European social democrats must campaign together to create the Good Society

Social Democratic parties across Europe must campaign together on areas of common interest including a more sustainable economic model and fairer tax system, according to delegates at a pan-European conference of social democrats in Istanbul on “Democracy and the Good Society in Europe”. The fall of the Labour government last month continued the trend of social democratic parties losing power across Europe.

At a panel on “New democratic structures in the EU”, speakers from Germany, France and the UK discussed the problems created by neo-liberal economic governance and the related democratic deficit. Martin McIvor, editor of the Renewal policy journal, told delegates, “there is no greater democratic deficit than on the economy” and criticised the pursuit of austerity packages across Europe which emphasise spending cuts over tax increases or pro-growth policies. He called for a new set of fiscal rules to enhance a Keynesian approach to the current economic crisis, and for a hard line to be taken on countries with economic policies which risk a double-dip recession. Mr McIvor outlined that any new integration should ensure that any future integration of the European Union ensured that the floor was raised on living standards and wages rather than causing a race to the bottom.

Jacques Reland, head of European Research at the Global Policy Institute at London Metropolitan University, stressed the importance of reversing tax competition which has cut the tax base across Europe. He criticised the current trend in a range of countries of raising VAT to pay for corporation tax cuts. Tax liabilities from profit-making companies, which often refused to invest, have been transferred to consumption which disproportionately impacts the poor. In making his remarks, he echoed his conclusions in a paper for The Smith Institute last year which said:

“European countries must stop using tax and social legislation as tools of intra-European competitiveness. They must begin to harmonise significantly their fiscal and labour laws. You cannot argue that protectionism is the greatest danger facing the global economy and the EU, while at the same time using social and fiscal forms of protectionism.”

Answering questions about what social democrats should do to bring about these changes in light of being out of power in many European countries, Vice President of the International Union of Socialist Youth, Cordula Drautz, outlined the importance of increasing the capacity to campaign among individual social democrat parties and the Party of European Socialists in the European Parliament. Ms Drautz called for a “social stability pact” to address the dislocation created by by unfettered capitalism and globalisation. Her remarks are consistent with the debate taking place around the Labour leadership election in the need to create a “movement for change“.

The conference brings together social democrat parliamentarians, party workers, trade unions, and civil society activists from across Europe and is organised by the British left-wing pressure group, Compass, and Friedrich Ebert Stiftung, a German political foundation.