Hollande’s plans for a growth initiative fall on fertile ground, especially in the European Parliament, which has repeatedly called for such measures. I am delighted that this message is increasingly echoed by the political mainstream, including most recently by European Central Bank President, Mario Draghi. Likewise, the European Commission is working on a “growth pact” to be discussed by EU leaders in June. Indeed, Europe needs a master plan to avoid a tailspin of recession, growing unemployment, and weakening banking systems.
A new master plan for growth would not be about printing money. Fiscal discipline remains essential, as are deep structural reforms. The growth pact can be properly financed by new sources of revenue, such as a financial transaction tax and joint project bonds for infrastructure investment, or by curbing tax evasion and tax fraud and eliminating tax havens, as well as by more efficient and intelligent use of structural funds.
The EU’s lack of solidarity, imagination, courage, unity and vision in recent years has made Europe a symbol of division for some, if not many. We cannot let this continue. Hollande’s election offers us a valuable opportunity to meet the challenges that the EU faces. Alternatively, we can allow growing poverty, fear, and anger to give rise to xenophobia and racism, and thus place at risk the EU’s greatest accomplishments.
But let us be optimistic. It is not too late. Europe can still emerge stronger from its current economic woes. The EU is changing direction at last, and Europe’s leaders will find an energetic partner in the European Parliament.
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© Project Syndicate
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