The current economic crisis in the EU is reminiscent of the crumbling of the Communist system in the Soviet Union some two decades ago.

The patent failure of a Communist economy operating for over 70 years to deliver a decent standard of living seemed to indicate that capitalism was the obvious alternative open to a modern Western state.

State enterprise and state overall control of an economy had failed miserably and the idea of nationalisation was utterly discredited.

The juggernaut state had proved itself not only highly repressive and inhuman but also counterproductive in economic terms, a barely manageable mammoth structure where the inbuilt corrective forces present in a market economy were absent.

A new dawn was ushered in with the dismantling of the repressive Socialist state and the affirmation of a free liberal democratic state embracing the dynamic of a laissez-faire free market capitalist economy. The watchword now was privatisation.

Progress was hence inevitable with the release of the forces of human enterprise and endeavour driven by the unshackled motive of profit and self-interest. The examples were there to be observed; on the one hand prosperous USA and on the other the downtrodden population of Communist China.

The spring season breaking in the continent of Europe did not however turn out quite so promising. Certainly the obvious anomalies that accompanied the aftermath of WW II were largely redressed. Germany was reunited and the hegemony of the Soviet Union over Eastern Europe was broken. The Iron Curtain was set aside and the European climate became distinctly warmer with the resolution of the Cold War.

The idea of a united Europe gathered strength and the European Economic Community evolved into a politico-economic European Union.

Cracks in the economies of individual European states and organisations however began to appear. Instances of the collapse of scattered large business enterprises and financial institutions began to make news. One can recall the Maxwell debacle and the folding up of Barings Bank. Reckless management and corruption in high places became more frequent occurrences. In 1999, the whole of the EU Commission then under Santer was compelled to resign because of the dubious and unacceptable standard of probity of some of its members.

The trend culminated in the collapse of a number of major financial institutions such as Lehman Bros in the USA and the threat of bankruptcy of such major enterprises as the car manufacturing industry, bringing the economies of the western world to the brink of melt-down in 2008.

The capitalist dream of inevitable and interminable prosperity dissolved into thin air. Its unacceptable face of greed and sharp dealing had brought the welfare of millions in the western world to the edge of disaster.

The present plight of a number of major southern European states, members of the eurozone remains grave. It was brought on by reckless, irresponsible state borrowing, resulting from the utter disregard of the fiscal criteria, patiently worked out in the Maastricht Treaty. Once more human frailty in the ruling class was jeopardising the welfare of whole populations.

The only solution in sight seems to be a bailout by the European Central Bank made possible by a massive printing of money and the prospect of a wave of inflation of major proportion.

It is not what the political class in all these eurozone countries augured for their populations. Yet to many ordinary citizens this same class goes about acting as if it has little to do with them. The politicians in charge behave as if it is their natural right to spend and borrow at the public’s expense without worrying too much abut the consequences of their policies, boasting of free services here and there without a thought for tomorrow.

This mess sends out a clear signal. It is not enough in a capitalist world where sharp operators and speculators are forever lurking to strike, to have fiscal rules and criteria more honoured in the breach than the observance. It is essential to have the political will and instruments to come down heavily on all who disregard the rules. And for those who repeatedly transgress them, to exclude them from the zone.

Joseph A. Muscat

TA’ XBIEX