Today we are not only living a financial crisis but a crisis in globalization. The crises started in the financial system but have spread to every aspect of the economy, creating socio-economic disequilibrium. In order to save the financial system governments have invested millions of Euros but the problem is not to save only the financial system by restoring credit, but to sort out the huge structural economic problems which are at the origin of the problem.

The growing inequality worldwide is at the heart of the problem. This is the most important dilemma we must face. We must decide whether we should restore a system that recompenses those that created the financial crises in the first place or transforming the system which will eventually address those at the bottom of the pyramid.

Some statistics of shame: According to the Eurostat, 59,000 Maltese were at risk of poverty – 14.6 % of the population, according to 2008 figures. 'At risk of poverty' is defined as meaning those living in a household with a disposable income that is below the risk-of-poverty threshold, which is set at 60% of the national median disposable income.

Eurostat said that in Malta, 16,000 were 'severely materially deprived’. Such people could not pay rent/mortgage or utility bills, keep their home adequately warm or face unexpected expenses. They also could not afford to eat meat, fish or protein equivalent every second day an cannot afford a car, washing machine, colour TV or telephone.

If national income had been distributed more equal, with lower profits and higher salaries the overall European economy would have been more stable. If the wealth that was speculated had been fairly distributed in the form of lower prices and higher salaries we would have been able to minimise the effects from the crises.

The crises we are suffering is to a great extent the crises of a model based on the growth of inequality. Salaries which are too low and poverty amongst the middle class has driven credit consumption to the exploding point of debt. Thus credit is no longer a socially and extended and economically solvent request used for investment into new fields of real production.

Increased competitive pressures on the social systems threaten to damage the social cohesion of European societies. In face of the highly mobile global economy nation states have lost their capacity to act alone and to adequately protect social rights. While capital has swept away borders through the single market mechanism, the welfare state has remained trapped with national boundaries. For decades the EU success model was the combination of economic progress with social progress. Then the governing conservative majority in Europe decided to focus on the removal of trade barriers while sometimes neglecting the social dimension.

Thinking in a global dimension has become a pre-requisite for finding solutions. Re-thinking governance and including new levels of governance expands the room for manoeuvre. Growing interdependence between societies and nation states does not only create new categories of problems, it offers the solution too. Nation states alone might not be the best vehicle for mitigating huge changes. The EU is much better equipped for finding solutions and implementing concrete measures in cooperation with other major players.

Now is the time to correct this imbalance. It is time for a new social Europe that places people not the market at the centre of economic activity. Social progress clauses need to be included in every piece of EU legislation and social and environmental impact assessments needs to be taken into account. If Europe again shows its social face it will surely regain the trust and the support of its citizens.

     

Perit Clint Camilleri is an MEP election candidate on the PL ticket