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Fighting for Europe's Economic Unity

Fighting for Europe’s Economic Unity

Published on August 23, 2012
Op-ed by Junior European Minister Bernard Cazeneuve published in the daily newspaper “Libération” on August 22, 2012

The troubles plaguing Europe continually serve to remind us of the prediction made by Jean Monnet, who thought that Europe would be built through crises and that it would be the sum of the solutions to those crises. The turmoil that has put Europe to the test has also helped to build its unity.

Amidst these tensions that are particular to our continent, a new failure has occurred, which is, sadly, of systemic importance. A severe banking crisis, notably as a consequence of the mistakes associated with reckless speculation forced the States to go into debt on the markets. The bank bailouts required to protect investors and to save the weakened economies were achieved at the cost of further deterioration in the public accounts. The sometimes irrational increases in interest rates affected - in the countries most at risk - the chances of a return to economic growth in the short term, by adding to the sovereign debt burden. In the face of this economic and monetary turmoil, the EU intervened all too frequently at the wrong time, aggravating the recessionary trends through measures based solely on austerity. As a result of this inability to overcome the crisis, Europe was weakened and its people began to distance themselves from it, from its goals and its plans. A kind of Euro-hostility gradually appeared which added a political and democratic crisis to the economic and monetary woes.

It’s in this extremely weakened context - in which France itself has also been weakened - that the French presidential campaign and the first few months of François Hollande’s 5-year term of office offered some hope. This hope – and it’s up to us to live up to this hope – is to achieve our goal of making extensive changes to EU policy.

Firstly, we must promote our desire for growth even more. The results of the European Council of June 29, notably the €120 billion emergency plan for future investments, cannot in any way constitute a full and final settlement. The next EU budget for the period 2014-2000 should increase the momentum created by the recapitalization of the European Investment Bank, trigger the initial generation of project bonds and the mobilization of European structural funds. By providing the EU budget with its own resources, notably through the adoption of the tax on financial transactions through increased cooperation, by boosting the internal market, by developing more integrated industrial and energy policies that comply with the principle of reciprocity with respect to trade, we will open up new prospects for growth in support of employment in Europe and in the interests of our industries. Growth also requires strong public services, social and environmental excellence for the employees of our companies. We have to rebuild Europe in order to make it stronger in terms of globalization and more protective of its people. The parliamentary debate scheduled to take place in the next few weeks will ensure that everyone can express their clear views on this goal.

And there can be no sustainable growth without cleaning up the banks, which should support the development of the real economy in the countries rather than speculation on the markets. Banking supervision, approved by the European Summit on June 28 and 29, and which will enter into force by the end of 2012, should be supplemented by a mechanism to resolve banking crises and to guarantee savers’ deposits. In the same spirit, the direct recapitalization of the banks by the European Stability Mechanism will allow us to break the dreaded link – which is based on the same recession-based logic – between the fragility of the banking sector, the explosion of sovereign debt and increased interest rates. The people of Europe will thus be better protected from austerity and the trauma that it gives rise to in their daily lives. Lastly, we should, within the framework of the work carried out by the President of the European Council, Herman van Rompuy, enhance the economic and monetary union in order to achieve the integration with solidarity advocated by President Hollande. Greater solidarity is now vital, notably for those countries that are still struggling, despite the efforts they’ve made to promote their recovery.

Greater solidarity is inconceivable without shared fiscal responsibility, without greater political integration. This simply means that it should be possible to exercise sovereignty in conjunction with European institutions that are more democratic, more clearly identified and, in a word, stronger.

Europe needs a plan that will make its people want to identify with it again. Developing this plan in a pragmatic manner, without obscuring reality, and while striving for the ideal, is a struggle. None of those involved in this struggle can take a step back. It cannot be won just through debates in newspaper articles. It continuously sets its own pace, the pace of the crises, the emergencies, the actions. It imposes a responsibility to achieve solidarity in Europe, to overcome stagnation and to eradicate the austerity that is depriving its people of a future.

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