Thursday

15th Nov 2018

Opinion

New model needed to save EU

  • The Syriza-led government was called on to drag Greece out of the financial crisis (Photo: EUobserver)

Since 2010, Greece has been experiencing one of the deepest financial and social crises, as a result of decades-long mismanagement and corruption by the political leadership of the ND and Pasok parties.

In addition to that, austerity politics have further damaged an already weak economy with deep-rooted structural problems.

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Between 2010 and 2014, the economic policy mix that has been implemented did not address the causes of the financial crisis, but, to the contrary, it worsened social inequalities, weakened the welfare state, and deregulated the labour market.

The low- and middle-income classes were hit by increased taxation, whereas expansive tax evasion never received proper attention.

Counter-productive policies

Counter-productive policies ruined the market, and the lasting recession led to sky-rocketing unemployment and poverty rates.

In other words, Greece ended up being a place where unsuccessful policies were implemented, with an incompetent political leadership giving its consent to a continuous downward spiral.

The Syriza-led government was called on to drag the county out of the financial crisis, with its memoranda: put the economy back on track, and create a safety net for the most vulnerable parts of the society.

The successful conclusion of this demanding process necessitates constant negotiations with the creditors, successful reforms, and positive fiscal results.

Unlike the Greek government, no other type of political leadership in the EU has found itself in such a position in the past, something that put additional pressure on the Greek side.

Nonetheless, this is a distinctive fact that has been acknowledged by a great deal of MEPs, the European Commission and many member states that support the Greek government and push all sides to reach a compromise.

Furthermore, the Greek government is developing a pro-European agenda that emphasises the increase of social and regional cohesion, a more sustainable economic model for the eurozone, and the improvement of employment rates.

All three of these objectives are set as core priorities of progressive political parties across the EU, which exert pressure on conservative forces in Brussels and Berlin.

This ongoing debate for the future of Europe - the challenges and threats to the European Union - are all reflected in the Greek case.

A new model

A large part of the European electorate and progressive political forces in Germany, France, Italy, Portugal, Cyprus and elsewhere, have recognised that it takes a new political and economic model to save EU from dissolution.

This development, along with the acknowledgement of the complex political balances within the EU, make us understand every piece of the EU puzzle, the role of decision-making mechanisms, and how conflicting interests are projected on Greece’s bailout review process.

We have 1.5 years until the conclusion of the bailout programme. The ongoing review should conclude with a compromise that also abides by the EU acquis and the positive fiscal results that have been achieved so far.

The Greek government should intensify its efforts and achieve sustainable growth within the EU context.

Exiting from bailout programmes should not mean the repetition of the same catastrophic policies of the past, but it should instead mean the implementation of policies that address the collective concerns of the society, boost production, assist in tackling brain-drain and take advantage of the skillful youth.

Dimitris Papadimoulis is vice president of the European Parliament, and head of Syriza party delegation.

Greece and creditors break bailout deadlock

Athens agreed on budget cuts worth up to €3.6 billion and extracted some concessions from creditors, but the IMF warned the package might not be enough.

Greek bailout talks to 'intensify'

Greece and its creditors will meet in Brussels later this week to unblock negotiations needed for a new tranche of financial aid, amid concerns over the country's economic situation.

Varoufakis back in push for ECB transparency

The former Greek finance minister Yanis Varoufakis and German left-wing MEP Fabio De Masi want to know whether the European Central Bank overstepped its powers when putting capital controls on Greek banks in 2015.

A positive agreement for Greece

The outcome of the Eurogroup meeting this week leaves a positive footprint, setting the basis for the Greek economy to exit the vicious circle of austerity and debt.

US steps in to clean up Cyprus

Cyprus has overlooked undertakings on bank probity made to the EU in the context of the 2013 bailout - but it might prove harder to get the US off its back.

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