In this post-Covid era, the European Union has no option but to adopt updated fiscal rules that are more flexible and supportive of economic growth and social protection. The 27-nation bloc simply cannot revert to its pre-Covid fiscal rules underpinning the Euro, which have been suspended since 2020, as it would be European families who suffer the most as national governments are forced to cut costs to meet the criteria. This would lead to austerity measures that would disproportionately impact the vulnerable in our society.
The European economy after the pandemic is, indeed, very different from what it used to be. In an interview with The Journal in Brussels, Pedro Marques, the Progressive Alliance of Socialists and Democrats (S&D) Group Vice-President responsible for a social Europe, stressed that, in this light, “going back to normal” would be unacceptable, also given that the pre-pandemic rules were already unfair and needed to be revised.
The S&D is the political group in the European Parliament composed of MEPs belonging to national parties affiliated with the Party of European Socialists (PES), including Malta’s Partit Laburista.
The European Union’s current fiscal rules, enshrined in the Stability and Growth Pact and in the Union’s treaties, require Member States to keep their public debt below 60% of GDP and their budget deficit below 3% of GDP. To allow national governments to respond to the severe economic downturn caused by Covid-19, the general escape clause of the Pact was activated in March 2020, temporarily suspending those fiscal rules. This allowed Member States to undertake appropriate budgetary measures, within the Pact, in the face of exceptional circumstance. Eventually, the clause was extended to protect European citizens from the energy price increases stemming from Russia’s invasion of Ukraine, but it is scheduled to be deactivated at the end of the current year.
The public finances of all EU countries have been severely strained by these crises, due to soaring healthcare costs and extensive government support for households and businesses. Public deficits have ballooned in most Member States, and the gradual decline in public has stalled, leaving many Member States with high levels of debt. EU finance ministers are engaged in talks to revise the fiscal rules, but a deal is reportedly still far from reach.
“We must urgently reform our fiscal rules to adapt them to the post-COVID reality. We need rules that allow Member States to invest in their economies and stimulate growth, especially in light of the cost of living crisis. This is essential to help families weather the storm,” said Marques.
Talking about the bigger picture, he said the EU’s commitment towards a strong social Europe that is fair, inclusive, and full of opportunity as outlined in its European Pillar of Social Rights and its related Action Plan must be translated into concrete action. More needs to be done to address poverty, even though progress has been made on the employment and training fronts. Praising the new EU Directive on minimum wage – which seeks to reduce working poverty and inequality through improved statutory minimum wages and collective bargaining – he highlighted the need for further steps to be taken, particularly in tackling homelessness and difficult access to housing, as well as child poverty across the continent. He also expressed his belief that the European Pillar of Social should be enshrined in the European treaties.
“In the Conferece on the Future of Europe, our citizens told us clearly that they want a more social Europe. It is our duty to deliver it to them,” said Marques.
The EPP’s dangerous flirting with the far-right
What if we fail? Does the centre-left risk allowing Europe to continue shifting to the right?
Rober Misik, author of Politik von unten: Gelingt das Comeback der Sozialdemokratie? (‘Bottom-up politics: Will the comeback of social democracy succeed?’), writes on socialeurope.eu: “One can blame this (the successes of the right-wing) on the incapacity of the left, liberals and progressives generally — but there are probably deeper reasons. These have to do with often-analysed phenomena, such as neoliberalism or the alienation of the classical workers’ parties from their traditional milieux and the feeling among the working classes that they are no longer represented. But now something else is added—a deep fear, of global instability, of decline, of loss of prosperity. There is general depression and little optimism. This fatalistic mood is the fuel of aggressive narrow-mindedness.”
As the June 2024 European Parliament elections loom, Pedro Marques warns that the far right and populists are poised to make gains if the EU does not act swiftly and decisively to address the pressing issues facing European citizens. At the same time, he chastises the European Popular Party (EPP) and its constituent national parties – Malta’s Partit Nazzjonalista is a member of the EPP – for “flirting” with far right notions and expressing willingness to build coalitions with it for the sake of safeguarding their numerical superiority within the European Parliament following the next EP elections. “They have aready done it in Italy, where they are part of a far-right government led by Giiorgia Meloni. We have seen this happening in Nordic countries too, and we just faced the risk of having that situation in Spain as well.”
The S&D, in sharp contrast, hold its principles close to its heart, he asserted. In fact, it has only recently suspended MEPs coming from the Slovak Direction – Slovak Social Democracy (SMER) and Voice – Social Democracy (HLAS) parties, as a reaction to their respective parties’ formation of a coalition government in Slovakia with the far-right Slovak National Party (SNS). This decision was carried through even though it meant that the S&D Group lost a number of MEPs from its ranks.
“We stand for our values. We take difficult decisions when they are morally right. We will not flirt with, or marry, the far-right for political expediency. That is what our progressive, centre-left political family offers to European citizens,” he said. “We strongly believe that we can win the next European elections.”
EU enlargement announcement: good news
We sat down with Pedro Marques just a few hours after the European Commission adopted the 2023 Enlargement Package, providing a detailed assessment of the state of play and the progress made by candidate countries. In light of the results achieved by Ukraine and Moldova, and of the ongoing reform efforts, the Commission recommended that the European Council opens accession negotiations with both countries.
“As progressives we’ve been champions of the enlargement policy,” Marques is quick to remark. Noting that, for practically a decade, the bloc’s enlargament policy had been frozen, he opines that it has been unfair that certain Western Balkan countries have been made to wait for so long when they have been working hard to meet the EU’s accession criteria. Some have even gone as far as change their official name to be able to join, he observed. Thus, the S&D Group cannot but be happy with the announcement that negotiations can now start with Ukraine and Moldova.
“Of course, this change was triggered by the situation in Ukraine,” he noted. “The Ukrainians are paying for their European aspirations with their blood and their lives. We fully support significant steps being taken in the case of those candidate countries that are better prepared, particularly Ukraine and Moldova. The same should be the case with Georgia, if they don’t keep veering away from the European path, as they have unfortunately been doing lately.” He added that the Commission’s announcement also sends a signal of hope to those Western Balkan countries that have backtracked in their endeavour to meet the accession criteria, perhaps also because of their frustration from too much waiting for the process to move forward.
“We need to take care of our neighbourhood and be willing to welcome those who want to share the European dream,” Pedro Marques said. Having said that, this goes hand in hand with taking steps to ensure that the further complexity resulting from the EU growing from the current 27 to 30 or more Member States does not have a negative impact on the Union’s functioning. Hence, a significant reforms must be undertaken in the European institutions. These have to include a considerable increase in the number of decisions taken by qualified majority voting (QMV) – 55% of Member States, representing at least 65% of the EU population – instead of via a unanimous vote. One of the areas the S&D believes QMV should be extended to is the EU’s foreign policymaking, where unanimity has been the default voting rule.
Gaza: the EU cannot afford a biased stance
The S&D Vice President’s reference to foreign policy brought us to the heavily criticised visit to Israel made by European Parliament President Roberta Metsola and European Commission chief Ursula von der Leyen, hot on the heels of Hamas’ 7th October devastating surprise assault. The President of the S&D Group, Iraxte Garcia, was among those who had harsh words in this regard, commenting that the leaders of two of the EU’s most important institutions had the duty to represent the position of the Union as a whole, including its Member States. “With their visit to Israel, they failed,” she told Politico, calling for the EU to work on a diplomatic offensive to ensure a ceasefire.
“The European Union must exercise all its leverage to stop violence and indiscriminate actions against civilians, which can only generate more innocent victims, more suffering and more extremism, escalating the conflict,” said Garcia. “Civilians must be protected at all times and any action of self-defence by Israel must respect and uphold international law and international humanitarian law. The humanitarian situation in the Gaza Strip is dramatic and human life and dignity must be the ultimate beacon of any action.”
But, we ask, has an EU position that has been described by the European Commission’s own staff – in an open letter to von der Leyen – as “uncontrolled” support of Israel and exhibiting a “seeming indifference … towards the ongoing massacre of civilians in the Gaza Strip, in disregard for human rights and international humanitarian law” taken away that international leverage referred to by the S&D Group President?
“The EU’s leverage to help reach a de-escalation and a ceasefire in the Middle East can come through the infuence that we can exert over Israel but also through our partnership with the Arab nations, and other countries that are on ‘the other side’. To be able to do that, we cannot take a biased stance,” Pedro Marques replies. “Those first significant remarks, which were made on the ground in Israel, have for sure not helped in our relations with those countries. Fortunately, we managed to correct that initial position significantly through the European Council. The President of the European Commission has also backtracked on her statements. Still, those first remarks left their mark. Even Olivér Várhelyi, Commissioner for Neighbourhood and Enlargement, didn’t help with his first remarks that we should stop the aid to the Palestinians. That comment was really unfortunate. The S&D was quick to condemn these statements.”
Marques added that the S&D Group fully agrees with what the EU’s High Representative/Commission Vice-President, Josep Borrel, has been saying from the beginning, and also with the UN Secretary General António Guterres’ call for a humanitarian ceasefire.
While maintaining that Israel has the right to defend itself from terrorist attacks and expressing agreement that the military capabilities of Hamas should be annihilated, he stated clearly that there can be no enduring solution to the long standing conflict as long as the occupation of Palestinian land continues.
Main photo credit: Huy Phan