Written by Hilary Barnes
Quote of the day:
“….today’s functioning of the EMU may be momentarily advantageous for capital-owners in the surplus countries and creditors at large, some of whom also espouse the ‘Maastricht orthodoxy’, but it is damaging for workers and entrepreneurs in the real economy, debtors of all types and most users of public services. This dynamic is not sustainable: it must be either altered through reform of the EMU, or the EU itself risks being destroyed by political conflict between the EMU’s winners and losers.”
It is not what this says, but the person saying it, and with a serious sense of urgency, that makes this interesting. It does not come from the Daily Telegraph‘s slash-and-burn-the-EU brigade. The author is László Andor, EU Commissioner for Employment, Social Affairs and Inclusion.
With a few more commissioners prepared to fight the Maastricht orthodoxy, we might at last get some movement towards “the new paradigm” that Commissioner Andor wants. Time, too, that some top politicians, such as France’s Francois Hollande, should become equally explicit in demanding that the Euro zone should save itself from its present disastrous course.
Andor’s excellent article labels the Maastricht orthodoxy in six cogent points, each of them in essence adding up to one critical weakness – the orthodoxy cannot accommodate the notion that the Euro zone’s problem is a deficiency of demand and that all the nostrums for solving the monetary union’s problems in the absence of this recognition are more likely to bust up the monetary union than anything else. As he says in his conclusion:
“Let us not forget that the single currency never was a purely financial or economic project. It was launched two decades ago with a strong political mandate to help keeping Europe united. However, the euro can only fulfil its unifying mission if the costs and the benefits of the EMU are more fairly distributed among the participating Member States, and if the rules of the game help boosting the growth potential of all of them. To deliver this, we need a new paradigm.”