The crisis is increasingly taking its toll on people's mental health. Studies show that for every 1% increase in unemployment, suicide rates go up by 0.8%. However, strong social safety nets can make all the difference and therefore should remain intact regardless of any austerity measures, MEPs and experts agreed at a workshop on 19 June in the European Parliament.
In the run-up to the financial crisis credit rating agencies often acted as cheerleaders, giving stellar ratings to complex financial instruments that later proved to be almost worthless, meaning immense losses for financial institutions, many of which had to be bailed out by the taxpayer. On Tuesday economic committee MEPs will vote on rules to make agencies liable for damage caused by their ratings and introduce more competition into the ratings market.
After the fall of the Berlin wall the European Bank for Reconstruction and Development (EBRD) was created to help countries from the former Soviet bloc transit to market economies. MEPs have now approved plans for the bank to extend its activities to Southern and Eastern Mediterranean in the wake of last year's Arab spring. We spoke to Bulgarian MEP Slavi Binev, responsible for steering the plans through Parliament, about how the EBRD can make a difference.
MEPs will be weighing up the benefits of growth versus austerity when they vote on 13 June on legislation that will give more power to the Commission to police national budgets. As the political climate in Europe changes, many have questioned the wisdom of pushing forward with austerity at the expense of growth. Yet there is broad agreement that public finances have to be consolidated. It remains to be seen whether MEPs agree the latest budget proposals fit in with the growth agenda.
The overheated real-estate market was what sparked the economic crisis in many countries. Blinded by the availability of cheap credit, many borrowers took out mortgages they could not possibly repay. That is why MEPs are pushing the finance industry to provide borrowers with high-quality advice about the risks involved in loans, which would make mortgage lending sounder and more transparent.
EP president Martin Schulz has called on member states to come up with concrete measures to create jobs and growth in the coming weeks to avoid Europe sinking deeper into economic and social turmoil. Mr Schulz made the appeal in a bold speech at the informal EU summit dedicated to growth in Brussels on 23 May. He said: "In the current situation, half-hearted statements of intent are simply not enough."
The need to combine current austerity with growth oriented measures without abandoning the overriding need for fiscal consolidation was underlined by most speakers in a debate in the EP plenary on May 22, one day before the informal EU summit in Brussels dedicated to growth and job creation. Most speakers also stressed Greece's plight, the causes for this and possible consequences.
How can the financial sector be made to contribute to the cost of the crisis it helped to create? Greek socialist Anni Podimata argues in her report that introducing a financial transaction tax would go a long way towards stamping out banks' risky behaviour while at the same time replenishing government coffers with much needed funds.
The economic and monetary affairs committee has a busy meeting to look forward to on Monday 14 May when its members will look at how to make finance work for the benefit of the society as a whole. Not only will the committee vote on measures that limit bankers' bonuses and demand that banks lend more prudently, it will also decide on stricter surveillance of eurozone countries' budgets.
It is likely to be the biggest investment you will ever make, however the economic crisis has shown that buying property is no longer safe as houses. Easy credit conditions up until 2008 fuelled high-risk lending and borrowing practices throughout the EU, which significantly contributed to the current debt crisis. The Parliament's economic and monetary affairs committee is scheduled to vote on a proposal that aims to make the market more stable in the third week of May.