The European election campaign did not get off to a rousing start. And it will not get off. Yet there is no lack of topics: How would Europe be able to defend itself, if the alliance with the United States were to fall apart? How would it be able to restore growth and employment dynamics? How would it be able to restore the depth of democratic governance? The anti-Europeans give a quick, simple answer to these questions: let’s put an end to the European Union, or at least the euro, and each nation will be restored in its capacity to face these issues. An illusion, obviously, because no European nation, if it found itself also in brutal competition with its neighbors, would have the means to tackle the challenges of today’s world.
And despite all this, Europeans are not trying to work to find lasting and common solutions. So, therefore, on the topic of the current thematic debate, that of growth, one can hardly believe it when one listens to the recent debates: none of us can fail to observe that the EU is indeed going through an economic recession; and if the British economy seems to be out of recession, it is because almost a quarter of its national wealth is produced by the City, the money-laundering capital and casino economy of our planet, with no benefit whatsoever for British citizens. Today for the Eurozone, the risk is even to be in deflation mode, that is to say, to go into a recession with an outright decline in prices with their disastrous consequences: increased burden of the private and public debt, decrease in purchasing power, halt in investment and decline in innovation.
The main underlying causes of all these problems are well-known: shortfalls in available finance for investment. And the current national policy, (aimed only at reducing public debts, by reducing spending, and by letting the value of the currency rise), will only aggravate the situation and make the drift into deflation irreversible.
Still, with the elections to the European Parliament a month away, at the very moment political agendas should be debated in order to respond to the prevailing situation, nobody is waiting for the answer from political parties, with their weak statements, or from the European Commission, with its cowardice getting worse and worse ever since the start of its mandate, or from the European Council, where Heads of State and Government gather for a few hours to handle the emergencies, whilst never getting into the substance. The only institution to be taken seriously is the European Central Bank (ECB), which has already saved the euro at the end of 2011, and which global markets hope will use, faced with the deadly threat hanging over Europe, because of deflation and the rise of the euro, one of the ultimate weapons still in its arsenal, such as cutting interest rates below zero, or the issuance for no consideration of two thousand billion euros.
Yet, this is not the true answer: today Europe needs genuine investments and not counterfeit currency. And, instead of letting loose two thousand billion euros for the sole benefit of banks, it would be much more reasonable to finance, using borrowings of the Eurozone (the only entity having no debt), an equal amount of investments critical for our future, and we all know they will never be financed by private investors only, because their level of profitability takes too long. The list goes on and on; it is clearly valued and documented today by countless studies: trans-European rail transport networks (9 rail corridors must be equipped, from the Baltic to the Mediterranean Sea), trans-European energy networks (250 projects are still suffering from a lack of funds, they will improve the interconnection of existing sources and reduce dependence on external sources), trans-European digital networks (to organize broadband access in continental Europe) and SMEs’ access to financing. In total, amounting to what is anticipated to be issued by the money printing of the ECB, and with even more usefulness.
The future of Europe depends on taking into consideration the needs of future generations; I have dubbed this elsewhere « positive economy ». And this will require in Europe the creation of instruments of « patient capitalism », in the service of democracy. Today, no one takes this element into account. Will voters be able to engage politicians and help to build the political will to act for their children’s sake? If they fail to do so, they will have no one to blame but themselves.
j@attali.com