Refugees and immigrants have become modern-day scapegoats for demagogues, who are turning a blind eye to the real causes of the crisis – rising inequalities, according to Greece’s Alternate Minister of Foreign Affairs Georgios Katrougalos. EURACTIV.com reports from Athens.

Speaking at the “Reasserting Europe’s values” seminar organised in Athens by the European Economic and Social Committee (EESC), the Greek minister lashed out against austerity policies saying that Europe is repeating the mistakes of the period between two world wars.

In OECD countries in the 1960s, he said, the highest tax rate for incomes of more than €1 million was 60% while today it is 30%. “This is not only an important gift to wealthy people but also a blow to the welfare state’s ability to finance its social structures.”

Over the same period, more than 50% of UK workers were covered by a collective labour agreement while today the figure is below 20%, he added.

“These long-lasting tendencies deteriorated during the crisis due to the effort to address it through austerity especially in the periphery. Not only inequalities increased within EU countries but also the gap among central European strong economies and the periphery was widened,” Katrougalos said.

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“This represents a historic irony: Europe repeats the same mistakes of the interwar period. In order to tackle the crisis of 1929, we tried with austerity-related policies, to respond to the inflation problem,” he added.

Back then, he said, these policies resulted in shrinking the middle class, which got panicked and sought a scapegoat.

“At that time, demagogues targeted as the scapegoat the Jews, instead of dealing with the real causes of the crisis, which then led to the darkest period of the continent.”

He explained that at the same time, on the other side of the Atlantic, Roosevelt’s New Deal applied exactly the opposite policies, prioritising the social model.

Referring to the modern EU crisis, he said Europe tried to address it with austerity while the policy of US and Japan followed a different logic of expansion and increase of salaries and social protection programs, in particular, the national health system.

Europe’s austerity option, he said, resulted in deteriorating living conditions, while modern demagogues are now willing to give responses similar to those of the interwar period.

“Only this time, the scapegoat is not the Jews but the refugees and immigrants.”

Katrougalos said the objective of the next EU election should be to restore the EU social model, the foundation of Europe.

“The other way is to return to golden nationalism, which is fortress Europe. But this is not a solution as it aims to turn Europe into something that it does not represent.”

Reflection time is over

EESC president Luca Jahier said the reflection time was now over.

“We have less than seven months to jump start a new narrative, secure what we have achieved so far, and continue building the European future,” he said.

He noted that the 2008 financial crisis and the fiscal policies Europe then adopted, led to the euro crisis and transformed the eurozone into a relationship between creditors and debtors.

“This created a toxic relationship that poisoned the very core of European ideals, such as the solidarity principle.”

He said many young people now see the EU as the enemy that has deprived them of jobs and a promising future. “Populist politicians exploited the resentment and formed anti-European parties and movements,” he said, adding that they also took advantage of the refugee crisis.

“We live in a world that is increasingly diversified and we cannot go back to national formats,” he said and added that it’s high time the EU faced the social malaise.

“This means among others delivering on the European Pillar of Social Rights,” he concluded.