A thorough treatment

“Europe can no longer postpone the consolidation of public finances, the reform of the financial sector and the rapid introduction of urgent structural reforms and measures to support growth. Policy coordination is essential to respond to economic challenges: we must increase the economic governance within the eurozone and Europe-wide”.How could the recent “timeless” statement by the President of the Commission José Manuel Barroso not be taken into due consideration? It’s irrefutable. Moreover, these same words have been reiterated for decades. This shows that although the European Union is aware of its diagnosis it’s not yet prepared – and even divided – when it comes to identifying the most appropriate therapy. We cannot be sure whether we’re dealing with the failure of the model of economic development (likely), or with the failure of its management (more likely). What nobody dares to question is that the point of non-return of EU’s public accounts has finally been reached. The degree of sustainability and survival varies from one Country to the next, regardless of whether it’s a euro zone Country. In fact, Greece, Ireland, Portugal, Easter Europe register very low levels, while they are plummeting in those Countries – namely the United Kingdom, Germany, Italy, France – which in the past could rely on the real-or statistical- force of their industrial production and exports to pay off the financial abyss caused by indebtedness, public squandering and speculation.If the basic principle of European integration – namely, that external help is necessary when a Country is in dire straits – is respected, (Germany is the most reticent Country, as it has no intention to loose its credit independence), the Heads of Government or State will implement the so-called “bailout mechanism” for Member States, featuring the European Central Bank and Community budget, along with the establishment of new tools for financial markets – such as the Euro-bonds – along with low interest rates on the new debts. Perhaps, given the failure of the joint International Monetary Fund-European Union mix of anti-crisis measures, which brought to their knees the development potential of Hungary, Greece and Ireland, maybe the EU understood that despite globalization and the songs of the Chinese siren declaring her willingness to shoulder world debts, that the Continent’s illness must be treated at home. Also because, notwithstanding the incapacities and the responsibility of the political and financial realm, the economic reverse is also due to poor control mechanisms and to the blind eye turned by Brussels and Frankfurt since the 1980s. Financial crises, at national and/or global level, are an inevitable item on history’s agenda. The bankruptcy declarations by numerous European nations at the end of the 19th century, the fall of Wall Street in 1929, the post-war famine; the 1972 oil crisis are but a few examples. Thus there have been dozens of “bailouts”. However, we’re back at the beginning. The bailout of the beginning of the Third Millennium ought to be inscribed within the major crises ever. Just like these, living standards are decreasing, growth perspectives are weak, jobs are lost and no longer recovered, payments fail to come through, ‘scrape and save’ habits are becoming widespread, while the threshold of poverty is tragically involving one on six families also in Europe. Pessimism is unavoidable, unless the approach to the system’s pathology changes. New measures are ineffective unless the true havoc is countered: along with public squandering there is also consumption indebtedness favoured by the distorted role of the banks, unrestrained tax evasion (recovering fled capitals, cracking down on black labour, and enacting equitable fiscal policies would be enough to balance the budgets), the relinquishment of welfare policies and the competitiveness ideal, the res publica in the wrong hands. Optimism is equally unavoidable. Considering that we are familiar with this disease it would be sufficient to treat it in the most appropriate, familiar, way.