European Solidarity on Trial – is there Friendship after Money?

f_n_s_vortrag_30_01_14 (127)Solidarity among its member states should be a given in a stable and successful European Union – but are large redistribution mechanisms per se an expression of solidarity? Is mutualizing national debt really the right way? Opinions about the practical application of “solidarity” differ vastly between states as well as party lines.

In front of more than 160 guests of the Friedrich Naumann Foundation for Freedom (FNF) in Berlin, Michael Link, former Minister of State at the f_n_s_vortrag_30_01_14 (213)German Foreign Office, claimed that “in order to confine the risks and reestablish trust in the European Union as well as the Eurozone, we need common rules without a scope of interpretation. Especially for liberals, solidarity based on rules – or ‘macroeconomic conditionality‘, as it is often called by politicians – is a prerequisite for the functioning of the Union as a whole.” The new German government of Conservatives and Social-Democrats had sent out a “disastrous signal” in softening the austerity measures previously agreed on by everybody. “This does not help anybody; in fact it even harms the recipient countries in the long run.”

What does solidarity mean in recipient countries? This was addressed by Josep Soler, Chairman of the European Financial Planning Association (EFPA) from Spain, Dimitrios Katsoudas, Director of the “Forum for Greece”, and Dick Roche, former Irish Minister for European Affairs and current ALDE Vice-President. Dr. Volker Wissing, Member of the Executive Committee of the FDP, then replied from a donor countries’ perspective.

f_n_s_vortrag_30_01_14 (189)Josep Soler agreed on the fact that the recipient countries of Southern Europe would have to act responsible since they would obtain tax payers money from other states. What in his view was missing in the whole debate was “responsibility from the donor states” since they had also contributed to the current situation by irresponsible fiscal policies in the last decades. He thus called for a joint and sincere tackling of the crisis by the European leaders because “solidarity as it is currently expressed by continuous money transfers from the European partners is a perfect reason for the acting governments of Spain and Greece for not implementing the necessary reforms.”

Dick Roche shared his insights on the tough negotiations between the Irish government and the European Central Bank (ECB) back in 2010 and focused on institutional flaws which should be f_n_s_vortrag_30_01_14 (94)eliminated in order to make solidarity among European member states feasible. He claimed that “it is impossible to have a currency without a proper central bank”. He sharply criticized the “mediocre crisis management of the ECB” during the Irish crisis when the ECB had been largely “ineffective in regulation”.

Dimitrios Katsoudas explained that the abandonment of liberal traditions and values in Greece since the 1980s has led to today’s catastrophic results. He demanded a “stronger and more honest control by the troika” because neither the Greek government nor the opposition would be willing to structurally reform the country with necessary vigor.

According to Dr. Volker Wissing, all problems derive from the misuse of freedom. “What we have seen so far is a permanent flight out of responsibility from the governments in charge”, he said. “Of course solidarity comes at a cost and this is totally fine as long as the results are satisfactory.” In times when the common good is determined by the interconnectivity of events, “more Europe instead of less Europe” would be the answer. “Who would have thought that the collapse of the German ‘Hypo Real Estate’ threatened Spain which had no direct link to this bank, or that the liquidity squeeze of the f_n_s_vortrag_30_01_14 (147)Spanish ‘Caixa’ would threaten Germany? As such threats simply cannot be dealt with by national parliaments, a stronger Europe is badly needed. This call for a stronger Europe, wherever necessary, distinguishes real liberals from populist parties, which all too often call themselves ‘liberals’. Let me reassure you: They’re not.”

The discussion was the first in a series of public events on European issues which the FNF will conduct in the run-up of the European elections. More than twenty events all over Germany will follow.

Markus Kaiser
Pictures: FNF-IP