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Weeklog Dennis de Jong: The menacing silence around the Euro

February 17th, 2013 • The last few months have seen things grow calmer around the euro, but appearances can be deceptive. The real reason for the relative peace is that Angela Merkel, with an eye to the national elections in Germany later this year, doesn’t want any trouble.

Dennis de JongIf you look at the stats from the weaker Eurozone countries, then you won’t see a restful picture, anything but. In Greece unemployment has reached a new record of 27% of the workforce, while youth unemployment is up around 62%. The economies of all Eurozone countries added together have experienced negative growth in the last quarter of 0.6%.This would surely be reason enough for the member state government leaders to feel the need to get together urgently to discuss how they can ensure the necessary investments and put some wind into the consumers’ sails in order to give the economy a boost. Instead things remain silent, menacingly silent.

European ‘Super-Commissioner’ Olli Rehn announced in a letter that for countries struggling with major setbacks, extraordinary conditions might be possible, so that temporarily they need not adhere to the 3% limit on budget deficits. That is a sign of advancing understanding, albeit much too late in the day. In the European Parliament, budget fetishism is making a comeback. Two weeks ago in Strasbourg the EP adopted two contradictory resolutions, one seeking to maintain a strict budgetary policy and the other calling for an investment policy, demonstrating growing confusion. Everyone sees that the economy is collapsing and that all of a sudden politicians must start thinking again instead of unthinkingly sticking to the budgetary norm. That’s not going so well.

Meanwhile the situation in southern Europe is deteriorating by the day. Italy is a mess, in Portugal people fear that negative growth will bring them down to the level of Greece, in Spain the reorganisation of the financial sector has only just begun and in Greece at the same time 40% of the population have barely enough money to cover basic necessities. The number of people dependent on food banks is growing rapidly. This is hardly a stable situation.

What should be done, then? The SP has argued for years that a combination of debt write-off and an investment policy represents the only solution that can in the end bring real stability. The longer we wait, the harder this solution will be still to realise. Are Dutch Premier Mark Rutte and his fellow government leaders going to sit back and wait until, for example, the fascists in Greece and Berlusconi in Italy are in power? Or will they take a close and urgent look at the dismal unemployment resulting from years of failed policies? I fear the first, but we in the SP will continue to call for a radical break with the past, in Brussels as well as in The Hague: people in Europe deserve government leaders better than the dozy bunch currently in power.

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