The EU and the euro are in a state of flux. Some would say it is a crisis. From financial crisis and democratic deficit to failing and crippling austerity measures, it is obvious that things must change rapidly for the benefit of the Union and, more important, its citizens. The decision to create a single currency was viewed by many across the political spectrum as an ideological and political decision to accelerate the move towards federalism within the EU. There was not a great deal of debate on the economic and social ramifications of the creation of the euro. There was no popular demand for a single currency and no frank and open discussion with citizens took place on its creation. It was not promoted to serve and benefit average citizens. It was a decision and project supported and promoted by elites for the benefit of elites.
The euro area jobless rate rose to a record level in March, growing over 12%. There are now 19.2 million unemployed people across the eurozone while youth unemployment is at a staggering 24%. The euro has been a factor in creating the crisis in Ireland and Europe. Cheap credit from the ECB facilitated reckless banking and lending and a property bubble that brought the State to its financial knees. We were told our hands were tied in responding to the impending financial crisis as we lacked fiscal autonomy and could not devalue or inflate our own currency. However, the euro is not the sole cause of the financial crisis we face today. Countries outside the EU have also suffered recession and crisis in the last few years. Sinn Féin agrees with many that it would not be in Ireland's interest to leave the euro as we are far too embedded within the European and global financial system to make such a radical move. The euro and EU can still help Ireland to get out of this crisis, but it will require a radical change of policy.
The EU's response to the crisis has been to focus on austerity, the socialisation of private debt and neoliberal economics. This has fuelled the increase in unemployment, poverty, personal indebtedness, homelessness and emigration, as we have witnessed on a daily basis. Instead of austerity, the EU requires an investment programme and a social insurance fund for countries struggling under the current crisis. The European Investment Bank must lead a physical and intellectual infrastructure development programme to improve Europe's competitiveness, create jobs and stimulate growth across Europe. Once employment has been stimulated, Governments will see an upturn in revenue which will inevitably lead to and promote a further lowering in social welfare payments and a decline in national deficits. eurozone countries should not be led down the route of stronger fiscal and monetary union underpinned by austerity, which would commit Governments to a further cycle of deficits. In a truly democratic fiscal union, member states suffering lower economic yields would receive transfers from wealthier economic states. Wealth and supports could be distributed in a more even-handed way but to avail of this member states would have to accept fiscal decisions on taxation and spending being made collectively for the most part.
Serious and meaningful work to transform the EU and shape it in the interests of all its citizens can begin in the upcoming EU budget negotiations. If the proposed budget is cut as suggested, it will be the first time in 56 years that such a thing has happened. The European Parliament rightly opposes the last proposed budget. The EU is facing its worst economic crisis since its creation and 90% of the budget is destined for investment in social and economic programmes in member states. The financial crisis needs investment-led growth not austerity failure.