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The Lisbon Strategy: The Only Hope for the Eurozone

By Anis Bajrektarevic

When the European Community became the European Union in 1993, it became a model for promoting competitiveness, prosperity, and stability. With the declaration of the Lisbon Strategy in 2000, the EU aspired to continue building the EU into a competitive and sustainable economy while maintaining strong social-cohesion.

But the present day Union is demographically sinking and barely staying afloat economically. The middle-class is shrinking, and the social contract is being abandoned. The Lisbon Strategy has been eroded. Agreed to in 2000, the Lisbon Strategy was a 10-year action plan to make the EU the world's most competitive economy by setting specific targets such as spending 3 percent of GDP on research and development across the entire region.

Instead, in places like Greecewhere dēmokratía originally came fromPrime Minister George Papandreou introduced the most drastic cuts that any European social welfare system has experienced in the last 80 years. The rest of Europe views the Greek debt crisis rather dispassionately, as if it does not concern the well being of 12 million people. Non-elected technocratic governments are slowly pervading in ever more states in the EU. First Greece and now Italy.

Despite its aspirations, the grand historical achievement of Europe was the final reconciliatory compromise between capital and labor. It resulted in a consolidation of economic entrepreneurship and flourished into a socially just and beneficial state. The Lisbon strategy was supposed to continue that with targets in both education and finance.

But Europe has lost its political left. The over-financialization and hyper-deregulations of the globalized markets have brought low-waged Chinese workers into the spotlight of European considerations. Thus, in the last two decades, the EU economic edifice has gradually but steadily departed from its traditional focus on internal labor to rely on immigrants from outside Europe. Today, the labor that still resides in the EU is either competing with, or reliant on guest workers that are disadvantaged in their socio-political rights.

In addition since 2008, the EU’s investments in renewable energy has been steadily decreasing. Yet, the EU budget allocation to agriculture subsidies is 10 times bigger than that of research and development. To make matters worse, nearly all European states have responded inadequately to the crisis by gutting their respective education, science, and research budgets. Although it appears to be a policy move, in actuality it is a thoughtless, panicked response that will hinder future generations. Instead of hitting the 3 percent of GDP goal, Europe's average research and development investment remains stagnant at 1.9 percent.

“There has been little willingness to strengthen civic watchdogs of international financial institutions, which might provide a more accurate service than the commercially driven credit-rating agencies that performed so disastrously in the financial crisis,” laments the FRIDE Institute Director, Richard Youngs, in his book Europe’s Decline and Fall.

Twenty years ago, the value of overall global financial transactions was 12 times the entire world’s gross annual product. By the end of 2011, it was nearly 70 times as big. Despite the obvious importance the financial industry has on the international community, the Euro crises have revealed that financial institutions are free of any form of authoritative control—neither democratic control, nor within the national sovereignty domain. Thus far Iceland is the only country that has reacted and sentenced its Prime Minister in response to the financial crisis. 

Therefore, negotiating the Eurozone debt crisis, without restaging the forgotten Lisbon Strategy is simply talk about form without any substance—it is a grand bargain about control via austerity, not a vision of prosperity. Re-introducing the foundations of the Lisbon Strategy is Europe’s best hope to pull itself out of this financial disaster.

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Anis Bajrektarevic is a member of the IFIMES International Institute and professor and chairperson of International Law & Global Political Studies at IMC University of Applied Sciences, Krems, Austria.

[Photo courtesy of European Parliament]

 

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