It’s the start of a new Semester in Europe. There is time for the class of 2014 to reflect on the homework done by the class of 2013. In the most recent European Council meeeting, Europe’s top students swapped notes to see what kind of “progress” they have made before they are tested and receive their reports and exam results in June.
This is no ordinary class, though. The students are all the Heads of State or Government, the teacher is the European Commission and the classes are centred on coordination of economic policy, the so-called European Semester.
The results of the class have not been convincing: a jobless recovery with jobless growth. The one thing we expect from economic growth is jobs. Only then is growth more than an objective in itself which helps a small number of people.
Commissioner for Employment, Social Affairs and Inclusion, László Andor, this week conceded that ‘The EU is still far from having secured an inclusive and job-rich recovery’. This open and frank admission from the Commission shows that the end of term is not far off. However, there are not many in this class who deserve a summer break.
While it might be unfair to say these students have ‘failed’ the class, they have just taken the wrong classes in the first place. In their class, they have been taught only one lesson: austerity. Yet if distributive wealth and job creation are the core of any economic recovery policies, austerity has not helped. Unemployment rates are still at record marks and the poverty gap is continuously increasing.
The class the European Commission needs to be giving is how Europe can create jobs.
To do this, we need investment in the real economy with more pressure put on the speculative economy. The highly volatile financial markets have been exposed, with the speculative economy adding nothing but zeros in bank accounts for the wealthy to sit on. Indeed, making the rich richer and the poor poorer does not make for sustainable growth. The OECD and the IMF agree.
More lessons need to be given on taxation and minimum wages. A class on fairer taxation and upping the fight on tax evasion and fiscal fraud would help. An education in the value of investing in people is also much needed to start the necessary debate on minimum wages throughout Europe.
If we move towards a culture of investing in people, we will see Europe’s economy fair better in no uncertain terms. The culture of reinvestment is particularly apparent in family businesses, which are more likely to reinvest in the best workers and which are not looking to reap only the profits or make a quick buck.
Successful and sustainable businesses focus on the human factor, their education and training, and in their pay and working conditions. The human factor was Europe´s backbone in times of the crises.
This is the lesson the EU and national leaders have to learn.
What is needed now is a political commitment to create the conditions necessary for a revival of the real economy made in Europe.
The EU has to understand that it cannot, not sustainably, compete with the world´s cheapest markets on a permanent basis. There will always be something cheaper, somewhere else. Europe’s success lies in its quality and innovation. Quality products from quality jobs, attracting good people with high standards of living.
Next year, there will be a new teacher in Europe in the economics class. The Commission will be replaced in November 2014. The composition of the Commission is as yet unknown, with EU leaders set to nominate a candidate which reflect the European elections.
As it stands, the current Commission will leave a legacy of austerity and hard times for the jobless and even those with jobs (as the in-work poverty rate has been rising). Even teachers can evolve thanks to lifelong learning. External lecturers such as trade unions could be brought in through better consultation.
By inserting more weight on social rights, with more focus on social policies rather than cold economic calculations and by using social indicators (such as poverty levels and employment figures) to determine economic policies rather than the other way around, only then can the current Commissioners pave the way for more jobs.
Growth without jobs is not a sustainable growth. This should be the last lesson of today’s class of European leaders.
The Employment and Social Situation: Quarterly Review March 2014 can be read in full here.
Klaus Heeger is Secretary General of CESI