Τσακαλώτος: Permanent straitjacket of the Stability and Growth Pact

“The Stability and Growth Pact acts as a permanent straitjacket,” he pointed out …
Finance minister, Euclid Τσακαλώτος, in an article published in the Ορεη Democracy. The article entitled “a Europe of two narratives” was published on the same day as the notification of the ministry of finance, of the letter to institutions and contains spikes against Germany, but also clear warnings about the risk of fragmentation of the eurozone.
Reports that the european institutions is not the home of rational debate that affects the results but if the narrative “rules-is-rules” is not replaced, then “it will lead to the dissolution of the Union”.
The minister of Finance interprets the rise of radical trends and centrifugal forces in the asymmetrical burden of the south, and extends responsibilities to institutions, to policy in a Europe of low growth, high unemployment, and deterioration of infrastructure and social welfare.
The euro area, not only abandoned the option of devaluation, but did not find suitable substitutes in the form of financial transfers or other tools.
Europe is facing a problem of low growth and high unemployment, infrastructure and the welfare state have deteriorated. What you need is to work on a development agenda that is based on a different economic and financial architecture, notes mr. Τσακαλώτος.
The social narrative, notes the Greek Finance minister, concludes that without such an agenda that includes the concerns of the citizens for their salaries, pensions and allowances, the far right populists continue to gain ground as well as reflect on the material needs of the social base of the κεντροαριστέρας and centre-right.
As mentioned in the article, mr. Τσακαλώτος, the narrative is that Europe can be saved if all eu member states “be more like Germany. If you do not do this, then the populist and centrifugal forces will be strengthened in the North and undermining the european ideal”.
He considers that “it would be naive to believe that the underlying differences could be resolved fully at the level of logical arguments. Because the balance of forces between the two narratives is uneven. But that’s the point.
The result is not only that we’re stuck in the most independent of central banks, attached to the risk of inflation, but in a Stability and Growth Pact, which acts as a permanent straitjacket. Within the euro area things are even worse. Having renounced the option of devaluation, the monetary union does not find adequate substitutes in the form of financial transfers or other policy instruments”.
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