Friday 27 March 2009

European recovery plan: smoke and mirrors

The two most prominent speeches made in the European Parliament this week showed two very different attitudes to solving the economic crisis. On Tuesday, Gordon Brown spoke of Europe's role in leading bold global recovery efforts, and Wednesday Mirek Topolanek, the Czech Prime Minister and current President of the European Council, used his speech on Wednesday to call President Obama's stimulus package 'the road to hell'.

The truth is that, as Gordon Brown says, ambitous recovery plans, of the sort the new US administration is implementing, are just what Europe needs. The European Council and the European Commission are trying to hide the truth. To claim that Europe is investing 3.3% of GDP in recovery is pure political spin. Of course when unemployment is going up then benefit payments will go up too - but this is not investing in new jobs and cannot be presented as investment in growth. In fact we are investing barely 1% in stimulating the economy.

Europe still needs a serious, effective recovery plan and I want to see it presented on 7 May. A European employment summit was planned for this date, but Nicolas Sarkozy has since scandalously downgraded this to a troika. The unemployment crisis will not disappear because he refuses to discuss what to do.

Now the IMF is telling us that the economic recession is getting deeper and will reach minus 3.2% in the Eurozone, which probably means it will be even worse in some other parts of the EU. If Europe doesn't make a strong and urgent new effort now to invest in growth, as the recovery plan of the Party of European Socialists proposes, I fear unemployment will reach 25 million by early 2010. Europe must act, and must act decisively.

1 comment:

DavidBrede said...

This is a huge opportunity for the EU to seize the agenda and show why the institution is important for everyones long term future and in general dish the Euro sceptics.

I hope they are bold enough to take it.