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EESC President Henri Malosse

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Finding new ways out of the crisis

31 Oct 2013
Ref: 67/2013

Since 2008 and the onset of the crisis, what lessons have we learned from this race for quick profit which has corrupted our economies, leading many European countries into recession, where algorithms have replaced traders, performing micro-second transactions, and where a company's share price no longer bears any relation to the actual situation?

The time has finally come to see that only substantive reforms can put us back on the path to a sustainable economy, with sufficient redistribution of wealth to be able to serve society as a whole.

Numerous intellects, less conventional than all the economists who failed to see the crisis coming, are reflecting on possible reforms which could put us back on the path towards a sustainable economy. Lord Adair Turner, former chairman of the British Financial Services Authority, is one example. He proposes distinguishing between socially useful and socially useless financial activities. It is, indeed, time to encourage those activities that finance sustainable projects and contribute to the real economy and - why not - to dare to prohibit those that harm it, which have already been the cause of so much sacrifice.

With stabilised, "socially useful" financial activity, the money invested will be able to play its role of development lever, matching investment timing to the needs of industry. Only with a policy that prioritises sustainable investment will Europe be able to reindustrialise; only tailored financing and innovation tools can encourage development of businesses in Europe.

Other avenues for improvement must be pursued, particularly those using "out of the box" tools which have been proven on the ground and, in some cases such as in Hungary, helped provide a way out of the recession and preserve major employment areas. Unlike Greece, Hungary reduced its debt from 81% of GDP in 2011 to 77% in 2012 without its economy plummeting, notably keeping its unemployment rate down at around 10%. Thus, it opted for unconventional solutions - although the long-term effects have yet to be seen.

We must be bold, and we must not be afraid to step off the beaten track. That is what will restore a European economy that truly serves Europeans.

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