Can Europe Make It?

Greece stands firm towards changing the course of Europe

The European Union is faced with a huge existential crisis, probably the most serious one in its history, as a result of the neoliberal policies that have been pursued during the last decade.

Dimitris Papadimoulis
2 October 2016

Greek PM Alexis Tsipras talks to Italian PM Matteo Renzi after the EU-Med summit in Athens. PAimages/Petros Giannakouris. All rights reserved.The European Union is faced with a huge existential crisis, probably the most serious one in its history, as a result of the neoliberal policies that have been pursued during the last decade.

The austerity policies that have been implemeted in many Eurozone member-states since the mortgage crisis in the United States, have further damaged the already fragile economies of the European South, deteriorating major macroeconomic indicators and the social pillars of the welfare state.  

After six years of continuous spending cuts and shrinking of national economies, Europe and its political leadership are called to find convincing solutions for the future status of the European establishment. The threat of dissolution is more imminent than ever before, with conservative and far-right forces seeking to revive national and inter-state tensions that the founding fathers of the EU tried to mitigate in the 1950s with the creation of the European Communities.

The EuroMediterranean Summit in Athens and the role of the European Parliament

The initiative of the Greek Prime Minister Alexis Tsipras to organize the EU Med Summit in Athens (September 9) was aimed at bringing together leaders of the EU member-states of the South towards shaping another political vision for the future of the Union. The basic goal of this initiative was to articulate another economic policy plan that would enhance social and regional cohesion, emphasize a growth-oriented model and tackle austerity.

In this context, the joint statement included the need to re-address democratic legitimacy and transparency of the EU decision-making bodies, improve distribution of European funds towards those peripheries that are more in need, strengthen Juncker’s stimulus package and focus on the need to combat unemployment, especially youth unemployment.   

These goals define the axis over which progressive, leftist and democratic political forces in Europe are moving, building cross-party synergies, stimulating the participation of MEPs from different political groups that have formed the “Progressive Caucus”.

The first initiative of the Caucus, after having supported and pressed for the successful conclusion of the first review of Greece’s bailout program during the first semester of 2016, was held a couple of weeks ago in Brussels against the ongoing negotiations over CETA and TTIP. Such endeavors to intervene in the public debate will multiply in the coming months, mainly focusing on an alternative economic model for Europe that could trigger sustainable growth rates. 

Immediate regulation of public debt in Europe

The Maastricht Treaty foresees that national public debt should not overcome 60% of GDP, making it practically impossible for many governments to abide by this rule, especially in times of financial crisis.

The average debt ratio in EU and Eurozone has been dramatically increased, scaling from 68.4% in 2004 to 90.7% in 2015, thus impeding investments and a more balanced tax system. For the member-states of the European South, like Greece, Spain, Portugal, France and Italy, the relevant debt ratio is way higher, at 126.8%. Taking into account the size of the French, Spanish or Italian economies, this issue has even more complicated dimensions, threatening the survival of the European establishment.  

The effort to deal with public debt departs from Greece and the commitment of the creditors (and the IMF) to concretize short- and mid-term measures by the end of this year, as it was agreed in the 24 May Eurogroup. A successful debt relief would contribute to more flexible tax policies and make public debt sustainable.

The Greek economy is showing signs of recovery, achieving positive growth rates, after eight years of recession and it now needs a clear, steady framework so that growth can start yielding results and leaving a positive imprint in the real economy. 

Increasing appeal of far-right as a result of EU leadership gap

In Germany and France, among other EU member-states, the far-right is trying to play an important role as an alternative political option. In cooperation with conservative political parties, such forces aim at causing the collapse of the EU and utilise hate speech as discourse against refugees.   

The danger of such an inclination by the electorate towards far-right parties is growing. Democratic forces ought to block such a development and intensify their efforts. The European Commission, the European Parliament and the EU Council have to acknowledge this threat and endorse the concerns of the European citizens.

At the same time, the European Commission should implement the relocation agreement and sanction these member-states that fail to comply in the refugee deal.

As long as the European institutions cannot apply binding agreements and political leaders avoid keeping their commitments, it is practically impossible for Europe to function in a collective and organized way. Europe à la carte has no future.

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