Open Letter on the Situation in Greece
The board of EUCDW gathered recently in Athens and agreed on a common initiative with regard to the situation in Greece. We hereby would like to provide the European Commission with the outcome of the gathering:
Over the course of the last five years and as a result of the crisis, unemployment in Greece rose to 27%, with youth unemployment exceeding 50% and six out of ten jobseekers not having worked in over a year. Combined with cuts in the average wage by 21% and a reduction of pensions by 40%, this has furthermore led to an increase of in-work poverty. One fourth of all enterprises, the largest share of which were SMEs, have closed the doors as a result of the crisis, further contributing to the high level of unemployment and low job creation rate. These developments, as well as the horizontal increases in income taxation, have been important drivers of growing inequality. However, a decisive factor was also that structural reforms for futureproof economic growth were not always sufficiently implemented. One in ten schoolchildren in Greece is now dependent on free school meals to avoid the risk of malnutrition resulting from increased poverty. These effects are most prominent in, but not exclusive to Greek society. The European Union is confronted with problems which can only be solved through a firm and a joint response by the Member States and by the Union as a whole. Budgetary problems and challenges in one Member State not only concern the citizens of that country, but affect the economy and job market of the entire EU.
Both Member States and EU Institutions have worked hard to re-establish trust in our financial stability and to strengthen our common economy through such measures as the Banking Union and the Stability and Growth Pact. We have overcome the worst, and Europe is
gradually returning to the path of sustained economic growth. Structural reform has always been at the centre of this process, as we always knew that austerity measures alone risk deteriorating the economic and social conditions and cannot lead the European countries out of the crisis. To save future generations from the burden of new debts and at the same time to create jobs – and a perspective for our youth in particular – we must follow a path combining fiscal responsibility, structural reforms and investment for growth. Without stability, there can be no sustainable growth. Without growth, there can be no sustainable stability.
The Greek authorities in the past years have implemented fundamental, often painful structural reforms, in order to re-establish the foundations for futureproof economic growth and to create a positive environment for investment, with the aim of creating jobs. Jobs are created by enterprises – and in particular by SMEs – not directly by governments. In Spain, Portugal and Ireland, we already see considerable signs of economic recovery, as well as in Greece where GDP is now growing by over 1%, whereas only three years ago it marked a negative growth rate of 7%. Now the time has come for next steps.
The European Commission has undertaken important steps to stimulate investment for growth with the Juncker Investment Plan of 316 billion Euros, to be used to boost SME funding, job creation and investment in human capital, as well as with the increase in pre-financing to the Youth Guarantee to tackle youth unemployment that has been launched by Commissioner Thyssen. These are important investment programmes that are to be unfolded in Greece too in the upcoming months.
EUCDW, the European Union of Christian Democratic Workers, supports this combined approach of fiscal responsibility, structural reforms and investment for growth, because it will lead Greece and Europe to economic recovery and job creation in the nearby future. A sustained economic and social recovery requires a balance of fiscal solidity, economic efficiency and social fairness, with the ability of civil society and citizens to participate in meaningful social dialogue. This social dialogue however is facing a serious and in some cases an existential challenge in some European countries since the beginning of the crisis. The time has come to restore and reutilise the full potential of the dialogue among all social stakeholders.
The social market economy is a fundamental pillar of our European model. We want to keep it that way today and in the future, also in precarious economic circumstances. It is a prerequisite for sustainable growth and the creation of qualitative jobs. Therefore EUCDW encourages a sustained social dialogue and defends the European Social Model more than ever in the present Greek context. It is an important tool to avoid increasing poverty and social exclusion and thus ultimately also political instability. Involvement of social partners is a far better basis for economic reform; it creates a fertile environment to create new perspectives.