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EI warns that public spending cuts will slow economic recovery

Speaking at the annual meeting of the World Economic Forum in Davos, Switzerland, EI General Secretary Fred Van Leeuwen warned government representatives and business leaders that public spending cuts will slow down economic recovery and, worse, will be like a slap in the face to the millions of people who have lost their jobs and for whom education and training is their return ticket to the labour market.

“We are in the eye of a financial hurricane,” said van Leeuwen, referring to plans by OECD governments for Draconian cuts in public expenditures. In some countries education budgets are already affected by the financial crisis, but “we may all have to prepare ourselves for unprecedented cutbacks in the years ahead.” Countries that have bailed out their banking sectors and have paid huge sums for stimulus packages to prevent their economies from collapsing will either have to raise taxes or reduce public expenditures, van Leeuwen noted. Speaking on a panel discussion on the “skills gap” with a number of business leaders, van Leeuwen noted that a growing number of European companies are spending less on training programs for their employees. He linked this to the rise in precarious employment and the unwillingness of companies to invest in people who they will employ for a short time only. Employers raised concerns about “skills shortages,” and said that school systems should do a better job in meeting the changing needs on the labour market by focusing on “21st century skills,” such as innovation and technology skills. However, Van Leeuwen said that employers should be more involved in skills development. He referred to the “Partnership for 21st Century Skills,” a US initiative aimed at bringing together educators, business corporations and government officials to help education authorities and schools bridge the skills gap. “Substantial investment in our public education systems are required to enable us to meet changing needs,” said Van Leeuwen, who emphasized that special attention ought to be given to the recruitment, retention and training of teachers. Many of the discussions at the WEF annual meeting in Davos focused on economic recovery. Global union leaders, who played an active role in those discussions, stressed that a jobless recovery and a return to “business as usual” is unthinkable. The labour leaders issued a statement entitled “Regulate, redistribute and return to social values and decency.” To read the full statement, please follow the link here.

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