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Hannes Swoboda on The European Left: an alternative way out of the crisis

30th March 2012

Hannes Swoboda is the President of the group of Progressive Alliance of Socialists and Democrats in the European Parliament.

Today Europe is in crisis. On various levels, be it economic or political, we see the European Union called into question. With Greece close to bankruptcy for months now, and countries like Spain, Portugal and Italy suffering dangerously from the economic crisis, financial and economic rescue plans are on the agenda on a daily basis. And yet not everyone agrees that we need to stand together in this difficult period. There are calls for Greece to leave the eurozone and the Fiscal Pact negotiations saw the United Kingdom decide to opt out, together with the Czech Republic. So the future Fiscal Pact will apply to just 25 countries as opposed to the 27 members of the EU.

Is that the Europe we want? And the Europe we stand for?

No, it is certainly not. We stand for a united and strong Europe based on solidarity. A Europe that gives hope to its citizens instead of leaving them unprotected. A Europe that is based on the acquis communautaire with the EU institutions as the consensual mechanism for creating new laws. A Europe that respects the need for austerity but takes action to promote growth and employment, especially for young people.  A Europe that takes the right decisions to get our continent back on track.

We must take action to promote growth and employment

The European Union cannot escape the crisis through a relentless move towards austerity. An excessively harsh reduction of public deficits and debt – as forced on citizens by  Europe's right-wing – is both socially unacceptable and economically risky. With more than 23 million people unemployed in the European Union, and of those around 5.6 million young people, the crisis is far from over or under control. There is a lack of action from the right-wing majority in the European Council to provide real and practical solutions to end the crisis, which particularly affects the most vulnerable groups in our society.

The current focus on austerity is leading to exactly the opposite of what European economies really need: instead of more growth and employment we have less, which also means less public revenue from taxes. The European Union needs to pursue an alternative economic policy agenda in order to exit the crisis in a fair way.  It must pursue the inter-related objectives of high-quality full employment, sustainable growth and fiscal responsibility within a well-balanced Europe 2020 strategy, combining ambitious policy agendas in the economic, social and environmental fields.

Fiscal responsibility is a necessity for our economic policy. We do not oppose this and this is not a point of disagreement between conservative and progressive forces. It is clear that deficit and debt levels are not sustainable and must be significantly reduced in the near future. However the timing and the nature of such consolidation must not undermine the recovery and Europe's future growth potential. Necessary consolidation must be socially fair and should not be achieved at the expense of those out of work and those most in need of public support and solidarity. Equally, consolidation should not lead to short-sighted budget cuts which undermine vital public financing of human and capital investment, thereby jeopardising growth and jobs.

We must tackle youth unemployment

The latest alarming figures on the high rate of youth unemployment in Europe require action from us. Europe needs to wake up and take practical action to get young people integrated into the labour market. We must take strong steps for a more just and socially responsible Europe.

Many young people live on less than €1000 per month and this is not the future we want to offer young people in Europe today. Young Europeans emigrating to Brazil or Argentina to find jobs should make us ashamed of not solving Europe's problems.  Youth unemployment costs Europe €100 billion every year. We need a new progressive direction with investment in education and employment for young people in Europe.

As the first of 20 concrete measures to offer Europe an alternative, we propose the introduction of a 'European Youth Guarantee'. This would ensure that every young person in Europe is offered a job, further education or work-focused training within four months of leaving education or becoming unemployed.

Some European Union countries have already introduced such systems, part of an overall 'dual-education' strategy, and the figures are convincing. Almost half of Austria’s teenagers for instance go on to a work-based apprenticeship after compulsory schooling. A similar number of youngsters combine practical trade skills with general education. Only a minority follow the academic path in regular schools. The country boasts consistently low youth unemployment rates, currently at 8.3% according to official figures.

We must prevent tax evasion

There are also other areas we need to tackle to get our economies functioning again. The figures on tax evasion and tax avoidance are alarming. According to a study commissioned by the Socialists and Democrats, the combination of tax evasion and tax avoidance could lead to public losses of up to €1 trillion a year. The report provides an estimate of tax evasion in the European Union at approximately €860 billion a year. Estimating tax avoidance is harder, however the report estimates it could be €150 billion a year. Together this amounts to around €1 trillion a year. This is a huge loss for national budgets and we have to take action.

Europe's budgets have faced endless cuts but little attention has been given to the question of tax evasion. The S&D Group are glad that the Council of the European Union has finally taken the decision to step up its fight against tax evasion and to submit a report by June 2012. In our view we need a growth package that includes the immediate introduction of a financial transaction tax, a clear commitment to halve tax evasion by 2020, the creation of a redemption fund to ease the debt burden and the extension of the credit line from the European Investment Bank.

Europe as a social project

Europe is a political and social project – it has never been and can never be solely a market. It is and must remain a project for peace, democracy, prosperity and for solidarity among nations and among citizens. The task of building a fairer, more inclusive Europe is not one for the EU alone. Our task is to renew, reform and strengthen our social contract, with new rights and duties, and a new deal between people and government. It requires a broad partnership between citizens and public authorities at local, regional, national and EU levels. In an inter-dependent world, the EU must be able to speak with one voice.

 

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