The State of the European Union. The European Parliament faces its most important elections yet

THE STATE OF THE EUROPEAN UNION 88 with problematic situations that are difficult to overcome without help: illness, unemployment, old age and the need for care. The cultural qual- ity of our society depends on public education services, cultural institutions and democratic participation. There needs to be a much greater focus on the European financing and organisation of such critical European public goods, which will also have significant implications for the next European budgetary period. In some (“wealthier’) Member States, an im- pending transfer union is seen in a negative light and has met with a subdued political re- sponse so far. The situation would be different if this larger European budget was used to cre- ate true added value for the entire EU, and thus also for Germany. If everyone makes a fair con- tribution to these European public goods, would it be so bad if some European Member States benefited more than others in certain areas? If eastern European states, which are particularly concerned about Russia, benefited dispropor- tionately from a security policy? Or if southern Europe enjoyed more advantages in terms of catch-up development on foot of a successful investment initiative? Or a genuine European refugee regime offered more advantages to Sweden and Germany? The European financing of European public goods would bring home to the overwhelming majority of voters, even those in the wealthier countries as well as our negoti- ating partners in the Union, the necessity that emerges directly from our own best interests. Fourthly: regulating the financial sector – finally pushing through a preventive reform policy The 2008 financial, economic and debt crisis shattered the belief that financial markets could regulate themselves. The major weaknesses in the global financial system were dramatically exposed. The sheer size and deeply integrated nature of the financial markets made it impos- sible to contain the damage to a particular re- gion or sector. Companies were bankrupted, economies head into recession and unemploy- ment increased. Nevertheless, it was the state and the social partners, that prevented the situation from de- teriorating even further. The governments man- aged to put together big rescue packages. Within the framework of the German social partnership, in cooperation with the state, it ar- rived to stabilise the labour market. Hope was rekindled that the era of neoliberal markets was drawing to a close. Ten years later, little remains of this opti- mism. 11 Instead, the financial crisis has damaged social cohesion and led to increased scepticism towards elites and the social market economy. Many states saw diminishing tax receipts and higher welfare bills. Government spending in several eurozone countries increased to such a level that they threatened to become insolvent. In response, bailout packages were launched, accompanied by further demands for budget cuts. These cuts led to serious social crises, par- ticularly in southern Europe. While some strong economies were able to stabilise themselves quickly again and return to growth, others have still to reach their pre-crisis levels. The ECB’s in- terest rate policy remains in crisis mode, favour- ing state finances at the expense of savers. This could be the calm before the next storm. Immediately after the crisis, far-reaching re- forms were discussed. These included increased 11   https://www.ips-journal.eu/regions/global/article/show/ whatever-it-takes-3047/