Lack of building. Once again, I find myself listening to Jacques Delors. First of all in his interview with Le Monde on 8 December and then later in a personal conversation in Brussels. His is the voice of balance and is a far cry from the criticisms against one or other of the protagonists of the financial crisis. At the same time, he firmly speaks out against the responsibilities and shortcomings of the different individuals in this affair. What a difference this makes compared to the different political forces who are only concerned with blaming their adversaries for everything that happened, as if they themselves did not have any responsibility in the decisions at a given time, in one or other of the member states. And what a difference he makes compared to certain economists who explain so well, once everything has occurred, the course of events and indicate so clearly what should be done.
The seeds of crisis had already been sown by failing to build the European project, which Jacques Delors had alone and in vain pointed out from the very beginning. He underlined the imbalance between the monetary dimension of EMU (Economic and Monetary Union), which was so well structured, and the economic dimension, which did not exist at all. Despite this gaping hole, “thanks to European economic and social cohesion policies”, the weakest member states “were able to reduce this disparity and, for example, Portuguese income, which was 52% of the average European income in 1986, is now around 80%”. He pointed out that he had fought for Ireland to join the eurozone but he added that he found it “a bit off that this country had responded in such an unusual way to this solidarity by practising fiscal dumping”. Delors' reference is to the abnormally low corporation taxes in Ireland, which he was almost alone in denouncing at the time. This column will be returning to this point.
Shared responsibilities. Mr Delors rejects, nevertheless, the idea that countries that have not respected the Stability Pact are exclusively responsible for the slippage that has occurred: “What has been the point of the euro Council? Why has the European Central Bank, so focused on price stability, failed to sound the alarm?” The only alarm he recalled being sounded, targeted France and Germany in 2004, who considered that they were unable to contain their respective budget deficits to below 3% of GDP. Many other more serious infringements subsequently occurred in silence and he denounces “the deadlines set for responding to the crisis and the verbal cacophony of governments, which fed speculation”. The eurozone should have had “a fund for dealing with different economic situations, in addition to Eurobonds” but the different misgivings, “especially but not exclusively from Germany” quashed this idea at the time. The idea of launching Eurobonds, which Jacques Delors advocated so long ago, is currently at the centre of reflections and the European Council will be discussing the matter next week.
Jacques Delors does not accept that Germany is responsible for what has not been done and his comments in this respect are quite cutting: “I consider it absurd that certain quarters consider that Germany should make as many stupid mistakes as some of its neighbours in order for Europe to advance”.
Indispensable sanctions. Germany must, however, recognise that its qualities and power also come with responsibility. Nothing, nevertheless, will be possible if the rules facilitating the appropriate functioning of the eurozone are not respected. An “anything goes attitude” will not resolve the problems. A minimum of fiscal and social harmonisation is necessary and the strengthening of the Stability Pact is equally indispensable and implies “a mechanism imposing penalties for non-compliant states”. As we are aware, discussions regarding this subject are continuing at great length. Mr Delors does not agree with the hypothesis of “political” sanctions (suspension of voting rights) but he does consider that “the most logical thing would be to use structural aid funds in this respect and suspend some of them temporarily for countries which fail to practise a healthy policy”.
As we can see, Jacques Delors does not prevaricate about the necessity of sanctions, which certain actors hesitate to introduce, because he considers that the wish to participate in the eurozone involves rules that go beyond those simply required in the member states that do not participate in this zone. Eurozone countries are responsible for the way the zone functions and for it being set up, and an “anything goes attitude” is out of the question. Whoever is unwilling to respect the commonly defined rules should not be able to take part. Mr Delors makes a very clear distinction between the EU as a whole and the eurozone. European solidarity exists and the least favoured countries benefit from aid and significant support, whether they are part of the eurozone or not. This column will return to this aspect tomorrow, as well as other political factors contained in single currency policies and what this implies for participant countries.
(F.R./transl.fl)