An ECB banker wants to change the European social model

Michel Barnier, Member of the EC, Jonathan Faull, Director General of the DG "Internal Market and Services" of the EC, and Benoît Cœuré, Member of the Executive Board of the European Central Bank (ECB) (from left to right). (EC Audiovisual Services).

Michel Barnier, Member of the EC, Jonathan Faull, Director General of the DG “Internal Market and Services” of the EC, and Benoît Cœuré, Member of the Executive Board of the European Central Bank (ECB) (from left to right). Conference on “Financial Stability and the Single Market-The Keys to Growth in Europe (EC Audiovisual Services).

A banker, member of the European Central Bank’s executive board, in the brief time of half an hour, during which he delivered a speech on Saturday 2 March, in the context of the European Conference at Harvard, wanted not only to ‘correct’ the Europe’s social contract but also to demolish John Maynard Keynes’s contribution to economics. The hopeful social reformer of course has nothing to do with politics. It’s someone, going under the name of Benoît Cœuré, appointed by France in the office he currently holds. Alas nobody is infallible, not even the well-structured French public administration that takes care of such appointments. But let’s turn to what actually said this ‘mountain’ of wisdom.

He started by saying: {At the heart of the crisis, there is the challenge of redefining the social contract to safeguard the sustainability of Europe’s social economy model. This model, set out in the Maastricht Treaty, notably aims to promote “social justice”, “solidarity between generations” and “solidarity among Member States”…. As I will strive to show, a redefinition of the social contract in Europe is essential if we are to restore the sustainability of public policies as well as trust in the state’s ability to positively influence economic outcomes}.

Nowadays all the newly minted ‘long term’ economists declare they are not happy with the way our European social model works. This French one discovered all by himself that Europe needs a good socio-economic reshaping and of course a political reshuffle. He aspires that us Europeans after reading his speech we will be convinced, he is the chosen, to reveal to us why we need a good revisiting of our way of life and how to do it; Obviously we are not convinced.

The ‘tools’

As we all know ‘long-term’ economist love ‘tools’. But in order to convince us that Europe needs those ‘tools’ to be happy in the long run, Benoît had first to demolish Keynes, because this great economist detested the long-term theories. The ECB member tried to bring down Keynes with three lines as it follows: {John Maynard Keynes famously said: “The long run is a misleading guide to current affairs. In the long run we are all dead”. And yet societies live in the long run”}.

There goes Keynes in the dustbin and Benoît introduces Thomas Hobbes, who remarked in his “Leviathan” that {“sovereign states are established to regulate social interactions and avoid the “war of all against all” that would prevail without the rule of law}. No wonder why Benoît loves Hobbs. This last one did not recognise any other role for the sovereign authority than the one of ‘gendarme’, no social care no nothing. It’s not only that. Hobbs is renounced for his anti-democratic ideas. For one thing he explicitly rejected the idea of Separation of Powers. According to Wikipedia, {Part 6 is perhaps an under-emphasised feature of Hobbes’s argument: his is explicitly in favour of censorship of the press and restrictions on the rights of free speech should they be considered desirable by the sovereign in order to promote order}. Those are probably the best ‘tools’ in the mind of this banker who wants to reshape Europe, .

The problem is however, that modern governments are cashing in almost half the Gross Domestic Product in taxes. Benoît says nothing about how governments should use their tax incomes, if they stop spending much of it on social policies. Obviously this ‘long term’ French economist has in mind that the part of taxes the government is not using for social policies can be directed to protect the banks. He says that indirectly in the following quote:” The basic premise of the new social contract between euro area countries, then, is that countries have to abide by the rules of the community, and when they do, they become eligible for mutual support. Euro area governments have earmarked €700 billion for countries that get into difficulty, a sum which can be lent against strong conditionality”.

The truth is however that those €700 billion from taxpayers’ money and much more from ECB’s printed money, also ultimately to be paid by taxpayers, is currently used to recapitalise the banks and support their liquidity. This is the ‘good use’ of people’s money according to Benoît, the little French economist turned in half an hour into social philosopher – transformer of Europe. In reality what he wants is that governments stop spending money on people and hand it to bankers.

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

EU: Turkey to shelter Syrian refugees and turn other immigrants back in return of €3 billion

Governments, businesses ‘walk the talk’ for investment in sustainable development: UN forum

Facebook changes its terms and clarify its use of data for consumers following discussions with the European Commission and consumer authorities

Ending the era of dirty textiles

‘Disaster resilient’ farming reduces agriculture risks, yields economic gains, says new UN agriculture agency report

MEPs want to boost energy storage in the EU to help spur decarbonisation

Bold measures needed to protect cross-border and seasonal workers in EU, MEPs say

4 rules to stop governments misusing COVID-19 tech after the crisis

Coronavirus: the truth against all myths

Russia – US in Syria: Selling Afrin to Turkey but facing off ruthlessly for Ghouta

In the United States, there aren’t enough hours in the week to make rent

World Retail Congress announces Dubai 2016 Hall of Fame Inductees

COVID-19 will accelerate the revolution in energy systems

COVID-19 is more deadly for some ethnic groups

Italy should boost spending and strengthen cooperation and integration of employment services to help more people into work

The mental domain in times of a pandemic

We must prevent a post-COVID ‘carmageddon’. Here’s how

Nepal faces a crisis as COVID-19 stems the flow of remittances

Gas pipeline in the European Union. (Copyright: EU, 2012 / Source: EC - Audiovisual Service / Photo: Ferenc Isza)

EU Investment Bank approves € 1.5bn loan for Trans Adriatic Pipeline (TAP)

The cuts on 2014 Budget will divide deeply the EU

Budget Committee backs €2.3 million worth of aid to help 550 redundant media workers in Greece

COP21 Business update: Companies urge now for carbon pricing as coal is still a big issue

The Great Reset requires FinTechs – and FinTechs require a common approach to cybersecurity

Sudan Prime Minister survives attempted assassination

An economist explains how to go carbon neutral in our lifetime

Whale populations are slowly recovering – this is why

In DR Congo, UN Security Council says December polls are ‘historic opportunity’ for country

West Africa ‘shaken by unprecedented violence’, UN envoy tells Security Council

Texting is a daily source of stress for 1/3 of people – are you one of them?

Antisemitism, intolerance, can be unlearned, Guterres tells New York commemoration

Brussels wins game and match in Ukraine no matter the electoral results

This man is installing 100 trash barriers in Bali’s rivers to stop plastic pollution

Climate change: new rules agreed to determine which investments are green

Mental health and suicide: when the alarm bells are faced with deaf ears

UN pushes for universal health care on International Day

This AI is working with a fleet of drones to help us fight ocean plastic

Hospitals among seven health centres attacked in Syria’s north-east

Geographical Indications – a European treasure worth €75 billion

Why city residents should have a say in what their cities look like

Click and Download: your app is ready to help you save lives

Trump blocks US warmongers from bombing Iran

Tackling pollution and climate change in Europe will improve health and well-being, especially for the most vulnerable

Got the blues? Head for some green spaces

The developing countries keep the world going

COVID-19 and nature are linked. So should be the recovery.

Libya: UN Mission condemns deadly attack against police in country’s south-east

‘Whole spectrum of Afghan society’ must get behind peace talks, UN envoy tells Security Council

It ain’t over until Google says it’s over

More than half a million Rohingya in Bangladesh get ID cards for first time: UN refugee agency

Behind the firewall: a discussion on the evolution of cybersecurity in the utility industry

Crime and drugs in West and Central Africa: Security Council highlights ‘new alarming trends’

More effort needed to improve equity in education

What are we actually working for?

Climate change brings a host of other risks for businesses

The EU heads of State and Government about the result of the European Elections 2019

Commission challenges Council over EU 2014 budget

The Eurogroup+ is born to govern the EU Banking Union

Belgium: Youth Forum takes legal step to ban unpaid internships

No more lead in PVC to protect public health, say MEPs

What Mary Poppins teaches us about behavioural economics

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s