Limits to European action. It has to be admitted: faced with the financial crisis, Europe has not tried to do the impossible. But within the realms of possibility, it has done as much as it could. Very often, those that criticise Europe for not acting with enough determination and resolve are the same as those that oppose progress in Community construction. The reality is that the political, institutional and legal conditions that would enable Europe to act as a state do not exist. Moreover, the reproaches made about inefficiency come from the same forces that reject progress. Those who call for a European Fund that is equivalent to 3% of the EU's net material product are those who prevent the Community budget going above 1%. Those who reproach the euro for not been stable enough in the financial storm, were previously condemning its excessive value, which was ruining its exports. I much prefer those who frankly and overtly oppose European integration to those who on principle criticise every EU initiative and action and consequently deny it the means to take action.
A few of the pundits at the Paris meeting (last Saturday) and Luxembourg (this Monday and Tuesday) think they are really sharp and well-informed, although they are insufferable in their ferociousness to destroy what the European institutions and national authorities have been striving to achieve: reassuring citizens and guaranteeing their essential interests in the face of the disasters provoked by “creative finance”.
One aspect requiring explanation and clarification. There is in fact a delicate aspect that at first glance justifiably provokes dissatisfaction, indeed, indignation on the part of the least well-off members of society. I am referring to those who point out that European countries, even the most in-debt of them, as well as those that consider austerity policy as indispensable, are making available colossal amounts of money to bail out the banks. This criticism is understandable: we can't muster up the resources for social guarantees, to set a minimum wage, but these resources are there to resolve the difficulties of the world of finance.
This situation should be clarified and the real situation explained. States are, above all, guaranteeing citizens' savings and when they rescue a bankrupt bank, it is not lost money. Some commentators are indicating this. Here are a few quotes. Bailouts are “not necessarily bad for the state and certainly do not end with a net loss. Nationalisation operations do not necessarily imply a disbursement of funds by European states; it is enough for them to subscribe to an increase in the capital of bank for its shares in its own funds to immediately improve ratio rates without the state in question spending a single cent”. Historic examples are recalled: at the end of the 1990s, South Korea nationalised most of the country's big banks to prevent them collapsing and a few years later privatised them at a substantial profit. At the beginning of the 1990s, Sweden nationalised its banks, cleaned them up and sold them off at much higher prices a few years later. According to one expert, “debt-equity swaps in banks provide states with a profitable medium-term investment”. On the condition that…
Role of European Parliament. On the condition that the financial markets have been cleaned up. It is not banking activity in itself that provoked the crisis but the abuses of the system, speculation, creation of artificial wealth that only existed on paper, and the absence of any rules. It is on these aspects that the EU has focused its action and worked out the principles cited in our publication EUROPE 9756, including a facility for the authorities to introduce changes to positions on the board of directors and to intervene over pay.
We will judge the action after we get the results. There is a clear about-turn and the new system of governance (in large part already planned) will be speeded up. In this context, the weight of the European Parliament is asserted. The situation had already significantly evolved; EP dialogue with the presidency of Eurogroup, the European Central Bank (ECB) and European Investment Bank (EIB) has become permanent and many reforms and new rules are entering the Parliament/Council codecision procedure. The parliamentary debate has the advantage of being public and all aspects should be looked at, including those that take the form of detailed proposals or direct criticism of one of the European commissioners. The vice president of the Greens Group, Pierre Jonkheer declared: “The crisis has clearly illustrated the insufficiency of European rules on banking and financial control and organisation. In this subject, as in many others, what is needed is not less Europe but more Europe”. I believe he is right. (F.R./transl.rh)