Inclusive Growth: The Positive Illusion Front

For those not in the EU "bubble"-a short contextual note: Currently discussions/consultations are taking place at EU level on the future of EU Cohesion policy. This accounts for about 35% of the EU budget= about €347 billion for the period 2007-2013.

On monday of this week I took part in the The EU Cohesion Forum-this is EU style "consultation" with about 700 people , all from inside the EU bubble, being asked to comment on the future of EU Cohesion policy in the period 2013-2019.(Yes its January 2011 but this is the nature of the snail like institutional framework that vested political groups and interests have cobbled together).

I first found myself in a workshop which focussed on "sustainable growth"-one of the key pillars underlying the EU 2020 strategy. I left after 45 minutes when it became clear that "sustainablity" was simply being presented as a "technical issue" for which , we just need technical solutions like: the polluter pays;Carbon Trading schemes; investment in renewable energy(including nuclear);carbon capture technology etc.
When will the message get through that "sustainability" also has a large social justice element. Climate change is a social justice issue as well as a technological and life style change process.

So then I found myself in what was called the "Inclusive Growth" workshop.This again is one of the key pillars of EU 2020.

Sadly what I encountered here was the "Positive Illusion Front(PIF)".The PIF is infact key institutions which make up the fabric you find inside the EU bubble.So the PIF included the EC(in the form of the European Commissioner for Employment Social Affairs and Equal Opportunities;ETUC;EP(in the form of the rapporteur on ESF); ESOC(the president no less); EAPN and the Slovenian Minister of Labour .

On the question of how can we have inclusive growth, the PIF created a message in two parts:
On the one hand we've been through a serious crisis;there are signs of worrying disparity;levels of unemployment are worrying; there is a gap between policy and implementation; we need to engage more stakeholders.

But on the other hand, we can address these issues by: re-inforcing partnership by remembering that it takes two to tango;simplify administration and financial control;strengthen the Social Inclusion process;implement active inclusion;connect the National Action plans for Social Inclusion and Protection to the National Reform programmes and above all lets keep ESF as it is in terms of function and institutional oversight.

So for the PIF inclusive growth is also just about better technical regulation.

We live in times in which the PIF is accendent. Positive thinking has become the "soma" of failed institutions and processes.The PIF has successfully removed the EU project from virtually any contact with the world outside the EU bubble.The PIF is a perfect tool for creating existential policy and promises.The PIF has its collective head so far up its own arse that any concession to "external reality" is simply ignored.

Let me explain what I mean- here are some of the external evidence based facts that the PIF simply smiles at and moves on as if they have no consequance in terms of inclusive growth:

1.Growth in the EU since about the mid 1970's has resulted in in greater inequality and thus less inclusive growth. The model we have is inherently "non inclusive". Indeed all periods of growth since the mid 1970's have actually created greater exclusion and poverty.

2. EU 2020 emerges from the back of the totally failed Lisbon strategy. I say totally failed in relation to the issue of Inclusive Growth. The gaol was to make a significant reduction in poverty by 2010..the evidence, the lived reality was the exact opposite..greater inequality , higher exclusion. YET the PIF will happily say lets give EU2020 a chance ..coca cola light may work better than coca cola.

3. The PIF just glosses ove the implications of the crisis with respect to public sector spending. The Lisbon Treaty lays down that EU collective public debt cannot exceed 60% of collective EU GDP. Its virtually running at 90% currently. This means a collective cut of €400 billion in public sector expenditure.On top of that add the special "Austerity" packages in Greece , Ireland, Spain, UK, Portugal, Germany, France, Hungary, Latvia, Estonia, Romania,Czech Republic, Slovenia are all inherently socially unbalanced in that they disportionately impact on the weakest. These measures are in the process of destroying what remains of social europe.

4. The PIF also just ignores the noise of protest from across the EU. these protests are simply dismissed as irrelevant. Yet for the European project they are far from irrelevant. they signify a growing alienation from our democratic institutions and for the EP they signal a continuatiion of a process which has already undermined the legitimacy of the EP in that so many of its mmebrs have been elected with turnout of less than 40% in the last elections.

5.The PIF ignores the structural nature of unemployment that now is confronting older and younger workers. 1 in 3 of the classes of 2008,2009, 2010 are not in secure and meaningful work . This is on top of the 1 in 5 or 6 who have been in a "holding pattern since" 2000. Inclusive growth will seem very hollow to this "jilted generation". Indeed the prognosis for the next 4 years is no better.Public sector spending has since the second world war been the largest contributor to job creation, however, with EU 2020 requiring governments to cut spending it is clear that the levels of exclusion and precarity will rise.

6. Relatedly, in all the praise for ESF what again is neatly ignored is that far too much of ESF money is simply spent in creating holding revolving door programmes for unemployed people which simply satifies the PIF need for massaging statistics.

In short what the PIF refuses to allow into the bubble is the possibility that the very model upon which EU2020 is based is fundamentally flawed. EU2020 is simply what some writers have dubbed "Selfish capitalism".Its about privatisation of public utilities ; its about deregulation which allows corporations and the rich to avoid paying taxation-look at evidence based campaigns in Belgium, Holland and UK which have identified that tax avoidence through created loopholes is resulting in a collective loss that could diminish by 40-50% the current austerity measures being imposed on citizens as result of the greed of banks and the financial sector. Moreover its a model that is convinced that consumption and market forces can meet our social needs.

In short the PIF projects an optimistic bubble of positive illusion, one that is deceptively rose tinted. Its hubris for which those outside the bubble will pay for dearly.