Higgins:Austerity model is flawed

The economic model being used to force austerity on countries is flawed and needs to be changed to offer real solutions for real problems such as unemployment, President Michael D Higgins told the European Parliament yesterday.

Members of the parliament rose to their feet at the end of his address to applaud his plea for people to be offered a real choice between different economic models, and not just a variation of the same thing.

He warned about political leaders taking their cues from credit rating agencies that were accountable to nobody, saying these agencies had been proved incompetent even in their own sphere having failed to predict the weaknesses of financial institutions that led to the crisis.

“The idea that populations of citizens in Europe would be living in fear of the response of rating agencies that have been more than proved to be fallible would be so wrong and we have to take decisions and make our Europe together,” he said.

President Higgins, who is 72 today, appealed for real dialogue between leaders and their citizens and between people from the different parts of the EU, saying it was dangerous that enmities were being created between countries, with some regarding others as being of a lesser status because the state of their economies was different.

He had noticed “competitiveness” took on the same weight as “cohesion” and “solidarity” during the debate on the Lisbon Treaty, but solidarity and cohesion have disappeared from EU speeches in recent years.

The EU was now at a turning point and must turn away from models that tried to fit people into the prescribed solution, rather than creating a solution to benefit people. Rather than defining Europe as an economic space where the strong and the weak do battle, people yearn for solidarity, cohesion and a response appropriate to an evolving political union, he said.

Europe was more than an economic space in which citizens “are invited or required to deliver up their lives in the service of an abstract model of economy and society whose core assumptions they may not question or put to democratic test in elections”.

“This is a serious challenge, not least because if we were to fail we run the risk of an economic crisis leading to a crisis of legitimacy for the Union,” said President Higgins.

“The single biggest problem, the biggest scar is the unemployment problem and not just because of the very big youth component.”

With 26m people, including 5.7m youth out of work and 115m at risk of poverty, resolving this was an urgent task, he said.

The EU had struggled to “match the speed of their reaction to the ferocity of the onslaught” from sources at times that are not accountable, he said. Citizens were suffering the consequences of the actions of bodies such as rating agencies.

People saw the EU’s response as not up to the task and not showing sufficient solidarity with them.