EU Strategy for Growth and Jobs: Discussion with European Commissioner.
Commissioner Günter Verheugen
Mr. Martin Territt, director, European Commission Representation in Ireland;
Mr. Eckehard Rosenbaum, DG Enterprise and Industry
Andreas Schwarz, a member of the Commissioner’s Cabinet
Senator Déirdre de Búrca: I welcome the Commissioner and thank him for his presentation.
I shall take up some of the points raised by Deputy Tuffy. In his presentation the Commissioner argued that the European Union should not abandon its agenda of competitiveness and growth. Does he not accept the European Union is now facing not only a short-term and temporary setback in that agenda but profoundly changed economic circumstances? Does he accept that over the coming years we may see the semi or total nationalisation of most major banks across the European Union? That is likely to have a profound impact on the European economy.
Does the Commissioner accept that now the real challenge for the European Union is to try to get the balance right between its competitiveness agenda and the sustainability agenda? In the past, and even in recent years, the leaning was much more towards competitiveness. The European Union pursued competitiveness at the slight expense of sustainability because it was trying to compete with very large blocs such as China, India and Brazil, where environmental and labour standards and labour costs were low. It was clear that if the competitiveness agenda won out sustainability would lose in the longer run.
Would the Commissioner accept also that, given the nature and extent of the economic crisis facing the global community, there will be an inevitable tendency to look inwards, pull back and retrench? Does he agree that the danger for the European Union is that if member states withdraw, become protectionist and look inwards the EU may suffer? If there is not collective action and an EU-wide response to this crisis, allowing member states to feel that co-operation will benefit their individual economies rather than have the opposite effect, over time we may see the Union unravelling somewhat. This is particularly the case with some member states being in a much worse condition economically than others. They may reach that point more quickly with civil unrest and high levels of unemployment and in that way we may see weakening of the Union.
Perhaps, as Deputy Tuffy and other speakers suggested, there should first of all be strengthening of the European banking system and willingness and capacity of the financial and banking institutions at a European level to provide credit and greater levels of capital to fund small and medium enterprises in particular. The EU appears to have been moving in that direction already, with its Small Business Act and the greater emphasis on SMEs. Perhaps the combination of the stimulus package and what the European Green Party in the European Parliament has been arguing for, namely, a green new deal, similar to aspects of the Obama—–
Mr. Günter Verheugen: The green industrial revolution.
Senator Déirdre de Búrca: Yes, the green industrial revolution or the green new deal. My party and the European Green Party have suggested that this would work and have provided figures. Obviously it would be up to the Commission to decide whether this approach is possible. A financial stimulus programme to the tune of approximately €500 billion to be front loaded over a period of five to ten years would have the potential to create up to 5 million jobs in areas such as renewable energy. This might be seen in the creation of a new energy infrastructure, such as, in particular, a pan-European grid and in the greening of European agriculture and its chemical industry, in areas such as eco-construction and design, energy efficiency, research and development.
We see huge potential in these areas for job creation but the issue of credit and capital would require a major programme of public investment at a European level and this is essential. What are the advantages? First, if the financial and economic stimulus programme in the US is successful Europe will be at a competitive disadvantage in another decade. The EU must realise it needs to engage or support a similar type of stimulus programme if it is not to fall behind. Second, the European Union is always trying to convince its citizens of its relevance. If there is no European wide response at a time such as this increasingly citizens will become convinced that the EU is not relevant and that its political system will not help them in times of serious economic crisis. That would be a very serious blow to the Union in the future. The globalisation adjustment fund and other supports, such as Deputy Tuffy mentioned, must be directed towards re-training programmes for workers. Perhaps new social economy programmes may create what one might call a third sector in which the high levels of unemployed people across the Union would at least have some type of employment. Such programmes could be provided and socially useful work could be done. Third, there is the importance of avoiding civil unrest, particularly in certain EU member states. The danger is that if the levels of unemployment continue to rise without any sign of hope we may face into a future with much greater difficulties in that regard.
There is a strong and compelling case to be made for the European Union to take action both in terms of an economic stimulus package, and a much greater willingness to engage on the part of its financial institutions, including the European Investment Bank and the European Investment Fund. The European Central Bank’s reconstruction and development might include the use of Euro bonds, as has been suggested. These are the type of initiatives the Commission should look at if we are to avoid the type of problems I have touched on today. I would like to hear the Commissioner’s response to some of those proposals.
