Paul Jorion: ‘Jean-Claude Juncker’s moral authority has been damaged’

Paul Jorion © Quentin Caffier

In an Interview with EURACTIV France, Paul Jorion calls for a U-turn in European policy and for the cancellation of eurozone debt.

Paul Jorion is a researcher in social sciences and a professor at the Vrije Universiteit Brussel. 

Does the LuxLeaks scandal represent a risk for the Commission?

Jean-Claude Juncker’s moral authority has been damaged. Of course, he hopes his investment plan will bring confidence, and it is a good idea. Especially if it can create employment and give purchasing power to European citizens. But his credibility has been tainted by the revelations about Luxembourg’s fiscal practices.

The current head of the Commission is the man who led the implementation of austerity policies within the Eurogroup, at the same time as organising tax evasion for big companies in Luxembourg. Member states lost billions because of him, and now he wants to impose austerity policies on us. This is an untenable position.

The European Commission’s economic growth predictions are being brought down all the time. Will this continue?

It is obvious that the Commission can only disappoint us with its predictions. Austerity policies have been condemned from all sides, from the IMF, even the OECD itself, but the Commission continues to implement them. The EU is now approaching a period of deflation, which is very bad.

Where do you think the EU is going wrong with its economic policy?

The Commission does not understand, or claims not to understand, what is happening in the labour market. Studies have proved that employment levels are sensitive to the increase of automation in the workplace.

We are witnessing the deindustrialisation of the EU. The latest report from Roland Berger consultants on this subject shows that the value added by industry to the European economy is plummeting. Mechanisation, in all forms, will cause jobs to disappear once and for all.

Our leaders are on another planet. There is a growing gulf between citizens and politics in general. Since the 1980s, we have been stuck with a programme of neo-liberalism, which is not working.

Which recent decisions do you think are a step in the right direction?

The EU’s adoption of the objective to reduce greenhouse gas emissions by 40% by 2030 is a cause for celebration. But let’s not forget that in order to stop the planet’s surface temperature rising by more than 2°C by 2050, the IPCC says global emissions will have to be reduced by 70%.

On tax havens, it is the same thing. There is some progress, some real changes, like the future generalisation of the automatic exchange of information between states. But this is only a start.

What do you think of the renewal of the European Institutions, as it happened this year?

The hearings of the new Commissioners in the European Parliament demonstrated a patent lack of judgement. We have a Culture Commissioner from a right wing party in Hungary and a Climate Commissioner with a financial interest in oil. It’s absurd.

Have you seen any changes to the economic models the institutions are following?

It is true that within the OECD, the influence of people like Olivier Blanchard is growing (particularly on the fight against tax evasion, ed.). The independent evaluation office of the IMF is critical of the austerity policies that have been implemented. But the IMF has blood on its hands! It has reduced life expectancy in Greece, and infant mortality is increasing.

Small changes are not going to change the big picture. We need a complete U-turn to get European policy back on track.

Should we keep the euro?

I think the euro needs to be kept to cement the Union together. But it may disappear if we do not change the way it works. There is severe friction between Germany and the European Central Bank, to the point where Germany could well leave the eurozone if tensions intensify.

As a primary emergency measure, the EU could pool all eurozone debt. But the best thing would be to organise a general default of public debt in the eurozone. After all, public debt is mainly owned by the banks. That would pave the way for federalising Europe, which is important.

We have handed Europe over to big business, and it is time for politics to take back the reins, because this has led to the rise of populism. The European project is very controversial, but rather than listening to the arguments and taking them into account, the Institutions behave as though they do not exist. Me, I am pro-European but I am not allowed to participate at the Commission, I am not invited to the debates because they don’t agree with my views. This is not normal.

The European Commission is currently negotiating a free-trade agreement with the United States, the TTIP. What do you think of it?

The world’s most reactionary and unimaginative policies are European. For example, the United States has refused to integrate finance into the TTIP, because the EU’s regulation is not up to scratch; it protects the banks and the bankers more than any other country. On the settlement of disputes, resorting to arbitration is a disastrous idea. We cannot call into question the basic principles of the law, which should be applied to all disputes. The risk of a conflict of interest is too great.

Finally, the question of secret negotiations is indefensible. When things are done in secret, they must be dishonest. I believe that if the negotiations were published, the public would realise that they are led by lobbyists: it is they who prepare the texts. This is a problem! 

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