From Thursday to Sunday we European Union citizens will be called to elect a new parliament. These elections are important, not only because for the first time will decide who will lead the European Commission. But mostly because the next 5 years represent a crucial point to understand whether the European Union will remain nothing more than a geographical expression (as Metternich called Italy in the Nineteenth century, before its Unification), or will be able to achieve a common economic and monetary policy, and with it a tax policy, a labor policy, etc. In one word: Policies.
The next 5 years will be critical to set up a new model of economic and social development, which will enable the European Union to be competitive in international markets, safeguarding welfare and environment. Today many opinion leaders think that we can overcome the crisis through the re-launch of production and mass consumption. But this model is what has caused the crisis: more production cutting the cost of labor, wages, increasing job insecurity.
We do not believe in this perspective, because the crisis is not just financial or productive. It is also clearly an ecological crisis that produces the desertification of the planet, destroying resources that have taken thousands of years to accumulate. Today we are buried by waste, one of the problems caused by the explosion in 2007 of the production model, as evidenced by the case of Campania Region in Italy, which is a prime example of what is happening.
If we want to re-launch our economy, we must first re-examine the European treaties and amend the Statute of the European Central Bank. If not, governments will continue to beat the heels and sign anything that Brussels, the ECB or the IMF propose.
The Treaty establishing the European Union and the Statute of the ECB unfortunately ignore the problem of our time: the creation of jobs. Article 123 of the EU Treaty prohibits the ECB from providing overdraft facilities or any type of credit facility to the States. It is a prohibition unique among central banks on the planet, another absurdity of the Treaty. It is difficult to change because of the opposition of the German government. It is curious to note, however, that that article does not prohibit the ECB to buy the bonds on the secondary market. What the ECB did between 2010 and 2011 when it purchased 218 billion of government bonds. The ECB could lend billions of Euros in exchange for a commitment to a plan that provides for the recruitment of new workers.
The ECB in recent years has lent trillions to banks without preconditions. This money was used to purchase bonds. Less than a third went to the enterprises, but also in this case without preconditions. Without resources, policies against unemployment made by European governments are palliatives compared to the 26 million unemployed and 100 million at risk of poverty in Europe.
Ulrich Baumann
IL BIOECONOMISTA 