Can Europe Make It?

Τhe European challenge: unity, return to growth and the social pillar

The White Paper presented by the President of the European Commission Jean-Claude Juncker a couple of weeks ago is proof of embarrassment and inaction.

Dimitris Papadimoulis
16 March 2017

President of the European Commission, Jean Claude Juncker. PAimages/Xinhua/SIPA USA. All rights reserved.

The White Paper presented by the President of the European Commission Jean-Claude Juncker a couple of weeks ago is proof of embarrassment and inaction.

It is a general list of ideas that could create further instability and division rather than provide what EU and Eurozone really need: strengthening of social and regional cohesion, decrease of inequality, balanced EU funds distribution between the strong and the weak member-states and peripheries, addressing the democratic deficit and promoting social justice. 

Major policy tools that the European Commission has promoted in order to improve cohesion, such as the Europe2020 strategy, cannot fulfil their goal under the current political and economic circumstances in the EU. Similar tools, like the structural and investment funds that aim at improving social factors and employment rates, bringing fiscal harmonization and accelerating the banking union are now under threat.

In this respect, it seems that the White Paper provides an alibi to the European Commission to endorse the creation of a small group of member-states that will supposedly run faster and more coherently at the expense of the rest of EU member-states.  

The recent meeting of political leaders of Germany, France, Italy and Spain in Versailles is the first step towards this direction. Nonetheless, it is interesting to note that even these member-states demonstrate different financial and social imbalances that make cohesion impossible.

The German government is violating the rules of the Stability and Growth Pact in terms of the maximum rate of trade surplus as of the GDP, insisting at the same time in austerity and tough fiscal consolidation for the rest of the Eurozone.

The French government has to deal with its public debt and deficit, whereas the Italian transitional government needs to address the discrepancies of the banking system and the excessive rate of non-performing loans that threatens to blow up the Eurozone.

Finally, Spain has to cope with massive unemployment and inequality rates as the government struggles to preserve the fragile political compromise and remain in power.

Furthermore, except for the French leadership, no other government of the largest EU member-states has presented a clear and convincing policy plan on how the EU and Eurozone can exit the lasting crisis. 

In this context, and only a few days before the 60th anniversary of the Treaties of Rome, the European Union is not listening to the growing concerns of its citizens but seems to be following a destructive path that favours far-right and populist forces, like Le Pen in France and Orban in Hungary, that vie for the return of nationalism and xenophobia.  

Amid these strenuous conditions, the Eurozone is also negotiating on the conclusion of the second review of the Greek bailout program. Most of the issues concerned and addressed in February’s Eurogroup have to do with the reinstitution of collective bargaining and the protection of labour rights, the cooling down of austerity politics, and the positive fiscal performance of the government. The European Commission, and the respective Commissioner Pierre Moscovici, have pledged to reset the Greek labour market taking into account the European acquis, but the thing is that so far there is no concrete development.   

The role of the European Commission is also important in bridging different perspectives between the creditors and the Greek government taking into account the mutual interest of Eurozone member-states and standing firm on the positive results of the Greek administration, the reform agenda and the forecasts of Eurostat over the performance of the Greek economy.

The successful conclusion of the Greek bailout review is in the interest of the Eurozone and has to be put above national or political interests – something that the Greek side tries to make clear – especially in a period of regional and geopolitical turbulences. 

The European Union is at a crossroads and it has to decide what political and economic strategy it will follow. The French and German elections are important chapters in this process and progressive forces in both countries should come closer, foster alliances and acknowledge that in these times the European project should be revised and reformed to address the European citizens, not the markets or specific financial interests. 

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