Former EU social chief: Beware protectionist ‘boomerang’

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Greek member of Parliament and former Commissioner for Employment and Social Affairs, Anna Diamantopoulou, told EURACTIV in an interview that Europe should fight protectionism, which she sees as a ‘boomerang’ that hits back countries trying to restrict competition and free trade.

Former EU Social Affairs Commissioner Anna Diamantopoulou is a Greek social democratic (PASOK) MP.

To read a shortened version of this interview, please click here.  

The economic crisis is starting to trigger social unrest in many countries across Europe, like Greece, France, Latvia and the UK. This week, French unions met with Sarkozy and tried to convince him to add a social dimension to the economic stimulus with tax cuts and extra welfare spending. Do you think that there is room to make those recovery packages a bit more social? 

It is not always very clear what we mean by ‘social’, because what can be ‘social’ for a government or a company might not be for the workers. For the time being, the first victims of the crisis are the weakest members of society. 

So, our first priority should be to support the real weak people and not all the people. We must have priorities. In each society, we can define the criteria and the pre-requisites in order to support these people. This means that there are different kinds of workers. There are workers in the public sector. There are workers in the private sector, industry, in services, in permanent or temporary employment. There are unemployed people, retired people. 

I believe that for the next two years, we should make it a temporary, not permanent, priority. These must be European priorities and national priorities. This is not the case at the moment. 

What kind of measures are you thinking of? 

For these very weak members of society, there is a need to support demand. That could take the form of benefit or projects, particularly training. 

After the crisis we’ll face the day zero and many people must be ready. We are usually terrified when we speak about benefits, because the situation is very bad. But it will be a real disaster if we leave the weakest part of society is left without support. 

That will have critical consequences on consumer behaviour of these people and the level of consumption. That will trigger very serious social unrest, which will have big consequences in the whole performance of economies, as we will have a big part of the society that will be on the fringes. 

One of the main sectors being crunched by the crisis is the auto industry. The car bailout unveiled in France and Spain hint at protectionist pushes. Isn’t this killing European solidarity for the sake of saving national industries and job markets? 

I would say that we must clearly fight against protectionism, which can be a real boomerang. When you throw it, it comes back to you. 

But since the European Union is not a political entity and we have a monetary union but not an economic union, we know very well that there is no economic authority, there is no economic common policy and at the same time, we accept non-respect of the competition rules, we accept state aid. It is obvious that the next step will be protectionism. 

So, on one side we say that competition rules are the same for all of us. If they are the same for everybody, it means that we cannot accept state aid. This was the basic idea of state aid. 

Governments say ‘okay, but this is money from my taxpayers, because we do not have the same taxation in all of Europe, and finally say: with our money for a few months and with the derogation of the competition policies, I want to support my own country. This thing will not have an end. 

I believe that if we do not have common rules, we cannot accept a common feeling of respect. I can say this in my own country [Greece], where there is a debate about supporting the subsidies of the banks in the Balkans. Should we support these subsidies with Greek money in Turkey, in Bulgaria in Romania? 

The answer is not easy. We know that they are very important for our banks, for national banks, but at the same time, in a country with lots of problems, do we use people’s money to support investment in other countries? 

So, instead of quarrelling politicians between countries, it is urgent for the Commission to bring again the rules to have a common list of rules for the crisis. It has to do with the economy, with competition, with social priorities. 

You know that in competition policies, there are social exceptions. So let us have some rules. Otherwise, everyone will work in his yard in the short term. But only leadership can bring about a change of rules. 

Competition Commissioner Neelie Kroes this week took a tough stance accusing some European leaders of lack of leadership and bribing multinationals and stealing jobs from neighbours. So this lack of leadership is a big problem. What do you think can be done to resolve it? 

I agree. It is a big problem. We have interesting and brave capable leaders at the national level. We do not have European leaders as we had fifteen years ago. But the leader who takes a European initiative at this critical time will write history. 

As for the Lisbon S trategy, later dubbed the Growth and Jobs Strategy, much of the social pillar has been sidelined. All the major targets are far from being met. How is the strategy seen from Greece? 

Is it actually working? A few years ago, I wrote an article about the Lisbon Strategy. The title was ‘The Lisbon Strategy has neither friends nor enemies’. What I meant by that is that the Lisbon Strategy was an agreement. There was nothing compulsory. So leaders could very easily agree, go back to their homes and do nothing in order to reach the goals. 

I believe that these kind of exercises are interesting because they give to the governments orientations and ideas. But if they do not have concrete goals according to which the member states have to be evaluated, they have no results. 

Let me just remind you that we had agreed initially that every year we report achievements of the member states. And there would be a comparison not between the countries but a comparison of each country to the previous year. 

In 2005, the Commission decided to stop presenting this list because of course it was a political tool and it was not very well accepted by the governments. 

To cut the long story short, the Lisbon Strategy was a very good idea. It was a very good plan. It can help governments to organise their policies, but it is not an instrument that can write success stories. 

So what should the post-Lisbon agenda be? 

The post-Lisbon agenda will be a post-crisis agenda. I believe that many things will change in the world and in Europe as well. Particularly in the areas of employment, of social policies, workers’ rights and competitiveness, we can be more committed. We will not have any other solution. 

To give you an example, the Czech Republic decided to delete the goals agreed on child facilities. We had agreed about daycare for very young children: these things are very important for competitiveness. Now, the Czech Republic wants to delete these goals, which shows there is a lack of understanding, and in my point of view, a very neo-liberal approach of what we need at the European level. 

This cannot be the situation after the crisis. I have hope. It is more an intuition, than a political statement but I believe Europe will invest again in the basics: Education, child care, gender issues, workers’ rights…because all of these are a very important for the European human capital and development and for the role that Europe can play in the world. 

Is it realistic to expect to develop a knowledge-based society? How far are we from this goal and dream? 

It is not a matter of realism. It is a must. European member states cannot compete in a world, with new big countries like China and Brazil and India, without having a new background. We cannot compete in heavy industry, we cannot compete in labour-intensive companies. We need new skills and new infrastructures. We need to invest in new technologies, in new ideas and infrastructure and telecommunication. 

We have to invest in new ideas and infrastructure in the education system. There are some countries which are on the right track and have changed their development models. But the majority of member states and in particular the newcomers, they have big problems in achieving the goal of transforming into a knowledge-based society. It is a must for any other economic development in the future. I believe all European funds should be conditional on the transformation towards a knowledge-based society. That is surely true for my country as well. 

CSR was put on the EU backburner after your term as a commissioner. Can climate change and the financial crisis, and subsequent calls for increased regulation, benefit the development of a mandatory EU framework? 

We very much need a new culture. Let us just hope that after the crisis…it is very obvious that there is a need for a new culture of cooperation among enterprises, workers, NGOs and authorities. This is exactly what the CSR multi-stakeholder forum did. It brought them all together. 

Everybody should give something in the public interest. Companies are now drawn into doing a lot in environmental responsibility, which could also help the social dimension. 

Are you going to run in the European elections ? Or are you staying in Greece? The Socialists have proposed their manifesto. Do you actually see those manifesto proposals being picked up at national level by your party, PASOK, for example? 

PASOK has already translated the manifesto into Greek and has taken many initiatives in presenting it. 

To be frank with you, I do not believe that in these elections, politicians and people will deal with European issues, at least not in a positive way. We all know very well that in each member state, there are huge problems and the European elections, I am afraid, there will be a fight between government and opposition. 

Two ideas for these European elections: focus on concrete proposals and propose names. We need to pick up two or three proposals from the manifesto to make it a bit more concrete: to say this is what Socialists say about the crisis for Europe. We should also present some names for the president of the Commission. 

We need to give Europe a face and tackle the dilemma of more or less Europe in order to respond to crises. In my opinion, the answer is more Europe, because if at the end of the crisis, we have a weaker Europe, it will be a crime not only for the idea and the fight for all these years, but for each country itself, we have to bring in the debate in a hot way the need to have more Europe, even now during the crisis. 

The idea of more Europe has been hijacked by Eurosceptics in some countries. 

Do you see Eurosceptics becoming more prominent in Greece and in Europe?

In Greece, no. In Greece, it is true that it is the first time that there is a negative climate for European affairs and European decisions, but still all in all, the people are still positive about the European project: They feel protected by belonging to the European family. But at the same time, we must not underestimate the fact that in all parties, in the conservatives, even in the social democrats, there is a big percentage of eurosceptics, which was not the case in the past. 

At the Congress in Madrid last December, European socialists failed to nominate a candidate for European Commission president. Prominent socialists like Jose Luis Zapatero (Spain) and José Socrates (Portugal) declared last year that they would support a second term for current EPP-ED Commission President José Manuel Barroso. In the meantime though, Barroso is losing ground and credibility, even in his own political family. Who do you think could be the next president? 

Just to be very frank with you, I believe that if we want to give political substance to Europe, we must be clear with persons and ideas. Barroso is a very conservative politician. I do not believe that he could be supported by social democrats. 

It would be a mistake for social democrats to support a conservative politician. I do not want to refer to names, but I do think that it would be a good idea to propose a woman. And I think that there are many very competent women at European level who would be interested in doing this. 

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