Europe after the crisis. Nearly all governments are deep in debt, some are on the brink of bankruptcy. What are the conclusions that Europe needs to draw from the crisis? This is the topic of the following three pages. You will find an interview with MEP Sven Giegold - Coordinator in the Committee on Economic and Monetary Affairs - about the future of the euro and the possibility of a European economic government, an introduction to the idea of Eurobonds, and some economic background that gives a fresh explanation of the origin of the crisis and what needs to be done.

You have just given a lecture on direct democracy. In your lecture you called on politicians to put their cards on the table. That's a good motto. As a young European I wonder: How bad is the situation? Member of the European Parliament Parliamentary Group: Coordinator in the Committee on Economic and Monetary Affairs Date of birth: Brussels and Verden, a small city in northern Germany Nationality: Co-founder of Attac Germany.

I am very concerned about the future of the euro. But it is not as easy as saying, put your cards on the table and tell us who will be the next one to go bankrupt, because it is very much up to the politicians who will be next. And it is clear that we cannot keep the euro if we don't create stronger coordination in economic politics, to the point of an economic union. The nation states must overcome their national egoism or the common currency cannot be kept in all member states of the euro.

Shifting economic regulation to the European level is something which economically strong countries like Germany don't want to do. How do you think people can be persuaded to go with you on this one? First of all, I believe that the people of Germany know that Europe is the future and no European country is big enough to solve future problems alone: For all this, the countries of the European Union have to act together.

Anyone who thinks that the euro is only an economic decision is wrong. If the euro crumbles and countries have to leave the eurozone, then European integration will be damaged for a long time. And so will be the vision of a true European Union. That's why it is in the interests of all Europeans to keep the euro.

And it is especially in the interests of the Germans because Germany is an export nation. If the euro came to an end, the money we lent to other European countries would be gone. And in that case it is smarter for the strong countries to help the weaker ones, for example with Eurobonds [see the next page of this article].

And then we do already have common monetary policies. It means complementing the common monetary policies with common fiscal- and budgetary policies. At some point we will also need to take steps towards a social union. But we are not at this point yet. Still, in this field we also need to talk about measures. It is very unfortunate that in the field of tax policies the European council makes decisions by consensus.

The European Parliament has to be heard by the council but there is no co-decision procedure. We have made some progressive proposals to change that in this legislative period but we didn't succeed. In the field of economic policy — especially in the field of saving but also in the field of common financing, the commission brought forward six drafts.

In four of the six drafts there is a co-decision of the European parliament. At the moment, the European parliament is trying to make strong, integration-friendly counter-proposals. Let's put it this way: There are European bonds within the European rescue measures. The only thing is that they are temporary. I'm not a very fearful person. But my fear is that if the German government continues their euro-sceptical policy - that is more like the talk you hear down the pub than real European responsibility — the European Union will be split to such an extent that integration will be damaged for a long time.

And resisting this should be the common goal of all pro-Europeans no matter which party they belong to. Sven Giegold was interviewed by Kristin Kruthaup. On the next page you'll get to know a possible solution to fill Europe's empty pockets. Shouldn't Europe be about helping each other out?

About living and working together, dealing with common things so that everybody is satisfied? What does actually "helping each other" mean? Is it about giving money or is it about finding new ways to make money together? And how important is the role of young people in this?

We are in love with money. But not that much with economics. We prefer to leave that kind of stuff to the politicians. We come from different places. From different countries, from around Europe. Some of our countries are having serious problems right now. And we live in these countries.

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Maybe studying, maybe working. Or maybe looking for a job in a country which is currently firing lots of workers instead of employing them. Instead of country by country the eurozone countries issue bonds as a group.

European Commission creates a fund, where common financial resources are collected. These resources would be gained by European Commission bond issuing and selling.

Greece draws money from Eurobonds and pays lower interest rates to the fund. In case of bankruptcy it has an assurance; it is guaranteed by all countries contributing to Eurobonds. From solidarity they are expected to help. Luxembourg, Italy, Greece, Ireland, Portugal Main opponents: I hope you get the point.

Young people are involved in politics and economics whether we like it or not. And we should develop opinions about financial instruments to help solve the fiscal situation, because it will affect our lives seriously if the economic system fails.

European politicians are trying to make the European fiscal situation better. They have hundreds of ideas - some are made for success, and some are not. Politicians have come up with one solution called Eurobonds. They have not yet reached a common opinion on whether the idea will succeed.

Maybe we should help them to decide with the voice of young people. The people who are building a united Europe - who represent the job of Europe. Pro ducing Europe as one united family which feels it has a duty to help all its relatives from near and distant places in order to live a better life by making their own sacrifices: EU are people The sovereign countries could lend money and save weaker countries from the crisis.

We would help each other. Each country should feel as if it is part of the community. There should be a feeling of cooperation, help and trust. It's not just about the money, it's about us, the people. No discrimination There wouldn't be such a divide between the poorer eastern countries with a bit of the old spirit of ex-socialism and the financially powerful western countries anymore.

There would be a common economic policy in the whole European Union. Investing in the future Economically stronger countries can give a part of their reliability to the economically weaker countries. It means they invest in their future and in their economy as they are creating or preserving their export markets. We are talking about a useful and competitive Give-Give relationship. Safe from speculation The Eurobond system prevents the countries in financial crisis from serious speculations because significantly more capital would be needed to bet against the eurozone.

This is very important, especially for smaller EU countries which are more exposed to dangerous speculations. Better refinancing It provides the "recession countries" with comparatively cheap refinancing because the interest burden would fall.

Another way of expressing the cons of lending money to friends is the song "Easy Money" from by Electric Light Orchestra. I've come to the conclusion it's like the old man said The only thing you gave me was shit and promises Easy money, whoa whoa whoa, easy money One day you'll have to earn all the money that you burn You snatched that cash right into your stash, easy money You got out of control and you sold your soul for easy money Easy money, woo woo woo, easy money".

Contra sting the states of the EU as one united family but different at the same time because different members can offer different help: Promoting passivity The main idea is fundamentally wrong.

Financial help shouldn't be all about giving and taking money when we need it. It would be better if the European Union would concentrate more on making money and how to do that. It should be more about learning how to make money from different projects which support cooperation and connect Europe - how to make a knowledge-based society. Lending taxpayers' money We cannot overlook the problem of many financially different countries. We are not all the same and nevertheless on the EU level financial balancing is not in the plan.

Not everyone is ready just to give their hard-earned money away. Losing fiscal discipline There's a chance that Eurobonds could affect the fiscal discipline of poorer countries. They won't think anymore how to solve their financial problems because they will expect the EU to provide them help. The new bonds would weaken the market incentives, by allowing spendthrift governments to borrow at lower costs, and would penalise virtuous countries, whose borrowing costs are likely to rise. Spending taxpayers' money Why should financially powerful countries be willing to pay high taxes to finance high social spending in Greece, Ireland and Portugal, which their fellow Europeans cannot afford?

In total it seems that the future of the European familiy does not depend on whether the youngsters are funded by Eurobonds or not. In fact Eurobond depends on many different decisions within the Familiy. And on top of all those decisions are different views about how economics works that inform our judgments about what's wrong and what's right to do.

The next page will present a different explanation for why countries on the periphery of Europe are in crisis. Greece, Ireland, Portugal - Why is it the European geographical periphery that is most troubled by debts? What are the causes of the crisis in these particular countries? Of course different factors play their role: But another idea of what is going on is provided by a theory called New Economic Geography, developed by Paul Krugman, who won the Nobel Prize for Economics in According to this theory, countries at the centre have an advantage and those on the periphery are disadvantaged when they share a common economic space.

The reason is this: From this perspective it is not much of a surprise that a decade after the introduction of the euro, with the world in financial crisis, it is the periphery that suffers most. So it is not only lack of budgetary discipline, spatial agglomeration dynamics might play a big role in the problem.

This can have implications for the public discourse: Along with this spatial perspective, a second cause can help to explain the current state of affairs.

Europe's monetary policy is harmonised by the common currency and the interest rates set by the European Central Bank. However, this is not true for European fiscal policies, such as taxation and government spending. This can lead to bad effects if you have a common market on the one hand with differing rules on taxation and capital- and labour markets on the other.

A harmonisation of taxes would mitigate this problem. This would be one of the tasks of a European economic government. BRAIN Think Seriously About Europe. How to get out of debt. How to get out of debt Eurobonds - the family money Economics of the crisis All Pages. Sven Giegold Member of the European Parliament Parliamentary Group: Co-founder of Attac Germany Giegold: The debate about the Eurobonds is partly a symbolic discussion. Archive Imprint About us Shop.

Giegold calls for deeper economic integration. On bailouts he says: The youngsters in the European family need money.

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And they will have to pay for the debt later. The euro sign in front of the tower of the European Central Bank in Frankfurt. Economist Paul Krugman might provide a different explanation for the fiscal mess in which the countries on the periphery of Europe find themselves.