Brussels, 26/01/2015 (Agence Europe) - Following the first European South Forum on Saturday 24 January, left-wing parties, unions and social movements from southern Europe have called for a European debt conference to be held.
Taking their inspiration from the London Agreement on debt of 1953, which supported the reconstruction of Germany following the Second World War, a European conference on debt would help to reach a “negotiated solution adapted to each country, creditor and owner of government debt”, the forum participants state in a joint press release. They argue that these negotiations should lead to a “partial restructuring” of the excessive debt by extending payment terms and reducing interest rates, “wiping out a large proportion of public debt” and “introducing a 'growth' clause for the repayment” of the balance remaining due.
At budgetary level, the participants call for the European Central Bank (ECB) to act as a “last-resort lender to the member states, not just the banks”. A commitment of this kind could be reflected in the issuance of “European bonds” to replace the national debt, but it would not be conditional upon the country being under a bailout plan. Additionally, the ECB would have to provide banks with cheap credit under the “strict” condition that they in turn increase their lending to SMEs by a “similar amount”.
Those attending the forum also call for the “suspension of the new European budgetary framework” and urge the countries in surplus to do more to correct their macro-economic imbalances. “The current asymmetry in the adjustment between surplus and deficit countries does not harm the deficit countries alone. It harms Europe as a whole”, they stress.
In the field of finance, the European South Forum is in favour of European legislation to separate retail banking activities from investment activities, to avoid “such a dangerous merging of risks into one uncontrolled entity”. In addition, any 'offshore' economic activity should be subject to effective taxation and corruption and fraud should be rigorously tackled.
Lastly, the participants call for the launch of a “Green New Deal” to fund the green transition, laying emphasis on investments in public services. (MB)