German Finance Minister Wolfgang Schaeuble is a frustrated man. With unemployment rates in Germany hovering at around 8 percent, and Greece and Spain at almost 60 percent, he believes the EU is on the brink of “revolution.” His answer is not to scrap the welfare model however; he wants to preserve it.
While Germany insists on the importance of budget consolidation, Schaeuble spoke of the need to preserve Europe’s welfare model.
If U.S. welfare standards were introduced in Europe, “we would have revolution, not tomorrow, but on the very same day,” Schaeuble told a conference in Paris.
Not everyone agrees. Italian Labour minister Enrico Giovannini says European youth are being asked to put their lives on hold, and that this is “unacceptable.” Werner Hoyer, head the European Investment Bank, acknowledged that there is no plan at this point to direct the spiraling downturn of the EU economy. There is, instead, a country-by-country “patchwork” approach. For instance, Greece is attempting to focus on job training and entrepreneurship for 350,000 young people, and France is working on a similar plan within its own borders.
In Becoming Europe, Samuel Gregg (Acton’s Director of Research) addresses this issue. In early 2011, young people began protesting across Europe due to their economic plight.
One of the most common complaints of the “indignant ones” (as they called themselves) was their inability, after several years of higher education to obtain anything other than part-time contracts.
These los indignados were frustrated by having to live with parents for longer and longer times, and having virtually nowhere to use their educations. But as Gregg points out, these young people aren’t seeing the true economic picture:
It is sad to report…that los indignados were not protesting against overregulation and other labor-market rigidities demanded by unions and conceded by governments. By and large, the indignant ones wanted exactly what unions had helped secure for their parents and grandparents: jobs for life, free health care, state-guaranteed minimal incomes, six weeks of paid annual vacation, early retirement, and generous state pensions. In other words, they wanted Social Europe. Far from being revolutionary, they were firm status quonarians.
The EU economy is being squeezed to death by enormous taxation, top-heavy entitlement programs nations can no longer afford, and the lack of promotion of free enterprise. People are simply not incentivized to flourish economically. This isn’t a revolution. This isn’t even stagnation. Dario Fo, the Italian playwright, may have gotten right:
Do people demand a really just system? Well, we’ll arrange it so that they’ll be satisfied with one that’s a little less unjust … They want a revolution, and we’ll give them reforms — lots of reforms; we’ll drown them in reforms. Or rather, we’ll drown them in promises of reforms, because we’ll never give them real ones either!!
