Investment Plan is voodoo and public guarantee for private profits
Pressemitteilung von Fabio De Masi
"Austerity killed investment. The only thing to reignite it is to bury austerity. Public investments, instead of Juncker's voodoo tricks, are what we need against the economic depression" states GUE/NGL MEP Fabio De Masi at the start of the European Council where heads of state and government are expected to give their go-ahead to Juncker's recently unveiled 'Investment Plan for Europe'.
De Masi adds: "The Commission and the member states want to guarantee private profits with public money instead of investing directly in the economy. This is abject stupidity, particularly in a situation where interest rates are near-zero and governments could easily raise additional funds. Private corporations such as Allianz eye lucrative deals when investing in public infrastructure, leaving taxpayers with the short end of the stick. This is the same philosophy as with the much hyped capital market union. Its purported goal of promoting dubious financial engineering will create more instability for which the public pays the check. At the same time, the dogmatically flawed euro policy as the root cause of plunging investment and the credit crunch remains unquestioned.
Juncker claims to stimulate €315bn of investment with €21bn of public guarantees over three years - a multiplier of 15. This is a mere 0.8% of GDP yearly, far from what would be needed to kick-start the economy, and hopelessly naive as private investors will be reluctant to come forward given the bleak economic outlook. Real public investment alone will be able to break the vicious cycle of lower wages and pensions, shrinking demand and crumbling private investment.
The Eurozone has an estimated investment gap of €800bn annually, compared to pre-crisis levels. Public investments of at least 2% to 5 % of GDP or at least €250bn annually are needed to lift the EU out of depression. We must end economically stupid and socially disastrous austerity. This could be financed via a wealth levy for millionaires and combatting tax havens. Further the European Central Bank or the European investment Bank should directly finance public investment instead of pumping ever more liquidity into banking sector."