TENS: Highspeed job-killer

The European Union’s attempts to promote a transport network based on international motorways and high-speed trains have been supported by some on the left who see them as a classically Keynesian scheme in which private and public money will cooperate to improve infrastructure and create jobs. Olivier Hoedeman sees things rather differently.

In the debate about how to reduce unemployment in the European Union, there seems to be disturbingly broad support for transport infrastructure investments. In Commission President Santer’s Confidence Pact, the Trans-European transport Networks (TENS) play a central role in the strategy for job creation, whilst the European trade unions and many progressive politicians have set their hopes on TENS. The warnings from the environmental movements have had very little impact: the belief in TENS as job creator is too strong. This is unfortunate, as TENS will soon prove to be the fastest lane to further loss of jobs all over the continent.

With a total budget of more than 400 billion ECU, TENS are the largest infrastructure plan in history. The plan includes more than 12,000 km of motorway, as well as high speed trains, goods railways, waterways and airport extentions, and will bring the total volume of transport to far above sustainable levels. For the European Commission TENS means the completion of the internal market and improved global competitiveness. To the trade unions TENS sounds like a good old fashioned Keynesian plan, bringing back a positive cycle of job creation, spending and more jobs.

The European Trade Union Confederation (ETUC) in January launched a call for urgent measures to reduce unemployment in Europe. ETUC demanded that the EU proved its determination to create jobs, by making more money available for TENS. In addition, Ken Coates MEP, initiator of the Appeal for Full Employment, seems to translate the demand for reducing unemployment into support for TENS. Whereas the enthusiasm of the Commission is not so surprising (‘improving the Internal Market and competitiveness’ is THE mantra of EU Commissioners), the trade unions’ support for TENS is a case of serious misjudgement.

Is TENS a job creator?

Let’s forget for now about the warnings of the environmental movement - a 15-18% rise in greenhouse gas emissions from transport, destruction of more than 60 natural sites of European importance - and concentrate on the question: is TENS really a serious job creation initiative?

It took a long time before the EU presented studies to document the claimed job creation effects of TENS. The EU argued that TENS were necessary as the physical part of the Internal Market to enable the transport of goods within the free trade zone. Apart from the obvious direct employment following from pumping billions of ECUs into infrastructure building, the EU claimed that the indirect effects through increased trade would result in large numbers of jobs.

In its l996 annual report, the European Commission published more precise estimates of the job creation effects of the TENS projects. The l4 so-called super-priority projects would result in l30,000-230,000 new jobs, while the whole TENS master plan would create 594,000-1,030,000 new jobs. To achieve this respectively 90 billion and 400 billion ECU investments would be needed. If the Commission were right, those new jobs would be very expensive ones; but it is very doubtful whether the Commission is right.

The roads and jobs myth

Researchers have long since given up the idea that building transport infrastructure equals creating jobs. Transport researcher John Whitelegg concluded in his l995 report ‘Roads, Jobs and the Economy’ that there is no automatic positive relation between infrastructure investments and employment. Some cities in England with relatively bad access to motorways have low unemployment figures, whereas others surrounded by motorways suffer from mass unemployment. The report ‘Roads and Economy’, published last year by the European Federation for Transport and Environment, summarises the academic discussion and comes to the same conclusion as Whitelegg: ‘the assumption that road building generates long term employment cannot be justified on the basis of the available evidence and research’.

The ECIS link

The Commission’s estimates are to a large extent based on studies by the European Centre for Infrastructure Studies (ECIS). Despite its innocent-sounding name, ECIS is by no means an independant research centre. It was created by the European Roundtable of Industrialists (ERT) at the end of l993 with the mission to ‘accelerate the construction of Trans-European infrastructure Networks’. The founding members were solicited by Fiat’s Agnelli, one of the 45 company heads in the ERT.

Since the beginning, ECIS has worked closely with the European Commission in paving the way for infrastructure investments in Europe. An example was the report ‘Lost and Found’, published in late l995, which claims that governments underestimate the economic benefits of building new high speed train links. This report was ordered by the European Commission and written by ECIS. Transport Commissioner Kinnock then used the new figures to argue for larger funds for TENS.

Job killers: TENS and the internal market

The job creation arguments of the Commission are based on the idea that a more smoothly functioning Internal Market will create jobs. But does shifting around goods from one corner of the continent to the other create jobs? Not really.

From l991-l996 the number of kilometres driven by lorries in Europe grew by about 30%, as did unemployment. Infrastructure projects for fast long-distance transport generally facilitate further centralisation of production. In combination with transport costs which are far too low, they enable multi-national corporations to reduce their number of production and distribution centres, relocating and supplying the whole European market from those which remain. The result is obvious: loss of local jobs. TENS will strengthen the grip of these corporations on the European economy.

The winners

The winners of the Internal Market have clearly been the trans-national corporations (TNCs) which have been given unhindered access to markets in every corner of Europe. Through their high productivity and advantages of scale they have enormously increased their market share, at the expense of local producers. Millions of local jobs have been lost. The core production of TNCs stays firmly rooted in the economic centres of Europe and the rest of the continent is supplied from there.

This is the process which these corporations wish to see continue. In this economic model low transport costs are crucial and new transport infrastructure is needed. No wonder that the European Roundtable of Industrialists has played a crucial role in putting TENS on the political agenda.

The losers

The creation of the Internal Market has removed almost all traditional instruments for strengthening local economies. Public procurement contracts now go to the lowest bidder, most often from outside the region, public services are deregulated and jobs are lost as subsidies disappear. The regions are left to compete to attract investments by TNCs.

The EU’s policy for development of ‘less favoured regions’ is built on the same principles. EU money is poured into transport infrastructure and training to improve the competitiveness of these regions. At the same time competitive pressures increase, regions and states are played off against each other and the destructive downward spiral of reduced environmental and social protection begins.

Fighting tens means fighting globalisation

And the Internal Market is only the beginning. The EU is consistently working to promote globalisation, by pushing ahead with international free trade agreements and by transforming policies and legislation to fulfill one goal: international competitiveness. EMU, deregulation, privatisation, promotion of biotechnology and TENS should be seen in the light of these attempts by the EU to adapt our societies to global free trade. Environmentalists and local citizens fighting new motorways, airport expansions and other infrastructure projects should be aware that these investments are closely connected to globalisation and the senseless shifting around of goods that is seen as the golden future awaiting us.

There can be little doubt that building TENS is about the worst way to spend 400 billion ECU. If such amounts were to become available for public investments in infrastructure renewal of cities, towns and rural areas (such as local public transport and housing), for work in healthcare and education, many more jobs could be created without the disastrous environmental effects.

It is high time to question economic globalisation itself. There are alternatives if we dare to argue for a different goal: strong and diverse local economies, controlled by local communities. To achieve this a transition is needed, away from adapting to destructive global competition and towards a situation where elected governments (local, regional and national) take back the power from TNCs and the irresponsible global institutions that serve their interests.

Spring 1999