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EU leaders must come clean and finally admit - austerity creed is bankrupt


19 Oct 2012


EU Priorities 2020

Statement by Gabi Zimmer, president of the GUE/NGL group in the European Parliament:


"Although the schedule for the banking union has now been decided - the rulers have once again cheated and avoided clear commitments, rectifications and urgent decisions. In the conflict between different interest groups and in the battle to claim back lost ground, valuable time has been wasted in the fight against the crisis.


1. The strategy to fight the crisis and achieve growth primarily through brutal cuts in public spending including wages and salaries, benefits, education and health care, has failed. Austerity has driven hundreds of thousands of people into poverty and has led to a mass extinction of SMEs in countries worst hit by the crisis. The IMF has already sheepishly admitted the failure of austerity - yet EU leaders have not engaged in any self-criticism of their disastrous policies!


2. The leaders have given no convincing answers on how to avoid a split in the European Union between non-Euro and Euro countries, between the centre and periphery, between rich and poor countries.


3. Their proposal for a banking union focuses solely on overcoming national fracturing of the banking sector, especially banking supervision, on the regulation of bankruptcies in the banking sector and on the existing deposit guarantee. Neither the necessary role of the ECB as "lender of last resort" is discussed nor the possible complementary roles of European investment banks.


4. The proposals in the Interim Report on the reorganization of the EU - which are summarized in four blocks - hide important dimensions that are essential for an effective anti-crisis strategy. There is no longer a European sustainability policy: social policy, environmental policy and trade policy are left out!


5. No specific mechanisms to deal with the integration of the EP and national Parliaments are identified. Real democratic control of the Council is not mentioned, and greater cooperation between the EP and national parliaments remains completely vague.


6. The employment package is simply insufficient and will not solve the current problems. It provides too few resources, while any growth momentum is to be generated at the expense of workers. We need a social pact within which socially and ecologically sustainable development can be initiated to invest in public goods and services. Sustainable growth will only work with decent redistribution and an adequate contribution from those who are responsible for the crisis."


GUE/NGL Press Contacts:
David Lundy +32 485 50 58 12

Gay Kavanagh +32 473 84 23 20

European United Left / Nordic Green Left
European Parliamentary Group