US Interest Rate Move Necessary... But - ITUC

World labour leaders at Davos: US interest rate move necessary, but fundamental problems must be addressed

Brussels, 22 January 2008 (ITUC OnLine): The announcement by the US Federal Reserve of a 0.75% interest rate cut, as part of a broader expected economic stimulus package, should help stem the financial contagion which has begun to spread through global markets, but will not begin to address the major fault lines which are evident in the world economy, according to the international trade union movement.

“The warning signs have been clear enough for some time”, said ITUC General Secretary Guy Ryder, “Governments have avoided putting effective regulation and management of the global economy. Stop-gap measures to shore up world markets must be replaced by a coherent strategy for the real economy”.

World labour leaders at the World Economic Forum Annual Meeting in Davos are calling for coordinated government action, to support living standards and put effective regulatory measures in place.

“This should include coordination between central banks, including the Federal Reserve and the European Central Bank and others, to deal with the immediate problems and to put in place urgently-needed policy measures for the longer term”, said John Evans, General Secretary of the OECD Trade Union Advisory Committee.

*A press conference of global union leaders will take place in Davos on 24 January at 11.30 local time.

The ITUC represents 168 million workers in 155 countries and territories and has 311 national affiliates. Website: http://www.ituc-csi.org.

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