On 19 January, Tony Blair gave an interview to the European newspaper. He made plain his belief that ‘not just socialism but social democracy as practised in most of Europe is past its sell-by date’. The reason for this judgement is said to be that social democracy has been unable to solve the problem of mass unemployment. But social-democratic solutions, developed in the Delors White Paper, and in the two Coates’ Reports on employment, followed by a number of other reports culminating in that of van Velzen last year, have been blocked in the Council of Ministers, with the active support of Tony Blair himself. This struggle has been personalized as one between Blair and Jospin: but it really ranges Tony Blair against, not only socialist policies, but even against the more enlightened Christian Democrat politicians, as the interview makes clear. Blair’s commitment to deregulation ‘puts him to the right. . .of a Christian Democrat like Germany’s Helmut Kohl’.footnote1
A target for the end of the century of creating fifteen million new jobs in the European Union was set in December 1993 by the European Commission under the Presidency of Jacques Delors. The proposal was made in a White Paper entitled Growth, Competitiveness and Employment, subsequently known as the ‘Delors Report’. It included measures both to improve the ‘employability’ of the labour force, and to set up investment in job creation. This was to be achieved by joint and common initiatives comprising the use of new European-wide financial instruments, in particular the issue of Europe’s own ‘Union Bonds’. The urgency of these measures arose from the high existing rate of unemployment—nearly 11 per cent in 1993—and the anticipated deflationary effect of governments’ fiscal tightening in the run-up to meeting the convergence criteria agreed at Maastricht for entry in the Economic and Monetary Union.
In the four years that followed, thanks to various forms of ‘statistical revisions’ and creative accounting, the actual fiscal tightening had been somewhat less than had been anticipated, but the total (net) borrowing by governments has been reduced from 6 per cent to 3 per cent of the Union’s gnp. At the same time, practically nothing has been done to establish a countervailing European Public Sector Borrowing Requirement. This failure has been in spite of two reports from the European Parliament, passed with overwhelming majorities in 1994 and
The result should surprise no-one. The unemployment rate remains in 1998 at just under 11 per cent. That means eighteen million men and women officially unemployed throughout the Union. Many more are without work, but uncounted. Even more serious, economic growth of European gdp at an average 1.5 per cent a year between 1991 and 1996 failed to increase the numbers employed. Indeed, they fell year by year by nearly half of one per cent a year. Most of this fall was in 1993, but since then, while there has been an annual average increase, it has been at a rate of less than half of one per cent a year. That means that, with an employed population in 1993 of 150 million, less than half a million new jobs were being created each year. At that rate of growth, seven years on from 1993, some three to four million jobs would have been added, not the 15 million by the end of the century, as envisaged in the Delors Report. 10 per cent of Europeans would still be unemployed.
But the real European employment situation is much worse than official figures have recorded. And the outlook is less rosy than official forecasts indicate. The impact of the severe crisis in Asia, in particular, could undermine European growth forecasts, and flood European markets with unbeatably cheap goods. The stringencies imposed by the Treaty of Maastricht have indeed inhibited social and public spending, and restrained recovery. But far greater restriction could follow the pursuit of Agenda 2000 for the widening of the European Union if vast sums of money are not raised through loans or taxes, or both, to cushion the process, underpin social cohesion, and improve levels of investment in infrastructure.
Poverty already passes any tolerable level in the West of Europe. Some of the results of unemployment in Europe have been revealed in the latest undp Human Development Report for 1997. Figures for the early 1990s show Ireland, Spain, the Netherlands, the uk, France, Belgium and Germany, all having over 12 per cent of the population below the poverty line, defined as an income per person of below $14.40 a day. And the Report comments on the setback to progress which followed the early 1990s in Europe: ‘The incidence of income poverty increased substantially in the uk, marginally in Belgium, Finland, Germany, the Netherlands. . .one in six children. . .in the uk is income poor. Income poverty is alarmingly high in one-parent families, and families headed by elderly women’. The Report explains the reasons as follows:
Governments, particularly those in the European Union aiming to meet the Maastricht criteria, have concentrated on keeping inflation low, reducing public debt and stabilizing exchange rates. The
race to fulfil the criteria for a single currency has meant separate and damaging deflationary policy in each eu country. These policies all contribute to further impoverishment, and are matters of public choice.