Today I am speaking about social Europe at a conference in Copenhagen. Symbolically, we are at the offices of the Danish trade union, LO. This venue embodies the transition to the welfare state as we would like it to be from the reality of where we are at in the United Kingdom.
I believe it is impossible to talk about Europe’s social challenges without addressing the elephant in the room – economic growth. More accurately – the mouse in the room. The reality is that we desperately need a plan for growth which involves meaningful cooperation between nations, including a pan-European dimension.
Over the last few months, the European Union has been rocked by two main events: the situation in Greece and the refugee crisis. In both cases, unfortunately, it seems that the fear of the unknown and threats of retaliation have acted as the clammy binding force for Europe. But cold sweat is not a great adhesive. Before the financial crisis, that force was economic prosperity – a much more powerful cement keeping the bloc together.
We are now in a situation where we have to restore economic prosperity – together with other issues, including foreign policy, security, the environment and security against terrorism – as the guiding light of a new direction for the EU.
And social Europe must be a key part of this. After the financial crisis, policies of front-loaded fiscal consolidation have left welfare states in the economically weaker countries severely underfunded. According to the OECD, the number of people living in households without any income from work has doubled in Greece, Ireland and Spain, and has risen by 20 per cent or more in Estonia, Italy, Latvia, Portugal, and Slovenia.
It is now time to reverse this: productivity-enhancing structural reforms in these countries must be combined with large investment in education and research, new technologies, networks, health, energy, environmental sustainability and the business environment, all of which would strengthen longer-term competitiveness.
Fiscal consolidation, which is crucial, has to go hand-in-hand with investments in infrastructure and innovation, and key issues have to be redefined, starting from the role of the European Investment Bank.
The problem is that in Britain as well as elsewhere, the debate is now stuck between those advocating for fiscal consolidation with no ifs and no buts, and those wishing to pursue a more traditionally Keynesian approach, often branded as irresponsible by the former camp. This is a very dangerous conundrum we find ourselves in: the world is now at a different stage, technology has destroyed many lower skilled jobs whilst creating incredible opportunities in the tech and service supply fields, and globalisation has often meant the availability of labour at lower wages.
The reality is that fiscal consolidation is key – but needs to happen in a responsible way. The idea for example that you build economic credibility by cutting tax credits is silly and cruel both in relation to the economy, and in terms of social cohesion. It simply does not work.
The debate around the fiscal charter in Britain points up the absurdity of the situation we are in a terrible, ideologically driven charter with no economic credibility or support behind it (to the point the Financial Times tore it apart in its editorial) sacrificing the people for no other goal than to trip up the Labour party. Of course, Labour has itself to blame for the media fiasco which followed.
So to me, the four pillars of a new concept of social security – which could work at both UK and EU levels are, first, tools enabling people to work (tax credits and infrastructure – the latter incorporating good, cheap, reliable transport as well as childcare); second, tools enabling students to achieve in their education both vocational and academic; third, fiscal responsibility; fourth, a plan of investment in research & development (matching Germany’s levels) to ensure we can compete with the powerhouses at a global level – with a particular focus on renewables and the environment.
On this basis, I see a future for Europe as a project – and this is what I will be saying in the seminar, hoping to help the social democratic process, under threat everywhere in Europe, to build its revival on solid new ground.
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Ivana Bartoletti is chair of Fabian Women’s Network and candidate for Havering and Redbridge in the London assembly election. She tweets @IvanaBartoletti
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