Commenting on the IMF Regional Economic Outlook, ETUC General Secretary Esther Lynch said:
“The IMF is arguing that the poorest people pay the highest price for a crisis caused by the profits of the biggest corporations.
“Real wages were negative across Europe last year while real profits increased and dividends skyrocketed.
“Nominal compensation in central, eastern and southern eastern Europe (CESEE), which the IMF has singled out for wage restraint, are all below the European average in purchasing power parity.
“The average wage share in these countries has also been below the EU average for the last decade and is decreasing, meaning that profit share is on the rise in these countries.
“So, clearly there is still room for wage increases in these countries. The call for further wage constraint is totally incompatible with our economic and social responsibility to bridge the chasm in living standards between eastern and western Europe.
“There is no evidence of any kind of wage-price spiral despite warnings of the kind that the IMF have made today or that conservative economists have been making for the past two years.
“On the contrary, the IMF’s own data shows that last year inflation was mainly driven by increases in profit margins for the EU as a whole, as well as in CESEE countries.
“There should be no trade-off between the wellbeing of workers across Europe and fighting inflation.
“We have other tools at our disposal, notably windfall taxes on the excess profits that have driven inflation, and fair and progressive taxation systems.”
