The Free Market Fundamentalists Are Now in Europe
By Roberto Savio | For a long time it was a given that while Europe was based on defending a more just society, with social values and solidarity, the United States was based on the glory of individualism and competition, and anything public was considered “socialist”.
One of the main accusations of the last electoral campaign in the U.S. was that Barack Obama had an unspoken design to transform the U.S. into another Europe, beginning with healthcare reform.
Well, it’s time for an update – the defenders of market fundamentalism are now in Europe.
At the last meeting of Ministers of Finance on Apr. 9, the freshly-appointed U.S. Treasury Secretary Jacob J. Lew tried to convince Europeans to lessen their commitment to austerity as the best medicine for economic problems. The U.S. Treasury, together with the U.S. Federal Reserve, has launched a policy of economic stimulus, with concrete success.
Every month, the Federal Reserve alone is putting 80 billion dollars into the bond market. Incidentally, Japan is doing the same, on an even greater scale. Lew was met with a firm rejection: the best way to achieve growth in the long term (contrary to any evidence) is to cut deficits and reassure the markets, even at the cost of higher unemployment and social misery in the short term.
Europe’s most powerful minister, Germany’s Wolfgang Schauble, said: “Nobody in Europe sees this contradiction between fiscal consolidation and growth. We must stop this debate, which says that you have to choose between austerity and growth.”
He was echoed by the president of the European Union, Herman Van Rompuy: “There is no room for complacency. The European economies have a high level of debt, deep structural medium-term challenges, and short-term economic headwinds that we need to confront.”
These short-term economic headwinds are the daily reality of all the countries of Southern Europe. Suffice it to point out that youth unemployment has climbed to 22 percent across Europe (Spain is close to 47 percent) to see that we are wasting a generation, which will have no access to a future pension or a house. Like it or not, a study by the International Labour Organisation (ILO) foresees that the generation now entering the labour market will retire with a pension of only 640 euro per month. Is that a sustainable society?
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*Roberto Savio, former Secretary General of SID, is founder and president emeritus of the Inter Press Service (IPS) news agency and publisher of Other News.
This article was first published in Other News