Ramona Mănescu, vicepresident of the ALDE party: Austerity measures have killed the private sector
Liberal Euro-deputy Ramona Manescu (vicepresident of the Alliance of Liberals and Democrats for Europe/National Liberal Party) said in a speech held in Barcelona, that ”in most Member States, austerity measures have killed the private sector”.
This is a crucial time both here at the heart of Catalonia and across Europe as a whole. Before entering the topic I would like to tell you what is decentralisation in my opinion:
Decentralisation is an affective tool for reorganization of the governments in order to overcome the problems of ineffective governance, macroeconomic instability and inadequate economic growth and to achieve broader objectives such as economic stability, sustainable growth and provisions of basic public services.
And to describe in just few words the current situation, I will quote my favourite philosopher, Jurgen Habermans: “in this crisis, functional and systematic imperatives collide” he says by referring to sovereign debts and the pressure of the market.
European fiscal integration is at a crossroads and every decision we take has the opportunity to push us towards or further from a brighter and more efficient future.
The context for all this is, of course, the crisis of the last six years. I’m sure there is nothing new I can tell you about that crisis its severity or the effect it has had on the majority of Europeans. Nor will it surprise you that there is still no consensus about the best way forward.
That lack of consensus does not just split countries and parliaments but it has also bred disagreements within parties. As the ALDE Party Vice-President I can tell you honestly that there remains a healthy and open debate within ALDE about the right solution. My view is that our primary obligation is to do whatever it takes to keep Europe united. Our European project must continue. But its success requires real reform and a fundamental rethink about the way we work.
The case for stronger central government, based in Brussels, has been made strongly in recent years.
And in the terms of this debate it focuses on the concept of ‘centralisation’. In 2010 the EU agreed to tighten financial supervision and a year later, we MEPs approved the economic governance “six-pack” of new rules. But once we had received the concrete measures proposed by the Commission and the Council to put the ‘six pack’ into practise we realised that its name was rather more fabulous than its policies!
A process of economic federalism is underway and I could not be more certain that this is a solution that we should look very careful on. And that view is borne out by its results.
Despite all the measures taken the core economic issues remain and unfortunately anti-European (and extremist) opinions have emerged among the European citizens. As is so often the case at times of crisis economic and political problems have merged and the best way forward needs to identify solutions to both.
As many of you know, I am the ALDE Coordinator within the Committee of Regional Development of the European Parliament. In that role, I have initiated many reports and published articles on the need for better governance.
In my opinion that means multi-level governance enabling independent decision making at local and regional levels.
I believe it provides the most efficient way to run European politics and economics and it is why I believe that Europe would benefit from a concerted push towards decentralisation.
I am firmly in favour of the Europe 2020 Strategy and its quest for a smarter, greener social market. But I believe that we will not be able to meet those goals without maximising the involvement of local and regional authorities.
Only they can have a genuine understanding of the needs of their territory and have the huge responsibility to implement national and European policies at local and regional level and by taking that responsibility they can close the ‘delivery’ gap and pave the way for sustainable growth.
An antipathy towards centralisation does not contradict a belief in Europe. Because like so many of you, my views on Europe are defined first and foremost by my Liberalism. And at the heart of Liberal values lies a belief in freedom: freedom of expression, freedom of trade and freedom to make decisions.
In that context, European Institutions have a crucial role to play. They can act as a catalyst towards better practise and efficiency through coherent strategies and co-ordination. They can provide direction, without needing to drive. In a nutshell, European Institutions should provide good governance but it should not govern.
In the European Parliament the are some MEPs that currently believe the opposite. They have pushed towards centrally controlled financial discipline. And the result is more power for Brussels.
This is not the time for a detailed financial analysis of these policies. But we have to agree that they are symptomatic of the direction Europe is taking. And I would like to reiterate precisely why I believe it is the wrong direction.
In short, under the pressure of the financial crisis and accelerated by the frenzy of the markets power has slipped from the hands of the electorate and shifted to bodies of questionable democratic legitimacy.
The European Council is acting as a governmental body that directly engages member states in policies, behaviour that the Treaty does not actually authorise. Meanwhile, the European Commission aims to grab as much power as possible without a requisite level of responsibility.
As a result, our ‘market’ economy does not have the flexibility to self-adjust as it is being controlled by politics.
Perhaps the most worrying example of this is in so-called ‘macro-conditionality’.
This system was proposed at the height of the Eurozone debt crisis allowing the European Commission to suspend regional funding payments when countries fail to meet their budget deficit targets.
The aim was to link funding from European money to economic performance of countries. But the outcome would be to blur the boundaries between private and public responsibilities. It means that if a government fails to meet its deficit targets the implications will be felt far from its parliament and will affect direct the citizens.
Take Ireland for example. A country hit hard by the recession and many of whose local communities have been kept afloat by European investment that has touched everything from schools and education programmes to hospitals and water plants. The implementation rate of these centrally funded projects is an encouraging 62.5%. But the Irish government has failed to correct its13.5% deficit. Under macro conditionality this would mean the withdrawal of that funding which is not just helping Europeans but is creating jobs and localised economic recovery.
We cannot punish a European citizen who is performing well because his minister of finance is failing. It is like penalising a schoolboy for the failings of his teacher. Sanctions must be felt at the right level or not at all. Or why to sanction citizens of Catalonia while they are performing well, because the central government in Madrid did not perfome?
And so the more I reflect on this theme the more I believe in the spreading of power to local and regional levels and this should happened in a reformed system where the interests of the council come back to the sovereignty of the member states within it.
I strongly believe that a Fiscal decentralization will quickly enable governments to become closer to their people who should cease to view Europe as an excuse for their problems but as a resource for a solution.
The key to unlocking economic growth is best held in the hands of those who understand their local environment, culture and people. And economic ‘freedom’ means trusting market forces and the private sector to find the quickest way to sustaining local recovery. And when I’m saying this I think at Catalonia as a model in this sense.
This will be achieved through lower taxes and less bureaucratic pressure not through generic and punitive central control.It means relaxing Europe’s hold, offering support, advice and good governance to allow local communities to become competitive again.
It is blatantly apparent that measures taken by the Council have not worked. We lurch from crisis to crisis.
Recently, Nouriel Roubini, at an IMF conference on “Rethinking macroeconomic policy” underlined that the austerity policy wasn’t so helpful as Germany thought. He said:” today in the euro zone there is absolutely no discussion about an agenda concerning economic growth but instead there are to many discussions about banking and fiscal union”.
The truth is that in the absence of and economic growth the states will face more and more negative reactions both socially and politically against austerity. To be realistic, if the GDP will continue to become lower than debt will tend to grow.
Governments are struggling to survive and the answer is not to rope them together but to encourage the private sector to put pressure on local and super government to take back the power and the responsibility.
We can encourage that process. We can help bring the private sector together and to enable it to act independently and collectively. It is the private sector that sits closer to our electorate than to any government.
The title of this debate referred not just to fiscaldecentralisation but also to political.
As I have already mentioned, I believe that the two are closely linked.´My fear is that the desire to gather central political power in Brussels has provided too much motivation for our leaders who should have been seeking the best solution to the problem.
In most Member States Austerity measures have killed the private sector making markets less competitive and leaving the door open for China and India to make long-term inroads into Europe.
The austerity measures have not resolved the crisis they are deepening it through the pursuit of a political agenda. This approach it’s not sensible. It’s not liberal. And it’s not fair on the people of Europe.
I strongly believe that the right solution for Europe is the Liberal solution. Political and economic decentralisation enables greater local control of central resources stimulating the market through the private sector … in a Europe where Brussels provides good governance, not a government.
Having this said, we still have to decide if we want a Federal Europe and how that should be:
A Europe govern by Brussels?
A Europe of Nations?Or
A Europe of Regions?”