Monday

26th Aug 2019

Greek commissioner defies EU model of austerity

  • The commissioner said that Brussels must stop viewing labour issues as a 'burden' to recovery (Photo: baaker2009)

The Greek EU commissioner has mounted a stern attack on the austerity policies demanded by her own institution in a remarkable break with the dominant consensus both within the EU executive and its governments.

Maria Damanaki, the commissioner for maritime affairs, publicly distanced herself from European Commission policies that she says could lead to "social degradation" and called for an "alternative economic policy agenda".

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In a prepared speech to a meeting of trade unionists in Brussels earlier this week, she said: "We have been too shy with the growth and job part of our resolve. While no could deny the need for fiscal consolidation, one could have aimed at a better balance between austerity and growth."

Composed of individuals from across the mainstream of the political spectrum -13 conservatives, seven liberals and seven social democrats, each member is appointed by a national government and they are not supposed to represent their state within the EU executive.

The commission college does however regularly battle over policy decisions, but behind closed doors. In public, they are supposed to embrace a uniform line, which until now has been that however punishing in the short term, there is no alternative to austerity.

Ms Damanaki however has now gone public with her disagreements, the first commissioner to do so, saying that there is an alternative and that she has fought against the logic of austerity within commission discussions.

"Too much emphasis is placed on the debt problem. Consolidation [the jargon for balancing budgets] is not a sufficient answer if it's not coupled with economic growth. And it is a distortive answer if it leads to social degradation."

"Is fiscal consolidation the right and only path to go for all countries? No, it is not."

The speech, given to a conference on EU austerity policies at the European Trade Union Congress in Brussels on Wednesday, was embraced by attendees.

"Since the economic crisis, we've basically been excluded from the commission. Normally we go there and there's no negotiations at all. We just get laughed at," said a member of the European Federation of Public Services Union, a trade union federation that helped organise the event, but who did not want to be named. "So it was excellent to hear a different vision by an EU commissioner."

She said that the commission had to give up its view workers protections as problematic: "We have to stop addressing the labour issues negatively, as a burden to recovery."

The Greek commissioner, a member of Greece's centre-left Pasok party that is currently imposing a regime of austerity drafted by the troika of the commission, the International Monetary Fund and the European Central Bank, said that Brussels is not considering the need to stimulate growth and create jobs and is only focussing on cutting public spending.

"Economic growth, investment and employment in Europe could have been taken on a par with the expenditure control logic, which is being used as the only privileged tool for the consolidation of the European economies."

"Is it only a debt crisis? The answer is ‘No' ... Too much emphasis is placed on the debt problem."

She said that the impact of austerity on employment has been "disappointing", noting how "more and more European workers are in precarious jobs only," with 13 percent on fixed-term contracts, 23 million in what she called "bogus self-employment with no contractual cover and little social protection."

"Insecurity has become a pervasive feature of Europe's labour market."

"We need to care about creating jobs now," she said.

"What we actually need is an alternative economic policy agenda. An agenda that will allow the exit from the crisis in a socially fair way. Let's dare discuss new ideas, which until now remain taboo."

Until 2003 a leading figure within Synapsismos, a coalition of Greek parties to the left of Pasok, she said the emphasis instead of austerity must be on job creation, and that banks should be made to pay "their share".

"There exists a different approach to the problem of debt. If, for instance, the banks were ready to accept their share of responsibility in a situation of restructuring of sovereign debt, fiscal consolidation could be pursued in a socially more acceptable way."

She said that she also supports EU-level issuance of bonds, a proposal backed by the Party of European Socialists, her political family, as well as a European tax on financial transactions, bank levies and green taxation - all as a way to find new sources of revenue to finance the creation of employment.

She also embraced deep European federalism as a solution, saying that another possibility is "a fully-fledged economic union, with harmonised taxes, co-ordinated labour laws and pension systems," - positions on EU integration far exceeding any Brussels has yet dared propose."

Ending her speech, she hit out at the "short-termism" of the current approach, saying the commission should not only be out to "please" business.

"We need long-term vision for our citizens, not a short-term reaction to please financial markets," she concluded. "Europe is a political and social project – it has never been and can never be solely a market."

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