Concerns about the European middle class – part 1

Employment & Income,Inclusive Economy12 May 2015Frans Bieckmann

The European middle class, long the driver of economic progress and political stability, is in decline. The economic policies of recent decades are leading to job polarization, rapid impoverishment and growing insecurity among many members of the middle class in European countries. The main underlying causes are financial and economic globalization and widespread automation. Good reason for The Broker to open a dossier on the European middle class.

Europe is at a crossroads. This is, in the first instance, having a great impact on Europe and on Europeans themselves. If we aim to make more knowledge available on how to achieve a fairer global society, we are increasingly compelled to focus on Europe. More and more people on the continent are finding themselves in progressively dire circumstances. Europe’s vanguard role and stabilizing influence as a provider of aid to developing countries is coming under increasing pressure, to the point that they are in danger of becoming obsolete.

At The Broker, we are going to focus more and more on Europe. That means looking closely at the political economy of the eurozone and the EU, at the financial and economic crisis that has held the continent in a stranglehold for many years and which is even now pushing Greece to the edge of the abyss, and at its political and economic causes and effects.

The knowledge that we have gained on developments in Latin America, Asia, Africa and elsewhere in recent decades will also be valuable in our analysis of the challenges facing Europe. Inequality is no longer something that exists between rich and poor countries, but is growing within all countries. Not only is Europe now also feeling the effects of extreme globalization, but countries in Latin America and Asia have also been experimenting for some time – and in a wide variety of ways – with political-economic models that could succeed the current neoliberal project in Europe.

And what about the debt problem? Where it used to be the poorest countries in Africa, Asia and Latin America that found themselves under the close scrutiny of the IMF and creditor countries (for example, the Paris Club), it is now southern European capitals that receive visits from the troika of European Commission, European Central Bank and IMF. A repetition of the deep wounds caused by the response to the debt crisis in Latin America in the 1980s – combined with the solutions imposed through the Washington Consensus – could be prevented in southern Europe; yet, to date, there is no evidence that the troika has learned any lessons from Latin America’s experiences.

At the same time, there is a growing degree of interdependence between what is happening within and beyond Europe. In Eastern Europe, the Middle East and North Africa in particular, political, economic and social developments can hardly be separated – as is painfully illustrated by the tragic events that have unfolded in recent months on the waters of the Mediterranean Sea. On our southern and eastern borders, we are being confronted more and more clearly with the state in which Europe currently finds itself: not only the appeal of a rich, free and just Europe for large groups of refugees, but also the difficulties involved in actually fulfilling that ideal, even for Europeans themselves. The impoverishment of the people of southern Europe could lead to confrontations with even poorer groups from outside seeking a better life, as they compete for increasingly scarce jobs.

The rapidly changing circumstances of the European middle class – not to mention the large groups of poor people in many EU member states – will have inevitable political consequences. The increasing popularity of radical movements on both the extreme right and left of the political spectrum is telling. Faced with this spectre of unrest, the centre parties that have taken turns at sharing power in European countries and in Brussels have dug in their heels.

That does not seem a sensible response. They should think seriously about how they can re-cast the European project – and should not steer shy of a number of taboos in the process. We at The Broker are happy to help think about a different Europe than the Europe of the 3% target, austerity measures, flexibilization and limited control of the financial markets. We have to lay the foundations for a new political, economic and financial European project which – unlike the current model – can deal with the challenges of the twenty-first century.

‘Another Perspective’ is The Broker’s new blog. The title reflects The Broker’s ambition to look at globalization issues in different ways. Through this blog, we also keep our followers up to date on matters that concern us.