In case you missed this breaking through development: German Chancellor Angela Merkel must have got off her bed this morning in a cheerful mood and a teasing sense of humour. Speaking from far-away Berlin, Merkel sends her messages to world public in general and the citizens of bailout EU-countries in particular. Merkel said that:
1. “Painful reforms in Greece, Portugal and Ireland were already showing results”
2. More EU solidarity that leads to “more competitiveness”.
In case you haven’t seen the ‘results’ (1.) yet, you will see them (2.) soon.
Then this much-praised ‘competitiveness’ swinging above our heads like a Damocles sword, it doesn’t include anything else except a bad omen of XXL-size. I must confess, I have not much idea of what’s going on in Portugal, Spain or Ireland concerning the labour rights. But experience shows, what the Troika imposes first in Greece, it soon does the same in the other EZ-countries in need, with or without bailout.
I wasn’t much surprised today to hear also Sweden’s PM Reinfeldt taking position on the competitiveness issue. “Europe is losing in competitiveness from Asia, Latin America and Africa. That’s where we need to work on,” he said.
Reinfeldt’s concerns are more than undertstandable. With such high salaries and such perfect social and welfare state in Sweden, one can easily say “we in Europe lose in competitiveness.” Why should anyone invest in Sweden, when half of the European Union and Euro area are falling apart? Why Sweden does not cuts salaries and taxes to boost the country’s competitiveness? Just like in Greece or Portgual?
What is Competitiveness?
Of course, competitiveness is not just about cheap labour forces, with minimum wages, no salary hikes and no compensations, 10-working hours per day, preferably part-time work without social security, no paid holiday, no healthcare and no pension and consequently no rights at all. In simple PIIGSish, we could call this “delete labour rights” or “kick workers’ a****”.
But Competitiveness has also to do with investment capital and growth and consumption.
But how can investment capital flow in countries with unstable economies like Greece, Portugal or Spain?
Who will risk his money in a country like Greece where the taxation system changes once every 12 months and bureaucracy full of red tapes kill every business effort? To the disadvantage of the investor/businessman, of course…
“Competitiveness” in Greece has a clear frame work scheme:
1. It kicks off with a permanent rising high taxation in form of regular and so-called emergency taxes, lowering tax-free amounts or even better get rid of them at all.
2. It primarily kills small businesses & medium enterprises. It also sends big companies away.
3. It raises unemployment, overthrows labour rights, dumps the minimum wages to absolute necessary and creates cheap because desperate labour forces.
4. It forces skilled workers in their best production age (24-35) to leave the country.secures a stable competitiveness environment for 10 years.
5. It secures a stable competitiveness environment for a period of 10 years.
6. It leaves behind unskilled workers so that one can hire them on the minimum wage. And have them earn just enough to cover basic needs. It gives them some basic training to carry around screws and push the buttons on simple productions machines.
After this stage is being completed, the environment for investment, development and growth is ready. For the countries of the rich North. Then spending consumers sit there, not in Greece or in Portugal.
Long Live the Common Currency!
Angela Merkel said also something else, repeating what Finance Minister Wolfgang Schaeuble said a day earlier:
“Europe has to create a powerful monetary commissioner with the authority to intervene in national budget processes in order to ensure the stability of the euro currency.”
But this is an issue, that the EU-member states politicians have to swallow. We, voters, are not asked about our opinions anyway.
We are just here to help draw the “contours of a stability union and to bolster the euro against future crises,” as Merkel told us.
Do not misunderstand me. Although I personally I am not the competitive-type, I have nothing against healthy competitiveness. But when it comes to destroy countries and people’s lives, Yes! i am against it!
PS Thanks to a KTG-reader for the inspiration 🙂