Today's subject is not a question of left and right. Condemnation of the financial world's purely speculative activity, without any relationship with the real economy, has been damning and contemptuous from figures right across the political spectrum. This column has quoted the positions taken by Valéry Giscard d'Estaing, which have been as radical as those expressed by figures on the left. This week, the strongest positions taken, to my knowledge, have come from two different camps: an MEP from the Socialist Group and the minister for the economy and finance in the Berlusconi government. I am not referring to positions on one or other of the different aspects (where clear-cut differences sometimes exist) but the overall evaluation of the current crisis, which I would say is almost historic.
A thirty year long evolution. The draft report by Pervenche Berès on the financial, economic and social crisis (and the measures she advocates) is a jam-packed document of 40 pages and will not have an easy life at the European Parliament: 1,625 amendments have been submitted even before the discussion at the ad hoc committee kicks off. The rapporteur (she used the feminine form of this French word to define this role, even though the feminine form doesn't exist in the dictionary) was surprised that her draft report had been perceived as being extremely ideological; I find her surprise astonishing because the lengthy part of her text focused on the causes of the crisis and is effectively an ideological interpretation in which she denounces the way in which globalisation works and how it is managed, as well as the “crisis of values and ethics”, resulting from this scenario. She referred to the $4 billion invested over ten years by the US financial industry to influence Congress and so on and so forth. The result of this report is not, however, my subject for today, even though it is easy to predict that it will encounter an avalanche of obstacles, including institutional suggestions.
My subject is the overall assessment by Ms Berès of the transformation of the global economy over the last thirty years or so, characterised by three factors (I'll look at a passage in her summary made to the French Parliament's European affairs committee): “At a financial level, a banking system of the shadows has developed, as well as strategies of short term investments, without any real relationship to the economy's needs for long term investment. In the social arena, this evolution has taken the shape of unequal distribution and the phenomenon of tax evasion to the benefit of capital and the detriment of labour”. Her report indicates a few figures: the share of wages in the gross national product in Europe went from 73% in 1980 to 64% in 2005. The report also denounces the enormous and persistent disparity between profitability of the financial sector and other economic sectors (she quotes the figures to back up her claim).
Centre-right political forces point out that over the course of these thirty years of transformation, the Socialists have mostly been in power and have enjoyed parliamentary majorities: it is not that long ago since Socialist governments were in a majority.
Against speculation. The previous remark is addressed more or less explicitly to the Berès report, which leads us to the declarations made by Giulio Tremonti, the Italian minister for the economy and finance. He underlines the fact that the value of international financial activity has, overall, superseded real production in the global economy by far. This means that the financial community artificially made itself rich on wealth that does not really exist. The speculators use money they don't really have and buy and sell goods that they don't really own, which provokes increases or falls in the international values of basic products and food, to the detriment of the real economy and sometimes the lives of millions of people. The rules the EU is currently trying to gradually implement will help to correct the abuses to the benefit of the real economy.
What this all means. Why has this column put the criticism made by two people who are diametrically opposed at a political level, side by side? To help us understand what Europe is striving to accomplish and what the US has already partly achieved. The ways of achieving this and the instruments to put in place are sometimes the subject of profound differences between the different political forces. There are sometimes very sharp and mutual accusations and the results will certainly be different according to the characteristics of the instruments used and how the instruments retained are actually employed but the objectives partly coincide. We can only hope that the political tendency in favour of the most Community-oriented and supranational formulas prevails but let's not forget that the overall objective is to have a fairer system. (F.R./transl.fl)