Invest in youth! Young people call for sustainable fiscal policy

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

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Europe’s youth faces tougher challenges than previous generations. But while they persistently pay the price for economic crises, we know that it doesn’t have to be this way.

As EU Finance Ministers open the debate on budget rules, it’s time to ditch the myth that public spending today will weigh heavily on future generations. We call for a new economic reality where intergenerational justice is a key component of the European Commission’s Economic Governance Review.

On 10 September, the finance ministers of eight EU member states signed a letter calling for the reintroduction of strict fiscal rules. Due to the pandemic, these strict rules have been suspended until 2022 to enable countries to effectively deal with the consequences and recovery.

Countries like France, Italy and Spain are approaching this debate with progressive propositions to increase flexibility and stop relying on arbitrary rules. Conversely, the Austrian-led offensive seems to be a show of force before the negotiations open.

The problem is, we’ve been down this road before. We all know where it leads. Reinstating these regulations will be done in the name of consolidation, efforts to reduce excessive debt or a return to the Stability and Growth Pact.

But, make no mistake, no matter in what guise it appears, the true name of this policy is austerity and it always has the same result: dismantling of essential public service, growing unemployment and inequalities and, in the end, the widening of intergenerational injustice.

Young people in particular have a lot at stake. Covid-19 has reinforced pre-existing trends undermining their participation and inclusion in society. Youth unemployment now hovers around 17% in the EU, with well-known and tragic consequences.

What’s more, as the climate crisis continues to worsen, young people all over Europe and the world on the front-line of the crisis are facing a future that is both uncertain and threatened. This makes the world look grim for many of us, and mental health figures are showing rising levels of anxiety and depression. All this makes us worry: will the pandemic leave a scar on this generation?

Is this the right context to tighten the fiscal rules? We have strong doubts. Fiscal hawks are back, spreading the usual narrative depicting today’s public spending as a burden on future generations. But have the younger generations been consulted about it? Spoiler alert: they haven’t. And while this myth has been debunked, its legend has survived.

Challenges facing young people need public support to be tackled – and will continue to do so. The tools to turn the tide are available: policymakers must invest now in a sustainable future. This means funnelling public spending towards several priorities: formal and non-formal education, clean energy and sustainable mobility infrastructure, healthcare and welfare. As Finance Watch urges in their report “Fiscal mythology unmasked, “intergenerational equity commands investment that builds a resilient and sustainable world.”

Public investment is good for young and future generations. Not only will “investment costs weigh less on future generations’ shoulders than the cost of failing to do so”, but they are also at their lowest point in modern history. The ultra-low interest rate and flattened-yield curves environment is the perfect opportunity to lock in the quality investments we need.

This is exactly what the youth of Europe have been asking for: public investment and government involvement in a fair ecological transition. Whether they strike on Fridays, take to the streets on Global Climate Action Days, or organise online to spread the word, they are advocating for more ambitious engagement of their governments and institutions. Most of all, they understand that climate change brings huge risks that cannot be set aside for a couple of arbitrary technicalities.

Too often important policy decisions happen behind closed doors when what we actually need is an open and accessible debate.

The European Commission is set to reopen a wide public consultation to reform its fiscal framework this Autumn, and the young voices of the continent must be heard. That is why the European Youth Forum, Finance Watch and other NGOs partnered up to build the Fiscal Matters coalition. Everyone has the right to be fully informed about – and have a say in – fiscal policy.

The first step in opening up the vital debate on Europe’s future to everyone is a four-day discussion and debate on the future of EU fiscal policy. Running online across Europe from 27-30 September, the week will highlight a wide range of perspectives, present recent academic work, and connect people who recognise the importance of fiscal policy in our shared future. Speakers including Joseph Stiglitz, Yanis Varoufakis, Frances Coppola and Mariana Mazzucato will discuss new ideas and potential solutions that could bring a sustainable and just future to the EU.

Join the debate on fiscalmatters.eu and be a part of the discussion. Whether you are a policy-maker working on economic governance, an activist fighting the climate crisis, an academic connecting the dots between the two, or a curious mind for which fiscal doesn’t yet mean a thing – this debate is for you. Fiscal policy matters for all of us in steering the required transformation of European economies onto a just and sustainable footing!

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