Green Investment Pact – economic and fiscal un-sustainability? Part 1/2

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It is obvious that the way out of the crises requires an integral approach reflecting the interconnected complexity of socio-political, economic and environmental relations. The recent Green Investment Pact by The Greens/EFA tries to address actual financial and economic problems within the current economic model. However, it is desirable to look for solutions and address the root systemic structures responsible for the instability and unsustainability of our current system. Does the Pact provide such option?

 This article reflects the first subhead of the GIP- Enhancing common fiscal policy for a fair recovery

It is essential for EU to have a stable fiscal environment and tools for ecologically responsible investment. However, such long term environment cannot be created through  the support and legitimization of the power currently given to the globalized commercial banking system including EIB and as well ECB, since this leads to a centralization  of power through a nonsovereign monetary monopoly. If we want to enable progress in our societies, we can not take steps leading us back to centralized empires. We should  look for the solutions with regard to spaces open to global potentials of exchange and collaboration in which we value diversity and uniqueness, preserving and reinforcing our sovereignty as citizens. United in diversity for thriving space safeguarding freedom, healthy and favourable environment, not legitimizing control of a technocratic apparatus lead by globalized capitalist financialization.

The flow of value within certain system must be in balance to be sustained, therefore anyinvestments based on monopolistic debt-created money and moreover assigned to any interests do not lead to social or ecological sustainability but may even worsen the indebtedness and increase power control. Any unity, e.g. community or region, should be enabled to create its own value system flow within its space.

The pact proposes more competencies to greater powers of EU and allow them to impose penalties for mismanagement of funds. It sounds really uncomfortable especially when EU should work and make decisions on base of mutual agreement and communication, and not on the wish of few big nations. The management of funds needs to be rearranged and lead to real fulfilment of its purpose, to strengthen and develop backward regions, support beneficial activities, and create thriving environment. The structural funds are being considerably misused (more then 8 bn EUR have been paid by error!) and do not flows where needed, the process is negatively influenced by red tape and organized crime. The increases of EU budget does not lead directly to creation of green jobs but it gives higer tax burdens on citizens. Not increase but rational transparent redistribution could be more efficient and desirable. Real determination for wisely greening other policies within the multi-annual financial framework could be sufficient to lower negative environmental impact and at the same time it could contribute to job creation together with targeted policies.

Financial transaction tax does not harm the real economy and is very efficient in generating the revenues for social purposes. As well it may be an interesting approach to reduce high frequency speculative financial transactions, while enabling a potential redistribution of wealth. Its collection and use must be handled transparently so as not to empower a non-sovereign transnational and European institutions misusing power over citizens. There is a strong need of taxation reform. The current system and specific national taxation policies leads many times to crash of SMEs and loss of employment. More economists scope to the shift of taxation from incomes and employment to use of common resources and factors of production.Accord to their studies, such shift would lead to attract investments, avoid tax evasions, or handle the problems with ageing population with regard to raising burden on those in active age.

Current bank system has not been designed to serve real economy and people, and virtually it does not fairly contribute to economy. If we want the system operate in any banking structure, such institutions should be designed to sustain the value flow within certain space and encourage progress and development. More convenient and desirable are so-called People´s banks or public banking institutions; they can generate new jobs, revenues and support local projects, as well as lower public debt. Legislation cannot restrict the disintermediary lending projects, specifically networks that enable lending and exchange of value without mediator/bank. It is well known that too big to fail banks are very dangerous for economies and their support in crises leads to austerity measures and does not solve the pending problems. The more competences, money and power for centralized banking system or banking union in EU just create such too big to fail mechanism regardless failing societies.

Therefore, I believe that it is in the ambition of green Youth to strive for favourable economic environment securing the decent and fully-fledged life. In conclusion, the Pact should care more of information and knowledge share and support spreading the real solutions throughout the EU that can be independently implied in any regions, stand against the monetary and banking centralization, and ask for transparent and efficient management of structural funds and taxation reform. Our goals need to be more ambitious and aim to address unstable roots of current structures.

The author would like to express gratitude to D. Monson for peer-review of the article.

 

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