1. THE FOUR PRESIDENTS’ NOTE: COMMENTS FROM THE ETUC ECOSOC HEARING MAY 2015 rjanssen@etuc.org

2. A DOUBLE NARRATIVE THE CRISIS HAS LITTLE TO DO WITH FINANCIAL MARKET FAILURE BUT WITH « RIGID » LABOUR AND PRODUCT MARKETS AND « SPENDTHRIFT » GOVERNMENTS. MEMBER STATES CAN’T BE TRUSTED NOT TO REPEAT THE SAME MISTAKES, HENCE MOVE COMPETENCE AND POWER AWAY FROM THEM

3. THE ARGUMENT ON PUBLIC FINANCES IF, IN THE « GOOD » YEARS, MEMBER STATES WOULD HAVE ADHERED TO THE STABILITY PACT AND WOULD HAVE CUT DEFICITS MORE… …..WE WOULD HAVE ENTERED THE CRISIS WITH PUBLIC SURPLUSES …..PROVIDING BUDGET MARGINS TO PAY FOR THE BANKS AND UNEMPLOYMENT BENEFITS IN OTHER WORDS, MARKETS WOULD NOT HAVE BEEN ABLE TO TRANSFORM THE BANKING CRISIS INTO A PUBLIC FINANCES CRISIS

4. ARGUMENT NOT REALLY BACKED UP BY THE NUMBERS

5. BEYOND THE NUMBERS IN CASE OF A FINANCIAL/DEBT BOOM, ONE SHOULD NOT « LAISSEZ FAIRE » AND EXPECT PUBLIC FINANCES TO CLEAN UP THE MESS AFTERWARDS BEST TO CONTROL AND LIMIT THIS BOOM IMMEDIATELY IMPLIES PUBLIC ACTOR TO INTERVENE OR STEER FINANCIAL MARKETS…. …. WHICH GOES AGAINST « LA PENSEE UNIQUE »

6. THE ARGUMENT ON WAGES IF LABOUR MARKETS IN THE EURA AREA WOULD HAVE BEEN MORE FLEXIBLE…. … SUPPLY WOULD HAVE KEPT UP WITH DEMAND…. …. WAGES WOULD NOT HAVE RISEN OUT OF CONTROL IN CERTAIN COUNTRIES….. …. SO NO LOSS IN COMPETITIVENESS, NO EXPLOSION OF EXTERNAL DEFICITS, LOWER UNEMPLOYMENT RATES FOR THESE COUNTRIES

7. THEIR ’EVIDENCE’: NUMBER ONE

8. EVIDENCE DISAPPEARING

9. THEIR ’EVIDENCE’: NUMBER TWO

10. EVIDENCE DISAPPEARING

11. CONFUSING CORRELATION WITH CAUSALITY ANOTHER FORCE IS AT WORK THAT LINKING WAGE AND JOB DEVELOPMENTS CAPITAL FLOWS OVERHEAT ECONOMY IN FIRST PERIOD HENCE (NOMINAL) WAGES REACT…. « SUDDEN STOP » IN SECOND PERIOD BLOCKS ECONOMY, MASSIVE JOB DESTRUCTION CAUSAL LINK IS NOT : WAGES ⇒ JOBS BUT CAPITAL FLOWS ⇨ WAGES (2000-2009) AND CAPITAL FLOWS ⇨ JOB DESTRUCTION

12. TO CONCLUDE IF YOU HAVE A FINANCIAL/DEBT BOOM ON YOUR HANDS, YOU NEED TO ADRESS THE ROOT CAUSE THIS IMPLIES A « HANDS ON » POLICY TO REGULATE FINANCIAL MARKETS AND STEER CAPITAL FLOWS « FOUR PRESIDENTS’ » NOTE LOOKING FOR « SCAPEGOATS » STRENGHTENS SUSPICIONS OF THE ETUC TOWARDS EUROPEAN ECONOMIC GOVERNANCE …. FORCING MEMBER STATES TO DO THE WRONG THINGS