Tuesday

19th Nov 2019

Opinion

How austerity measures may kill states - and the EU

  • Commission president Barroso called the member states to take steps to secure financial stability, growth and job creation. (Photo: European Commission)

“Discipline must be accompanied by convergence and responsibility must be matched by solidarity", European Commission President Barroso said on Wednesday (18 April) during his address at the European Parliament's plenary session in Strasbourg.

In times of increasing unemployment and poverty in Europe, Barroso called the member states to take steps to secure financial stability, growth and job creation. With this in mind, the Commission presented two new Communications: “Employment package” and “Growth for Greece”.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 year's of archives. 30-day free trial.

... or join as a group

As always, time will judge whether these new initiatives will prove to be effective – but reaction and concrete measures are needed now.

Eurostat unveiled in its latest report that unemployment in Europe has again reached record numbers with Southern European countries being particularly hardly hit. Especially worrying is the on-going increase of youth unemployment. Spain alone has a 50.5 percent joblessness rate amoug its young people.

These data also expose the weak side of the current austerity measures for which Portugal provides a good example: Despite the fact that the Troika (EU, IMF and ECB) has positively assessed Portugal's programme of economic reforms, it's economic situation is alarming.

According to Eurostat and the latest interim forecast of the European Commission, Portugal's real GDP contracted by 1.5 percent in 2011 and is expected to further decline by 3.3 percent in 2012. Its unemployment rate was almost 14 percent in 2011 and is expected to further increase this year. The youth unemployment rate in February 2012 already exceeded 35 percent,with no apparent signs of economic recovery in sight.

It is difficult to imagine a worse impact than austerity measures on economies already hit by economic slowdown. With economic activities halted, neither employment nor state income is generated and public spending cuts prove completely ineffective (given that the parameter used to measure public deficit, the GDP, continues to fall). It is a vicious circle.

But voices calling for a revival of stimulus measures are getting louder. At the last European Summit – although the Fiscal Pact was signed- there was recognition that the EU needed to move beyond austerity measures. The conclusions of the European Council praised the “recent measures taken by the ECB as regards long-term lending to banks." Experts agree that further ECB intervention will take place in the foreseeable future and in the long term.

Of course, such scenarios give rise to concerns that the Eurozone is rushing towards inflation and - especially when it comes to demands for a real transfer union - that incentives for reducing state deficits could vanish.

Yet what are the alternatives when it becomes evident that apart from the economic consequences, the socio-political impact of the austerity measures may be devastating? What actually remains of a state when its citizens do not have jobs, when public coffers are empty and productivity is down?

When this happens citizens often deploy their last democratic weapon and turn against themselves, letting extremism and totalitarianism rise. Not without a certain irony, current measures originally meant to save Europe (“If the Euro falls, Europe will fall!”), may lead to the very opposite: to the rise of radical anti-Europeanism.

The current one-sided austerity measures not only do not help to bring deficient countries back on track, but endanger the structure of the entire state and of the EU itself.

More and more voices are calling for change in Europe, for further economic integration and for creating a genuine transfer union through the collateralising of debt.

The latest statements by French President Nicolas Sarkozy on changing the rules of the ECB and concentrating part of its activities on growth stimulation go into the same direction.

But it is unclear whether the momentum for change is really here yet. The answer lies with politicians in richer northern states.

The writer is Secretary General of the Confédération Européenne des Syndicats Indépendants

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

EU commission tries to win Greek sympathy

With less than a month to elections in which Greek radical parties are set to score well, the EU commission is keen to show it has more to offer than austerity.

EU investment bank 'wide open to abuse by fraudsters'

Fundamental reforms are needed if the EIB is to become more accountable, democratic and transparent. Establishing a firm grasp on corruption to ensure that public money no longer feeds corrupt systems is a vital first step.

European beekeeping in crisis

Europe's bee population is dying. The number of pollinator species threatened by extinction is increasing each year, and human activity is the main cause.

Corruption in the Balkans: the elephant in the room

Over the years, both real and perceived levels of corruption in Albania, Bosnia and Herzegovina, Montenegro, North Macedonia and Serbia have remained high. The necessary reforms in those countries, to put it mildly, are not yet effectively carried out.

News in Brief

  1. Hungary, Poland block EU conclusions on rule of law
  2. France: wide EU backing for enlargement change
  3. EU Council calls for policy action to protect marine life
  4. ECJ: Poland's judicial independence in doubt
  5. Suspected 'middleman' in Caruana Galizia case arrested
  6. European populists more favourable to Russia
  7. Hungary's new commissioner approved by MEPs
  8. Balkan coal power plants fail to meet emissions targets

'A game of roulette' - life as a journalist now in Turkey

Turkey has more journalists behind bars than any other country in the world. The authorities seem to equate journalism with terrorism: everyone has the right to express themselves, but, in their eyes, legitimate journalism is a threat to security.

Stakeholders' Highlights

  1. Nordic Council of MinistersEarmarked paternity leave – an effective way to change norms
  2. Nordic Council of MinistersNordic Climate Action Weeks in December
  3. UNESDAUNESDA welcomes Nicholas Hodac as new Director General
  4. Nordic Council of MinistersBrussels welcomes Nordic culture
  5. UNESDAUNESDA appoints Nicholas Hodac as Director General
  6. UNESDASoft drinks industry co-signs Circular Plastics Alliance Declaration
  7. FEANIEngineers Europe Advisory Group: Building the engineers of the future
  8. Nordic Council of MinistersNew programme studies infectious diseases and antibiotic resistance
  9. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  10. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues
  11. Nordic Council of MinistersNo evidence that social media are harmful to young people
  12. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021

Stakeholders' Highlights

  1. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  2. Nordic Council of MinistersEducation gets refugees into work
  3. Counter BalanceSign the petition to help reform the EU’s Bank
  4. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  5. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  6. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  7. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  8. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  9. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  10. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  11. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  12. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year

Join EUobserver

Support quality EU news

Join us