Dr Charles Tannock

Member of the European Parliament for London

Public finances in EMU - 2011 and 2012

Delivered in Plenary - 16th January 2013

Mr President

The eurozone crisis gives me no pleasure and unemployment and recession are evils that nobody deserves, but they are a consequence of the profligacy and irresponsibility of some governments which avoided the choices that many other governments had to make in the 1980s and 1990s. By failing to reform rigid labour markets and sustaining corporatist economic structures, they did not bring about the prosperity which is required in a globalised economy. Therefore, some countries have had to face reality much more harshly than otherwise would have been necessary.

Nevertheless, I support wholeheartedly the supply-side reforms that are now happening in most eurozone countries. This report highlights those desirable structural reforms. Which Conservative could oppose a statement that fiscal consolidations based on cutting unproductive expenditure, rather than on increasing revenue, is the correct one and will aid growth and job creation?

However, it is never going to be possible for the EU budget to reduce macroeconomic and social imbalances throughout the eurozone. For instance, the European job youth guarantee for unemployed people can be no substitute for the real issue at stake that the eurozone economies must now take a dose of Thatcherite medicine as the only remedy for economic sustainability.