Jean-Claude Juncker said some remarkably candid things to the European parliament yesterday. His role as the chair of the Eurozone group of countries has given him limited scope to speak freely to date. Indeed he’s someone who is quoted as saying ‘I’m for secret, dark debates‘.
Now that he’s about to step down, he’s made some extremely critical comments about the entire approach the EU has adopted in response to the crisis. Eurointelligence summarizes his ‘furious attack on Berlin’ as follows, noting:
- that he disagreed with the rhythm of adjustments “imposed on certain countries”, and that the Eurogroup has not made political valuations of the adjustments which too often were just rubber-stamping recommendations by the Commission, ECB and IMF “whose democratic legitimacy is not clear”.that “the choice was made to make the adjustment fall on the weakest”;
- that certain countries who benefitted from capital flight out of Greece were not doing anything about it;
- that the mistake has been made to “underestimate the drama of unemployment” and to “give the impression that Europe is only there to punish” and by not rewarding the “program countries” for following through with their adjustment plans;
- that his successor would be well advised to “listen to all Eurozone members on an equal footing” even if it takes a long time to go through a meeting, or else “we’ll see the results in 6 months if my successor doesn’t”;
- that the ESM should have “some degree of retroactivity” and be able to “recapitalise banks” and not just address “new problems that may apply in the future”;
- that the results of the latest European Council were “disappointing”, because “the original idea was to present a road map for the following decades”;
- in respect of economic policy coordination, that “we can’t carry on with a system where the Frankfurt monetary arm is strong and the economic policy arm is feeble” and “those who refused [in 1997] are now the largest voices calling for this idea”. And “we have to make sure that every time a government recommends a structural reform it is explained to the Eurogroup and that the ministers in charge explain the consequences and others say what the consequences of such reforms will be on policy in their countries”;
- “there’s a need for all member states to agree on a ‘minimum social wage’”, a need for “a basis of minimum social rights for workers”, as “otherwise we’re going to lose the support of the working classes”. There’s a need to “agree on the elements of solidarity”, “principle and ways and means of bank resolution”, and “a deposit guarantee scheme”;
- that the Green party in Luxembourg will vote against the Fiscal Treaty because “they are fed up with what they see as a German diktat”.
I’m especially struck by his recognition that poor coordination and procrastination has resulted in unacceptable costs in the form of unemployment, inequality, and social hardship, because this is where the real human cost of unremitting austerity is felt. Unemployment in the Euro area is now 11.8% – worst of all in Spain and Portugal, where it is over 26%; very serious too in Portugal, Ireland , Latvia and Slovakia. And even these official data conceal a lot: the standardized unemployment rate in Ireland, for example is 14.6%, but there are also a great many under-employed people and discouraged workers who don’t appear in the official statistics.
The end of the Christmas holidays has been a particularly poignant time in Ireland this year. It’s the start of Ireland’s seventh phase of holding the rotating Presidency of the EU, so Dublin is full of Euro-bureaucrats; all the commissioners arrived yesterday. It’s also the start of a year-long government initiative to boost tourism called ‘The Gathering’, which is meant to promote an influx of visitors analogous to Scotland’s ‘Homecoming’ a few years ago. But we’re also seeing large numbers of people leaving, especially young people, and lots of sad friends and families have been saying goodbye. The gathering up and out of a new generation of emigrants, sadly.