European politicians want to 'turn back time'

Protectionism and nationalism are holding back Europe's escape from the economic crisis, warns MEP

While China and other emerging economies are steadily growing towards world-power level, Europe seems to be shrinking and dissolving into its nation states. The present debate on the eurozone and Greece's role within it is characterised by prejudice, ideology and a general lack of political will to further the European integration process. Politicians and commentators seem to want to turn back time. They now claim that the euro is a wrong-headed artificial creation that is doomed to fail. A sense of national protectionism, bordering on old-fashioned nationalism, is growing.

Intensified verbalisation of prejudice is a sad by-product of the ongoing debate. Openly claiming regional differences in efficiency and labour intensity is no longer looked down on. The clichéd separation into the 'industrious, efficient north' - above all Germany - versus the 'lazy South with little productivity and basically omnipresent corruption' has become a new dividing line, separating good from bad. The states that are now being declared the only remaining safe havens of national interests were, of course, themselves artificial projects when they were created. Nothing natural accompanied the build-up of the French and German states. On the contrary, in many cases force and mythology played a leading role.

What we need today is to take the political will and fervour available and turn it into the determination to defend and strengthen the euro as the common European currency. Economic and legal aspects must not be neglected, especially when discussing Eurobonds. But we should look at the facts and not be distracted by ideology and prejudice. The budgetary problems are not the result of the introduction of the euro, but of the political choice not to merge the currency with a clear economic policy.

An economic policy free from ideology should have directed the financial resources into industrial development and productivity gains. In the absence of reasoned economic intervention, the Greek public sector kept growing without improving efficiency. And Spain let cheap money create a property bubble similar to that seen in the United States. In addition, the prevailing ideology of deregulation and abstention from economic intervention all over Europe prevented politicians from calling for correction of these budgetary and macroeconomic imbalances. We will all eventually have to bear our share of responsibility.

Our priority must now be to create and implement measures promoting growth and jobs in addition to the legislative provisions in place to consolidate budgets. The rules and policies in place for growth are inversely proportional to the current needs. We are rigorously strict concerning budgetary discipline; we are moderately efficient in correcting macroeconomic imbalances. But we still lack binding rules for investment and growth. Concerning economic imbalances, the European Parliament will decide further regulations in form of the 'two-pack', in addition to legislation already in place.

The current lack of common policies and instruments is closely connected to the lack of solidarity prevailing in today's politics. For conservative and right-wing forces 'solidarity' turned into terminology non grata, as it is polemically associated with the principle that one side pays while the other side spends. A clear-cut economic policy that lays out the principles for both budget consolidation and sustainable growth would foster the convalescence of our economies and thereby alleviate misconceptions of unilateral financial dependence. Heads of state and government today fail to acknowledge this, as they are preoccupied by defending the ill-constructed fiscal compact.

Today, old fashioned ideologies of markets free of public interventions in combination with priority given to national interests prevent the continent from getting back on the path of growth and job creation - and meeting global challenges. Arguments like 'yes to growth, but no to debt', found especially in German conservative political and media circles show the ideological barriers. But economic growth does not happen by itself. If we want to generate growth and employment, we need to use the credits which exist for that purpose. We need stimuli, especially amid recessions in many countries and reduced growth worldwide.

We have to overcome the strange combination of rising nationalism and egocentric economic ideology. The failures of that policy should be visible by now. Instead, a pragmatic economic growth and investment policy in connection with long-term fiscal responsibility is needed. Of course, we will need some political courage to continue the European integration process and simultaneously address the biggest problem for our citizens today - unemployment – and to prepare for the global challenges of tomorrow, competition and quality services and products.

Hannes Swoboda MEP is president of the Progressive Alliance of Socialists and Democrats political group in the European Parliament