« Each one of us, however powerless or insignificant, can change the world, » wrote the late Vaclav Havel, dissident and "president-philosopher" of the Czech Republic from 1993 to 2003, a few weeks after the Berlin Wall fell.
In 1989, "insignificant" women and men changed the course of history. Twenty years later, the neoliberal system, in turn, is falling apart. It is up to us, the citizens, to say in what kind of society we aspire to live. A society of injustice and chaos -- or a society of harmony and fraternity? The choice is ours. It is up to us to act.
There is increasing despair in our country, France. There are already 5,000,000 unemployed people registered with the unemployment office, hundreds of thousands of the unemployed who no longer qualify for benefits, and millions of people living in poor and precarious conditions. Hundreds of thousands of families have great difficulty paying their rent or utility bills, and there is every indication that a new recession is likely in the near future.
The total amount of U.S. debt has attained 358% of GDP (Gross Domestic Product). In the first 3 months of 2011, while U.S. public debt increased by 380 billion dollars, the GDP increased by a mere 50 billion. More debt for less growth! The world’s biggest economy is like a car that needs a pint of oil every 500 feet. At any moment, a piston rod might succumb and the engine explode. Colossal budgetary cuts planned for 2013 may throw the USA into a recession of historic magnitude.
In China, the real estate bubble is double the maximum amount reached by the bubble in the United-States before the subprime loan crisis. In 2009, in order to avoid recession, the government ordered banks to grant all the credit requests they received.
Is it legitimate that States pay an interest rate 600 times higher than private banks? It was recently disclosed that the US Federal Reserve secretly lent the huge amount of 1,200 billion dollars at the ridiculously low rate of 0.01% to banks in financial difficulty.
At the same time in many countries, people are feeling the full brunt of austerity plans imposed by their governments as a result of financial markets lending money to certain states at an imposed rate of 6, 7 or 11%. Asphyxiated by such rates, governments are forced to freeze pensions, family allowances and civil servants’ salaries and to cut back on investments- thus increasing unemployment which will soon plunge us into an extremely severe recession.
Is is normal that, in crisis situations, private banks - which can usually obtain funding at 1% from Central Banks - can often benefit from rates as low as 0.01%, whereas states in the same situation have to pay rates 600 or 800 times higher?
The average European profit tax rate is only 25% compared to 40% in the USA. How ironic! The USA is considered the most liberal country in the world -- but they apply heavier corporate tax rates on profits!
Why does Europe practice such a low rate? Since Ireland and Great Britain joined the EU in 1973, Member States have been forced to lower their rates because of other States lowering their taxes on profits to attract new corporations. Ireland reduced its tax rate to 12% and all other Member States had to reduce their own profit taxes... At the European level, the average tax rate on profits has come down one third in the last twenty years. This converging towards the lowest common fiscal denominator has been one of the main factors weighing on public debt.
To emerge from market dependency and rebalance our public accounts, there is also considerable room for maneuver at the national level through cancelling a good many of the tax cuts that have been granted in the last 10 years to big companies and to the wealthiest of our citizens.
The report, issued by UMP (Union pour une Majorité Populaire) party deputy Gilles Carrez on July 5, 2010, shows that were we to cancel all tax cuts enacted since 2000, the State would save 100 billion more each year. If we simply went back to the taxation system as it existed in 2000 (no one thought it confiscatory or Sovietlike at the time), our deficit would turn to a budget surplus!
French state lost 100 billion in tax revenue
Les Echos July 5th 2010
According to a European Parliament report, 1 to 1 .5% GDP is lost in tax revenue in each EU Member State, due to flight of capital to tax havens. In France, about 20 to 30 billion euros are lost every year. But beyond the rhetoric, no serious action has been initiated as yet to fight against tax havens.
In 2009 Germany, hard hit by the collapse of its exports market, experienced an economic crisis twice as serious as France at the same time. Yet despite this, unemployment increased six times less in Germany than here in France.
|Recession 2009||Unemployment trend|
|Germany||- 4,6 %||+ 220.000|
|France||- 2,3 %||+ 1.200.000|
How may this "miracle" be explained? German unions went to Angela Merkel to demand that dismissal become the last option to be considered, and that the general rule be to keep the maximum of employees, the maximum of skills, in the company by developing Kurzarbeit.
In each of our countries, each month, tens of thousands of men and women lose their unemployment benefits and face social and job insecurity. Given the dire nature of the crisis and the unlikelihood of a quick return to full employment, it is urgent to extend unemployment benefits and improve coaching and access to employment training.
In order to protect citizens’ savings, public finances, and to finance the real economy, the principle of strict separation between deposit banks and investment banks was recently approved in Great Britain. However, lobbies managed to get its application postponed until ... 2019! This is obviously far too late. With the risk of a major crisis erupting soon on financial markets, this reform has to be implemented as soon as possible in order to protect the real economy.
To prohibit banks from speculating on anyone’s and everyone’s money, the "total separation" between retail banks and investment banks must be achieved. This is one of the first reforms that Roosevelt passed in 1 933 when he approved the Glass Steagal Act. When Roosevelt passed this law, he gave banks only a few weeks to implement it. This is an absolute “must” if we want to keep huge global banks from taking European corporations hostage because they are "too big to fail".
If such a tax had been created in 2008, even at a very low rate, it would have already brought in between 250 and 600 billion. The Greek crisis could have been settled quickly without calling for a particular effort from European populations. Why do we continue to hold off in creating such a tax when it would reassure both Germans and other European members that this is the last time they will be asked to make an unfair effort ?
From now on, it is the financial markets that will be called upon to replenish the European Stability Fund.
In 1944, before summoning the Bretton-Woods summit that would reconstruct the international finance system, Roosevelt organized the Philadelphia Summit that established as an absolute priority, respect for a few simple social ground rules: "...Work is not merchandise. [...] There will be no lasting peace without social justice." asserted Roosevelt and the other heads of state before defining regulations on salaries, work hours and a way of distributing wealth fairly between salaries and dividends...
These were very concrete rules to be applied in every country as well as in world trade. Before they were dismantled by neo-liberals, these rules made 30 years of prosperity possible without incurring debt.
Does it make sense to do away with 40,000 construction jobs when the housing shortage in France shows a lack of 800,000 homes, and rent is so high that 1 .8 million families have a hard time paying them ?
No, it makes no sense! Thousands of construction jobs are cut - yet 800,000 homes are lacking! Contributions by local authorities to the housing sector are at their lowest level in 30 years, mainly due a decline in State participation.
As Patrick Doutreligne, Executive Director of the Abbé Pierre Foundation explains: "Given our country’s demography, we need to build 500,000 new homes a year, including 1 50,000 in low income housing, for at least 5 years to overcome the crisis. Today, we build barely 400,000 a year down from 550,000 a year in the 1970s. Obviously we must avoid repeating certain mistakes made in the 70s, but clearly this is a matter of political will."
All recent studies show that the present climate change is swifter and showing more serious consequences than were expected 5 or 10 years ago. The West continues to produce more greenhouse gases each year. Every week, China builds one or two coalfired plants. In Siberia, “permafrost” thaw is releasing large quantities of methane into the atmosphere… The outcome? The production of CO2 and methane grows year after year while the ocean stores less than expected. If nothing changes, we will reach a threshold from which it will be extremely difficult, perhaps impossible, to turn back.
If we want to win this race and save the planet, it’s not enough to talk about “sustainable growth” or to take baby steps towards the implementation of timid international agreements. If we want to win this race and not leave our children an uninhabitable planet, we have to TAKE ACTION. It is necessary that a country, or a group of countries, take action on a large scale and show the world that it is truly possible to divide greenhouse gas emissions by four without sacrificing an agreeable lifestyle.
Developing the Social and Solidarity Economy (SSE) is a key element of the social change we are striving for. The SSE opens the way to an economic and social model serving citizens at a local level. It seeks to produce and distribute wealth more fairly, and to develop economic projects respectful of the people, the environment and the territories. It is the kind of economy that brings people together, one which has already proved its effectiveness and which can be developed in all domains.
Today the Social and Solidarity Economy already represents more than 10% of all employees, as much as 14% in the private sector, for a total of over 2.3 million people working in more than 210,000 organizations. In addition, 19 million French citizens carry mutualised health insurance; more than 20 million hold shares in a cooperative bank; 20.7 million belong to a mutual insurance program; between 11 and 14 million offer their time as volunteers, and more than one French citizen out of 4 belongs to at least one association.
“The issue of working time deserves better treatment than the caricature of a debate we had a few years ago”, declared Benoît Roger-Vasselin, President of the Employment Commission of the French management federation MEDEF, on October 23, 2010. It is very difficult these days to find a steady job before the age of 28 or 30. Then, between 30 and 40, people are expected to work “all systems go” and to achieve optimal success in both their private and professional lives. Finally, around the age of 55, people are tossed away like used tissues, but urged to continue contributing to pension funds, etc. “Obviously, this does not make sense,” added the President to his wideeyed audience. “We must renew debate as to how working time might be differently allocated throughout a lifetime. ”
Today’s sharing of working time makes no sense:
Such a distribution of working time is absurd. It causes enormous suffering, not only for the throngs of the unemployed but also for those who work their utmost, while accepting increasingly stressful or poorly paid jobs out of fear they might be the victims of the next layoff ("If you're not happy, go somewhere else"). The present division of working time primarily benefits shareholders whose incomes have never been as high.
“The extension of Europe to include more countries makes fundamental institutional reform inevitable” said Joschka Fischer, the German minister of Foreign Affairs on May 12, 2000.“ How can we possibly even imagine a European Council comprised of 30 heads of state? How can we escape paralysis with the existing institutions? How can we avoid increasingly skewed compromises and prevent Europe’s citizens from losing all interest in the Union? There is one simple reply to that question: the transition to an entirely parliamentary system.” In an inter-governmental system (the presentone), there are only HEADS of state and HEADS of government around the decision table. On an important question, it is almost unthinkable to vote a HEAD OF STATE into a minority position and risk humiliating his entire country... In other words, there must be unanimous agreement among all 27 before any political change may be made.
With such a system, no political changeover is possible. Paralysis is sure to ensue. And when political leaders are paralysed, it’s the technocrats or the market that end up making the rules.
But if we adopted a parliamentary system, as the Germans suggested in 2000...
“Vote yes to Maastricht and we’ll get right back to work on a social Europe”, promised Jacques Delors a few days before the Maastricht referendum in 1992. He admitted that the treaty gave glaringly insufficient consideration to social issues, but asked the European citizens not to destroy the continental dynamic by voting no. The “yes” to the Treaty just squeezed by (51%).
Twenty years later, as the social crisis continues to deepen throughout the world, European treaties are again under debate. The citizens are sick of promises. It is high time to act.
Regulating trade with China is indeed a fundamental question, but how can we prevent industrial production from being outsourced here inside Europe itself?