For social democrats, the principles guiding any crisis exit strategy must be the smooth transition to a model based on sustainability and solidarity. This requires to recognise the social origins of the crisis and to draw the correct policy implications from it.

This is not only a political, but also an ideological battle, as recent decisions by the Ecofin and the spring European Council – i.e. the end of exceptional support measures for the labour market and the EU 2020 strategy – have shown.

While other countries, notably the US and Japan, invest in their future and boost growth, the conservative European leadership is obsessed with slashing public finances at any social and economic cost. While the last Eurostat figures show that unemployment has reached a ten-year high with 23 million people being out of work and youth unemployment reaching 20%, this consolidation of public budgets is too early. An agreement over a two year moratorium on the infringement procedures of the Stability Pact should be reached to face these circumstances. Moreover, these decisions don’t recognise the economic advantage of strong welfare systems and better social standards, which were praised until recently for having shielded us from even worse effects during the climax of the crisis.

Tightening fiscal policy in this context bears high social but also economic risks. It will generate several more million unemployed, thereby prolonging the recession and generating costly long-term unemployment, result in less internal demand and more social exclusion. But there is also a significant political and democratic risk connected to this policy: Exacerbating social inequalities might radicalise citizens or alienate them altogether from politics.

A further cause for concern is the European Council’s decision to postpone to June the selection of quantified targets relating to poverty and education to be included in the EU 2020 European Strategy. While the European leaders endorsed the five objectives listed in the Commission’s proposal (employment, R&D, environment, education and poverty), they postponed the adoption of quantified targets and indicators for the last two.

Let me recall that the initial proposal by the Commission foresees that the number of Europeans living below the poverty line should be reduced by 25%, which would mean lifting 20 million people out of poverty. It had already been criticised by social NGOs for its lack of ambition before being simply removed by the Council on the grounds that by virtue of subsidiarity, the European Union should not act in this area.

It is true that the current situation calls for action, and not for a further sterile institutional dispute over treaty changes. However, according to the Treaties, the fight against poverty is both a national and an EU competence. Article 151 of the Lisbon Treaty mentions the fight against social exclusion as one of the Union’s objectives, with the Union supporting and complementing the actions of member states (Article 153).

The crisis has revealed a severe lack of regulation of financial markets, a lack of coordination of economic policy and a lack of tools in the social area. The lessons that should have been drawn are firstly, that we can’t afford to deprive ourselves of the few tools that we have; and that combating the effects of the crisis and preparing for tomorrow’s challenges need to be done in a more focused and coordinated way in order to ensure a maximum effect of synergy among all levels of governance.

The second lessons should be that economic policies need to be directed at job creation and reducing social inequalities. However, the current political majority in Europe prefers to give full powers to the treasuries without involving employment and social affairs ministers.

In this political and institutional context it is up to the European Parliament and national Parliaments to fight for change of priorities that puts citizens first.