Friday, April 1, 2016

Social Democrats should push for Piketty's New Deal for Europe

If the decline of social democracy in Europe is not stopped, that would be a tragedy for our world. The European social model shows that our continent, which concentrates 50% of social expenditure in the world, is the mother land of the center-left, and an example for the rest of the Planet. But today the challenges of rebuilding the social contract can only be addressed if we have the courage to go beyond the nation-state. That is why I believe that social democratic leaders in Europe should follow the advice of French economist Thomas Piketty about the need to build a true federation in the eurozone. I am afraid that the alternative more and more is Marine Le Pen and similar xenophobic populists. Here is what Piketty has to say in The New York Review of Books in his article "A New Deal for Europe": "The far right has surged in just a few years from 15 percent to 30 percent of the vote in France, and now has the support of up to 40 percent in a number of districts. Many factors conspired to produce this result: rising unemployment and xenophobia, a deep disappointment over the left’s record in running the government, the feeling that we’ve tried everything and it’s time to experiment with something new. These are the consequences of the disastrous handling of the financial meltdown that began in the United States in 2008, a meltdown that we in Europe transformed by our own actions into a lasting European crisis. The blame for that belongs to institutions and policies that proved wholly inadequate, particularly in the eurozone, consisting of nineteen countries. We have a single currency with nineteen different public debts, nineteen interest rates upon which the financial markets are completely free to speculate, nineteen corporate tax rates in unbridled competition with one another, without a common social safety net or shared educational standards—this cannot possibly work, and never will.
Only a genuine social and democratic refounding of the eurozone, designed to encourage growth and employment, arrayed around a small core of countries willing to lead by example and develop their own new political institutions, will be sufficient to counter the hateful nationalistic impulses that now threaten all Europe. Last summer, in the aftermath of the Greek fiasco, French President François Hollande had begun to revive on his own initiative the idea of a new parliament for the eurozone. Now France must present a specific proposal for such a parliament to its leading partners and reach a compromise. Otherwise the agenda is going to be monopolized by the countries that have opted for national isolationism—the United Kingdom and Poland among them.(...)
If France, Italy, and Spain (roughly 50 percent of the eurozone’s population and GDP, as against Germany, with scarcely more than 25 percent) were to put forth a specific proposal for a new and effective parliament, some compromise would have to be found. And if Germany stubbornly continues to refuse, which seems unlikely, then the argument against the euro as a common currency becomes very difficult to counter. Currently, a Plan B involving the abandonment of the euro is being touted by the far right, a policy that is increasingly tempting to the far left. Why don’t we start by actually giving a chance to genuine reforms that would make the eurozone work for the common good?"

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