Clamor for a pact

The waves of protestors at the demonstrations held during the May Day celebrations on Wednesday, in which hundreds of thousands of people flocked to the streets to take part in more than 80 events, suggests that the public wants the government to subscribe to a pact with the country’s political parties and social agents aimed at redirecting the course the economy is taking.

Before the demonstrations took place, the business figures who make up the Family Business Institute (IEF) had already called for a broad state pact to deal with the crisis. A number of leading businessmen have also suggested this, while the main opposition Socialist Party has proposed an agreement to the government on certain economic areas to reduce unemployment and stimulate growth. Clamor for such a pact sets the May Day celebrations that took place on Wednesday apart from those of previous years.

Public pressure is growing for agreements that help the government adopt the right decisions in light of the fact that an economic policy limited to the adjustment programs inspired by Brussels has run its course. Practically everything points toward the need for political and social agreements.

This change of focus is also supported by a shift in European economic strategy sparked by doubts about the economic costs incurred by the intransigent adherence to controlling public deficits and the appearance of new political figures on the stage, such as the Italian prime minister, Enrico Letta. With his calls for less strict policies that lean more toward creating employment, he is a breath of fresh air. “We have to show the same determination as regards growth as we have done for fiscal consolidation,” Letta said on Wednesday after meeting with French President François Hollande.

Going beyond just a broad pact to tackle the crisis that would put shackles on its management, limit political criticism and be difficult to organize, what the economy needs are at least two specific agreements: a reform of the state pension system and the creation of jobs. Both should entail a commitment on the part of those adhering to such joint action, regardless of the political costs entailed. A pact for employment should mark out the scope that exists for investing in economic stimulus measures, and if such leeway is not available, Brussels should be called upon to introduce a public investment program that includes an action plan to jumpstart the creation of jobs for young people.

Turning a deaf ear to the public

A dose of realism is required. The openness of the opposition at present to forging such a pact does not currently go beyond an averred public disposition toward such an agreement, while the government’s stance is that any such accord should be interpreted as a form of compliance with its decisions. But that is not what is being demanded by a public and business community that is increasingly concerned about the appalling rise in unemployment and the grim prospects for the economy in the medium term, accompanied by the growing conviction that a recovery based exclusively on fiscal adjustment is not possible.

Seldom has there been such clamor for a political agreement to confront the crisis, while the tendency for the political classes to turn a deaf ear to such demands has been par for the course, as is the case now.