Liem Hoang Ngoc, on behalf of the S&D Group. – (FR) Mr President, ladies and gentlemen, Mr Giegold’s report is particularly significant given the current macro-economic debate. This report is all the more relevant given the fact that its author is a German MEP who wanted to draw the attention of Europeans to the distorted effects, for the countries of the euro area, of the German strategy of reducing labour costs in the single currency system.

The German Government is, in fact, about to drag the euro area and the whole of the European Union into generalised wage deflation with damaging macro-economic consequences. Particularly in the absence of consistent structural funds and sufficient budgetary resources, and faced with the impossibility of devaluation, Member States with current accounts in deficit are condemned, in order to resist, to trim their wages and reduce the perimeter of their social security systems.

The result is firstly a slowdown in internal demand which, since the second quarter of 2008, has led to negative growth, and this was even before the start of the liquidity crisis. Secondly, we are seeing a rise in the personal debt of households with modest incomes and means, whose purchasing power is no longer increasing. Their debt to acquire homes was fed by the whole deregulated financial machinery, in Spain, in the United Kingdom and in Ireland, with the disastrous consequences we have observed in the subprime crisis.

Ladies and gentlemen, listening to the debates in committee, a significant number of MEPs would seem to be forgetting the lessons of this crisis. This crisis is far from behind us. The current recovery is all the more fragile given the fact that Europe is continuing with wage deflation and the Commission, but also the President of the Eurogroup and the President of the European Central Bank – whom we heard on Monday – are calling on the Member States to prematurely adopt exit policies that are comparable to real austerity plans.

These policies risk nipping growth in the bud when it has barely become positive again, even though capacity utilisation rates remain low. These policies will fail to reduce the deficits in Greece, in Spain and elsewhere, because the expected tax revenue will fail to materialise also. They will exacerbate unemployment and will fuel social tensions.

The Giegold report has the merit of drawing attention to some of these macro-economic imbalances. Unfortunately, the final version, amended by the Group of the European People’s Party (Christian Democrats) and the Group of the Alliance of Liberals and Democrats for Europe, refuses to condemn wage deflation. However, on the whole, the debate opened by Mr Giegold may be beneficial at a time when neoliberal dogma thrown into doubt by the crisis is back in force in Parliament, in the Council and in the Commission.