Towards the June summit: EU leaders and Altitude sickness

After several informal and formal high-level EU summits in response to a two year economic crisis, we may start to wonder if our EU leaders are not suffering from a similar syndrome as altitude sickness when attempting to address Europe’s economic recovery.

The symptoms are remarkably similar

• Disabling weakness (e.g. cannot stand up): our economies are clearly lacking oxygen. After two years of austerity measures, we just evaded another economic recession and the unemployment rate has reached an historical peak of 10,3%. Following in the footsteps of other fallen climbers (Greece, Portugal and Ireland) Cyprus and Spain will certainly receive before the end of June an EU bailout since they cannot borrow anymore on the financial market (6% interest rate for Spain when it is 0% for Germany).
• Cannot count accurately: The bank crisis in Spain may require an intervention between 50 to 100 billion euros. The one in Greece: 50 billion. At this number height it becomes difficult to count accurately. The problem is that without growth in sight nor available national budget reserves, member states are being asphyxiated and are therefore unable to respond to another financial crisis.
• Loss of coordination: Three weeks before the next European Council, Europe has lost the French-German leadership and the other members seem to have lost their sense of direction. On June 7, the German Chancellor called for the Eurozone to move towards a “political union” requiring nations to cede more sovereignty. Angela Merkel also stated that “we cannot stand still because some do not want to go with us”. At the same time France appears hesitant to take a federal leap. The President of the European Council will “only” present building blocks on closer euro zone fiscal and banking union. Meanwhile the UK Finance minister George Osborne declared that “there is no way that Britain is going to be part of any Eurozone banking union”. The members are left with a cacophony and unable to choose a pathway at a time when even President van Rompuy himself recognises that the “Eurozone is fighting for survival”.

So how can we treat this altitude sickness:

• Descent: As many mountaineers would advise, descent is the definitive treatment for all forms of altitude sickness – re-joining with the EU population in the plain. We can only support what the Cypriot Ambassador said on June 6. “Under the current difficult economic circumstance, the Cyprus Presidency would not push for “more Europe” or “less Europe”, but a “better Europe” that is “more relevant to its citizens and the world".
• A plan for inclusive growth: we will make a proposal to EU leaders that is in response to people’s needs and not to market needs. We will call to invest in a social pact in the economic governance that will support an inclusive growth with both quality jobs and reduced social exclusion. The social pact will provide the missing link between social inclusion, sustainability and growth.

Descent towards an inclusive growth can treat the current altitude sickness.

Pierre Baussand

Director - Social Platform