"Good" interview (we would have done without!):
http://www.france24.com/fr/20130222-eur ... min-coriat
"Brussels realizes that the economy of the European Union is collapsing"
France, with a deficit of 3,7% in 2013, according to projections by the European Commission announced on Friday, could be given a deadline to reach the 3% target. Analysis by Benjamin Coriat, member of the “Terrified Economists”.
In view of the pessimistic forecasts for the euro zone, released on Friday 22 February, the European Commission has raised the possibility, under certain conditions, of postponing to 2014 the objective of 3% of public deficit for France.
Benjamin Coriat, professor of economics at Paris-XIII and co-chairman of the group of "Terrified Economists", sees a certain relaxation of the position of the European Commission which, according to him, seems today to take into account the devastating consequences of " accelerated return to a balanced budget ", without renouncing the objectives of its policy.
FRANCE 24: How do you interpret the leniency of the European Commission in relation to the deficit that France has announced for 2013?
Benjamin Coriat: The Commission realizes that it has set the bar very high with the European Budgetary Treaty which imposes on the signatory countries an accelerated return to equilibrium ... and that this translates into recession.
The Commission can ease off all the more easily because it has won on the merits. We see this in the case of France, which has embarked on major structural reforms - such as the recent agreement on labor flexibility - and in very significant budget cuts in an attempt to reduce its deficit and its debt. The Commission has every interest in not putting too much pressure on the member countries to continue to follow the path it has traced.
F24: Can we talk about coaster?
BC: I would like to answer yes. The Commission realizes that it is not working, that unemployment is exploding, that the economies of the member countries are collapsing. In this sense, yes, there would be back pedaling. But this attitude is only circumstantial because the Commission has obtained significant counterparts: the States are nevertheless engaged in policies of cuts in their social spending. The Commission, intelligently, is ready to ease off to stay the course.
However, it is obvious that the economic policy imposed in Europe today does not work, neither economically nor socially. In Greece, it is a monumental failure, with catastrophic social consequences. Greece is massacred in silence. In Spain and Portugal, it doesn't work any more. Unemployment in Spain affects more than a quarter of the active population, the sick have no medicine, we can no longer pay for pensions… It seems that Ireland is more or less getting away with it , but with unemployment of 15%. Big deal !
F24: As an economist, what policy do you defend for Europe?
BC: What many economists advocate is not to moderate public debt and the adjustment of spending at the expense of employment at all costs. The Commission's policy boils down to this: 'too bad if unemployment reaches 15, 20 or 25% as long as spending is balanced'. It is a completely suicidal logic.
We, the “dismayed economists”, propose an opposite reasoning: a policy that allows to return to high activity and growth so as to be able to repay the debt, but over a longer period. Debts should be paid over 15 or 20 years. We cannot envisage returning to balance over three or four years, as we can see today! Attention, the question is not to avoid paying the debt ... but to relaunch the activity in order to be able to repay it, by adjusting deadlines and conditions.
We are not the only ones to say that. The OFCE [French Observatory of Economic Conjunctures] holds the same point. It is also that of the Nobel Prize for economics Joseph Stiglitz and Paul Krugman who launched an appeal for a return to a "reasonable" economy. Unfortunately, the Commission is determined to play debt against unemployment.
F24: Why does it persist in this way?
BC: Everything is done in the interest of Germany. It is Germany which at the moment really holds the reins of the European Commission. Berlin benefits greatly from this 'accelerated return to balance' policy. It is the only country in Europe to have an economic structure that is already in balance, in particular because it has a catastrophic demography, so it does not end up with the problem of young people who struggle to find jobs. Germany's economy, which is very export-oriented, enables it to benefit from a strong euro and to record huge commercial profits. At the expense of its European neighbors: it is enough to look at France, with its 10% unemployment, with its deficit forecasts which go from 3% to almost 3,7% ... In fact, everything is a problem of imbalance of general governance of the European Union. Europe must be rebuilt if we want to give it a chance.
