Belgium in crisis can point the way to social Europe

5 July 2010

Belgium in crisis can point the way to social Europe

Stricter legislation can prevent a situation in which the taxpayer has to pick up the bill. In the face of spending cuts, Europe's social model can be maintained.

Dennis de Jong, Member of the European Parliament for the SP

Dennis de JongOn 1st July, Belgium took over the six-monthly rotating European Union presidency. Under difficult circumstances, because both the economic crisis and the fact that Belgium is governed for the time being by a temporary administration while attempts to form a government continue, present challenges. The central question is this: has Belgium the courage to find a socially progressive way for Europe to get out of the crisis?

The action programme that Belgium, in its role as the EU presidency, wants to carry out is one which promises change. Add to this the changes which throughout Europe and even in the United States can be seen in the way in which the financial sector is being addressed and you can only hope that this proves to be the moment when we leave neoliberal Europe behind us and return to our social roots.

In order to help the presidency, I recently, in my role as a member of the European Parliament Crisis Committee, put forward almost fifty proposals the implementation of which is necessary if we are to find a socially progressive way out of the crisis.

One of the most important is the call for an enquiry into the 'too big to fail' phenomenon. Many corporations and financial institutions have in the last few years grown so large that if they fall into economic difficulties they must be aided by the state, and thus by the taxpayer. The enquiry should clarify whether anti-cartel legislation should be sharpened. In addition, something must be done at European level about decision-making at these big international firms and financial institutions. Employees have an interest in stable enterprises, so they should be given more say, while the influence of speculators must be reduced.

Belgium wants to see the member states balance their budgets, but at the same time says that Europe's existing social model must be maintained and even that the social differences within the Union should be reduced.

This can, however, not be achieved by blunt spending cuts.

What this means for ordinary people is clear from recent research. Spending cuts mean that the majority of Greeks have no idea how they will pay their bills. In the EU as a whole one in six people lives below the poverty line.

That's around 80 million people. In the Netherlands nine out of ten citizens see poverty as being on the increase, or at least not decreasing. At the same time, in the last year the number of millionaires has risen.

Cuts hit primarily the poor. In order to maintain Europe's social character, these must be gradual and conducted in a responsible fashion, so that those most able to pay carry the heaviest burden.

This means, amongst other things, that concrete form must be given to the idea of a bank levy, a tax which financial institutions must pay to contribute to the fight against the crisis. In addition, an end must be put to competition between member states in their attempts further to reduce corporate taxes. In order to achieve that, a minimum tariff for this tax should be instituted.

The Belgian presidency must choose: one-sided pressure for cuts or effective measures to democratise the economy and thereby stabilise it, forcing down the rate of poverty in Europe. Belgians can once again be proud of their country if they choose this latter solution.

This opinion piece was first published (in Dutch) in the regional daily, the Dagblad van het Noorden.

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