17 Σεπτέμβριος 2012

The European dream must be revitalised

Nikos Chrysogelos

MEP, Greens

 

The Greek crisis stems from a truly unsustainable development model that was followed for decades, as well as from Eurozone’s structural problems. However, it is not only the causes of the Greek crisis that are shared between Greece and the rest of Europe. The consequences of a potential Greek exit from the euro will certainly have an impact in both Greece and Europe as it will be a real catastrophy for the Greek economy and society, but also a severe blow for the European dream of a united Europe. Hence, euro must become a tool for unity, not for division and Greece mustremain in the Eurozone.

 

To address the Greek problem, the Troika (EU, IMF, ECB) continues to insist on a one-dimensional policy, based on "internal devaluation" and reduction of wages and pensions (more than 30%) as a tool for the increase of “competitiveness”, as well as on a dramatic cut of public investments and spending for social services.

 

Judging by the results of these policies during the past 2.5 years, one can observe that they failed to achieve their primary objectives. The deficit did not become eliminated while all predictions for the debt levels failed. In the process, however, something even worse occurred: The fiscal crisis was transformed into a deep economic and social crisis.

 

The harsh austerity policy led to an explosion of unemployment which reached the overall level of 23,1%, while youth unemploymentskyrocketed to 54,9%. Moreover,the household income was reduced by 25-30% and it is estimated that it will be further reduced by 5-7% until the end of 2012. Furthermore, 20.9% of the population now live below the poverty line, while the real economy is rapidly being destroyed, as Greece heads towards its sixth consecutive year of recession. The total reduction of the greek GDP will reach 20% (2008 – 2012) while it shrank by 6.2 percent just in the last quarter. The crisis has moved from the public to the private sector especially in SMEs which represent a huge part of Greek economy. As a result of all that, the huge amount of money that Europe is spending for the rescue of Greece, is to a large extent used to service the debt and recapitalise Greek banks, instead of being available to revitalise Greek economy.

 

Can the situation be reversed? It is certainly a very difficult task at the moment. First, Greece needs to urgently changeits administration model taking all the necessary steps to restore the common sense of justice. Second, Greece should set and achieve different targets and priorities in its economy. Emphasis should be placed on a green turn of the economy, which, as studies show, can create new jobs, while jumpstarting the economy in a sustainable and long-lasting fashion. Such a plan will enable Greece to succeed in fiscal consolidation and at the same time upgrade its social infrastructures as a means to compensate for the loss of income. This will in turn, strengthen social cohesion and solidarity and will provide the basis for citizens to start believing again that an exit from the crisis is possible. To this end, Greece shouldget the necessary support to overcome the deepest crisis it is facing in its recent history.

 

The Greens in the European Parliament are in favour of a number of reforms in policies promoted by the Troika as well as in the terms of the Memorandum of Understanding leading to the Second Economic Adjustment Programme. In this direction, we have publically presented 7 proposals for a way out of the Greek crisis:

 

1. Green New Deal Investment Package. Greece must be supported in investing in energy and resource efficiency and the use of renewable energy resources as well as in green and social innovation. The corresponding package should be financed from Project Bonds, the European Guaranty Funds, a fair levy on wealth and Financial Transaction Tax (FTT), in addition to the effective utilization of unused resources from Structural Funds andthe innovative utilization of financial instruments from Commission budget resources.

 

2. Adaptation of the terms of the Memorandum of Understanding to European policies and theirgoalsto successfully address employment, poverty eradication, social dialogue and sustainability issues.

 

3. Extension of the time available to Greece to achieve the fiscal targets by two (2) years (until 2016, instead of 2014) in order to succeed. The ESM should finance this extension.

 

4. Ensuring of the Greek borders with European guarantees, in order to freeze all armament programs for 3 years.

 

5. Ensuring a European support for migrants and refugees in Greece.

 

6.     Engagement of the European Commission in the effort to get detailed data from the Swiss and other banks for Greek deposits. Help for the improvement of the efficiency of the Greek tax administration as well as fair tax harmonization measures in Europe.

 

7.     European Agencies should directly support Greek regions and municipalities in revitalizing the real economy, absorbing the existing European Funds and mobilizing additional investments

 

If the data used for the ranking the financial state of regions for ERDF are primarily of theperiod before the crisis (2006-2009), this could lead to a situation where certain regions are erroneously classified as of higher financial performance, while the current socio-economic reality is totally different.

 

Although we undoubtedly need a long term policy for finding a way out of the crisis, which will include speeding-up the reaction of the European Union to the crisis, some social groups are facing an immediate problem of survival. A substantial part of the Structural funds should be earmarked - where necessary without co-financing - for social purposes, fight against poverty and the creation of jobs, especially for the young people. A Youth Guarantee System aiming at job creation in the 8 countries with high percentage of youth unemployment and a Solidarity Fund which could support directly the vulnerable social groups facing difficulties to survive in Greece and other crisis countries must be established with the utmost sense of urgency. The funding could come from the ESF and other European resources (e.g. 120 billion by “Europe for growth”).

 

Moreover, the debt crisis has led Member States to curb public spending and implement austerity budgets although massive investments are required to break the cycle of the crisis and achieve the EU 2020 strategy. It is therefore particularly important to increase the EU budget which is currently too small to handle the problem.

 

The establishment and implementation of a multilevel governance model is also of particular importance. Such a model must include a performance-oriented approach for the resources of the Structural Funds and the tools of the Cohesion Policy. At a more integrated level, the Greens propose a Green New Deal which constitutes a comprehensive response to the multiple crises, integrating macro-economic reforms with a social inclusiveness agenda and green industrial policy, from the local to the global level. We need to advocate the necessary investments to jump-start the urgently needed transformation to a sustainable greener economy, allowing the creation of new green jobs, thus leading to social cohesion.

Last modified on Σάββατο, 02 Φεβρουάριος 2013 20:07