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Europe’s political choice

Poul Nyrup Rasmussen

 

The right's leadership has left Europe divided, unequal, and vulnerable to the economic crisis. A progressive majority in the EU Parliament would mean a major change of direction.

 

It goes without saying that the financial and economic crisis will be the key political issue for months, if not years to come, and will impact on elections around continent. And it also goes without saying that this includes the European Parliament election.

There is a strong case for saying that the crisis will make this seventh European election the most political ever. This is because the crisis has shown two very different ways of running Europe, giving voters a political choice of unprecedented clarity.

 

Market-led Europe

Over the 2004–09 mandate, the right has been in power in a majority of EU member states. It has therefore had a majority in the EU Council. It also has a majority in the European Parliament and in the European Commission, whose President, José Manuel Barroso, is a conservative.

No one can say that the right – European conservatives and liberals – has not had the political capital to take Europe in a positive direction. But what has it done with this opportunity? Did it address rising energy and food prices? Did it fight poverty and inequalities? Is Europe fairer than it was five years ago? Did it support the left’s initiatives to deliver more and better jobs?

Instead, the right wasted its opportunity by pursuing a policy of blind faith in the market, creating a Europe which is more divided, more unequal, less coherent than before, heading towards eighty million people in poverty or at risk of poverty – many of them children – and twenty-five million unemployed.

Even before the onset of the financial crisis, the right used its leading position to undermine social and environmental legislation under the mantra of ‘the invisible hand of the market’. It created divides between different parts of the continent by failing to ensure a fair deal for all. It responded to the challenges of globalisation by encouraging a race to the bottom in social standards and blocking and weakening moves by the left on issues ranging from working hours, fair pay and decent conditions to public services, accessible education and financial regulation.

This alone shows that the right is not fit to lead Europe, but since the start of the financial and economic crisis the proof has become even stronger. Not only did the right’s support for unfettered markets exacerbate the effects of the market failures that provoked the crisis, but they also made Europe’s economy and citizens more vulnerable to the economic fallout.

Now more than ever we need strong social policies and public services to cushion people losing their jobs, faced with the ever-present risk of home repossessions and an ever-greater struggle to make ends meet. For example, it is those in precarious jobs, the sort of jobs favoured by the neo-liberals, that are hit first and hit hardest by economic contraction.

What’s more, the right has failed to deliver the bold leadership and recovery plans needed to take Europe out of the crisis. Again, it is now that we need strong impetus at the European level more than ever. No country can solve global problems by acting alone, and concerted, coordinated European action is essential. But the right has failed to rise to the gravity of the situation, talking about the crisis as if it were unavoidable, a law of nature, and failing to recognise the risks of not doing enough.

After all, from the very beginning, European conservatives and liberals underestimated the scale of the crisis. The Party of European Socialists warned about the threat of unregulated markets long before the collapse of Lehman Brothers.

Back in April 2007 I joined with Ieke Van den Burg, a Dutch Socialist MEP, to present a report which warned of a financial crisis and the effects that this would have on the real economy, on the real industries, real enterprises and real workers and those that depend on them (Burg and Rasmussen, 2007). In November of that year PES member parties unanimously adopted a resolution calling for new regulation, accountability and transparency (Party of European Socialists, 2007).

The contrast with the right could hardly be starker. Over the past parliamentary term figures from the European conservatives and liberals have not only blocked essential new regulation but consistently and vocally criticised what they called ‘over-regulation’. The events of the past year could hardly have debunked this more clearly; the left has been and is categorically, unequivocally and unambiguously on the correct side of the argument.

 

Responses to the crisis

This is also the case with the right’s response to the crisis itself. In September 2008 the European Parliament passed my report calling for regulation for all financial players, to which the Commission is obliged to respond (European Parliament, 2008).

Again and again, President Barroso has promised to put forward proposals that match those demanded in the report, repeatedly postponing this urgent legislation. All the while his Commissioner for the Internal Market in Services, Charlie McCreevy, has acted like a lobbyist for the private equity industry, continually expressing faith in voluntary regulation. If the right does not recognise the destabilising potential of unregulated markets now, it never will.

Its response to the crisis has been equally unsatisfactory in terms of relauching the economy. The OECD has predicted that the Eurozone economy will contract by 4.1 per cent. That is not just a statistic; it means a wave of job losses, bankruptcies and misery on a scale unprecedented in the post-war era. Yet conservatives and liberals have gone to extreme lengths to avoid correspondingly drastic recovery measures.

Firstly the right-wing Commission has repeatedly claimed that the EU is investing 3.3 per cent of GDP in stimulus spending, a completely misleading figure which counts automatic increases in spending (primarily increased unemployment benefits caused by the growing numbers of jobless) as real investments to fight the recession. Unemployment benefits are an essential social service, but to claim that they create new jobs and provide the sort of stimulus needed to kick start economies which are contracting at a rate not seen for generations is utterly ludicrous.

It shows that the Commission is sticking its head in the sand, failing to recognise that the total EU stimulus is less than 1 per cent of GDP, proof of its own failure to coordinate the bold, pan-European investment needed and a stark contrast to the recovery strategy of the new US government, which is spending well over the 2 per cent of GDP recommended by the OECD on real, concrete stimulus projects to boost growth and jobs. Incidentally, it was the conservative Czech Prime Minister Mirek Topolanek who described President Obama’s recovery plan as ‘the way to hell’.

The Commission has also shown a lack of solidarity with new member states in difficulties, secured only a measly €5 billion of EU funds for new investment to support employment and has, with every new downward revision of economic growth, reiterated its complacent belief that Europe has done enough.

Despite impressive commitments secured by Gordon Brown at the G20 summit in London, European conservatives, most notably Nicolas Sarkozy and Angela Merkel, blocked a desperately needed commitment to a new global stimulus package. It is a terrible shame that at the very moment when a new centre-left administration in the White House is providing leadership in a progressive direction, the conservative hegemony in Europe is preventing us from pulling our weight in the new transatlantic partnership.

In contrast to this sorry state of affairs, PES leaders met in Brussels on 19 March to propose a stronger, more ambitious recovery plan, calling on the EU leaders summit to agree on increased investments, new credit facilities, a Pact for Employment, a Social Progress Pact, better regulation, and action on a global level to combat the economic crisis. It goes to show that whilst the right has excuses, the left has a plan.

 

Competing visions

That is why this election presents such a clear choice, why this election is going to be so ‘political’. The past few years, and in particular the economic crisis, have revealed two different visions for Europe.

On one hand there is the right’s regressive vision for a market society, a society which shrugs its shoulders at poverty, inequality and injustice and leaves people in the hands of the market and of forces beyond democratic control. It is a vision that is plain to see if one looks behind the rhetoric of the manifestos of the European conservatives (EPP) and liberals (ELDR), not to mention their record in the European Parliament, Commission, and national governments.

On the other hand there is our vision for a progressive Europe, proactively fighting for a better future for our citizens: safeguarding employment and living standards against the recession, tackling climate change, promoting social justice, security and fairness in today’s globalised world. The PES manifesto for the elections (Party of European Socialists, 2009) contains 71 concrete proposals for the next European mandate, proposals that can overturn the reactionary ‘Barroso Consensus’ currently dominant and create a New Social Europe.

These proposals include financial market reform, an end to tax havens, a new smart green growth and jobs strategy, a European framework for public services, strengthened fundamental workers’ rights to collective bargaining, information, consultation and decent minimum pay, the mainstreaming of social goals into all legislation, ambitious new targets on climate change, improved parental leave, humane standards for legal migration and new initiatives to enhance Europe’s role as a partner for peace, security and development on the global stage.

These are all areas where Europe can make a real difference, improving people’s lives and in doing so regaining some much needed legitimacy. Now that is a real political choice.

 

Re-routing the Lisbon agenda

Still not convinced? Just look at the evolution of the Lisbon Strategy. In 2000 it was socialists and social democrats that dominated EU governments and institutions. Under the leadership of the then-Socialist government of Portugal, European leaders agreed to make the EU ‘the most dynamic and competitive knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion, and respect for the environment by 2010’. The strategy comprised mutually-reinforcing initiatives to support economic, social and environmental goals, a reflection of the progressive priorities of the leaders present at the summit.

But in 2005, by which point it was the right which was in the majority, the new Barroso Commission refocused the strategy on the ‘immediate target’ of growth and jobs, undermining social and environmental goals. Recent PES-led efforts in the European Parliament to reorient the goals of the strategy were blocked by both the Commission and Council.

Due to this change of direction the mutual reinforcement of goals designed to support each other has faltered and the objectives have become confused; right-wing figures in the Commission and national governments have lacked the political will to implement the strategy properly. That is why it is forecast that most member states will not meet the Lisbon targets by next year.

A progressive majority in the 2009-2013 European Parliament would mean a major change of direction for Europe, and the socialist, social democrat and labour parties of Europe are working to create that majority. The next Parliament will be responsible for voting on the next steps in the Lisbon agenda, the majority of new European legislation, steps to implement the Lisbon treaty (if ratified), and crucially the next European Commission. That gives it a fundamental role in the direction in which we take Europe, and in these times of dramatic economic, social and environmental change, the next years will be decisive.

 

Europe at a crossroads

So I urge every voter to read the PES manifesto, look at our record and make their vote accordingly. Europe stands at a crossroads; those who want to continue with the failed right-wing policies of the Barroso era should vote for conservative or liberal parties. Those who want to take Europe in a new direction should vote for PES parties.

Like a fairground mirror, the financial and economic crisis has stretched and emphasised the characteristics of the European spectrum, making the political choice between one sort of Europe and another starker than ever. There is all to play for.

 

References

Burg, I. van den and Rasmussen, P. N. (2007) Hedge funds and private equity: A critical analysis, Brussels, PES.

European Parliament (2008) ‘European Parliament resolution of 23 September 2008 with recommendations to the Commission on hedge funds and private equity’, available at http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P6-TA-2008-0425

Party of European Socialists (2007) ‘Social market economy comes first: A new strategy for hedge funds and private equity’, Adopted Resolution, Sofia, 22-23 November.

Party of European Socialists (2009) Put People First: A new direction for Europe, PES manifesto, European elections June 2009.

Renewal