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SHAKING EUROPE: EUROPE’S MAIN FOCUS MUST ALWAYS BE ON PEOPLE! HAS THE EUROPEAN UNION LOST ITS WAY?

Lost up a blind alley governed by liberal economics, our social and united Europe is clearly struggling to gain traction. The European social model was to be “based on a high level of social protection,  education  and  social  dialogue  […]  a  balance  between economic  prosperity  and  social  justice”  (Barcelona  European Council, 2002).

Nowadays  this  model  amounts  to  little  more  than  a  few  cautious concessions made by inward-looking Member States. Or a collection of  odds  and  ends  supposedly  intended  to  soften  the  blow  of  the crisis. Meanwhile  government  budgets  are  rapidly  shrinking,  social protection  systems  and  intergenerational  solidarity  are  being dismantled, the labour market is becoming insecure and so on.

The liberal globalisation model has failed to take into account the interests of citizens, and has not lived up to its economic promise. The result of all this is no social justice and no economic prosperity… It  is  high  time  we  took  another  path,  leading  to  a  Europe  in  the service of its citizens!

Many different local, citizen and/or social and solidarity economy initiatives  are  being  launched.  But  they  are  not  well  known  and tend to have little collective impact, especially at European level. Such initiatives are readily recognised in their local area when they reduce the social  inequality  that  public  authorities  are  unable to manage. But they struggle to make their voices heard on their own proposals for alternative models for global governance.

The  Charles  Léopold  Mayer  Foundation  for  the  Progress  of Humankind,  the  European  Movement  International,  and  the Institut  des  Hautes  Etudes  des  Communications  Sociales  decided to give these  initiatives a platform, in the thematic proposal papers!

Esther Durin – IHECS

COMBATING POVERTY SHOULD NOT BE THE FIFTH WHEEL ON THE EUROPEAN CART! IS THIS CURTAINS?

Last  year  was  2010,  the  European  year  for  combating  poverty.  But  is  the party  over,  now  that  it’s  2011?  Do  we  turn  off  all  the  party  lights?  Do  we lock the doors to the hall and move on to something else? Do we bring the curtains down?

The  answer  of  course  is  no.  Because  nobody  seriously  imagined  that  the 2010  European  year  (whose  activities  were  coordinated  by  the  European Commission)  would  lead  to  almost  miraculous  structural  changes  in  such a short space of time. A European year is designed to raise awareness, alert people and kick‐start action. Moreover the report on the ‘2010’ actions, at European level and in the Member States has still to be fine-tuned, with the necessary hindsight. Only when that is done will it be possible to measure the  true  impact  of  this  ‘awareness‐raising’  on  combating  poverty  over  the twelve months.

Yet even before this report is delivered, it is clear that the 2010 European year has not changed the face of the world. Worse still, as far as European citizens are concerned, 2010 will have been an ‘annus horribilis’ from the viewpoints of social and daily living standards.

2010, AN ANNUS HORRIBILIS

In 2009, the EU Member States were hit hard, in a sort of domino effect, by the global banking crisis – the world’s most serious financial crisis since 1929.  Europe  soon  felt  the  initial  impacts.  People’s  savings  held  as  shares, often  accumulated  by  small  savers  over  a  lifetime,  just  melted  away. Low‐income households found it increasingly hard to get loans. Credit was now being  offered  sparingly  to  small  and  micro‐enterprises,  with  the  result that  many  of  them  became  paralysed.  And  this  despite  the  fact  that  small and  micro‐enterprises  are  the  greatest  source  of  new  jobs  in  Europe.

The  Member  States  themselves  stepped  in  to  rescue  the  banking  sector from bankrupcy by injecting huge financial aid. But they did little  to  ensure  that  this  sector  would  not  in  future  dabble  again  in  similar speculative  activities,  which  are  harmful  to  the  public  interest.  Member States  loosened  their  purse  strings,  calling  on  taxes  raised  from  their citizens.  In  2010,  due  to  a  fall  in  consumption  and  the  reduced  ability  of both individuals and small businesses to make investments, Member States also  had  to  come  to  terms  with  the  fact  that  they  now  had  less  revenue.

AN UNTENABLE SITUATION

Higher expenditure. Lower revenue. The situation is now untenable. In 2010, the ‘markets’ – in other words, the operators holding claims on State debts, the operators who oddly enough are often banking establishments that have benefited from subtantial financial gifts from the Member States – began to  panic  and  speculate  on  those  States  in  the  most  trouble.  The  markets imposed  drastic  increases  in  reimbursement  rates,  thus  driving  a  number of the Member States (including Greece, Ireland and Portugal) to the brink of bankruptcy.

The  euro  is  in  danger.  It  can  and  must  be  saved.  But  the  euro‐zone’s strongest Member States, led by Germany, are laying down their conditions. EU Member States close to bankruptcy, as well as all the  European States, must be obliged to implement draconian public spending reduction plans.

IS THE PATH WE ARE TAKING JUST A BLIND ALLEY?

One way to rebalance the books would be to increase the tax base for some revenue. This could be done by raising a tax on financial transactions (the Tobin  tax)  or  by  harmonising  at  European  level  the  taxation  of  business profits. Some military expenditure could for example also be reduced.  Another option would be to invest massively in major projects that generate jobs,  social  welfare  and  well‐being  in  general  –  especially  in  education, culture, the environment, health, assistance for elderly people, support for young job‐seekers, and so on.

Yet that is not the path taken by the heads of State and government. Instead, it is tantamount to walking a path of forced austerity as well as to aggressive cuts in public spending in the social field.  Only  one  thing  can  be  taken  for  granted  in  future:  these  policies  will  lead to  increasing  social  exclusion  in  every  European  nation.  That  is  the  key conclusion to be drawn for the year 2010. And the outlook for 2011 is just the same.

THE END OF THE WELFARE STATE, THE END OF A COMPROMISE

These ‘social engineering’ efforts would only be a lesser evil if  they  led  to a sustainable recovery of social cohesion systems for the future, and if the current situation in terms of poverty and exclusion was not as serious as it looks today.

Since World War Two, there have been several phases in the Europe formerly known as the European Economic Community (EEC) and now the European Union (EU). Firstly, from 1945 to 1975, there was a 30‐year period of strong economic growth. Even if these years failed to produce evenly divided wealth, they did bring linear social progress for the most disadvantaged people.

Welfare States kept a close eye on developments, balancing the mechanism of the market economy with the mechanics of regulating the economy. They also called on strong systems aimed at reducing disparities, i.e. progressive direct income taxes, and social security.

Metro stations in cities were again filled with beggars. Workers laboured hard  for  small  reward.  But  at  least  there  was  plenty  of  work  available, allowing  people  to  escape  from  abject  poverty.  Moreover,  there  was  a working  system  of  social  mobility.  Those  able  to  follow  higher  education courses stood a good chance of improving their lives.

Then came the global oil crisis and a paradigm shift in the late 1970s. Growth collapsed. National debts has to be dealt with and the first reductions in social spending were made.

STANDING ON ONE’S OWN TWO FEET: AN IMPOSSIBLE GOAL?

The  1980s  brought  little  improvement.  Those  without  jobs  increasingly became  ‘long‐term’  unemployed.  People  excluded  from  society  found  it harder than ever to stand on their own two feet. Completed in 1992, the European Single Market was supposed to solve the problem by increasing employment; it was hoped that this would get social progress back  on  track.  Disparity  between  the  Member  States  certainly decreased.  But  notwithstanding  the  positive  impact  of  the  European Structural Funds, ‘free and fair’ competition could not prevent a large wealth gap developing between Europe’s regions.

Meanwhile, poverty is on the increase and not only in terms of the number of people who lack the standard of living considered necessary. Poverty is also affecting more categories of people, including young people (for the first time, they know they will have a tougher life than their parents), workers (who were formerly protected), elderly people (whose retirement pensions are gradually dwindling), and just recently even some of the middle classes.

We  are  seeing  a  dual  phenomenon.  Growing  segments  of  the  population lack  job  security,  are  faced  with  poverty  and  at  risk  of  falling  more  easily off the top of the ladder. Meanwhile, those who have already fallen and are experiencing poverty find it increasingly tough to climb back up the slope.

GOOD INTENTIONS

So  what  solutions  does  the  European  Union  propose,  besides  its  current initiative of strict financial management, and cuts in public and social spending? In  March  2010,  Manuel  Barroso,  President  of  the  European  Commission, unveiled his proposal for a European strategy for the 2010‐2020 period, ‘A strategy for a smart, sustainable and inclusive growth’.

One of the five targets announced in this strategy is that 20 million fewer people  should  be  at  risk  of  poverty  or  social  exclusion  in  the  European Union. This sounds impressive, but how will these good intentions be put into practice?

CONCRETE ALTERNATIVES

The Foundation for the Progress of Humankind (FPH) is not a ‘lobby’ or a federation of organisations. It does not represent anyone or in particular any party. Its goal is to support, though the  limited financial ressources it can mobilise, those who back initiatives. It also supports flagship schemes working for sustainable development, social cohesion, and fostering active citizenship.

In  2008,  the  FPH  introduced  a  ‘Europe  unit’,  highlighting  its  faith  in  the feasibility  of  a  democratic  and  citizens’  Europe.  People  want  union  and integration.  But  this  necessary  integration  cannot  be  achieved  without cohesion and social progress. Put another way, social progress is an integral part of the European project. Without the social component, Europe’s very foundations are threatened.