The European Union

Almost five years have passed since the beginning of this depression, which started when the bankrupcy of Lehman Brothers. During that time, our economies have been tested in all possible ways: risk premium, deflaction, unemployment rate... But the real test has not come yet. The challenge is to rebuild our economies around a weak system like the EU, marked by the continuous fights between the south and the north, a non-integrated fiscal monetary system and old political rivalries.

In the case of the Mediterranean economies we have two problems. The main problem is to find out how to finish with this depression and the current european policies, based on the idea of contraction equal more. The other one is that nowadays our economies are seriously injured, because the previous governments didn't do anything in order to achieve the growing and competitiveness in the most important areas.

For example, let's see the spanish case: during the gold age of the spanish economy, the different governments did policies that rose the wages on non-technological industries, they didn't support the technological development (despite that there are good researchers in the country) and neither of them created an efficient banking system. As a consequence of that, the unemployment rate, the risk premium and the fall of the banking system have been unstoppable during this little great depression.

With these evidences, all of us are wondering about the same question over and over again: should we give it all up in the southern countries? should we let them collapse, through neoliberal policies, as punishment for their behavior in the last years? No, this would be a huge mistake, because in Europe the powerful countries  need the weak countries more than they think and vice versa, and nowadays the EU can't afford a failure.

The north needs to understand that the southern countries don't need contractive policies that help to strangle more their economies, they need expansive policies to solve their problems with their financial systems and unemployment, and the south needs to understand they must reorientate their economies to achieve more competitiveness and stability, and also, to understand that this doesn't mean cutting off the economic and social rights.

Against the general opinion, there aren't different teams and every country must push in the same direction because there is only a feasible direction, otherwise, none of us will get out if this depression.

Author: Christian Corro Alvarado

Editor: Raquel Guerrero Plata