The negative implications of inequality are manifold. While devastating for individuals at the bottom of the ladder, evidence also shows that an unequal society causes the economy as a whole to suffer.
The Central and Eastern European member states of the European Union (EU) predominantly reacted to the global financial crisis by implementing austerity policies and structural reforms, which have had negative repercussions for social justice. To counter this unfortunate development, this paper argues for a more European approach to both social and fiscal policy: in particular, a shift from passive social policy measures to a preventive approach based on social investment. Economic policy tools, such as a European minimum wage or a more universal approach to social benefits administration, could help prevent income poverty and social dumping, as well as foster regional investment. In order to cushion the regional consequences of asymmetrical monetary shocks, greater financial capabilities on the part of the EU are needed. This must be complemented by effective measures countering tax evasion practices and corruption. All of this demands a careful rethinking of the EU’s social and economic principles says Dr. Maria Skóra.
The relationship between Greece and Germany has often been described as a game of chicken. Two teenagers in a car are heading towards each other. In a head on confrontation, the first to swerve would lose. If neither of them swerves, they both die. The only way to win is to tie yourself to an immovable position. That is why the newly elected Syriza government hammers on about its political mandate, on which it has to deliver.
On March 3, Anke Hassel and Henrik Enderlein – both professors at the Hertie School of Governance and members of our Circle of Friends – together with Hermann E. Ott – Senior Advisor at the Wuppertal Institute for Climate, Environment and Energy, and former Green member of the German Bundestag – discussed the possible consequences of low or even no growth to the national economies of the industrialized world. László Andor, Mercator Senior Fellow at the Hertie School and former EU Commissioner, provided the keynote for the panel debate.