N. 6 December 1998 | There can be no real fight against unemployment without a european fiscal power and government

The challenge ahead is to develop an employment policy which will create jobs by generating actual wealth, instead of causing a waste of resources.

The election of a social democratic government by the country which is, economically, the European Union’s strongest member, and the consequent increase in the overall number of member countries led by left wing parties or alliances, have left many believing that the EU has entered a new phase in its history. This belief is fuelled by the frequent declarations, made by government leaders, ministers and commissioners, in which the emphasis, shifted away from the indispensable need for strict budgetary policies, is laid on the urgency of the unemployment problem. To many, therefore, a new socialist Europe is emerging, one which is breaking free from the shackles of Maastricht and its convergence parameters; the era of economic austerity would appear to be drawing to a close, allowing the era of growth and development to begin.

This new emphasis reflects a widespread awareness that the problem of unemployment in Europe is one which must be tackled at once – and this is something which can be done only within the framework of the Union. And yet, the problem is presented in such a way that striving to reduce unemployment and pursuing a strict budgetary policy are seen as two alternative options, with the path followed depending on the political colours worn by the majority of the Union’s governments. In fact, these two propositions are both false and dangerous. Any prospects for growth in Europe must necessarily be underpinned by the implementation of strict budgetary policies, and the real challenge is to develop and carry out an employment policy which does not lead to a waste of resources, but generates occupation through the creation of real wealth. And this objective, which is the prerogative neither of the left nor of the right, is one which must be pursued regardless of the orientation of the majority of Europe’s governments.

It goes without saying that leaving the national governments a free hand, allowing them, at random, to develop policies of their own in order to boost demand, is not the right way to go about achieving this end. Such an approach would mean sanctioning the abandonment, at least by some governments, of the policy of stability, and thus would be tantamount to sabotaging EMU. Instead, what needs to be put forward is a proper European infrastructural investm ent programme, along the lines of the Delors plan.

But the belief that this has become possible simply because the majority of European countries now have social democrats at their helm must be considered the most dangerous of illusions. The institutional order of today’s European Union renders transnational political affinities quite irrelevant, and leaves room for the expression only of opposing national interests. For as long as this order continues to bear the hallmark of the intergovernmental method, relations between the member states will go on being conditioned by mutual mistrust and by efforts, on the part of all the governments, to secure minor short-term benefits while paying as small a share as possible of the costs involved in any common policy. While these conditions persist, the development and implementation of an effective investment programme, one which targets growth, will remain impossible. It is easy to predict that, in the absence of major institutional change, all that the Union’s governments will be able to achieve will be a series of low-profile compromise decisions which, without really stimulating the growth of the Union, will serve only to jeopardise its financial stability. While it is true that such decisions will, under normal circumstances, be taken without losing sight of the common interest of safeguarding monetary union, it is also true that in certain emergency situations that may arise, the gap between divergent national interests may become so great as to throw into question the very future of the single European currency.

The fact is, a European development programme is much more than a vague coordination of the economic policies of the governments of the Union’s member states. In order to draw up a development programme, the Union needs to adopt an economic policy of its own and, still applying strict budgetary policies, to free the resources required to implement it. This can be done by eliminating the enormous waste of resources due to the existence of fifteen different industrial policies and fifteen different regional development plans, all laboriously coordinated at European level. Moreover, a single European economic policy requires also that the imbalances that in the future will inevitably emerge in the economic cycles, finances and labour markets of the Union’s various regions be made up for through proper transfers of resources. But all this will be possible only if the mechanisms through which democratic consensus is formed within the Union allow the growth of a real sense of European solidarity, in other words, the replacement of the notion of national interests with that of a common European interest.

In short, the unemployment problem in Europe can only really be solved when we stop thinking of the European Union as a sort of consortium to which the states are obliged to make financial contributions – on which they feel entitled to expect proper returns – and start seeing it as a common homeland to which we, its citizens, will (in full compliance with the principle of subsidiarity of course) be required to pay taxes proportional to our incomes and from which we will receive the benefits and services to which we are entitled, whichever state we belong to. But to come about, all this requires a political contest at European level, a democratic European government, and an adequate budget fed by a European tax system – even a direct one. In short, a European federal state. It is, given the current situation, the only compelling solution, and to deny this is to jeopardise the security and wellbeing of all the citizens of the Union. In view of the forthcoming European elections, it is essential, therefore, that the continent’s political parties give top priority and prominence in their electoral programmes to their commitment to fighting for a European federal constitution.


Read more