Contributions to a Critical Debate
E-Book, Englisch, 166 Seiten
ISBN: 978-3-8012-7003-2
Verlag: Dietz, J.H.W., Nachf.
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A Progressive Vision for Europe A View from Spain Josep Borrell Fontelles From Enthusiasm to Rejection Spain has generally been a Europe-friendly country. During the isolation of the Franco regime, for Spaniards of my generation Europe represented a combination of political freedom, social solidarity and economic progress, which we craved. Furthermore, in the EU we have enjoyed the best period of Spain’s recent history. The assistance provided by the EU and the credibility boost bestowed by the euro contributed to this. However, the euro crisis has adversely affected perceptions of European integration. Indeed, the »real Europe«, the one responsible for policy measures to combat the crisis, is regarded as an agent that weakens democracy at national level without strengthening it at European level and also compels Spain and other nation-states to make cuts in social services. Only 18 per cent of Spaniards believe that they have a democratic voice in the EU. We have learned that one can change a government but not policies because the latter are decided on by other agencies, over which we have no control. At the behest of the European Central Bank (ECB) we had to swiftly amend the Constitution and the changes had to come into force within a matter of days. Furthermore, the European authorities, with little legitimacy, have constantly harangued us concerning by how many percent we should raise our taxes and lower our pensions and wages. Indeed, inequality and insecurity have increased significantly throughout Europe and Spain is now in second or third place in the EU with regard to inequality. Taxes on wages have been raised more steeply than capital gains taxes. Furthermore, without a flexible exchange rate social norms have served as adjustment variables to counter the difficulties created by an asymmetric macroeconomic shock. As in other EU peripheral states this approach is not regarded as a solution, but as one of the reasons why the social situation has deteriorated. This Europe does not represent the values and goals of the left, which calls into question the legitimacy of the European project. The legitimacy achieved by the positive developments of the first few years of the euro has been lost because of the severe economic consequences of the crisis. In Spain, 67 per cent of people believe that the policy measures taken have had no positive effects. There is no prospect of growth, which might help to reduce the unsustainably high unemployment rate, and the promise of lasting prosperity has gone up in smoke. The social strata supposedly represented by the left have been hardest hit by these negative developments. Election results show that the left is not in a position to help such people out of their predicament. They do not get any votes or support from the victims of this new crisis of capitalism, a crisis in which banks have not been wound up, but instead bailed out with vast amounts of public money, and without even kick-starting the credit cycle. All this explains the growing antipathy to European integration. Trust in the EU has fallen from 57 per cent in 2007 to 31 per cent in 2013, and 46 per cent are dissatisfied with the democratic functioning of the European institutions. The same polls also show, however, that Europeans in the Eurozone do not want to revert to their national currencies – perhaps because they are aware of the cost of a break with the EU and a return to the old order. Or it may be because they suspect that it could be more difficult to stand alone in a global world. It is as if they basically know that the answers to their problems are to be found in a space that is bigger than the national sphere and that an alternative to the recessionary austerity measures being implemented in Europe must be found. No Solution without Growth This requires a policy that would lead to the recovery of growth and the maintenance of domestic demand with decently paid jobs. Such a policy would not seek a solution to the economic crisis in punishing pensioners, the unemployed and the sick nor sacrifice those things that would make it possible to build for the future, such as education, investment and environmental restructuring of the economy. This is the most efficient way to reduce the deficit, debt and social security costs. However, as regards growth policy, the current architecture of the Eurozone cannot cope with the problems. The surplus countries of the North are right to demand that the countries of the South with deficit problems take responsibility. But they must keep their demands realistic and implement policies at home that help to maintain a balance in the Eurozone. If the surplus countries of the North continue with their restrictive policies and stick to the low wage growth pursued from 2000 until very recently, the aim of international competitiveness will lead to an unacceptable level of »internal devaluation« in the deficit countries of the South. Excessive austerity measures and deflation with higher unemployment and a credit shortage mean that the reforms needed to restore competitiveness in the deficit countries of the South are neither politically nor socially viable. The structural reforms are contractionary in the short term. If they are to succeed they must be accompanied by policy measures to boost demand, while simultaneously serious efforts are made to stabilise taxes. At present the Eurozone has the weakest growth in the OECD and the severity of the recession in the deficit countries of the South continues to pose a major problem for the survival of the euro. But this situation did not emerge overnight. Weak growth and a rising unemployment trend existed in the EU before the crisis. Community policy, which faithfully follows dogmas imported from countries that do not comply with them themselves has led to social and tax competition between European countries, weakening domestic demand. The opening-up of Europe to unconditional free trade has undermined the industrial capacity of several countries like Spain, Portugal, Italy, France and Greece, for which the euro has been overvalued. In Search of a New Raison d’Être for Europe The current situation can be summarised as follows: European integration has achieved its main aim, namely bringing peace to the continent, but it has failed to create lasting prosperity and solidarity for all, based on the emergence of a European demos. Europe’s economies have never drifted so far apart as today. The euro has made it possible to end currency wars in Europe but it has only masked the growing differences in competitiveness. Furthermore, the path to political unity has not been laid; instead, the sense of Community has been weakened, resulting in a new divide between the North and the South of Europe. In order to overcome the threefold crisis – the legitimacy, credibility and effectiveness of the EU – a new »raison d’être« is needed for European integration. It can no longer be based on a desire to avoid a repeat of the horrors of the past, but must be oriented towards a future value-added that would be perceptible in people’s everyday lives. And as Jürgen Habermas has said, the only political project that can mobilise citizens is one based on a European social model or the preservation of the European way of life in the face of globalisation. Today the citizens of many countries take the view that European integration, especially in the realm of the economy, has not served these projects and even threatens the social norms they want to protect. Legitimacy and the Social Dimension The weaknesses of the social dimension represent the core of the EU’s legitimation problems and even more so those of the Eurozone, in which the economies are more closely integrated. The crisis has exacerbated this lack of legitimacy because, on one hand, more discipline, but on the other, more solidarity was required. Both dynamics demand legitimised institutions in order to make decisions concerning fundamental policy issues. Without sufficient awareness of our mutual dependence we have allowed the tax problems of a small country to expand into a problem for the whole monetary union. The presentation of the crisis as the result of a lack of tax discipline was one-sided and incomplete. In Greece the deficit caused the crisis, but in Spain the crisis led to the deficit. Therapy based on a mistaken diagnosis has exacerbated the problem. The euro has survived only because of the ECB, which has based its actions on a rather free interpretation of the treaties. If Trichet had said the same in summer 2010 as Draghi said in summer 2012 we would have been spared the crisis. The Functions of the ECB Events indicate the need to rethink the functions of the ECB. The ECB’s mandate should be expanded in order to enable it to take account of the goals of growth, employment and financial stability. Furthermore, it should also act as lender of last resort for countries so that the vicious circle of public debt and the financial system can be broken and the Eurozone’s financial dismemberment can be avoided. However, if the ECB is to be able to act as a central bank with full authority to intervene in the sovereign debt markets, new political institutions are needed to create treasury for the Eurozone, of the kind possessed by all fully-fledged monetary unions: a common budget of adequate size, the possibility of EU borrowing, and fiscal transfers within the Eurozone. The fact that the ECB decides on the inflation target for the Eurozone poses a problem of democratic legitimacy. How much inflation a...
