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Jun 16

[:BG]“EU SOCIAL FABRIC DEVASTATION ANTE PORTAS: OPENING PANDORA’S BOX?”[:]

[:BG]Christos Cheretakis
Expert Counsellor Hellenic MFA

During the last 10 years the EU has been confronted with a multifaceted crisis: financial, migration and security crisis. The EU has to respond to the challenges related to the economic and monetary crisis with its prolonged high levels of unemployment, slowing of growth, and rapidly rising poverty, not to neglect the terrorist attacks front. In addition, the refugee crisis has mushroomed and, in some cases, Eurosceptic parties have profited and openly threaten some of the EU’s core values and principles. None of these challenges can be resolved by one Member State alone since issues of such magnitude have to be addressed in a true, common, united European approach.
A perfect storm of fears by the European citizens
over the future of the EU
is brewing!
European leaders need to prove to the European citizens that they can stand united, take decisions to deal jointly with the current problems and adopt a true common European approach. Ensuring stability in the European space is crucial. This requirement must be reflected in policy-making, but, above all, it must be mirrored in the EU’s budget. EU budget should be at the forefront of our leaders’ determination to instill confidence among EU citizens in the capacity of Europe for economic recovery, development, growth and job creation, thus, overcoming, successfully, the multitude and magnitude of the current multifaceted crisis they are living with.
The debate about the future of the EU and its budget currently being at the forefront of EU agenda, is calling for responsible and accountable reflection in terms of what the European citizens needs are and how these needs can be placed at the epicenter of any relevant decision.
How can we convince EU citizens that more integration and more Europe is needed, if we deprive EU Budget of sufficient resources and we persist on dividing Europe between “payers” and “receivers”?
There is an urgent need to create the conditions for a transition to an all-MS-inclusive growth model and view the EU budget as a development instrument, thus overcoming today’s narrow accounting approach, which colors every debate on EU budget.
The division between “net payers” and “net receivers” tends to overshadow the true value of EU budget, which mainly consists of supporting development, growth, employment, competitiveness and convergence, while elevating the living standards of all EU citizens. Moreover, this division distorts the perception of the real value of EU budget and creates confusion among EU citizens on the costs and benefits of EU policies.
Since its inception, EU budget has been proven to be a “win-win situation” for every EU country, either rich or poor. Growth in one poorer region leads to the purchase of goods and services from another, richer region. Additionally, one euro spent at EU level can deliver significantly more than one euro at national level.
EU budget needs to take into account the bigger picture of challenges and adopt an ambitious, innovative and imaginative vision. Now that the EU is planning to deepen its economic and political Union, the EU budget should be the cornerstone of this exercise.
«Better Spending» is not the cure for all challenges. It is only one part of a holistic treatment. Being an ongoing and ever-lasting goal, is certainly a condition sine qua non for ensuring credible EU spending, and therefore credible EU policies. Not being a panacea, it should not be interpreted by default as a “Less Spending” agreement.
Revision of EU budget shall imply, as well, adjusting the size of EU budget in relation to the needs and the current challenges faced in the EU. Let’s not oversee the fact that EU budget represents just 1% of the EU Gross National Income.
Particularly, in times of austerity, it makes absolute sense to pool resources for collective investment. Especially, in times of economic downturn, the way to give value to money, is by pooling money.
It is absolutely necessary that
EU budget reaches that critical mass of leverage required,
in order to overturn the negative context of growth crisis
and generate the necessary positive results.
Needless to say, that the EU citizens, urgently, need to have tangible and measurable proofs of shared solidarity. Partial solidarity should not be an option. This implies that binding commitments amongst Member States do not remain rhetorical! We must remain cautious by not adding to the above-mentioned crises a solidarity crisis as well, that would definitely lead the EU into an existential crisis that equals with EU’s paralysis. Shared solidarity is a duty – it is not a virtue, because a virtue is voluntary.
The EU is called to ensure that achieving a comprehensive definition with respect to the added value of EU budget is feasible. In other words, both a political and an economic assessment of European Added Value are needed.
An economic assessment in terms of efficiency and effectiveness of European Added Value is definitely necessary when it comes to defining the best instruments for implementing a given policy area.
However, deciding between different policies competing for scarce resources, focusing solely on an economic assessment of European Added Value, or interpreting added value just by measuring performance, by increasing flexibility and making available financial instruments within the EU budget, may result to misleading and, ultimately, unsound decisions.
The definition of European Added Value must encompass a multitude of factors and remains, above all, the outcome of a genuine political process. When reflecting on the European Added Value of the EU budget, we should not neglect that an assessment of it, includes preserving the EU social fabric and strengthening economic and social convergence (a principle enshrined in the Treaty on EU), particularly in the context of the ongoing financial instability in our continent, as well as, other obvious advantages of European integration, which cannot be assessed in purely accounting terms.
It is primarily via the comprehensive interpretation of European Added Value according to the principles and values enshrined in the EU Treaty that we will be able to ensure a sustainable upturn of the economy and employment based on the principles of solidarity, integration, multilevel governance and territorial cooperation.
European Added Value has come to mean
in the conscience of EU citizens
more and better Europe.
Undoubtedly, EU’s future depends decisively on its ability to adjust to the new international environment, through a powerful and consistent boost to smart, sustainable and inclusive growth, improving at the same time the living standard of its citizens and reducing inter- and intra-regional disparities. This is the role that only Cohesion policy can fulfill. European Cohesion Policy being rooted in the EU Treaty (Article 174) aims at reducing disparities and promoting economic, social and territorial cohesion and solidarity among Member States. Furthermore, article 175 states that Member States shall conduct their economic policies and shall coordinate them in such a way as, in addition, to attain the objectives set out in Article 174.
Particularly, in the current context of financial and economic crisis, the aim of reducing disparities and inequalities and enhancing balanced and sustainable development among the European regions, is more relevant than ever. This is precisely where lays the single most contributing factor in determining European Added Value for Cohesion Policy.
Looking at the case of Greece, undergoing its ninth year of recession, as a result of both the economic crisis and the refugee/migration crisis that was recently added-up, real GDP contracted cumulatively by 25%, intensifying the debt dynamics and contributing to the self-reinforcing nature of the crisis. Not to mention that the unemployment rate of approximately 25%, being the highest rate in the euro area, is by almost 60% affecting younger generations. Moreover, more than one third of the population has reached the threshold of poverty and social exclusion. Adding to the above, from 2010 to 2015, fiscal adjustment efforts in Greece amount for 30% of the current GDP to which it should be added measures of approximately 5.7 billion euros, introduced, already, in the 2016 budget while this trend most probably will continue for the years to come.
Taking into consideration the above-mentioned facts, we can easily understand why, in the case of Greece, as well as, in the case of a number of other EU Member States, Cohesion funding is a decisive, if not the main, public investment instrument and a track to deal with persisting recession and rapidly augmenting unemployment.
Cohesion Policy should be further reinforced
to address structural challenges and ensure, in the long run,
economic and social convergence among the M-S of the EU.
Cohesion Policy can ensure the success of the Productivity – Inclusiveness Nexus which will require a comprehensive, adequately funded policy, and adequate administrative setting, to account for the multiple tasks involved in increasing productivity and decreasing inequalities. As it was proven during the economic crisis, Cohesion Policy has the unique potential to address long-term structural challenges taking into account the specificities and goals of individual Member States and regions and the EU priorities.
The EU is not and, arguably, never was meant to be “fixed” or shaped in one big leap or step forward. Each step that is taken in its development is meant to build on the lessons drawn from experience, often in a trial and error fashion. The EU has accumulated enough lessons-learnt till now, and has exhausted any available space left for a trial-error fashion of managing crises!
Handling, appropriately, the current context of “perfect storm” in the EU,
requires reviving EU’s founding principles, according to the words of Robert Schuman
at the very birth of the first European community:
“Europe will not be made at once, or according to a single plan.
It will be built through concrete achievements which will first create a de facto solidarity”.
Today, there is an urgent need to return to the value of solidarity which can prove, once again, vital in regaining the pace lost, so much needed for our common future.
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