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How much economic policy should be done at the European level?
Fri, 17/09/2010 - 16:43
How can we deal with our interconnected economies?
Do we need to centralise more policies to be more efficient?
How much should the European Parliament decide?
Tue, 02/11/2010 - 15:48
#2
don't forget subsidiarity
I don't agree, this is against the subsidiarity principle. The basic economic governance should indeed be at European level, as it is not logic to have a common market and a common valuta (at least some of us) but not having a common economic policy. But besides this, there should be the possibility for economic policy choices of elected politicians at all levels, and in particular at local level if and when they can best deal with the subject. In my view, democracy starts from below, so local communities should have the right to decide on what is a good life for them, including economic decisions, of course within the framework of European rules. But then, that was possibly what you meant as well, without going into detail ;-)
Wed, 03/11/2010 - 08:55
#3
Strange question?
Maybe the question shouldn't be how much economic policy should be done at European level. Not at this stage.
Perhaps it would be better to ask what kind of economic policy the PES should advocate.
And only then ask "Are existing powers enough?"
Some examples of different directions in which we can go:
Social ownership and regulation of the core utilities, electricity, water and gas at a European level; the establishment of a bloc to buy electricity from renewable sources, and gas from our neighbours
A single European Railways regulator, which gradually moves as much freight as possible away from motorways and co-ordinates a pan-European railway authority based on social ownership, and which can ensure that cross-continental train travel is priced competitively to air travel
A single European Postal Authority which ensures that previous neo-liberal directives are counterweighed by an emphasis on the universal availability of core banking and postal services - and a well-resourced unit to fund, encourage and support credit unions and co-operatives
The ability to issue bonds and borrow from the capital markets in order to redistribute investment and ensure solidarity within the EU
The creation of an EU 'volunteer corps' which can involve volunteers in projects in disadvantaged areas
Encouragement of social ownership and stakeholder models to be a prime determinant of EU project funding
Wed, 03/11/2010 - 09:16
#4
volunteers corps and social ownership
Could you further describe your last two suggestions?
Thu, 04/11/2010 - 20:34
#5
In summary
Sure - firstly, an equivalent to the Roosevelt-era Works Progress Administration, deploying skills from around Europe in projects to develop infrastructure and enrich the some of the most deprived areas within the enlarged EU. This would not just be for engineers - like the WPA it could also deploy artists, writers and those in the knowledge industries, to add lasting and sustainable public works to the areas that need them most.
Secondly, there are unfortunately countless examples of corruption and double-dealing relating to EU projects and the tendering process. And I think a way to counter this - and introduce social representation to the beneficiaries of EU funding - is to set up a system which provides preferential treatment to social enterprises, mutuals, worker co-operatives and which indicate a high level of economic democracy.
Fri, 05/11/2010 - 14:32
#6
Thanks for reply Carl
Thanks
for your reply, didn't realise it before, sorry. I think your second proposal
is a very good one. However, the criteria should not be the "institutional"
status, but the fullfillment of social criteria. There are so called social
enterprises with a certain institutional status that are as greedy/corrupted as
"normal" enterprises with a social consciousness. On your first proposal, I actually wanted to discuss this question of
volunteers with you: On the one hand, I think it is a very good idea and
society is in need of it, on the other hand, there is the danger that
right-wing governments just push the responsibility (and the bill) over
to the volunteers, instead of having a good welfare state. This in
relation to the upcoming year of volunteers. What do you all think on
this?
Fri, 05/11/2010 - 14:45
#7
Agreed on all counts
I agree with you on all counts :- )
I used the example of the WPA to indicate that this 'volunteer corps' would be a form of innovative public interventionism rather than yet another example of the overstretched voluntary being asked to pick up the tab - yet again.
Fri, 05/11/2010 - 14:48
#8
great then. I do not know the
great then. I do not know the WPA, I didn't get this point from your description ;-)
Fri, 05/11/2010 - 14:57
#9
inpirational
http://en.wikipedia.org/wiki/Works_Progress_Administration
In many US cities you can do a tour of WPA-planned projects - some of the finest Art Deco buildings. It's only this level of investment - and commitment to excellence - which can pull us out of this hole. I would argue!
Wed, 03/11/2010 - 15:51
#10
I think Carl R is right. It's
I think Carl R is right. It's not how much economic policy should be decided at European level, but what policies do we need? Once we understand what we need to do we can talk about what tools we need to do it.
Wed, 03/11/2010 - 19:07
#11
What/where
Carl R and Desmond, you have a good point. Answering the question of
“what policies do we need?” must of course come before asking ourselves how and where to
do it.
But if we agree that we need both structural policies – whatever they
might be – to adapt Europe to a changing world,
as well as instruments to deal with the economic cycle (in other words both
economic/regulatory policies and macroeconomic policies) this raises institutional
questions in the EU context.
The traditional EU belief – very much influenced by the monetarist theories
that were popular in the 1970s/1980s and reinforced by the current
conservative/liberal majority in EU institutions – is that both issues are
totally separated: the EU level should just deal with structural policies,
while fiscal and monetary policies are relegated to the “stabilisation” of the
economy.
So in my opinion addressing how much economic policy should be done
at the EU level also asks the question of what sort of policies we need.
At the heart of the argument is the peculiar nature of the European
Union, in particular the eurozone: we have one unified monetary policy, but 16 different
fiscal and budgetary policies.
Prior to the crisis, the same low interest rate monetary policy
applied all across the Eurozone. In the booming Irish economy, this had
pro-cyclical effects (due to negative real interest rates) and led to the
formation of bubbles. In less dynamic economies, say Italy
or France,
this had counter-cyclical effects and counteracted to an extent the depressive
impact of low growth rate. How should we deal with this? And where?
Some argue that enhanced coordination of fiscal policy won’t be enough
and that it is necessary to conduct more economic policy from the EU level to
be able to cool down overheating economies and provide stimulus when needed.
Do
you think a larger EU budget, with extended budgetary powers and new fiscal
powers are necessary to this respect? And if yes, how do we address Marit’s
point that different democratic choices should be reflected in different
policies? In other words, how can any economic policy be legitimised at the EU
level?
Wed, 03/11/2010 - 20:26
#12
How to frame this debate
An intelligent response from Paul-Ugo and I agree with you as far as you go, but I don't think you - or the PES in general - are framing the question in the right way.
People see the profits that are made by utility companies across Europe, made at the expense of citizens, and they're angry. Increasingly, there are populist demands to renationalise these.
My argument against these populist demands is that, yes, e-on, RWE, Veolia etc should be socialised, and socialists in the EU need to work out a way of doing this at a European level, under democratic control, which uses a stakeholder model to provide long-term investment into utilities and European society.
I understand that this would be an abrupt change - it would mark the beginning of the EU as a provider and director of infrastructure, rather than a just a procurer. But without this change, I cannot see the prospect for a real increase in monetary and fiscal powers.
Thu, 04/11/2010 - 16:18
#13
Thanks for your thoughtful
Thanks for your thoughtful response Paul-Ugo. Just a few comments on what you have written:
1. Low interest rates. I would argue that low interest rates in the Eurozone contributed only marginally to the scale of the disaster that Ireland is now experiencing. This is an argument that has been put forward by some people, not you I'm sure :-), who say that Ireland should never have joined the eurozone in the first place and that euro-wide interest rates are designed for large countries not small countries like Ireland. Interest rates are only one of a range of instruments for controlling monetary policy. In Ireland, the far greater reason for the development of a property bubble was the regulatory negligence that allowed (a) Irish banks to lend capital to developers and house-buyers way in excess of their capacity to pay, and (b) the failure to ensure that the banks retained sufficient capital (either on their own balance sheets or with the Central Bank) to meet future cash calls or cover impaired loans, especially in the event of an economic downturn. The essential problem with Irish monetary policy was the failure to use these other instruments to mitigate the attraction for increased leverage that historically low interest rates presented.
2. Monetary policy in the Eurozone. I think there is clearly a need for a much greater level of intergation and co-ordination of economic policy across the eurozone and I note the proposals for legislation that have recently been published by the Commission. These proposals however address themselves to a narrow range of metrics concerning only deficits and government debt. There is no concomitant development of co-ordination on employment or productivity levels, much less issues relating to social justice or ecological sustainability. In this instance, I would agree with you that there is significant scope for European institutions to develop a more assertive role in the fiscal and monetary policies of member states. The question remanins, however, whether the weaknesses in democratic governance and acountablity of EU institutions would allow this to happen.
Thu, 04/11/2010 - 20:49
#14
Agreed. But I'm confused...
You're absolutely right Desmond. There is this weakness in governance and accountability.
But how did this happen? For if we don't know how it happened, we won't know how it can be resolved.
For my part, I suggest it has partially arisen from the technocratic approach which is adopted in practice by so many of our elected representatives. Maybe it stems from the way that politicians of all shades, turn to this technocratic language as a substitute for the idealism and value-driven activity which is, unfortunately, so often absent among those who nowadays draw their living from the profession of politics.
It also stems from the seductive nature of modern economic nationalism, which has permeated European social democratic discourse, at the expense of genuine international solidarity and class consciousness (as well as at the expense of environmental and ethical concerns).
Firstly, I suggest that we need to re-introduce elements of empiricism and objectivity to our approach. For example, the term 'modernisation' so often means something which relates to post-modern concepts of advertising and cultural mores - and under closer scrutiny, fails miserably to reflect a full spectrum of modern experience.
So maybe in this area so kindly provided by the PES, I hope that we can run through different alternate models of European socialism, and look with some depth, not only at what is considered immediately possible, but at long-run outcomes reflecting the societies and the futures that we want to see. And I hope we can slowly get an idea of a map, and be involved translate this map for our own parties and groups. Like most things the PES does, I think it's a brilliant opportunity - as long as people engage.
Fri, 05/11/2010 - 14:16
#15
Focus on building the PES more than the EU institutions
One of the things I like best with the PES is that is not about the institutions of the EU. As social democrats we do not controll the instututions and we should not be to defending of the systems and technocracy. What we do have at all times and what we do need to develope is or partys and our european PES. What I find great here is that we are discussing and developing social democracy together. I strongly believe in the subsidarity principle but we on an European level can help each others so that we can make wiser policys even on local and national level far from Strasbourg.
One important element of polycies needed is towards capital flows banking rules, tax evasion. The capital products are so complex to day were risk and earning is separated. Capital markets are in desperate need of regulation.
Fri, 05/11/2010 - 14:40
#16
Socialist to shape our society
I like very much your last para. One of the best things with the Socialists is that they are discussing and drafting programs and visions of society. Now it is good they are back on track after many of them just reacted (or even worse subscribed) to predominant neo-liberal ideology sold as "only possible option" or even worse as "reality".
Wed, 23/03/2011 - 23:54
#17
Where are you alla?
Hey, have we had no inputs in this discussion since 2010?
I want to post my agreement with Carl R and others about the technocratic tendency with our politicians in Europe, but I would swap the word 'technocratic' for 'economistic'. The non-scientific theories of economics are all too dominant in politics, and for the past 25 years the neoliberal theory has sadly been the credo even of socialdemocrats. Enough of that now!
I know two good books abt global financial crises, one in Danish by Poul Nyrup-Rasmussen and one in Swedish by Stefan deVylder. Both excellent reading for our FTT campaign.
Luckily there is also a splendid book in English, with a different angle though, showing why greater equality makes societies stronger: 'The Spirit Level' (and it is not about religion) by Wilkinson & Pickett, 2010. It is a landmark volume, full of data from 20 years of research on the health of societies in Europe and America. If you have not read it, do!
Thu, 31/03/2011 - 17:32
#18
A new macroeconomic model is needed!
Hello Lena,
Thank you for having joined the discussion and for your contribution.
You are right, indeed: neo-liberals and monetarists have completely
monopolized the economic scenario, leading the mainstream according to
which “state intervention
is bad! Let the market works alone”. It’s high time we regain the upper
hand on the political arena, but also in terms of economic policy!
We, the Socialist, have not such a blind confidence in the market hand as
the neo-liberals have and the recent financial and economic crisis
proved that the basis
of the current economic neo-liberal theory is very fragile.
That is why the Party of European Socialists is working on a new
macroeconomic model with the best economic academic experts. We will
soon start a topic allowing
all of you to join this debate as well.
Tue, 21/02/2012 - 23:04
#19
New macroeconomic model
Dear Andrea,
It has been a year now since you wrote this. Where is this topic?
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"How much economic policy should be done at the European level?"
All of it!
I live in Ireland, by the way!