European Union: Solidarity through wealth transfer
23 June 2011
The European Union is entering a new phase in the "transfer of wealth," writes Arie Eshout in De Volkskrant. For the journalist, the "game of billions" around Greece could be just the beginning of a structural process which, in the name of unity, would oblige rich countries to transfer part of their wealth to countries in crisis.
“It is impossible,” Alshout contends, “to pluck a chicken while asking it to pay back the billions in bail-outs. Especially if the chicken has blackmail as a weapon: 'If I go down, everyone goes down with me'."
For the rich countries of the EU, there are only two solutions. The first is what the reporter calls "the mountaineer’s dilemma”: "We leave behind the injured to keep others from dying too. In short: create two groups of countries that have the euro, or abandon the euro."
The second solution is the "transfer of wealth." "The U.S. economist and Nobel laureate Paul Krugman calls this ‘the transfer union', which would mean strong governments automatically helping the weak."
For Arie Elshout, this latter choice can be made "based on the beautiful principle of solidarity and belief in a unified Europe. But politicians would have to justify that decision democratically and be honest in saying that those billions are not abstract and must be paid back. By taxpayers, homeowners, retirees, parents of children and adolescents, students, users of the health system, consumers of art and culture. In short, by all of you."
This development will change the concept of solidarity among Europeans that the EU is founded on, believe Ryszard Petru and Paweł Świeboda for their part. In Gazeta Wyborcza, the president of the League of Polish economists and of the demosEUROPA thinktank states that with the crisis, Europe is no longer split "between rich and poor along an east-west axis" but "between a conservative North and a wasteful South without prospects for growth."
In fact, the solidarity that came with the enlargements of 2004 and 2007 has given way to a new solidarity, which, the authors note, is meant to bail out the peripheral countries of the euro zone to save the financial institutions of the prosperous centre. But this poses difficulties, and the vicious circle of new loans, hidden under the euphemism "European mechanisms”, must be broken. Ryszard Petru and Paweł Świeboda argue for focusing on what is driving growth across all of the EU: improved productivity.