‘Ill advised cuts can risk a downward spiral,’ EU Commissioner warns

'The country in the triple dip should not lecture the EU about economic growth', says EU Commissioner for Employment, Social Affairs and Inclusion in reference to David Cameron's plan to repatriate power back from the EU.

Governments must avoid policies that axe spending in the name of competitiveness and short-term savings, “but in reality jeopardise future competitiveness and longer-term prosperity”  EU Commissioner for Employment, Social Affairs and Inclusion László Andor has said in a speech to the Institute for Public Policy Research (IPPR) today.

In his keynote speech at the IPPR’s Revitalizing Social Europe event, Mr Andor warned that “polices that axe spending in the name of competitiveness may jeopardise … future prosperity”.

“Ill advised cuts can aggravate [deficit reduction] and risk a downward spiral,” he said.

“For instance, putting public workers out of work may reduce public spending on wages, but it will increase public spending on welfare benefits as well as resulting in a loss of tax revenue.”

The Commissioner also said a rise in social welfare spending at start of crisis held up UK living standards compared to those of Ireland and Greece, and he added that social investment was crucial to ensuring that a stronger, more cohesive and more competitive EU emerged from present crisis.

“It means treading a fine line between reducing spending to improve the public finances and jeopardising the future.”

Mr Andor also defended the EU’s Working Time Directive, which has been subject to much criticism from the Right in Britain of late.

“[The Directive] is a much discussed piece of legislation which I inherited as part of my portfolio, along with the Posting of Workers Directive, that was also controversial in some quarters,” he told the audience.

“A few weeks ago, I saw a set of short BBC interviews of individuals who were responding to questions regarding the consequences if Britain were not a member state of the European Union.

“Among them was a doctor who was very concerned at the effect of long working hours on his capacity to perform his work properly. He was worried that he might make serious errors of judgment affecting his patients through being overworked and lacking sleep.

“Another interviewee was a haulage-company operator. He was worried about unfair competition from other hauliers from other Member States who did not have to comply with the same rules.

“We must work to ensure that employment and social cohesion are given substance in EU policy — on a par with financial consolidation and economic growth.

“The recovery must bring jobs and opportunities for people, not just profits for companies and banks.”

Mr Andor’s full speech can be read here.

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