31 May was, both literally and figuratively, a bright day. First of all there was Commissioner Pierre Moscovici who, when presenting the Commission’s “reflection paper” on deepening the euro zone, underlined, as Mathieu Bion reported (see EUROPE of 1 June), the need to act to make the single currency “a vehicle for shared prosperity”. He might have added “finally” for the benefit of citizens who could very well end up otherwise calling it into question for real.
The same day, in Frankfurt, European Central Bank President Mario Draghi welcomed the economic upturn shown in Eurostat’s latest batch of figures, which, with all due respect to his German critics, are not a repudiation of the accommodating monetary policy that he advocates.
Nonetheless, just as we can be burned by the sun, so figures can be misleading. While we have to be pleased that unemployment was “only” 9.3% of the working population in the eurozone in May, should our thoughts not also – indeed, above all – be with the 15.6 million women and men who are being left behind? Does the claimed improvement make any more acceptable the still astronomically high levels of unemployment in Spain and Greece, for instance, and among young people in particular?
No doubt this case will be made by some technocrats, divorced from real life, life that for some can at times mean having to go without and tears, uncertainty and declining health for want of treatment, and more. There will also be some to argue that, along with Germany’s virtually full employment (3.9% jobless), is, according to the International Monetary Fund, a “slow secular rise of the at-risk-of-poverty rate”, of workers living below the poverty line whose only consolation is perhaps knowing that they are a bit better off than the Greeks who have seen their pensions slashed to less than €500.
A slight improvement certainly but only on paper, not in the lives of most “ordinary people” who make up the vast majority of European citizens. Ordinary people in all the countries of the eurozone have, since the start of the decade, been bearing the brunt of a dogmatic policy that has been applied indiscriminately and without democratic legitimacy. So, yes, Commissioner Moscovici could not be more right when he states that “the status quo is no longer an option”!
The status quo would mean allowing Germany – and, in its wake, the northern hardliners – to continue to impose a policy which, according to Desmond Cohen, former Dean of the School of Social Sciences at Sussex University “has directly contributed to years of low economic growth and high unemployment in the EU, especially for other Eurozone countries”. It would mean accepting that Berlin corner all the important economic/monetary jobs, such that German central banker Jens Weidmann would quite naturally be lined up to succeed Mario Draghi as president of the European Central Bank in 2019 when his fellow countryman Klaus Regling has very recently been reappointed to head the European Stability Mechanism, the role of which is to provide financial assistance to euro area countries experiencing or threatened by severe financing problems.
It would mean accepting that the fate of the assistance duly promised to Greece would depend even longer on the power struggle between the International Monetary Fund and Dr Schaüble over whether a debt of 179% of gross domestic product is sustainable or not. Solidarity with Greece – which has stuck to all its commitments to the detriment of the (quality of the) lives of many of its citizens – can no longer remain hostage to elections in Germany, where savers are more highly regarded than the working poor.
Rejecting the status quo would mean open discussion without any no-go areas so that management of the euro area might finally become transparent and fully democratic. This debate could be informed by the ideas advanced by the Commission in its “reflection paper” but it has to go further, show itself more fearless because, clearly, “responsibility for finding a way out of the crisis has to be shared between debtors and creditors, between deficit areas and surplus areas, as is the case within states”. French economist Bernard Barthalay punctuates this point of view with a call which resounds like a clap of thunder: “So, German friends, you will have to rethink your official economic doctrine – your so-called economic ‘constitution’ – you will also have to rethink your idea of a Europe with no automatic stabilisers, no transfers” (Facebook, 31 May).
Are these taboo areas for Berlin? Yes, but can the euro zone continue any longer to resemble little more than a mark zone with a few European trappings and German leaders the undisputed masters?
This is not a German problem, it is European. It is a function of the flaw in the original design of the euro zone, when political leaders agreed to share monetary sovereignty but jealously held on to their economic and budgetary sovereignty.
The unemployed and the working poor are paying a heavy price for this today, with national elections unable to effect any changes whatsoever since, as the treaties currently stand, only the German electorate is in a position to do so. That’s why the wave of populism has threatened to overwhelm a goodly number of European countries, the EU also having too long been concerned far more with the winners from globalisation than with the ordinary folks who are struggling and suffering.
Hence the warning call for reason delivered at the European University Institute in Florence by Belgian philosopher and economist Philippe van Parijs: “If the European Union is to escape from the trap in which it is currently stuck, if it is avoid a fate made of chaos and self-inflicted agony, it needs to become and be perceived as having become a caring Union” (Social Europe, 24 May). He argues that “it will achieve it by doing something unprecedented in the history of mankind: setting up a scheme of transnational and interpersonal redistribution”. This would be nothing short of acting like Bismarck did in his day under the pressure of violent protest. An elegant way of asking Angela Merkel, Wolfgang Schaüble and all European political leaders – beginning with those of the euro zone – whether they genuinely think the EU will be able to survive without radical change.
Michel Theys