A plan to get the eurozone back on track

In the last years, European citizens have lived through one of the worst economic crises since the great depression of the 1930s. What started as a financial problem was soon to become a dire moment in the history of the continent due to the lack of proper action by conservatives ruling the EU. 

Instead of a strong and structured plan to work as a whole EU, conservatives’ proposals focused exclusively on austerity and sought to create an unacceptable division among stronger and more vulnerable EU members. This path was proven wrong time and again. In recent elections citizens have penalized the conservative approach and elected progressive leaders that have pledged to invest in growth and job-creation policies.

Together with its member parties, the PES proposes a progressive way out of the crisis, to be applied without further delays:

Economic governance 

Job seekers

The measures outlined so far in the economic governance package focus mostly on bringing national deficits down, by shrinking the public sector and deregulating the labour market, instead of promoting a strategy focusing in growth and jobs. 

While there is a need to keep national budgets under control, this cannot be the only objective of economic policy. Other than the fact that austerity measures tend to aggravate economic downturns, the EU cannot neglect the need to create jobs and spur growth to tackle the crisis. There should be a policy of investment in key sectors in order to create new jobs and pave the way to a sustainable growth. 

Rescue mechanism

The PES has long defended that the European Stability Mechanism should be allowed to intervene directly on the market and purchase sovereign bonds. This instrument must be backed by strong collective guarantees that can dissipate the fear effect markets use to play against States.

Eurobonds 

With eurobonds in place, countries would be able to issue sovereign bonds with the backing of the EU up to 60% of their GDP. This would mean that countries would be able to finance themselves at reasonable interest rates, for at least part of their debt. Above a given threshold, most countries would pay their own individual interest rate, without the guarantee of the EU.

Eurobonds could then work as an incentive to keep debt below the agreed threshold as well as to help countries financing key economic sectors.