Tuesday 28 May 2013

The Misleading Change of Focus in the European Commission’s Discourse on Economic Policy

Olli Rehn
So, this morning I read in the papers that the European Commission said that the Member States should “shift the EU's policy focus from austerity to structural reforms to revive growth.” The authors quote a European Commission official who said that “the main message will be that the emphasis is shifting to structural reforms from austerity.” That sounds interesting, I thought, so I read further in the hope to see a change of discourse by the European Commission just as the article describe. In the last couple of years my hope has been that the European Commission will initiate an alternative discourse within the EU. I am not hoping that the Commission will promote hardcore neo-Keynesian policies tomorrow, but I still hope that it will stop stigmatizing individual countries, and perhaps understand that there are more structural problems within the Eurozone, promoting an approach that focuses on sustainable growth. I can’t describe my disappointment at the end of the article, and I would say that the article is misleading and even dangerous because the title and the first ten lines suggest something completely different from what the article actually says.

So to cut a long story short, the Commission has not stopped promoting neoliberal policies – it has merely changed its justifications. So instead of cutting expenditures and increasing taxes to reduce budget deficits and obtain fiscal consolidation, Member States should reduce the minimum wage when it is too high like in France, or “open up closed professions like taxi drivers.” (What does that remind me of? Oh yeah, they did the same in Greece, wanting to open up the taxi market. I mean of course, people want to become taxi drivers – that was their dream job when they were kids! I have to say at this point that this completely failed in Greece, because now no one takes cabs anymore and it has become somewhat of a luxury. So what exactly is the point of becoming a taxi driver if you have no costumers?). The Commission also wants France to reduce the really rigid labour code, to basically reduce workers’ protection from getting fired.

I have to say this should not really surprise me. The lack of imagination of the Commission’s staff is really worrying. This recycling of old ideas has become a bit annoying, especially because in Greece this has been done for three years and Greece still has one the biggest unemployment rates in the Eurozone. I don’t really get how it’s going to work for France. We are one year away from European elections, and I fear the rise of Eurosceptisicm once again. No one has actually explained that the problem is not the Commission itself, but the people at its top, the composition of the European Parliament and the Composition of the Council. In those three institutions, there is a majority of right wing, conservative/liberal politicians. What are they supposed to say? Let invests to have growth? No, this has never been their ideology. So it is not surprising. So goes the famous quote by Jean Monnet: “Nothing is possible without men and women, but nothing is lasting without institutions.” Monnet also says that nothing is possible without people; people and their ideas matter as much as institutions. So perhaps we should start being more critical of the people who are dictating these policies and not of the institutions. I mean let’s not forget that Olli Rehn is a liberal, member of the Center Party in Finland, what was he supposed to suggest?

Some media just have no critical analysis whatsoever! They only repeat what the Commission says. 

A. A.

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