Interview: Gianni Pittella, Vice President of the European Parliament
Europes top proirity is definitely to tackle the consequences of the financial crisis which threatens the future of the euro. Europe has generally accepted that short term financial consolidation is neccessary to create a new foundation for sustainable economic growth. But what these new solutions are for new growth, job creation... is still not clear. Following old recipes will probably not work, austerity measures urgently need systematic upgrade through development initiatives that will bring new confidence amongst European citizens. We discussed these challenges with Gianni Pittella, Vice President of the European Parliament.
How do you see the current situation in the EU? Do you think that European governments, together with the European Commision, are using the right ‘tools’ for solving the financial and economic crisis in Greece and other countries with budget problems?
Europe is facing the toughest economic crisis since 1929. The root cause of this crisis is financial and it is related to a lack of regulation of the financial markets. Therefore, in order to solve this crisis, the top priority should be a reform of the financial markets with the goal of making them more transparent. In this regard, the adoption of the Tobin tax may be an important step to better regulate and control international financial flows. In terms of macro policies, I welcome the loose monetary policy carried out by the European Central Bank aimed at providing liquidity for the banking system, thus limiting the risk of a new credit crunch. However, I think that the we need a change in budgetary policies. The austerity measures supported by the European Commision and adopted by many European countries might be counterproductive. Unfortunately, there is an obsession with austerity measures even though they are likely to hurt GDP growth. I strongly believe that the EU, alongside national governments, should put forward a set of expansionary measures to strengthen GDP growth. In this regard, eurobonds are a critical tool that should be implemented as soon as possible.
In recent decisions of the European Commision and EU countries, we do not see solutions to the real long term problems of the European economy - moving traditional industrial production to more ‘flexible’ countries often with poor democratic, ecological and social standards, resulting in growing unemployment, social inequality in the EU, ecological problems... Do we understand what the real problem is?
As I stated before, the obsession with austerity measures is somehow misleading many European leaders. When we speak of structural reform we only think about debt reduction, cuts in social spending and shrinking the welfare state. However, in my opinion, structural reform should accompany the transition from a traditional development model, based on quantitative growth, to a new economic model. Europe needs a new, appropriate growth policy, focussed on innovation and capital intensive production. Growth comes from innovation improving quality. As Harvard scholar Philippe Aghion pointed out, there are three policy areas that are potentially relevant for growth in Europe: competition, education and macro policy. Higher company turnover and special attention paid to higher education are growth enhancing in countries closer to the technology frontier such as many European countries. Counter cyclical budgetary policies might also be growth enhancing for European economies. I know that the European Commission and the national authorities are working on a European programme to support growth and I will do my best to influence this process to support a model of economic development based on innovation.
Are you satisfied with the role of the European Parliament in decision making connected to instruments that are used for solving the financial crisis? The EU is obviously strenghtening the political union with its fiscal pact, is this something that should be discussed more frequently inside the European and national Parliaments?
The European Parliament plays a pivotal role in the EU decision making process. Following the implementation of the Lisbon Treaty, approximately 90% of EU bills have to be approved by the EU Parliament. Unfortunately, these new powers have frightened some nationalist forces who are seeking to weaken the Parliament and as a result, many projects seeking to reform economic governance in the EU have been prepared by the Commission and the European Council without taking account of the central Parliament. However, I am confident that things are changing for the better. In this regard, the EU Parliament has substantially contributed to improving the new European Fiscal Pact. I am also confident that the new President of the EU parliament, Martin Schulz, will strengthen the role of the Parliament in the EU arena.
How do you see the role of the United States in today´s global situation, it seems that on the one side they are strong allies of the EU, on the other we can see that they do not want a too strong and too independent Europe maybe also more closely connected to the Arab countries, China and Russia?
The US is not in good shape. The current financial crisis was born and bred in the US. US debt is higher than that of the eurozone and they have an impressive account deficit. All these elements are weakening the dollar and many observers predict that the dollar is about to lose its ‘exorbitant privilege’ as the leading international currency. The rise of China will probably pave the way for a structural change of the international monetray system which will turn the page of the Bretton Woods system and the dominance of the dollar. Faced with this prospect, the US will need a strong Europe in order to create a critical mass to balance China’s emergence. In addition, any split of the eurozone will undermine global financial stability and this will have negative effects on the US economy. Barack Obama is not G.W. Bush. The Obama Administration is aware of the importance of a stable Europe and it has always reiterated its willingness to support deeper economic and political integration in Europe. The US needs a stable and more integrated Europe and this is why I believe that cooperation between the EU and the US will be fruitful and mutually beneficial.
What is your position on the ACTA Treaty, latest information indicates this is another area where the EU is blindly following the interests of one sector of the economy?
The ACTA proposal is wrong in both content and process. It does not reflect the interests of citizens but rather, the interests of large corporations and profit margins: it confers on them alarmingly broad powers to punish and restrict. We cannot allow legislation to privatise internet governance and limit fundamental freedom. Intellectual property rights must be guaranteed, but not at the expense of the rights of citizens. The statement adopted at the PES Presidency on 9 February 2012, commits PES to a long term campaign to remove the stated risks from the draft. Mr. Stanishev added that; “PES does not support the type of extreme censorship proposed by ACTA and regrets that the conservative majority in the European Parliament has shut down the opportunity to conduct a clear and fair debate at the social and political level”. PES Secretary General, Philip Cordery stated: “ACTA will have a huge impact on the lives of citizens and yet, the European Commission discussed the text in absolute secrecy. This is unacceptable. Any debate related to ACTA must be transparent, publicly accountable and faithful to our most democratic values”. ACTA is set to be voted on by the European Parliament in June and ratified at the national level. In the meantime, a massive, EU-wide demonstration against the agreement took place on 3rd of March. The online petition calling for the rejection of ACTA was endorsed by almost two million signatures.
How do you see the future of the North African countries that recently stepped on the way of democracy? What kind of role should the EU play in their future democratic and economic development? Do you support Turkey entering the EU?
I am a friend of the Mediterranean countries. I come from a Mediterranean region. What happened in Northern Africa last year was something incredible. Jean Pierre Filiu, Professor at Sciences-Po in Paris, compared the Arab Spring to the storming of the Bastille.
Do you think that further enlargment of the EU with the countries from the Western Balkans is reasonable before we solve our financial problems and improve the institutional structure in a more efficient and democratic way?
The Western Balkans are the heartland of Europe. Their history and their culture are part of European civilisation. However, I do not want to gloss over the social, economic and political complexities of these countries. Much has still to be done to stabilise the countries of the Western Balkans. We should not underestimate the progress accomplished by this region. The poison of nationalism was put into the hearts and minds of the Balkan people but has now been rejected. For example, Serbia is fully cooperating with the International Criminal Court. Many challenges remain to be addressed such as transnational crime, corruption and sluggish economies. I do believe that Europe cannot say to the Balkans : “Do all the work yourself and later maybe you can join the EU” This is the wrong message. The EU should support the process of democratic deepening through the dissemination of good practice on a daily basis. EU Accession is not an end in itself but rather a long term process of institutional transformation. In this regard, I welcome the decision to recommend Serbia for membership candidacy.
How do you assess the functioning of Slovenia in the European Union. Are we down in the average or have you seen some fresh ideas from our representatives at EU institutions?
When I think of Slovenia, I think of great European intellectuals such as Boris Pahor and Drago Jancar. Based upon this cultural European background, Slovenia’s accession to the EU has been a success story. Until the crisis, Slovenia was experiencing strong economic growth, the country modernised and ‘Europeanised’ its economic structure and the population was fully supportive of the EU as shown in the eurobarometer polls. Slovenia has given a very good impression at EU institutions. In politics, trust and credibility are the most important assets and over the past 8 years the Slovenian leadership has proved itself to be amongst the most credible and serious stakeholders in the EU. The EU has really benefited from the Slovenian accession and we have to thank Ljubljana for its contribution.
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