The Wrong European Economic Government of 17th June 2010

, by Pascal Malosse, Translated by Kirsty Chetcuti

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The Wrong European Economic Government of 17th June 2010

The European Council of 17th June 2010 is supposed to have given birth to the “European Economic Government” - a leap forward which has been dreamed about for decades by the most passionate federalists, regular readers of the Rêve européen by Jeremy Rifkin and Mémoires by Jean Monnet. Yet, something sounds false in this nice announcement.

Firstly, the conclusions of the summit use the anglo-saxon term of economic “governance” which doesn’t mean much. The term “government” would have frightened the Germans, for them meaning the political control of the European Central Bank (BCE). Then, the only concrete measure which the Union provides is a mechanism of a priori budget surveillance by the European Commission, meaning, an alert system which allows to verify, every Spring starting from 2011, if the budgets of the State Members aren’t too unpredictable and respect the criteria of the stability Pact. Knowing that only three States out of 27 respect the famous criteria (Estonia, Sweden and Luxembourg), the procedure promises to be sporting! They also do not agree yet on the nature of eventual sanctions.

As for the Europe 2020 strategy, which is named for employment and growth, it is almost non-existent, in addition recapturing in its headlines the Lisbon Strategy with a pinch of “green growth” and “digital innovation”. The document understands the objective of the fight against poverty, but the recommendation remains vague and without constraint.

A phrase taken from the conclusions of the Summit summarises well the helplessness of the European elites: “It is suitable to give priority to budget stabilisation strategies which favour growth and are principally centred on the limitation of spending.” The contradiction between the objective of growth and that of the reduction of expenditure is so striking that it resembles a replica of La Cantatrice chauve by Ionesco. Though the private demand has absolutely not been relaunched and has been maintained at arm’s length by the boosting programs, the decision of cutting out from public expenditure risks taking us back into the recession, or even into the depression. Numerous personalities like Joseph Stiglitz, Nobel Prize winner in economics, and 100 Italian economists, signatories of a letter sent to the European leaders, pointed out the incoherence of this decision without being heard.

Above all it is a bet taken in emergency: rapidly making use of the generalised austerity in order to reassure the markets or more precisely the lenders, to conserve the mark AAA attributed by the assessment agencies and to guarantee an easy access for debt. Let’s hope that the bet isn’t suicidal...

Anyway, it’s an elegant way of burying for good the image of the European project in the public opinion. Brussels will be once again the reprehensible service which asks the people who are suffering for supplementary efforts. A little music which was heard often when the national governments privatised the big public enterprises and dismantled their social right.

For it is once more a matter of an integration which can be dubbed negative, the one which restricts and abolishes instead of being positive, the one which proposes, innovates and supports projects. In 1992, the Maastricht treaty set up a considerable advancement, carrying out the unique market, putting on the rails the future Euro zone, but already compromising an original flaw. The last obstacles for the free circulation of goods, of people and capitals fell, while the economic connection, fiscal and social did not take place. The European budget, supposedly assuring the cohesion of the Union, stagnated since 1982. Only the stability Pact and the method of open coordination, that no one takes seriously, should have filled in this emptiness.

An increase in the budget and the emission of European treasury bonds would allow the putting into action of a European economic policy worthy of this name, in order to save our social model.

An increase in the budget and the emission of European treasury bonds would allow to put into action a European economic policy worthy of this name, in order to save our social model. That day, the citizens will no doubt identify themselves with the European Union.

One can go on about the reasons of this big disappointment: the dominant intergovernmentalism, the differences between the member States, the failure of action of the Commission and the European Parliament. But this isn’t the most essential any more. The solution cannot be but European and federal. It is a question of survival.

Image: Euro, by mammal on Flickr.

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