Mood changes in Europe in favour of growth and jobs

László Andor, Member of the EC in charge of Employment, Social Affairs and Inclusion in the podium. The European Commission organised yesterday in Brussels a Joint press conference on the 2013 country-specific recommendations. José Manuel Barroso urged member states to move quicker and to be bolder on structural reforms that could deliver growth and jobs. (EC Audiovisual Services, 29/5/2013).

László Andor, Member of the EC in charge of Employment, Social Affairs and Inclusion in the podium. The European Commission organised yesterday in Brussels a Joint press conference on the 2013 country-specific recommendations. José Manuel Barroso urged member states to move quicker and to be bolder on structural reforms that could deliver growth and jobs. (EC Audiovisual Services, 29/5/2013).

Economics is primarily a social not a mathematical science. Forgetting that may lead mathematicians to create toxic investment products like complicated derivatives, which have no other purpose than to cheat people. This misunderstanding may also lead executives like László Andor, EU Commissioner for Employment, Social Affairs and Inclusion, to talk about ‘labour market’ as if it was an open air Saturday vegetable vendition. It was like that when he delivered a speech last Tuesday entitled, “Building a Single European Labour Market must be part of the EU’s recovery strategy”.

All along the past two years of economic crisis and steeply rising unemployment in southern Eurozone countries, politicians in the north and Brussels bureaucrats kept insisting that the best solution to this problem is that the unemployed young of Greece, Spain, Italy and Portugal seek a job in Germany. Andor baptised it ‘creating one EU labour market’. Yet this proposal found only some thousands of followers, while the bulk of the millions of jobless stayed home and start using substances.

Which labour market?

The Commissioner commenced his speech like that, “It is a pleasure to open today’s conference and discuss the final report of the Single European Labour Market project. The paper provides a good overview of the main patterns of labour mobility in Europe throughout the crisis years, and explains clearly the benefits of people’s ability to move across borders”. Draft as many labour market projects as the Commission may, the unemployed don’t seem to bother.

It’s not that the jobless in the south love so much their country and they cannot live elsewhere in the Union. Take for example a Greek unemployed couple in their forties with two children. How possible is it to them to go to Germany and look for a job? True young Greek medics and Spanish engineers are already working in Germany. However this doesn’t solve the bulk of the problem. It’s impossible to employ today the practices of the 1950s, when Greek and Italian workers were transported to Germany in ‘special’ trains, to help this country become the ‘miracle economy’.

South Eurozone societies are not that desperate and impoverished as in the 1950s and can guarantee a subsistence living to their young. Southern societies are ready to accept a deep reduction in living standards in order to avoid the Germanic adventure. On top of that those already in the north tell their kin and friends back to Athens, Rome and Madrid, that life and incomes in Munich are not rosy at all.

The good Commissioner said that “The European Commission is a strong supporter of greater labour mobility. The notion of a genuine European labour market is one of the cornerstones of our 2012 Employment Package, which set out a medium-term agenda for how the EU and the individual Member States should support a job-rich recovery from the ongoing crisis”. Unfortunately he doesn’t seem to understand today’s social realities in the south as described here.

However in view of the irrelevance of the labour mobility theorising in solving the unemployment problem of Eurozone’s periphery, the European decision makers have now changed their attitude without telling Andor about it. Only yesterday in Paris, the Franco-German conference on growth and employment came out with a major ‘new deal’ plan to address the dead ends of the labour market. The new plan in called “the European Initiative for growth and jobs”, and will be financed primarily with EU money.

Today the German Chancellor Angela Merkel goes to Paris to meet the French President Francois Hollande for the same reason; to make Eurozone grow and offer more jobs. In this meeting Germany will be once more in the defendant’s bench, apologising about austerity at home and all over Europe. The European Central Bank is also accusing Germany for doing almost nothing to support growth.

There are more indications that something is changing in Europe. EU Council President, Herman Van Rompuy addressed this week a letter to the 27 EU leaders ahead of their June summit. He tells them that in “preserving financial stability, where we are on the right track” and then stresses “In June, I would like to put the fight against unemployment high on our agenda”. It’s not by chance that today everybody in Brussels is talking about growth and jobs. The very European project is at stake in this front, with social and political risks on the rise.

Of course the labour market problems will not be addressed with letters from Rompuy. This is an indication however that the mood has changed and today the financial crisis is not the No 1 issue. Not to forget that we are facing a deeply social problem here and healing takes time.

We are not yet on it but at least we are before it.

 

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