Sunday, November 30, 2014

Hope for Europe

There are tangible signs of change concerning the future of Europe. Let's take here three important facts.   

In his address to the European parliament on November 25,  Pope Francis called for a united Europe. His main argument was human dignity as a central value for the rebuilding of Europe. This is an extract from his speech

Promoting the dignity of the person means recognizing that he or she possesses inalienable rights which no one may take away arbitrarily, much less for the sake of economic interests.
At the same time, however, care must be taken not to fall into certain errors which can arise from a misunderstanding of the concept of human rights and from its misuse. Today there is a tendency to claim ever broader individual rights – I am tempted to say individualistic; underlying this is a conception of the human person as detached from all social and anthropological contexts, as if the person were a “monad” (μονάς), increasingly unconcerned with other surrounding “monads”. The equally essential and complementary concept of duty no longer seems to be linked to such a concept of rights. As a result, the rights of the individual are upheld, without regard for the fact that each human being is part of a social context wherein his or her rights and duties are bound up with those of others and with the common good of society itself.

The second message is delivered by Mario Draghi in a speech at the University of Helsinki. He said (perhaps more openly than before) that Europe has to guarantee the sovereign debt of all States. The reference is clearly for Greece in case of victory of Szyriza at the forthcoming elections. The danger of a unilateral decision of withdrawal from the euro area would put at risk the whole monetary union. But Greece could stay if Europe holds  responsibility for the Greek debt for 50 years (as asked by Tsipras), which  is relatively small compared to Italy or Spain. This explains why Draghi has urged for further economic and fiscal integration while continuing his plan of massive purchase of private bonds. 

Last but not least, the president of the European Commission, Jean Claude Juncker has proposed the European Parliament a 3 year investment plan of € 315 billion starting from Autumn 2015. However, this amount is allocated to a specific Fund which includes so far €21 billion. But this initiative is different from previous ones as regards the modalities through which it will be made up. The Fund will be topped up by contributions from member States (including from non-EU States and other international funds) with a larger participation from richer EU States. In fact this is a step toward a genuine EU budget to issue guarantees for sovereign debts (to which Draghi referred to in recent declarations). 

Member States will contribute - up to at least € 200 billion in exchange of the possibility of making investments - outside the parameters of the Stability Pact- which should create new jobs and income in order to stimulate global demand, and generate new tax revenues and therefore save some financial resources for further investment.

As the economic scenario deteriorates in Europe, it would be difficult for member States to reject the Juncker Plan. There is no alternative than an EU wide plan for growth and jobs. 

The combination of these three messages provides some hopes for the future of Europe. In times of crisis and rise of populism, we need to mobilize all  our forces to act for the common good. 

1 comment:

  1. On 22 January, the ECB will launch a Quantitative Easing plan aiming to purchase public debt especially in heavily indebted countries to revive growth in Europe. According to financial analysts it could end up in at least 500 billion euros but probably more over one or two years. The liabilities will be kept in the ECB while long term loans will be provided to the real economy and refinancing of banks will be made at very low interest rates. but Draghi's grand plan is to help build a political Union based on true federal institutions (of course limited to euro area member States)