While public service workers are giving it all to save lives, public spending is saving our entire global economic system from collapse: rescuing jobs, supporting salaries and bailing out many businesses on the brink.

Although this essential spending is being made by our governments today, the debate over how to deal with the debt generated by the Covid crisis will be of vital importance to unions and workers in the decade ahead.

We must do all we can to avoid the mistakes of the 2008 economic crisis: after governments took on billions in dodgy private sector debt, major corporations gouged on tax cuts, bail-outs and buy backs while workers faced frozen wages, foreclosures and austerity guttered our public sector. We must avoid the catastrophe that the international finance institutions forced on Greece: destroying peoples lives as well as all hope of economic recovery with a blind devotion to discredited austerity.

The current crisis exposes the urgent need to rebuild a strong and resilient public sector. Our public services, which have born a huge burden through spending cuts and the pandemic, must be bolstered through expansive increases in funding and support.

Meanwhile, with the ILO estimating up to 195 million Covid-related job losses, we must extend social security programs to ensure no one is left behind, and limit the justified anger and alienation which has helped fuel the far-right.

Paying for these programs will require more than just debt– to raise public revenues, the major companies who cashed in big since 2008 must be made to pay their fair share through a reformed global tax system. Making multinationals and the mega-rich contribute to the cost of crisis and recovery should be a key goal for our movement. The tech companies who made billions from dodging their taxes and skimping on the rights of their workers and are now cashing in big from the lock down must be top of the list. Wealth taxes to ensure those who have profited from the global economy in the last 20 years pay their fair share are now urgent.

After decades of deregulation, corruption, privatisation and tax-cuts for mega rich corporations, many countries- especially those in the developing world - were already struggling with debt before the Corona virus outbreak. According to the IMF, 34 countries were already at risk of debt distress or in default in 2019. The international community must intervene to financially support these countries who cannot currently increase their expenditure without incurring even more unsustainable debt.

Some steps in this direction have already been taken:

• the IMF and the World Bank are providing loans to more than 100 countries to tackle the crisis.

• the IMF has approved debt service cancellation for 25 countries for six months

• the G20 has announced a suspension of debt principal and interest payments for the poorest developing countries until the end of the year

However, these measures are neither sustainable nor effective solutions to the deeper questions of developing world debt. Instead, we must support calls for a debt jubilee: a cancellation of odious and unsustainable debt and the cancellation of all external debt payments due in 2020 and 2021. This must cover all external creditors, both official and private, and all low-income countries. In addition, we must support emergency financing for developing countries in the form of grants rather than loans.

In the long term, unions should support a systemic change to global debt governance.

We must stop putting the needs of creditors ahead of those of people. All analysis of debt repayment must place the realisation of human rights as its key priority. We should support calls for debt workout mechanism which should guarantee transparency, independence from debtors and creditors as well as inclusive participation of all stakeholders instead of the ad hoc and opaque procedures which currently exist.

We can not return to the broken and unsustainable business as usual which governed debt and tax before this latest crisis. Workers and users of public services must no longer be made to bear the brunt of debt restructuring. Now more than ever, unions must be prepared to fight for a fairer global debt system and ensure the wealthy and corporations pay their fair share.

By PSI Assistant General Secretary Daniel Bertossa and Policy and Project Assistant Virginia Palomba.

This article is made available under Creative Commons for any union which would like to share information on Debt issues with their members. Download the WordDoc version here. We encourage unions to post it to their websites, add to newsletters or publish in relevant union journals. For further information, contact leo.hyde@world-psi.org

Public Services International has prepared a series of Briefs on Debt and Workers to help unionists understand these issues and build strategies for a new system: