A Change In Course Towards A Social Europe

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Martin Allespach

A unified Europe without dividing borders, with the certainty of a peaceful future and social security accompanied by social and economic progress – this has always been and still is the essence of the ‘European dream’. To us it describes the hope we associate with the project of a Social Europe. After all that we have been through recently, however, we now know better than ever before: our aims and desires cannot be attained merely by dreaming. We have to work towards these, rather, in a concerted, deliberate manner. The European dream has very little to do with the free movement of capital, nor is it just a candy shop for international financial markets. Europe must be more than just a community that is there to benefit banks – it has to be a community that protects its citizens as well. That is the Europe we are fighting for – a Europe offering better living conditions and better job prospects for all its citizens. A Europe marked by socially responsible, sustainable business and economics. A Europe that serves as a global model for a vibrant, living diversity of cultures.

Jan Machnig

Jan Machnig

Probably no other topic stirs up more emotions at present than the international and European financial crisis, its repercussions for Europe and its people. Europe’s elites’ answer to the Euro crisis has thus far been to slash spending, pensions, social services, fire civil servants and lower minimum wages while raising taxes and levies. These various measures have among other things included the rollback of protection against redundancy in Italy. But none of them have truly targeted the root of the problem and grabbed it by the horns: slumping industry and rampant tax evasion. To take another example: in Spain ailing companies can now unilaterally cut wages and lengthen working hours. Europe is trying to save itself out of the crisis. Cyprus has also recently imposed belt-tightening measures. The aim and hope? If government spending can be cut and wage costs lowered enough for business enterprises, the engine of growth will somehow get jump-started and the public deficit will recede. Only in this way, it is argued, can government budgets be saved from oblivion.

United Europe has lost its attractiveness for many of its citizens. Individual member countries are being force-fed austerity policies with the support of European institutions. The EU Commission never tires of initiating yet another round of deregulation. That is why many people are blaming the European Union for the erosion of their living conditions and policies solely serving the interests of ruling business elites. This is destroying the consensus on the European project. This is why we need a change of course towards a united Europe without any dividing borders, a future living in peace, with guarantied social security accompanied by economic progress.

What we need is a political and social Union. A European social package has to create a new order in labour markets and combat social dumping while enabling participation, democracy and co-determination. This can only happen if EU countries adopt a common economic and social policy. The economic and social policies of the member states should be coordinated by an economic administration democratically elected by the EU Parliament.

The preliminary balance sheet of European policy to confront the crisis to date shows ever more clearly that the neo-liberal model does not work: austerity policy is sharpening the recession and causing the debt burden to mount further. Rampant unemployment among youths in the crisis countries has in the meantime reached dramatic levels. The economist Peter Bofinger hit the nail on the head when he said that saving aggravates the crisis because it slows growth. He considers the drastic measures imposed on Greece by the EU Troika (EU Commission, European Central Bank and International Monetary Fund), for instance, to be counter-productive. The policy of budget consolidation is above all being pushed through at the expense of lower and medium income persons as well as Europe’s younger generation.

No political strategy is ‘without any alternative’. The longer the crisis lingers, the more urgent it is becoming to change course in the direction of a Social Europe based on solidarity. There are various strategies for making Europe more viable in the future. In its ‘Karlsruhe Declaration’, IG Metall advocated as far back as 2011 a solution to the crisis based on European solidary – a strategy marked by ‘an unwavering, immediate change in course with respect to the EU Commission’s and German government’s financial, economic and labour market policy towards a democratic, ecological and social Europe’. It reaffirmed its call for a Europe united in solidarity and democratically legitimised at the ‘Change-of-Course’ Congress in 2011. To spell it out in concrete terms:

  • Europe needs sustainable growth through an active, coordinated and democratically legitimated economic and industrial policy to ensure the viability of its industrial base and value-creation.
  • Saving the Euro requires that the Community assumes joint liability as well as establish Community controls over national budgets.
  • Europe needs comprehensive regulation of the financial market.
  • The European Union needs the backing of its people. To this end it has to become a social Union.
  • The European Union needs to become a political Union.

Europe requires a European Marshall Plan. The contours of such a plan have been developed together with other German trade unions under the umbrella of the Confederation of German Trade Unions (DGB). This plan provides a package of various measures to boost public and private investment as well as creates instruments to lift consumption. Instead of strangling demand by tightening the belt ever further, it has to be ensured that the enormous amount of capital awash in the world at present is channelled into investments in the future. Europe has to fight the crisis, make its economy and infrastructure viable for the future and create permanent, secure jobs. To this end it is absolutely essential that the member states curb the power of banks, regulate financial markets and establish a just tax regime. Banks have to be forced to perform their primary role: serving the real economy. In addition, highly speculative investments must be regulated and rendered less attractive by means of a financial transaction tax. A European supervisory authority for banking and a common rating agency need to be created. The deposit and credit business must be detached from investment banking.

It is only a combination of measures like these that can bring about a change in course towards a Social Europe. Political decisions and not the market need to have primacy in designing Europe’s structure. Finally, Europe has to once again become a project of the broad majority of its citizens and not its so-called elites. Strengthening the social dimension of Europe hence requires a colossal effort. Let’s roll up our shirtsleeves and tackle it together – in Europe and for Europe.

This is a shortened version of the author’s contribution ‘Kurswechsel für ein gutes Leben: Der Beitrag der IG Metall’, in: Huber, Berthold (Ed.): Kurswechsel für ein gutes Leben – Wege zu einer solidarischen Gesellschaft, Frankfurt am Main, Forthcoming 2013. It is also part of the EU Social Dimension expert sourcing project jointly organised by SEJ, the ETUCIG Metall, the Hans Böckler Stiftung, the Friedrich-Ebert-Stiftung and Lasaire.

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  • anatman29

    Having worked so hard to purge the collective false-memory of Europe in 1932 it is not unreasonable that people today fail to recognize the dangers inherent with the rise of ethnic nationalism in times governments are enforcing austerity. I call it a false-memory because in more than 70 years Europe has failed to come to terms with the real scale and scope of collaboration with fascism that was the result of the last major combination of large ethno-linguistically diverse and economically dispossessed populations held in thrall to ill-advised bank-driven economic policy.