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Conclusions of the Meeting of the OECD Council at Ministerial Level, Paris 27-28 May 2010
Evaluation by the TUAC Secretariat

31/05/2010

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Introduction and Overview

  • 1. The Meeting of the OECD Council at Ministerial Level (MCM) took place against a backdrop of speculative attacks against the Euro and sovereign states, with bond markets driving governments into prematurely exiting from stimulus and in several cases implementing draconian fiscal consolidation plans, which will threaten the recovery and with it the jobs and livelihoods of millions of workers around the world.
  • 2. The OECD’s latest Economic Outlook 87, released on the eve of the MCM, reported that recovery was stronger than previously expected, although with variation between countries and regions: U.S. growth is forecast to be 3.2% in 2010 and 3.2% in 2011; the Euro area 1.2% in 2010 and 1.8% in 2011; Japan 3.0% in 2010 and 2.0% in 2011. The OECD predicted that unemployment would fall from a peak of 8.5% in 2010 to 8.2% in 2011, thus signalling a nearly jobless recovery. These projections do not fully take account of the austerity measures announced by European governments in the final two weeks of May 2010.
  • 3. In its statement to the MCM, TUAC called on Ministers to act urgently to re-regulate the financial economy and to continue with stimulus measures until a stronger recovery is in place. This message was reinforced in an address to the MCM by Richard Trumka, President of TUAC. TUAC considers that a premature withdrawal of stimulus would be a historic mistake, tipping the OECD countries back into recession with disastrous impacts on employment.
  • 4. Overall, the Conclusions in the meeting are more balanced than many of the speeches made at the MCM by, particularly, European Finance Ministers. Indeed there are several positive elements. TUAC welcomes the commitment made to continue “efforts to assist the recovery with appropriate measures until sustainable growth in private demand has taken root” (§4), together with the recognition that fiscal consolidation should not “jeopardise growth” (§7.2). TUAC also welcomes the commitment to creating “more and better jobs”, reducing inequality (§8.3) and supporting skills development in particular with regard to the shift to the low carbon economy and the “expansion of the health and social sectors” (§8.4). The commitment to working on youth unemployment and gender equity is also positive (§8.5). The issue remains, however, as to how these commitments will be delivered against the background of the austerity measures already being undertaken by several OECD governments and the corresponding risk of returning to recession. The OECD Secretary-General admitted in his speech to the OECD Forum that the OECD was being “schizophrenic”.

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(The full evaluation is attached)

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