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The face-off needed to stay polite but firm. And it did. On Tuesday, 22 June, Dominique Strauss-Kahn and Pascal Lamy, Managing Directors of the International Monetary Fund (IMF) and World Trade Organization (WTO) respectively, set out their organizations’ stalls to the 1,400 delegates of the International Trade Union Confederation (ITUC) meeting for their second World Congress in Vancouver (Canada) from 21 to 25 June.

They were also there to defend their record during the economic crisis of the past two years, and their proposals for exiting it.

Mounting the podium at the Vancouver Convention Centre on the port in turn, the two men well knew in what poor regard trade unionists the world over held their institutions. The IMF and WTO are suspected – not to say accused – of promoting policies of fiscal restraint and engineering a globalization accompanied by deregulation and the rolling back of labour rights.

But on the eve of the G20 in Toronto on the far side of Canada, Messrs Strauss-Kahn and Lamy mounted a charm offensive and played up the "points of convergence" with the union movement and the International Labour Organisation (ILO) which campaigns for decent work and maintaining policies of support for employment.

Arguing the "need for financial regulation”, the former Socialist minister claimed that the IMF had "the same" aims as trade unionism: "There has to be a tax on profits, bonuses and high salaries, and the time has come for that tax." Playing the populist card, the IMF chief averred surprise that "we can find billions to bail out banks but not for jobs."

"YOU WON’T BELIEVE ME, BUT ..."

This “all pals together” act left delegates unconvinced, however. Especially when Mr Strauss-Kahn went on to defend the need for States to tackle rising debt. "Two years ago the house was burning down, and the firefighters doused it," he said. “Now the house is flooded.” This means the debt has to be mopped up, he argued, while saying there was no need for unduly drastic austerity policies.

An FGTB (General Labour Federation of Belgium) delegate criticized the draconian austerity plans introduced by States "following IMF instructions." "The more states want to give confidence to markets, the more they forfeit that of workers”, she told him. “It is asking yesterday’s firebugs to be today’s firefighters”. Following hard on her heels, a Greek trade unionist spoke out against the "irreversible damage caused by the measures promoted by the IMF." "I know you won’t believe me”, said Mr Strauss-Kahn to laughter from the delegates, “but the IMF wants to help countries facing difficulties and we are moving towards developing safety nets for the most vulnerable."

Union commitment to taxing financial dealings rather than profits caused another clash. "It's a technical disagreement, the main thing is to get the tax in place," said Mr Strauss-Kahn. "It is not a technical difference”, ITUC General Secretary Guy Ryder told Le Monde. “What we want by taxing transactions is to reduce the volume, bring them down, whereas the IMF wants to create a kind of insurance for the financial system against possible losses, possible future crises, without changing the system."

TAXING THE FINANCIAL SECTOR

Dominique Strauss-Kahn did not have to suffer delegates’ polite barbs alone. Fellow countryman and WTO chief Pascal Lamy also had to defend his record. In reply to a Nigerian delegate’s charge that "free trade always went together with deregulation and jobs were shed under the auspices of the WTO," Mr Lamy said that regulation was central to its concerns. "Trade and deregulation are two different things," he said.

The WTO chief particularly insisted on the need for coherence of state policy. Putting the ball back in the unionists’ court, Mr Lamy called on them to influence their national governments to follow a coherent policy line in institutions as different as the WTO, ILO or IMF. This was branded a “facile” argument by many delegates, including Yves Veyrier (FO), who told him that "coherence is not about making national social policies fit market conditions, it is not about making ILO policies fit those of the WTO or the IMF."

After the debate, and on the eve of the G20, the trade unionists could harbour hopes that the Heads of State would understand the need to maintain policies to support employment and growth and decide to tax the financial sector in some way or other. To applause from delegates the ITUC’s German Vice-President, Michael Sommer, gave a final expression of union impatience: "Why does it take it so long - years – to regulate the financial markets when it takes only a week to shell out vast sums for the banks or for an IMF programme?" Food for thought for the G20 ...

By Rémi Barroux

This article was published in the French newspaper Le Monde dated 24 June 2010.