The question of European action to tackle the issue of excessive government indebtedness was central to a conference hosted on Tuesday 7 March by the GUE/NGL group at the European Parliament.
"In recent times, the debate (on government debt: Ed) has moved on a bit. People are realising that the problem is a European one", said Dimitrios Papadimoulis (GUE/NGL, Greece) (our translation). The chair of the GUE/NGL the group, Germany's Gabriele Zimmer, regretted the fact that on this issue, ideology takes priority over everything else. She criticised the attitude of the German finance minister, Wolfgang Schaüble, who has, in her view, made himself “devil's advocate”, with the hypothesis of Greece leaving the euro zone cropping up from time to time in the media. She went on to regret the fact that the European Commission's White Paper on the future of the EU does not raise this question which, she said, will inevitably have fallout for the European integration project (see EUROPE 11736).
On behalf of the Greens/EFA group, Belgium's Philippe Lamberts said that government indebtedness was vital to finance investment, but is much less so to pay for consumption. If Greece has ended up in a situation in which it has become incapable of refinancing its government debt on its own, this is because of irresponsible Greek governments and creditors, he said. Criticising the European Commission's obsession that debts must be paid back at all costs, whatever the social price tag, he called for a radical change of course to prevent the European project from running aground.
Marisa Matias (GUE/NGL, Portugal) called for a European solution of solidarity to deal with the matter of public indebtedness that stood at nearly 180% of GDP in Greece, 133% in Italy and 130% in Portugal in 2016.
In the view of Pervenche Berès (S&D, France), co-author of Parliament's report on a budgetary capacity for the Eurozone (see EUROPE 11725), there are several measures that would help to lighten the burden of government debt. There is, certainly, the possibility of restructuring, but a growth strategy that would make it possible to reduce the weight of the debt in relation to the wealth of the country is also an option, she said. She stressed the importance of tackling the question of moral hazard, which is immediately brandished by opponents of any solidarity-based initiative in this field.
“At Eurozone level, the worst is now behind us” when it comes to public indebtedness, said the representative of the Commission, Lucio Pench. After the financial crisis of 2008, which was extended in the form of a sovereign debt crisis, a peak was reached in 2014, when average debt stood at 94.4% of GDP in the euro zone. He said that the “situation is certainly of concern, but does not require drastic action”. (Original version in French by Mathieu Bion)