07 October 2011

Steinmeier: Solving the European crisis – Money alone is not a solution

If we want to break the vicious circle of the current EU rescue policy, if we want to stop politics being driven by the markets, then we have to find a new approach. A look back at the history of European integration shows what this might look like. At a critical time for Europe, shortly before the fall of the Berlin Wall, then-President of the European Commission, Jacques Delors, presented a step-by-step plan for an economic and monetary union. It was the blueprint for the euro, the answer to the arguments on economic and monetary policy which had almost torn the European Community apart in the 1970s and 1980s.

The Delors Plan shows how Europe can overcome crises. It needs a longer-term goal, cleverly-defined intermediate steps to get there, and bold leadership. The present crisis is far too serious to continue beating around the bush: we need a Delors Plan II, a ten-year roadmap to political union which is ambitious without being utopian.

All too often current debates focus on meaningless buzzwords. We have to finally make it clear what the political union can and cannot be. The improvements to the Stability and Growth Pact, the European semester – these are all the right approaches, but we must not stop there. We need a roadmap for greater harmonisation in tax policy. We need a European banking strategy which solves the “too big to fail” problem. We need further-reaching proposals on how to regulate the financial markets, proposals that ensure transparency and stabilise the system. And, as an act of European wisdom and European solidarity, we urgently need a rescue strategy for Greece which is not limited to simply calling for cuts.

In the longer term, Greece will only get back onto its feet if the country pursues a committed course of modernisation with European aid. The money for this can be made available. The European Commission still has over €200 billion from what is left of the Structural and Cohesion Funds. Additional funds can be generated by introducing a financial transaction tax. We also need to adopt a new course with privatisation. Instead of selling Greece’s national assets at give-away prices, we should go down the route of a European trusteeship (Treuhand) solution. Greece’s national assets would be placed under the control of a trust agency, restructured and then, over a decade, privatised under better conditions. Europe needs to show leadership, responsibility and solidarity. If we are unable to start afresh now, European integration will not survive this crisis. We must ensure that things do not get that far – we owe it to the fathers of this united Europe and we owe it to our children.

A German version of this article appeared in Handelsblatt.

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