As the economic slump across the European Union deepens and social distress grows, a terrible sense of political impotence grips those desperate to see recovery. There is a blunt reality to be faced: if progressives cannot respond to the crisis in the Euro-area with an effective alternative, there is a growing danger not only that the course of European integration may be reversed but that the far right will harness popular discontent and anger in ways that could threaten democracy itself in some European states.
It is little wonder then that so many hopes are being invested in the outcome of the German general election in September. Throughout the Euro-area – notably in those countries whose economies are being devastated by so-called “austerity” strategies – the question is being asked “How long will Berlin insist on enforcing its discredited austerity policy?” Without a change in German policy towards the Euro-area economies paralysed by unemployment and falling living standards a destructive political crisis in the European Union could follow before too long.
The hope is that, once the German general election has been held, there will be more domestic political space for whoever forms the next government (even Angela Merkel) to signal a change of approach. But there is a fervent wish that the opposition Social Democrats and its Green Party allies will, either in coalition with each other or in separate alliance with the Christian Democrats, act as a catalyst for change.
There have been hints from SPD leaders – including the candidate Peer Steinbruck – that, if elected, his government would abandon the more destructive aspects of Berlin’s present economic strategy for the Euro-area. He rightly suggests that there must be a more balanced fiscal policy with the stronger EU economies to stimulate demand and offset the depressing impact of public spending cuts and tax rises imposed on the so-called Euro-area “peripherals” – from Cyprus to Ireland.
There have also been muted signals that a German SDP led government might increase resource transfers to the slump hit economies and even accept some progressive “mutualisation” of Euro-area debt. It was, therefore, with some hope and expectation that I read the helpful summary of the SPD Manifesto 2013 for the general election and in particular what it had to say about “A New and Better Europe.”
There are elements in the manifesto to be cheered, including the statement that “the SPD wants to make the European Union more democratic and towards a strong social union preventing wage dumping.” The call for the Commission, to “be democratically elected by the European Parliament” and a common European “economic government and coordinated fiscal policy” is also welcome.
But I sincerely hope that these helpful but excessively vague commitments are spelled out in much greater detail before the election. There should be a clearer disavowal of the present, utterly failed, austerity orthodoxy pursued by the Euro-area (largely at the insistence of Berlin and a few other governments) and some concrete examples what actions an SPD/Green or even an SPD/CDU coalition would have to take to reverse the economic tsunami which is devastating so many Euro-area economies.
Of course any such commitments risk be seized on by the right wing in Germany and elsewhere to try and alarm voters. But the SPD and the Greens should not hesitate to hit back by spelling out the devastating impact on German jobs and living standards which would follow if the Euro-area eventually crumbles and a new D-Mark – or “core Euro” – is propelled sky high on the financial markets, undermining Germany export led growth.
Of course abandoning austerityitis should not mean abandoning economic and social reform. There is a need for economic re-structuring but – to be fully effective – this demands massive, parallel Euro-area supported investment in infrastructure, re-skilling and new technologies especially in the peripheral economies. Monopolistic regimes run by some professional and business groups should be broken up but a fierce cross border drive to force the rich to pay their taxes must be launched across the EU.
The SPD’s welcome support for a European “social union” but this must also be converted into support for concrete and coordinated action at EU level. In particular this should aim at narrowing the grotesque wealth and income gap which has opened up between the ultra-rich and the mass of both working and unemployed people across so much of Europe since the eruption of the world wide crisis of finance capital.
Is it too much to ask for expressions of goodwill and a desire for change by the German SPD and Greens to be converted into firm commitments for action? The more the SPD and the Green party spell out their intentions now and, above all, fight, to win public support, the more powerful a democratic mandate they can hope to win. But time is running out. Facile comparisons with what happened between the two world wars should be avoided, but there are lessons which cannot be forgotten.