International

According to the CPB - the official Dutch Bureau for Economic Policy Analysis – each of us gains a week’s salary per year from ‘our’ euro. This is a bizarre statement, when you consider that the purchasing power of a Dutchman or Dutchwoman has not on average increased since 1997. As for GDP, it’s true that this grew strongly in the euro’s first years; however, since the credit crisis it has ceased to grow. As soon as it had at last become clear even to the financial world that huge differences existed between member states in the eurozone, there has no longer been any sign of growth. So I can’t find any confirmation in the statistics that the euro is good for our economy, and I ask myself with increasing frequency if it hasn’t actually made us poorer rather than richer.

The CPM makes two mistakes in its assertion. First, it assumes that developments during the early years of the euro can be continued into the future, an extremely bold statement if you consider that there has been no sign of any growth since the credit crisis. Everyone is doing, in the runup to the German elections, their best to present a rosy picture, but as things stand I can see no structural recovery in southern Europe. The question remains: can you erase the enormous inequalities within the eurozone in just a few years?

There are only two possible ways to achieve this: one is currently being tried and involves a reduction in wages and erosion of conditions of work in the Mediterranean area, as well as the dismantling of public services. This can lead to greater ‘competitiveness’, but what remains is no longer a social economy. And don’t think this will be limited to the south: as soon as these countries achieve greater competitiveness, employers here in the north will be demanding that we reduce wages and the level of public services. So this is probably practicable, but it’s also dangerous to all of us.

The second method is to make an enormous transfer of money from northern to southern Europe. The reason that this isn’t happening is principally because of a lack of popular support. It leaves a sour taste, too, to think that the banks which caused this crisis by lending too much money to southern Europe contribute hardly at all, the burden falling almost in its entirety directly on the taxpayer.

The CPB’s second mistake is to write as if economic advantage really does reach everyone. As I have previously noted, the purchasing power of households has not risen since 1997. The cake has been divided unequally, with corporations and government taking a greater slice. Between households, also, differences have grown: the poor have grown poorer, the rich richer.

The proposition that the euro is making us poor may seem somewhat bold, but I feel able to risk making it all the same. If we are now afflicted by lower wages and deteriorating public services, then we can cough up for a recovery plan for southern Europe, for all the good it will do us. As long as economic inequalities remain, growth will in any case be stymied. In my view, the CPB needs to do its sums all over again. If they come up anew with the same outcome as far as our weekly wage goes, fine, but couldn’t we see it in our bank accounts, too?