A new Europe for new battles
The Left is rising again in Europe, because the Left has realized that you only lose the battles you don't fight. The Left has realized that it is time to stop a certain brand of European Union that compromises with conservatives, in which social democrats were left to negotiating the terms of regression with the right-wing. Our generation needs to take its full place in this political alternative to come. We, young Socialists, intend to defend this strong line within ECOSY and within our parties, and the PES in order to mobilize all those that will join us to build this new Europe.
30 years of neoliberalism: a challenge to European democracy
In the last 30 years, we have known multiple crises, produced by a social model that is out of breath. Ever since, Europe has known lackluster growth, only interspersed by brief flashes due to speculative bubbles, as well as fiscal rigor that increases the national debts, a rise of inequalities and towering unemployment rate among youths - especially those most vulnerable - and among the population of overseas territories.
The rise of the far right, of xenophobia, of racism, and other forms of discrimination in Europe, are but by-products of the dire social situation. In Hungary, the ruling party is leading its country down a dangerous path toward authoritarianism, limiting fundamental rights without any possible efficient reaction of the EU. Nationalism is also rising in the Netherlands, in Belgium, in Greece and elsewhere in Europe, 31 as the electoral results of far right parties show, notably in France.
Meanwhile Treaties are negotiated by the Commission and by Heads of State without people's representatives in the European Parliament being systematically consulted. Financial markets and rating agencies seem to bring more influence to bear on the European Central Bank's decisions than this institution. Technocracy is winning and democracy is losing. At a time when peoples are facing the question of maintaining their democracy, Europe is at a crossroads.
This democratic crisis is no accident. It is the result of 30 years of neoliberalism in the world, behind which the European Union, encouraged by European conservatives since the 1980s, has been a driving force. The Washington consensus, the German social market economy and Thatcherism have helped carving in stone the policies of neoliberalism, which has become an inescapable economic dogmas. Far from having slowed down this choice of policy, the social democrats that held a majority of European governments in the 1990s have helped comfort it.
The American consumer credit crisis through the explosion of Subprimes in the USA, but also the explosion of European real estate bubbles (Spain, Ireland) pushed the States to subsidize with Sovereign debt the bank rescues in order to minimize its impact on their national economy, weakening even more the heavily in debt states, by financing themselves on the financial markets. This downward spiral can only be broken by transforming the system.
The numerous ongoing crises are symbolizing the overrunning of the political power by the economic one: the economic crisis appeared, because of our incapability to stamp out the headlong rush towards an unrestricted and uncontrolled financial capitalism; the social crisis appeared because of our incapability to develop or even to preserve, our public services and social programs; the environmental crisis appeared because of the influence of industrial lobbies on the political powers of the most polluting countries. Hence, all these crises are linked to the political crisis. Against that, when the liberal model thrives from that agony of the public authorities, we have to be offensive especially on the question of the instruments that a State can use.
As they did in the past, today's economic crises which were caused by conservative economic policies become an excuse to harden the very neoliberal dogma that caused them. Far from engaging in necessary public investment policies, which could help maintain an indispensable social safety net, Europe is getting deeper into a fiscal tightening that is presented by the ruling conservatives as the only possible option. The Greek crisis came at the right time for those advocating a "shock strategy" that had already been used in the 1980s as a testing ground for new neoliberal policies.
The question of whether or not European States still enjoy economic sovereignty has to be asked, ever since the Maastricht Treaty laid the foundations of "economic constitutionalism" and tied government's hands, ever since the Single European Act instituted the single market, ever since the Constitutional Treaty of 2005, ever since the Euro Plus Pact in 2011.
The failure of the "small steps" strategy
The problem is not the opening of the European internal barriers, the problem remains in the fact that this opening did happen without any harmonization of the social and fiscal policies. This original sin of the Internal Market still has heavy consequences: it set the states against one another, fighting in order to obtain the investors through fiscal and social dumping. This loss of balance weakened Europe and its States, nourishing the criticism against the powerlessness of the public actors. Tomorrow's challenge is to find the way of this fiscal and social harmonization. This will happen through a transfer of sovereignty of these state prerogatives towards Europe and through a great reform of the European institutions, giving them more legitimacy.
A Europe of standards has superseded the Europe of rights and common values that was promised in 1950. The goals of improving the fate of European peoples, of harmonizing fundamental rights and individual freedoms, have given way to the mere observance of uniform economic, fiscal, and budgetary rules, which form the only remaining link between Member States.
These rigid standards have been imposed on very diverse countries, with very different economic constraints, specific political systems and unequally developed social systems, without developing the necessary instruments for the constitution of a genuine European budget. They are co-responsible for all of the crises that Europe has known in the past three decades, and have not permitted any other harmonization than by the lowest bid in social, fiscal, and environmental standards.
On social issues, the Bolkestein directive (directive instituting a disloyal competition between European states) remains the poster child of harmonizing down. It is a textbook example of the drive to create competition between social systems and a first step towards a real « social dumping » which will have direct effects on wages, worker's rights, and the social safety net they enjoy in the country they work in. The dogmas of free trade and free competition have been used as an excuse to destroy public services by privatizing them.
The method remains the same in the field of fiscal policies. Corporate tax rates tend to be 88 harmonized down toward the very low Irish rate. Meanwhile the European citizens have to endure an upward harmonization of the VAT, at the expense of a progressive tax system.
The environment, finally, is not spared by the liberal policy of harmonising down. The productivism of the CAP favors big farmers and hinders the development of a more local and rural agriculture, functioning in short-circuit, which would also be better for the environment and the household budget. Concerning the energy questions, the EU prefers to develop unconventional hydrocarbons (shale gas, oil sands, oil shallows) than to promote renewable energies, letting the goal of reducing the greenhouse gas emissions by 25% by 2020 become a pure fiction. Unrestrained free trade within and outside European borders has only resulted in the relocation of industries abroad, and has caused that today, the most common goods are produced and shipped to Europe from the other side of the globe.
Having abandoned the original goals of European integration, an EU led by conservatives and past social democrats has been satisfied with an economic integration through markets, promising a step-by-step social integration that would follow the Maastricht Treaty. These promises have never been kept. The European Socialists have to break with the belief according to which we should expect a strong growth in order to obtain social conquests. The social progress is gained through trade union and political fights that have to be lead at a European level.
The return to power of economic constitutionalism, at the expense of peoples
The ESM (European Stability Mechanism) and the new European Fiscal Compact are the youngest breed of the ideology that systematically submits every refinancing opportunity of Member States to the goodwill of markets and rating agencies. The stability pact already showed its limits and pointed its incoherencies, notably by fixing the objective to set the public deficit limit at 3% of GDP - the Fiscal Compact reduces this to 0.5%. And from now on, the European Court of Justice will be able to sanction a Member State, a sign of a political defeat towards technocracy, and the government of judges.
We cannot accept that the European Central Bank remains exclusively focused on target inflation rates that can harm growth and increase public debts by preventing governments from using monetary policies, and by refusing to let States borrow directly from it at lower rates.
Today, we are faced with a choice, of either letting the right impead a genuine European social right construction, or to give to the left the power to renegotiate the treaty, inducing a new European social pact.
1 - Reining in financial services to put democracy back at the heart of Europe
The break between technocrats and peoples bears a real risk for European democracy. Those responsible for the crisis, including Goldman Sachs, have seen their past employees take over positions of power in Europe, for instance Mario Draghi as director of the European Central Bank, Mario Monti as Italian Prime Minister or Petros Christodoulos as manager of the Greek sovereign debt. This deliberate blurring of the lines between experts and politicians signals that political power is bowing down to the power of international finance.
Economic constitutionalism is the other result of European neoliberalism. By enshrining it in Europe's constitutional rules, the ability to choose and implement economic policies according to the particular state of the economy is taken away from democratically elected governments. There are four aspects to this economic constitutionalism: the power to implement exchange rate policies has been taken away from States, and yet the EU does not exercise it; the Common External Tariff remains toothless; there are no European fiscal policies; and the European Union is still deprived of any meaningful budget and of the power to levy taxes. This dangerous infringement on the sovereignty of the people lets liberals take the Welfare State apart piece by piece, all the while wealth is increasingly used to pay off shareholders instead of workers. This is the strategy of neoliberals: transferring powers to the EU first, and then preventing it from using them for anything other than their own policies.
On the contrary, it is the people that should be put back at the heart of European policies. As showed the 2005 debates on the European Constitutional Treaty on the future of Europe, this crisis must allow us to rethink european construction, especially regarding peoples' participation, the role of the European Parliament and the question of federalism. Similarly the renegociating the Treaty on Stability, Coordination and Governance (TSCG) must enable us to impose more solidarity between states and thus between peoples. Whereas creating a common currency should have been a tool for economic and social progress, states have lost control on their monetary policy since the creation of the Europe. It is essential for the public power to take this lever back.
Instead of considering a low rate of inflation as a goal in and of itself, monetary policies should be used as a tool for attaining goals that should be determined through political debate. The European Central Bank must have its role completely redefined. It is today free from any kind of democratic or political control, and refuses to act in accordance with goals determined by the European Parliament. A reform needs to address its target inflation rates, in order to allow for their adaptation to the state of the economy, and its goals must be expanded to include full employment and a sustainable growth with low carbon emissions.
ECB's role should also be redefined so it can buy state obligations on markets or directly to the states at rates similar to those offered to private banks in order to break the speculative attacks from financial powers on european countries. We support private banks political take over when the public power recapitalised them. The creation of Eurobonds will increase the EU's financial capacity, which can be used for big investment programs. But while Eurobonds are a precious tool to counter financial markets' pressure on sovereign debts, they cannot be the one and only solution to pull Europe out of the crisis. We will only put an end to imbalances and unleashed competition between the states with an economic, solidary and coordinated politics at the european level. It should be driven by the industry and pursue the construction of a new development model with finance serving social Europe.
At the same time, the financial sector needs to be reined in, so that politics can resume its rightful role. European countries will have to impose a tax on financial transactions in order to limit out-of-control speculation and find a new source of revenue for the EU. Part of it could be dedicated to development aid which is necessary to build a fairer world.
Deposit banks and investment banks must be separated, in order to protect the savings of private citizens from speculation. This will also favour loans to the « real » economy, which many banks have drastically cut back because of the higher profits that pure speculation produces. Europe will also have to make sure practices and tools enabling speculation on sovereign debts, such as CDS, are forbidden.
Corporate tax has never been as low as it is today in Europe, and with the creation of a new, European corporate tax, we will begin the journey toward a positive fiscal, social and environmental harmonisation. This tax will allow for a common budget that would not depend on Member State contributions, and be big enough to implement autonomous policies in accordance with the will of the peoples of Europe.
Finally, a Europe of peoples will only be possible through democracy.. Major political decisions, chiefly those in the fiscal or social fields should require a qualified majority of a stronger European Parliament. It should appoint the Commission according to the majority which emerged in the European elections, which should be held on the same day in all member states under a transnational list system. THus the Commission will be politically accountable towards the European Parliament. THe latter and the Council should be put on an equal footing in the ordinary legislative procedure. The European Parliament should share the legislative initiative right with the Commission instead of it being monopolised by the latter. Finally, citizens' initiative should be strengthen by making the Commission's opinion a consultative decision. This is how we will build the Europe of humanist values that we want.
2 - Creating jobs and building a greener, social Europe
Beyond economic sovereignty, the questions of the content of economic policies as regards employment and a fairer distribution of wealth must be addressed by European democracies. The Left must put forward real alternatives, in order to challenge our current consumption habits. It is unacceptable to be forced to buy washing machines produced on the other side of the planet when so many industrial jobs have been lost in Europe. In order to fight unemployment, Europe must transform our economies, fight for the reindustrialization of the continent, and promote shorter distances between the consumer and the producer.
This will also help meeting the goal of reducing Europe's greenhouse gas emissions by 20% by 2020, a commitment that has been made by the EU but that it will not be able to keep without a stronger financial commitment and some restrictions to free trade. We have to reserve the right to increase the goal to a 30% reduction at European level. An ambitious rail transport development policy for passengers and goods should be started.
We will reaffirm our commitment to the « polluter pays » principle, by taxing companies according to their ecological footprint. A carbon tax must also be created for imported goods. This participation of firms should also be linked to an industrial research policy which will encourage discovery and use of technologies that are more adapted to environmental stakes.
Instead of free trade, we want a fairer trade, in which countries or entities such as the EU know their own strengths and are able to protect them from unfair competition from countries without any kind of significant social and environmental rules.. Europe will have to converse with all of economic powers on the planet in order to implement common environmental norms while participating to the development of Southern countries. The United States and the States of MERCOSUR have long taken the necessary protectionist measures to safeguard their jobs and industries. Meanwhile, Europe has opened up its single market to the rest of the world within 30 years, refusing any kind of regulation, and following the neoliberal dogma of the Washington Consensus at the IMF and WTO. Thus, we reaffirm the necessity to activate the Common Tariff at the EU's borders, which would take into account social and environmental criteria in producing countries, in order to protect our industries, by going back on the constant decrease of import duties that has taken place in the last decades without consulting the European Parliament. In Europe, the fight for employment requires to start reindustrializing.
In order to create jobs, Europe will need to massively invest in energy transition, and in the diversification of energy sources through the development of local enery production units. The EU has to attain energy independence, by putting the reduction of energy consumption front and centre.. Alternative energies such as solar power, wind power, hydraulic power, biomass energy, and geothermal energy need to be developed. . We will also need to pool and interconnect our energy resources at the European level in order to reduce our dependency on nuclear power and fossil fuels, and in order to put our economies on the path to the future. We want to go further with a common energy policy in order to rationalise its production and to end the national vision of energy production that prevails today. A common voice should speak in negociations with exporters. Finally, investing in energy efficiency for new and old buildings will create thousands of jobs. It is a social imperative as well as an environmental one.
Europe should be concerned with favouring better jobs, and giving consumers more choice, including on agricultural products. This will require a deep reform of CAP and the management of fisheries resources, and towards a more local, farmer's agriculture to encourage territorial quality sectors, local distribution networks and collective structures. This is crucial to the jobs of European farmers and their survival, crucial to the purchasing power of consumers, and crucial to the environmental safety of European citizens. Supporting the development of social, solidary and environmental economic sectors will also contribute to this change.
Finally, the comeback of the undemocratic Anti-Counterfeiting Trade Agreement (ACTA) brings up the question of the "patentability" of living organisms and of common goods. More than ever, Europe needs to be at the forefront of the struggle for universal access to clean water, for biodiversity, and to prevent the appropriation of these resources by a minority for their own profit.
3 - Toward a new social Treaty for a better distribution of wealth
For the past 30 years, inequalities have grown exponentially, economic insecurity has increased and unemployment reaches records heights, chiefly among the young generation. This crisis of wealth distribution makes our solutions all the more necessary. It is the result of right-wing policies: since the 1980s, the part of added value used for wages has decreased compared to that used for capital. Profits, including those from increases in productivity, have been confiscated by a small privileged class of shareholders and executives, to the detriment of investment or redistribution. Even worse, this imbalance created by conservatives 238 has been used as a justification for anti-social policies. Pension systems, for example, have been dramatically cut back in order to safeguard countries' AAA rating.
Against all this, we assert that it is crucial and urgent for Europe to negotiate a progressive Social Treaty. This commitment that the Socialists have promised for decades will now have to be kept in 2013, with the victory of the Left in the elections in Italy and Germany. Practically, such a Pact should define common rights and targets for the evolution of social legislations in Member States. A European minimum wage, calculated using the parity of purchasing power method, should be instituted first, as well as a minimum retirement pension of at least 60% of the median income of each country. Wage equality between women and men should also be guaranteed in every country. Work legislations (work hours, paid vacations, parental leave, social safety nets) must be harmonised up. We must also put an end to "social dumping" through the unfair competition between European workers - in the field of labour laws, those of the host country should always apply. The arguments of « flexibility » or « labour cost » are too often used by neoliberals to harmonise down the rights of European workers.
Not everything should be subject to the market. Health, culture and education, but also the justice, the security and the defense, should for instance remain public affairs. Other public services such as energy, telecommunications, and networks of transportation for goods, persons or energy have proven that they are most effectively treated as natural monopolies. Thus, there is only one possible solution: The public powers should become majority shareholders in those companies and their democratic administrations at a European level that is the most pertinent. This will be possible through the institution of continental network of public services and the revocation of the separation between network operators and service providers. Only thus can the quality of service be guaranteed for citizens, and some measure of territorial equality - which is also crucial for economic development - be ensured.
Finally, at a time when major economic decisions should be made on a continental level, and when Europe should take its rightful place on social issues, it is vital to allow for a greater role of trade unions. The EU must encourage collective bargaining between trade unions and industries, in order to better distribute profits from increases of productivity, to increase wages, or to restart a program of working hour reduction in order to effectively fight unemployment.
Our generation bears the responsibility to implement the change called for by the electoral victories of the Left in France and Denmark, and to work on future victories in Italy, Germany and the rest of Europe. A progressive Europe should give priority to the issues of employment, access to common goods, ecological development and public services, and work on the emancipation of individuals as well as individual and collective wellbeing. It is our duty to fight a real political battle on these issues. With all the young people that want to join us, we will bring proof that a Left-wing Europe can exist, and that it can change society.