More rules and transparency

Times are changing and, in the midst of the financial crisis that is gripping the world, the most frequently cited economist in EU headquarters is once again John Maynard Keynes, sponsor of public intervention in the economy, in contrast to the pure liberalist theory. MEPs, EU Commission and Council are debating these questions at the present time: they are reviewing the first ten years in the life of the euro, assessing the results of the recent G20 summit, and looking ahead to the next moves at the Community level. The free market structure is confirmed by the majority of exponents in the EU (with the exception only of the Greens and the United Left), but at the same time everyone is asking for more rules, greater transparency, and interventions to support employment and consumers.Transparency and responsibility. “The recession is by now manifest. For 2009 we predict zero growth in the EU27. It is only a question of knowing what will be the impact of this situation on individual member states, on the various sectors of production, and on family incomes. What is sure is that it is the gravest crisis since 1929”, declares Jean-Pierre Jouyet, Secretary of State for European Affairs of France, i.e. the country that is now holding the rotating Presidency of the European Council. Faced by so worrying a situation, says Jouyet, “the summit of 15 November represented an historic moment, a proof of unity”. He maintains that “the principles upheld in Washington, namely transparency and responsibility, are the same that the EU had indicated in calling for this summit”. “The decisions taken at it – he continues – now need to be followed up. We need to arrive united as Europeans at the next meetings of the G20”, due to be held in April and July next year. Above all “we need to plan tangible actions in support of the real economies”, actions aimed at reviving investments and consumption. The French Secretary of State mentions in particular “aid to the most threatened industrial sectors, such as that of cars” and the corresponding support of employment. He also mentions the next stages, in particular the European Council of 11-12 December, to “demonstrate that Europe is acting in a coordinated manner within the EU and as a global player in the world”.“New climate of collaboration”. No less inspired are the words of European Commission President José Manuel Barroso, who, questioned about the results of the G20, goes so far as to speak “of the possible beginning of a new era for the common management of the world economy”. “A new governance is possible, today more than ever – he explains -, because the crisis is demonstrating that the free market, in which we continue to believe, has a need for rules”. The Portuguese statesman, however, makes a point of stressing that “the fundamental values of the EU include the social economy of the market”: and when he says “social” he raises his voice, emphasizing what he regards as an essential aspect of the EU. He also endorses the decisions taken in Washington: reform of the financial markets, rules for the global economy, coordinated interventions to stimulate recovery, and the rejection of any form of protectionism. He then adds: “We in the EU must reaffirm that the difficult economic situation at the present time cannot make us forget the great challenges before us”, from the Millennium Objectives (fight against poverty) to climate change and the demographic and energy questions. “We cannot tackle the problems of high finance and forget those who have no food, water or medicines”. Barroso explains that the Commission’s programme of work for 2009 includes a series of interventions for the real economy and that decisions should be taken by the spring on the control of rating agencies, the support of businesses and jobs. And he concludes. “At Washington I noted a willingness to pull together and a spirit of collaboration hitherto unthinkable. This crisis is providing us with the occasion for a serious reassessment of the economy that will hopefully lead us better to reconcile freedom with solidarity”.Protecting citizens, reforming the economy. A consultation of opinions within the European Parliament (meeting in plenary assembly from 17 to 20 November) confirms some of the convictions expressed by Jouyet and Barroso, and also by the head of the Eurogroup, Luxembourg MEP Jean-Claude Juncker, who underlines the “strategic value of the introduction of the euro”: for the single currency “has sheltered Europe from instability” and from far graver recessions than the one now underway. Joseph Daul, French MEP and head of the European People’s Party, denies that what is taking place is a crisis of capitalism, though he does mention the “errors committed in the Nineties”; if we are to protect ourselves from these we need to “guarantee a free and transparent market, with a few clear rules”. Martin Schulz, German MEP and leader of the Socialist group, underlines the “urgent need” for measures to “protect citizens and their savings and revive industrial production”. Graham Watson, English MEP and head of the Liberal-Democrats, cites both Keynes and Adam Smith, the first advocate of laissez-faire: but he immediately adds that “the recession is a propitious moment to rethink the mainstays of the world economy”, too exposed to financial instability.