It is June 2015, and the European prime ministers are meeting to discuss how the European parliament can represent European parties, instead of national parties. Prime minister Ed Miliband speaks at the airport and then off he goes to meet Chancellor Hannelore Kraft, who has replaced Angela Merkel following the last Federal elections. French prime minister François Hollande will be joining the meeting, as will Pierluigi Bersani, the Italian prime minister. The 2012 ‘European Spring’ seems a distant but vivid memory. During the lunch break, the prime ministers smile as they recall how tough that time was. They remember how, back then, European people decided to raise their heads and shout against the orthodoxy of austerity with no grip on growth, forcing governments to implement a strategy for growth: eurobonds were issued; and the European Investment Bank and the European Central Bank were given new roles, responding to democratically elected European Parliamentarians. They recollect how Obama (now re-elected as President) pushed for a New Deal for Europe, and encouraged European countries to follow his approach to growth (Obamanomics) by combining long-term deficit reduction with short-term stimuli. And Europe did grow. And a nation of Europeans grew too. United by the fight against financial market domination, Europeans restored peace; a peace brokered by a war, but not the traditional war of armies and weapons: a silent war with Greece at its centre, which originated from the failure of politics and replaced the dictatorship of the markets.
That is my dream; a pleasant dream for me — after all, I grew up breathing in the advantages of Europe, which never fully emerged and disenfranchised many — but it should be a great dream for Britain.
In this scenario Britain would be a richer country: our membership of the EU means that British businesses have direct access to 500 million consumers for their products and services; the largest single market in the world. And if Europe grew, we would profit, as we would sell more. European laws allow us, for example, to sell in France without having to pay more tax than a German business competitor would. Our membership of a wealthier Europe is connected inextricably to growth in Britain. What the Conservatives label as ‘restrictions’ (European laws) are powerful tools to provide access to a massive market, where well over half of British exports go.
However, dreams aside, the situation is dramatic.Greecereally could leave the euro, with terrible consequences: not because of the weight of its economy (which constitutes 3 per cent of the EU’s total) but for what is termed the ‘exit domino effect’: panic will spread that this is the end of Europe, triggering financial speculation.
But what needs to happen to save the situation and, in the longer term, make my dream come true?
First, issue eurobonds and transform the European Central Bank into Europe’s main lender, as François Hollande and Mario Monti are asking Angela Merkel to accept. Sadly, the German chancellor is refusing to do either. It is true, Germany is a richer country; it has reformed its industry and welfare state courageously and kept salaries and unemployment under control. All this has placed Germany as a key exporter, behind China but ahead of Japan. However, Germany needs to realise how much it has benefited from the EU; most of Germany’s exports are to the euro area, and this has been possible because of the existence of a common currency.
Second, introduce a plan for growth and jobs. This could be done, for example, through a new role of the European Investment Bank, with a new push on innovation.
Third, return to the original spirit of the European Union. Its core principle was to provide a space for growth — a free and massive market, able to compete with the emerging powerhouses — but with a truly European approach, with economic and social goals inextricably linked. This is exactly the spirit of the Lisbon Strategy. However, we mustn’t forget that the focus of that Strategy has shifted slowly, with social policy progressively losing its importance. And we must bear in mind that this has not happened by sheer coincidence, but as an outcome of the swing to the right, which has occurred in many countries over the past ten years. The management of the crisis is a clear example.
I believe that much euro-scepticism is the result of a process which has failed miserably. If Europe was set up originally to create a space for social and economic growth, they have not happened, as we are witnessing now.
But shouldn’t we be arguing that it is about time they did? Shouldn’t we be arguing that it is in our own interests to stand together with the progressive side of the world, including President Obama?
We should stop for a minute and think how the Greek crisis started: when Greece joined the euro, it did so despite a huge outstanding debt with Goldman Sachs (5.1 billion euros). How did that happen? It’s simple. Greece was able to override the strict EU debt rules by taking out a secret loan: Goldman Sachs lent Greece 2.8 billion euros so its balance sheet would pass the requirements to join the euro currency.
That does not sound right to me, which is exactly what we are talking about when we argue for responsible capitalism. And this, in the end, is what Greek people are saying to the world: they have paid enough for sins they never committed.
This crisis is telling us that we, Labour, are right in claiming fairness and responsibility. It is now time to say that we are ready to do this as Europeans, because by doing so we will achieve both a richer and a fairer country.
Ivana Bartoletti is Editor of Fabiana and a former policy adviser, Romano Prodi government