Speech bij Progressive Governance Conference - Main contents

Op donderdag 24 april mocht ik in De Balie in Amsterdam spreken tijdens de Progressive Governance Conference. Lees verder voor mijn speech over het aanpakken van de Europese werkloosheid.

‘It’s all about policies and politics.’ That is what an economist told the social democratic politicians who were gathered at the progressive economy forum in March this year. Isn’t it strange that an economist feels compelled to explain to politicians, to social-democratic politicians, that it’s all about policies and politics? Clearly this was not just any economist. No, it was Joseph Stiglitz.

Joe Stiglitz was addressing the issue of inequality. Tonight I will focus on the most obvious inequality in Europe at this moment: between those that have and those that have not: between the workers and the jobless.

The European Central Bank is a poor copy of their American originals. The irony is that he Chicago school of thought had much more impact in Europe than it had in the United States. In fact, we have seen an unfortunate marriage between the Chicago school of thought and the German fear for hyperinflation.

The transatlantic differences in policies and politics show during this financial crisis. The Federal Reserve in New York wants to foster full employment; the Central Bank in Frankfurt does not. In the United States banks have been forced to recapitalize and in Europe banks have been offered cheap loans. The Obama administration has allowed a much higher deficit than 3%, while the European Commission is obsessed by it.

We constrain ourselves. With the result that macroeconomics has been reduced to mass psychology, with the aim to restore consumer and producer confidence. As if, Europe could talk its way out of the crisis, through a combination of reassuring words and motivational speeches. At this point I have to confess: I’m a macro economist.

Having said that, the transatlantic differences in policies and politics produce different results. Yes, in the U.S. public debt is higher. Yes, in the U.S. public deficit is higher. Significantly higher. But they got something in return. The growth in the last two years has been 5% higher and the current unemployment rate is 5 %-point lower.

Does this make the American model win the Miss World competition? Far from it. The best examples in the world are still found in Europe with countries combining high productivity, low unemployment and moderate inequality. But we need change, sometimes radical change, to unleash the full potential of Europe.

Therefore, we need to break up the unhappy marriage, that produces the children of small, unambitious governments and free markets. This is one reason why the Dutch Labour party proposes a norm for unemployment, not more than 5%, changing the mandate of the ECB and changing the European budget rules. The related, other reason is that we cannot give into the cynical, technocratic position; that we cannot boost employment, that we have to wait for confidence and animal spirits to return. We need to politicize the theme of work. We need to restore the ambition to make Europe work.

Diederik Samsom told you earlier this evening about investments in sustainable energy and how we can make everybody benefit from it. That is the ambition we need.

Back to Stiglitz: As social-democrat by conviction and an European by heart I do agree with him. If we succeed in bringing back work into the heart of politics, we can really make politics work. We need to politicize work. That is what I want to contribute to Europe. Now and than it may seem an uphill battle, but it is worth the fight.