According to The Federation of Enterprises in Belgium (VBO); Flemish Network of Enterprises (VOKA) and Union of Independents (Unizo), there is no alternative but to lower the wage costs and to work longer weeks or do more overtime. ‘We don’t have a choice’, so they claim. Are they right?
If the government should choose to follow one of those ‘options’, it would be further evidence of how the state is being blackmailed by capital and by a small elite of shareholders and top managers.
The crisis is still out there
Coincidence or not, as more and more people sink into poverty, lose their jobs, depend on credit, … profits increase for this small elite. The crisis generates a lot of uncertainty for the Average Joe but not for the rich and certainly not for the super-rich.
It has been four years since the start of the crisis and there is no sign of recovery yet. On the contrary: the figures don’t even show a glimpse of light at the end of the tunnel.
Most of us expected governments to act firmly against banks and speculators, as it was the taxpayers who elect them who have had to pay for their escapades. But the reaction of governments and international organisations has left us all in the cold, while for the elite who have the power and capital, it was business as usual.
The politicians don’t even manage to explain why we are (still) in a crisis, let alone offer a solution. Over and over again they tell us that this crisis and its consequences are far too complex a matter for us mere citizens. Moreover they claim they are doing well, the drastic austerity measures hidden behind a smokescreen discourse of growth before the cameras.
But the reality today in our country and in Europe can no longer be hidden. According to the latest report of the European Commission, 20.8% of Belgians live in poverty. In the case of single parents, the figure rises to 35%. The latest figures on child poverty are equally alarming.
The Eurozone as a whole is not doing any better. According to the most recent Eurostat figures more than 18 million people are unemployed. This is the highest figure since 1995. In southern European countries, unemployment figures are positively catastrophic. Not surprisingly, poverty is increasing throughout Europe. Almost 25% of the European population is in danger of poverty. This is the reality. What are the solutions?
Germany as the model
Unizo, Voka, VBO (let’s call them the Troika) and with them political parties such as the N-VA (biggest political party in Flanders, neoliberal and conservative) constantly point to Germany as the role model to be emulated. A while ago, however, the German government relased a report on poverty in the country, which suggests that poverty has increased. The authors also admit that the situation of the millions of working poor is no longer tenable. In Germany 1 out of 7 children are in danger of a life in poverty.
The troika wants us, as in Germany, to opt for either lower wage costs or longer working days (and preferably both). But why should we opt for those measures when we see that they didn’t do much good for the Germans?
The only people to gain from this situation are a tiny elite whose interests are defended by the troika, the N-VA and Open VLD (political party in Flanders, also neoliberal). About Germany: in the same report, we read that ‘the Germans’ have increasingly more money, but in fact it is mostly the wealthiest Germans who are getting even richer. The richest 10 percent own more than half of the total financial means, the poorest half owns only about 1 percent.
In Belgium too, their intention is to enrich this same small elite while impoverishing the working class. This is what those options the Troika are asking for, will deliver. Isn’t that clear enough?
Maximisation of shareholder value
Once, and it seems a long time ago, industrialists and shareholders thought it only normal to invest in their companies. Since the 1980s and the rise of neoliberalism, this is no longer the case. Nowadays, another model is dominating the world of business and trade: the maximisation of shareholder value.
This concept can easily be explained in understandable language. Shareholders are no longer interested in investing in their business. They want to make a profit and preferably as much and as quickly as possible. And here the managers enter the game, or as they are known today: the ‘top managers’. They are the heroes of the shareholders. They get a free hand to do their thing, as long as their thing generates profit for the shareholders (and for themselves, of course). How those ‘top managers’ realize their profits is of little importance to the shareholders. They are not interested in the short or long term consequences for the company and/or what is going to happen in the future. That is what is so worrying for the employees.
These highly placed managers take ever more risks to make ever more profits. By the way: it was this risk taking and speculation that played an important role in the emergence of the crisis which we now have to live with.
In addition to taking risks on the financial markets, there are also other ways for these ‘ top managers’ to realize profits. The most popular method is the undermining of workers and their jobs: (mass) redundancies, reducing wage costs, longer hours, less investment in employment, etc. If they don’t get their way, they threaten to transfer production to low wage countries such as India and China. Pure blackmail to increase profits for shareholders and ‘top managers’. Their blackmail works as we can see that most of the time they get what they want. It is no coincidence that this elite becomes richer despite the crisis. It is the workforce who are the victims of this systematic blackmail.
The more money you make, less taxes you pay
“Yes, but”, the gentlemen of the troika and parties such as N-VA and Open VLD protest, “these companies employ people and they make profits and pay taxes on those profits”. Thanks to the work of the think tank of the PVDA+/PTB+ (political party in Belgium, left), we know what taxes these companies pay for real. The rule seems simple: the bigger the company, the fewer taxes they pay. Very often they pay nothing at all. Such companies as ArcelorMittal, for example, whose financial affiliate AMFSB cashed 1.597 billion Euros in 2011 and paid zero Eurocents tax.
Here again we should take Germany as an example. Rich Germans are getting richer but the German state gets poorer. The income of the state decreased by 800 billion Euros between early 1992 and the beginning of 2012. The rich on the other hand, saw their assets rise by 1.4 billion Euros during the crisis years 2007 – 2012.
There are even more striking figures. Tax Justice Network (TJN) recently calculated that the super rich have taken no less than $21 trillion (a conservative estimate – the figure may be as high as $32 trillion as estimated by other organisations) from their own countries and parked it in tax havens. Our country has the ‘honour’ to be internationally known as a tax haven. It is no surprise that Brussels counts hundreds of super rich tax exiles (most recently the Frenchman Bernard Arnault) who come to park their money here. The Belgian rich themselves prefer bank accounts in Switzerland. The Swiss national bank recently calculated that rich Belgians have over 30 billion Euros in savings parked in Swiss bank accounts.
In a television debate (Terzake) between Voka Managing Director Jo Libeer and the President of PVDA+, Peter Mertens, journalist Kathleen Cools called the latter ‘naive’ when he plead for taking on tax havens and having real redistribution of incomes and fiscal justice. Demands that are not only made by the PVDA+, but also by trade unions and other organisations. Demands that are moreover fully supported by the large majority of citizens. Calling these demands ‘naive’, shows not only how wrong the neoliberal position is, but also that the media are complicit in blinding us and preventing us from seeing a different approach to our reality and making other choices than those which were made in the last thirty years.
Bleri Lleshi is political philosopher
Translated from Dutch by Lief Vandevoort/Bart Peeters