clark, “It cannot be assumed that job creation will flow automatically from a resumption of growth. Often employment figures are the last indicators to move when growth recovers”, and  put forward the International Labour Organisation, ILO’s Global Jobs Pact as the path countries should follow to restore employment levels and support decent work.

On their part, Dominique Strauss-Kahn, Managing Director of the International Monetary Fund and Pascal Lamy, Director General of the World Trade Organization,  along with ILO Deputy Director General Kari Tapiola, also spoke in similar vein..

Strauss-Kahn spoke of the positive impact of economic stimulus policies to prevent an even deeper recession, and argued that countries not beset by deep financial problems should maintain planned fiscal stimulus this year, given that the recovery has been very uneven.

He however noted that some countries unable to finance additional debt were obliged to begin reducing their fiscal deficits now.

Even if trade unions and the IMF did not agree on the economic strategy governments should adopt, Strauss-Kahn stated that the IMF appreciated unions’ proposals made on behalf of working people and that the Fund had made efforts to ensure social safety nets were maintained to protect the most vulnerable and agreed with the need for more progressive taxation.

On global trade union movement’s support for a financial transactions tax (FTT), Strauss-Kahn, said  the IMF had expressed its preference for a different kind of financial activities tax based on profit and compensation and  agreed with the ITUC that a substantial contribution from the financial sector is justified to pay for the cost of the crisis and to dampen overly risky behaviour in the financial sector.

He stated that the specific choice between the FTT and another type of tax is “a technical discussion” that needed to take place.

According to the statement, Mr. Pascal Lamy agreed with trade unions’ advocacy of stronger regulation on the financial sector, which had caused the global crisis, and observed that the global trade union movement had played a valuable role in pushing for greater coherence among international institutions.

He invited trade unions to play an even stronger role in favour of regulation and coherence in the future, both on the national and international level.

On his part, the statement added that Mr. Tapiola said  in recent months, employment had received less attention than fiscal considerations in some countries: “From our point of view, there is no recovery until there is a recovery of employment.”