François Hollande has been in power for less than six months and we are already seeing a new direction in Europe, revealing that it is possible, after the Merkozy era, to conceive of a different approach, combining rigour with investment in growth and jobs.
The quiet leader — too lacking in charisma, according to Eurosceptics and Sarkozy’s (few) fans — is, in fact, delivering.
In a pre-election speech, ‘Renaissance pour l’Europe’, addressed to an audience of European Social Democrats, Hollande gave shape to his idea of how to create growth globally. Taking a fresh approach on the socialist idea, Hollande advocated a degree of national autonomy coupled with the ability for Europe to intervene to stimulate growth, through measures such as project bonds and Eurobonds.
The German Chancellor was worried enough by Hollande’s approach to ignore him initially, and later campaigned proactively for his opponent, Sarkozy. But the French people made their choice, and Hollande has won the trust of many others, including Barack Obama. Obama is certainly worried about his own re-election, as the United States are suffering tremendously from the economic slowdown, caused in part by the inability of the European leaders to lead a response to the crisis.
The Wall Street Journal, discussing the Federal Reserve Bank in parallel with the European Central Bank, highlighted how both banks bought bonds in 2009 and 2010: the outcome was that, although the markets appreciated the move, there were few benefits for the real economy. This was because countries were too focused on the short-term, ineffective politics of austerity, which have led to recession, nationalism, populism and poverty. Most importantly, they have let people down, disregarding the right to a future of an entire generation of young Europeans.
In a recent article for the New York Times, Paul Krugman stated that not only can the Euro be saved, but that it must be saved. Not saving it, he argues, would inflict irreversible damage on the whole European project, which is what is really at stake now.
When Europe was born following the ravages of the Second World War, it was based on the premise that a union could protect people more effectively against the hatred and destruction they had experienced from the Nazis. The idea was to eradicate nationalisms by transferring power to a technocratic elite; less emotional but much safer. And it did work, guaranteeing peace and prosperity for a long while. New countries joined, providing new markets and new opportunities. Countries such as Spain — although now maligned — have played a key role in the development of strategic relationships with South America, as well as producing politicians of the calibre of Javier Solana.
The economic crisis, born in the US, has shown the fragility of the European economic basis and, I think, clearly demonstrated that Europe needs to be stronger, if it is to protect its people and creating a space in which they can prosper. For example, the idea underpinning the Lisbon Strategy — that the economy must grow hand in hand with social rights — has been slowly abandoned. This did not happen by chance, but has been the result of the swing to the right, which has occurred in many countries over the past ten years.
As a result, workers’ rights have been eroded, unions have been weakened and a misleading idea has been introduced: that economic growth and workers’ security are at odds, rather than being complementary.
Since the crisis began, workers in Greece, Spain and Italy have been abandoned: pensions have been cut, and enourmous sacrifices have been made on the altar of the ideology of austerity.
As Ed Miliband stated recently, what we are seeing is the outcome of a Europe that has been dominated by the right for decades.
In a letter addressed to their countries’ Prime Ministers, the most powerful Italian and Spanish trade unions called last week for a fresh European social contract, where the confidence of the markets — which is, of course, necessary — is to be restored through reforms made by citizens and workers participating in the governance process.
What they are stating is obvious: the conflict caused by austerity policies has deepened the crisis and prolonged the recession, thus disenfranchising many people from politics and from Europe.
If Hollande can show another way for the euro-zone, this should be welcomed. Britain has already paid the price of short-sighted European leaders; it is now time to welcome visionary ones.
Ivana Bartoletti is Deputy Director of the Fabian Women’s Network and a former policy adviser to the Romano Prodi government in Italy