Former Prime Minister and MEP Alfred Sant told the Economic and Monetary Committee of the European Parliament that contrary to what the European Commission was saying, the eurozone economy was not moving ahead.
When one spoke about fiscal consolidation in the eurozone, in reality it was operating as an internal devaluation which was politically very dangerous, socially dangerous and economically ineffective.
The eurozone, he said, had locked itself into a situation where, to remain competitive, through internal devaluation, it was eroding the social model on which Europe was based. This was a trap that undermined social cohesion.
The Maltese MEP, who has been appointed shadow rapporteur for the S&D Group, was reacting to the draft report on ‘European Semester for economic policy coordination: Annual Growth Survey 2015.’ presented by Dariusz Rosati.
He said that instruments used in the surveys were not good enough and they were giving wrong results.
"We don't have the measures by which we think we understand what is developing. We have instruments that need to be audited, that need to be critically considered and we are not doing that. The indications at the Autumn forecasts made by the EC since 2009 are not reflecting the real results.
"If you look at 2011, there are three forecasts for growth in the year 2011 – 1.5%, 1.5%, 1.5%. The actual was 1.4%. If you look at the three autumn forecasts of 2012 – it started 1.8%, went down to 0.5% - real – and the end of it was -0.4%. The actual was -0.7%. If you look for the forecasts of the year 2012 - it started at 1.8% growth, it went down to 0.5% growth, the third forecast was -0.4% actually it was -0.7%. If you look at the 2013 report – starting at 1.3% growth, it went down to 0.1% growth to -0.4%growth. The reality was 0.5% growth. And if you look at the forecast report of the year 2014, they started at 1.4%, went down to 1.1% and down to 0.8%. It’s going to be less than that," Dr Sant said.
"Are we on the right track? The commission is basically telling us, and some of our members are telling us that we are on the right track. But if you look at the policy that has been following for these past three, four years – and you ask – look at the economy – has the economy been moving? And they tell us yes its going to move, its going to move. I remember Galileo, back in the counter reformation, and he understood that the sun doesn’t go round the earth but the earth goes round the sun. He had to accept that he was wrong – but then he also said ‘eppur si muove’ it still moves. Well before the European economy as it is moving now, and they tell us its going to move, its going to move, eppur non si muove – its not moving....that is the conclusion I come to Mr President," Dr Sant sad.