15 / 150
INTRODUCTION. THE EU’S MAIN CHALLENGE: GROWTH, JOBS AND INVESTMENT TO EMERGE FROM THE CRISIS
15
Nor is there enough capital being ploughed into the real economy. The
Economic and Monetary Union relies much more on financing through
debt than through private equity shareholders.
The cash injection by the ECB is a step forward, but it is primarily going
to mobilise speculative financial investments; not the flow of credit to busi-
nesses.
This means that economic policy will have to influence supply and the
strengthening of the European productive apparatus. Investment in RD&I
and education is central in this respect as an effective demonstration of
what are being called “structural reforms” and which so far have been
limited to stripping wage earners of their rights and to distorting the
European social model.
Naturally, any public investment policy needs the support of a progres-
sive taxation system as regards direct taxes, as well as tax harmonisation.
They are conspicuous by their absence in the European countries, which
are responsible for their own taxation policies. If that is not the case, the
Union will continue to drift further away from one of the core goals of the
2020 Strategy and the growth just visible on the horizon will remain pow-
erless to create quality jobs in a solid and firm manner. It will also remain
incapable of building a demand base that is essential to sustainable growth
- growth that in the first half of 2015 is the result of temporary phenom-
ena: the drop in the price of oil, the depreciation of the euro, the ECB’s
sovereign debt-purchase programme. Therefore, there are risks and uncer-
tainties of an economic nature (financial instability, deflation) and a politi-
cal nature (the Ukraine crisis), against a backdrop of a weak global econ-
omy (the emerging countries).
The other major issue arising from the crisis –actually the quintessential
European challenge– is the deterioration of the welfare state. It can be
seen in salary devaluation, precarious employment, inequality and poverty.
It can also be seen in especially painful effects on young people and chil-
dren; not so much on the elderly and pensioners, who have a more solid
protective shield, with the resulting generation gap that divides Europe.
In Spain, youth unemployment is as high as 50%; in Italy, it is nearly
40%; in France, 25%; and 17% in the United Kingdom. The percentage
of people severely deprived of material resources in Europe went from
9.1% to 9.9% during the crisis.
It is a proven fact that child poverty will have indelible cultural, social
and physical effects in the course of the children’s lives. In Spain, child
poverty went from 28.2% to 36.3% in five years of crisis (UNICEF figures).