Europe, beyond hope | Economy

Human chain convened by the Pobresa Zero association.  EUROPE PRESS
Human chain convened by the Pobresa Zero association. EUROPE PRESSEuropa Press

The European Union’s response to the economic collapse caused by the pandemic has been in a completely different mood from that of the last European crisis (2008–2012). Now, instead of destructive austerity, solidarity measures such as common debt have been implemented to support the worst hit countries, their companies and workers.

This is a historic turn, but the rebuilding task is immense. Contrary to certain appearances, the European social reality is very similar – and in some respects even worse – to that of the United Kingdom, a model quite refractory to social rights.

The comparative data deserve reflection. The British unemployment rate, for example, is 4.3%, half that of the euro zone (8.1%). Other social indicators such as youth unemployment and long-term unemployment, the risk of poverty, severe poverty or the proportion of young people who neither study, work nor take training courses, show that the euro zone obtains a lower rating than the United Kingdom . In aspects as significant as inequality, measured as the difference between the richest 20% and the poorest 20%, Italy and Spain are worse off than the country that has just left the Union.

The facts show how the neoliberal wave also hit the European rulers and their policies squarely. Perhaps the most significant difference is that broad sections of citizens maintain their ambition for a more social Europe. An idea shared by the Scots who mostly aspire to rejoin the club.

The steps necessary to make the European Union a project for all citizens are well known. There are projects such as the European Deposit Insurance, the most supportive leg of the Banking Union, and the European Unemployment Insurance that have been parked for years. Both initiatives have been on the table of European leaders since 2012. We can also mention the European minimum wage, which was proposed in 2013.

It is precisely one of these projects that Joseph Stiglitz, Nobel laureate in Economics in 2001, has referred to in his recent work Recovering from the pandemic: an appraisal of lessons learned, published by the Foundation for European Progressive Studies (FEPS). The economist advocates “expanding the SURE program (European temporary support instrument to mitigate unemployment risks in an emergency, for its acronym in English) or for a complete unemployment plan for the entire EU. For Stiglitz, this “income support scheme is essential to maintain aggregate demand, which is a necessary strategy to maintain a speedy recovery.”

The American professor also believes “there needs to be more solidarity among European countries and more trust in common institutions.” He maintains that “the approval of the 750,000 million euro fund is an important first step. But it is just that, the first step ”. This crisis is an opportunity for Europe to turn into reality what until now have only been hopeful projects.