ALFRED SANT TELLS ECON THE EUROPEAN ECONOMY IS NOT MOVING

Former Prime Minister and MEP Alfred Sant told the Economic and Monetary Committee of the European Parliament that contrary to what the European Commission is saying, the eurozone economy is not moving ahead. The Maltese MEP said that if one looks at the past four years, one concludes that the European economy is not moving, despite the EP’s repeated statements that we are on the right track. When we talk about fiscal consolidation in the eurozone, in reality it is operating as an internal devalutation which is politically very dangerous, socially dangerous and economically ineffective. This is the real problem. And that is why then, when we come to interpreting how things move forward, we differ. It is not just a question of a tecnocratic assessment. It has to be a political assessment. The eurozone has locked itself into a situation where, to remain competitive, through internal devaluation, it is eroding the social model on which europe is based. There is no other way out. To become competitive you have to erode your social model, and that is of course a trap, a trap because it undermines social cohesion.

The Maltese MEP, who has been appointed Shadow Rapporteur for the S&D Group, was reacting to the draft report on ‘European Semester for economic policy coordination: Annual Growth Survey 2015.’ presented by Dariusz Rosati. Alfred Sant told ECON that said that instruments implanted in the surveys are not good enough and they are giving us wrong results. ‘We dont have the measures by which we think we understand what is developing. We have instruments that need to be audited, that need to be critically considered and we are not doing that. The indications at the Autumn forecasts made by the EC since 2009 are not reflecting the real results. ‘If you look at 2011, there are 3 forecasts for growth in the year 2011 – 1.5%, 1.5%, 1.5%. The actual was 1.4%. If you look at the three autumn forecasts of 2012 – it started 1.8%, went down to 0.5% – real – and the end of it was -0.4%. The actual was -0.7%. If you look for the forecasts of the year 2012 – it started at 1.8% growth, it went down to 0.5% growth, the third forecast was -0.4% actually it was -0.7%. If you look at the 2013 report – starting at 1.3% growth, it went down to 0.1% growth to -0.4%growth. The reality was 0.5% growth. And if you look at the forecast report of the year 2014, they started at 1.4%, went down to 1.1% and down to 0.8%. It’s going to be less than that.’ Said Alfred Sant.

‘Are we on the right track? The commission is basically telling us, and some of our members are telling us that we are on the right track. But if you look at the policy that has been following for these past 3, 4 years – and you ask – look at the economy – has the economy been moving? And they tell us yes its going to move, its going to move. I remember Galileo, back in the counter reformation, and he understood that the sun doesn’t go round the earth but the earth goes round the sun. He had to accept that he was wrong – but then he also said ‘eppur si muove’ it still moves. Well before the european economy as it is moving now, and they tell us its going to move, its going to move, eppur non si muove – its not moving….that is the conclusion I come to Mr President.’

Follow Dr. Sant’s intervention at the ECON