Austerity lovers to put a break on Renzi’s growth vision for Europe? the Sting reports live from World Economic Forum 2015 in Davos

Europe's Twin Challenges: Growth and Stability (WEF, 22/01/2015)

Europe’s Twin Challenges: Growth and Stability (WEF, 22/01/2015)

The World Economic Forum is said to be a congress of polyphony and contradictions. This year’s edition bore witness to this perennial value of the organiser. The European Sting is pointing one major contradiction of utmost significance from today’s sessions.

While Mr Matteo Renzi, Italy’s Prime Minister made the main congress hall of the World Economic Forum yesterday shiver with his inspiring speech on the need for growth and the end of excessive austerity, today it was time for the “austerity lovers” to take the floor.

Just before noon a big panel was convened, moderated by Mr Robin Niblett, Executive Vice-President and Chief Operating Officer, Center for Strategic & International Studies (CSIS). Five distinguished people took a seat at his panel, 4 of them were Prime Ministers of European countries: Mr Enda Kenny, Taoiseach of Ireland, Mr Mark Rutte, Prime Minister of the Netherlands, Mr Sigmar Gabriel, Vice-Chancellor and Federal Minister of Economic Affairs and Energy of Germany, Mr Alexander Stubb, Prime Minister of Finland and, last but not least, Laimdota Straujuma, Prime Minister of Latvia. The topic of the session was: Europe’s Twin Challenges: Growth and Stability.

First of all, while almost all panelists produced some insightful and worthy of reporting opinions about Europe and Eurozone we must be excused to discard any comment about the time the Prime Minister of Latvia’s used. The reason was mainly her poor English that made it rather impossible for anyone at the congress hall to be able to comment anything on the sayings of the Baltic politician. Trying our best to avoid any further comment on the “good” hands that the Presidency of the European Council is in today, we flip rapidly to the stimulating gist of that “Northern Europe panel”, as the moderator Mr Niblett called it.

Sigmar Cabriel

The German powerful politician was sadly the weakest chain of the panel, the Latvian leader of course excluded. He was rather conservative and moderate in his views, as expected, speaking about how good Germany took structural reforms before the rest of the EU even smelled the danger. He appeared adamant in his pro-austerity stance with all kinds of reforms in Germany and Europe. Of course he recognised the danger there might be around when those reforms are substantial like in Greece or Spain. Luckily, for his country, as he stressed, reforms were milder and thus allowed him still to come to Davos as Vice Chancellor. He continued encouraging all EU members in trouble to take austerity measures fast and in a German efficiency way. He did say though that it is recommended that austerity is combined with investment in education and competitiveness. Did he mean GROWTH? We would never know. The word growth did not come from Mr Cabriel’s mouth.

Enda Kenny

Mr Kenny was invited to present how a European country that was hit hard by the economic crisis made it to stand on its feet, correct public administration anomalies of the past, and produce growth. Mr Kenny underlined that the key to this success story has been the political agreement he had with the other party in his Irish coalition government. He said that both parties unanimously sat down at the negotiation table with Troika to make the best deal for the country. He also added that he was very clear to the Irish people about the difficult times his country was passing and that harsh measures would be needed to be imposed. Further, he claimed that his aim is to reconstitute by 2018 the 250.000 jobs lost in Ireland due to the economic crisis. He wants Irish immigrant youth to come back to live in their own country and to provide value to it.

Furthermore, Mr Kenny very insightfully pointed the chasm that there is currently between the European institutions and the member states. He urged the European countries and the EU to bridge this gap fast. Particularly he pointed towards institutions for that purpose. “We should not be in the position that there is this chasm or disconnect between the institutions and the civic society”, the Irish leader addressed.

Mark Rutte

The turn of the Prime Minister of the Netherlands had come to speak. Mr Rutte, a well known fanatic supporter of austerity, said that the Nertherlands is managing to survive from the crisis and can look into the future thanks to the intense fiscal consolidation programme followed. Reforms should be taken everywhere, the Dutch politician said. At the same time though he said that the Netherlands is investing in infrastructure. Mr Rutte mentioned that his country has invested over 8 billion euros in roads and railway network in Holland in the past years, something that he expects to bring fruit very soon. Moreover, he sees that the European Union is too much debating about austerity. Mr Rutte is known to dislike talks.

“We are extremely vulnerable and that is because it takes us so much time to take all the necessary measures”. Last, he made an unspeakable comment on the long austerity debate in Europe that some found it undemocratic: “this is a painful process and when you are going though a painful process, make it as short as possible!”. So, no talk just action for Mr Rutte, who is one of the austerity lovers in Europe and will keep being so. Until next elections, of course. Because 1+1=2 and Mr Rutte prefers to “explain” to the masses, as he stated, the importance of his policies. But what about dialogue and also listening carefully to what his electorate has to say? Dialogue is a word that was sadly not heard by Mr Rutte in his long pro austerity speech.

Alexander Stubb

We kept Mr Stubb for the end, as he was the shining personality that almost monopolised this panel discussion, sharing with us some very interesting views on how austerity is the king and also how he likes to collaborate with far right parties in this country. Mr Stubb is pro business and this is a very good thing to be today. He underlined that growth in Finland and in Europe will come only through the private sector. He shared with us three keys to success:

– Structural reforms as soon as possible and as soon as possible (AUSTERITY)

– Single market and particularly digital single market by cutting red tape and stopping protectionism

– Liberalization of the world trade. He particularly stressed his arguments on TTIP.

Then a relevant question came to his way from the moderator:

Mr Niblett, referring to the coming General Elections in Greece on Sunday he wanted to test the Finnish politician if he had done his homework properly. The questions was:

“How much sympathy will there be amongst the group of this sort leaders if there is a demand for renegotiation of some sort of the burden currying? “ How much room for manoeuvre is there?”

Mr Stubb luckily seemed quite prepared for this one. He said initially that there has been plenty of solidarity towards Greece and the fellow EU members in economic distress. Showing the obvious respect about democracy he underlined: “I can’t take issue on the Greek elections… “we will deal with any democratically elected government that Greek has and that it will be very difficult for us to forgive any loans or restructure debt at this particular moment; we can look into different kinds of extensions,  programmes…”.

He also presented “exclusively” from Davos three possible scenarios for post elections Greece:

– Things will continue as they are

– Extend the programme’s period and renegotiating something but not at the debt level

– Dirty exit. “I think we need to avoid the dirty exit at all costs”

So, basically, Mr Stubb’s revealing speech revealed two things:

-That everybody in Brussels is prepared for Tsipras’ left party expected win on Sunday’s elections

-That after harsh negotiations with Troika Mr Tsipras will receive something in return but it will be “something“.

All in all, it is interesting to see in the first two days of the World Economic Forum in Davos two different sides of European politics. The one side is Mr Renzi’s young, optimist and growth oriented one that we witnessed yesterday. The other side, presented today, is austerity and further unfair impoverishment of the European middle class.

We just hope that, after flipping it, the coin will land on Italy, so that the European youth is able to dream again, to live again and not leave again from their home country.

Stay tuned at the European Sting, the only Brussels media that effectively broke the “Brussels bubble” and made it to Davos with live critical coverage of the most important sessions of the World Economic Forum 2015.

You can view the full session from Davos here:

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