Greece, the Eurozone crisis and the end of European solidarity?

Image by Wikimedia Commons

After five years of imposed austerity, the Greek economy is on its knees. GDP has declined by 25 per cent, unemployment is at 26 per cent with youth unemployment above 50 per cent. And yet, all the EU has got on offer for Greece is yet more austerity in exchange for a third bailout agreement (BBC, 13 July 2015). Pension reform will be part of the deal agreed at the marathon meeting of eurozone leaders on July 12, as is further privatisation and labour market liberalisation. EU agents will be given oversight of Greek government spending, including a new independent fund that will monetise €50bn in state assets to repay debts.

There is no sign of European solidarity in this deal. It is a punishment handed down to Greece for daring to say no to austerity. The EU was established on the principles of cooperation and mutual support – and many are now wondering what has happened to those aspirations. But solidarity fell by the wayside some time ago in Europe. This is just the most recent example of how European integration today is about profit maximisation for capital – not about cooperation between European people.

LO Sweden: Can an Old Model be Renewed?

LO Sweden is starting a high-level commission on a “new Swedish model”. Long ago, Sweden was known for what was called the Rehn-Meidner model. The idea was that union wage strategies and government policy should be combined to promote full employment and fair distribution while respecting the autonomy of unions and employers. The basic element was a “solidaristic” wage policy which would raise the income level of low-income groups and simultaneously speed up structural change and thereby create more jobs in the future. Unemployment benefits and active labour market programmes would give workers security in the process of change; a “security of the wings”, as Gösta Rehn, LO economist at the time, phrased it. In this guest post, Ingemar Lindberg discusses the huge task of this new commission: How to re-establish a strategy for these goals in our times?