#EUBEF20 Poll: Majority Sees Greater Role for States in Economy as Desirable and Inevitable
There is no easy way to separate government and market responsibilities in helping economies restart after Coronavirus, an online audience at the 2020 Brussels Economic Forum heard. Although audience members were generally in favour of an expanded role for the state, a debate at the BEF showed that opinions were complex and liable to be swayed.
Participants were asked to vote on whether they agreed or disagreed with the statement "This forum believes that an expanded role for the State in the economy after the coronavirus crisis is inevitable and desirable.”
At the start of the debate, 78 percent of voters said they agreed with the statement while 22 percent disagreed.
Panellists were then given time to make their case in favour of or against the statement before the audience had the chance to vote for a second time.
Sharan Burrow, General Secretary of the International Trade Union Confederation, started proceedings with an argument strongly in favour of an increased role for the State in the EU economy.
“The role of the state is critical,” she said. “The threat of withdrawing support now is intense and it would throw people back into destitution.”
She reminded the online audience of the global feeling of “collective despair” even before the virus hit world economies this year. Research by the International Trade Union Confederation showed that, just before lockdowns were introduced in many EU countries in March, exclusion and income inequality had “pitted the wealthiest 1 percent against people and against decent work,” Burrow said.
“We were seeing historic levels of inequality. A collapse of the world’s labour market was on its way,” the General Secretary said she believed.
“And then we had Covid19,” she said. “The impact has been astronomical,” with millions of jobs lost. “Overwhelmingly, people want governments to act.”
But “now we see a fight back not to regulate” to protect workers, she added. The fight is led by sectors including tech companies, “who have made billions out of this crisis because people depended on online shopping.”
She told Europe not to repeat mistakes made in response to the financial crisis, where “the moment business felt safe, support was withdrawn. People’s jobs and wages collapsed.”
“We’re going to have a tough time ahead. Yes an expanded role for the state is desirable, but it’s not inevitable,” she said, warning that it could not be taken for granted.
Alexander Stubb, Director at the School of Transnational Governance with the European University Institute, and a former Prime Minister of Finland, replied that things were not so simple.
“An increased role for the state is inevitable in the short-term, but undesirable in the long-term,” he cautioned.
“I am a Nordic capitalist,” he explained. “That means free and open competition, driven by enterprises and entrepreneurs who pay a high level of tax. The state can then distribute that tax income among citizens.”
Put simply, said Stubb, a former member of the European Parliament, “Welfare is taken care of by the state and competition by the market.”
Following Coronavirus, “we will inevitably see a political will for an increased role of the state,” Stubb said.
The EU has always been about the opening up and liberalisation of markets, he added. “At the beginning of Covid, member states wanted to stop all that.” He said there was a push in several member states to close borders and to renationalise industries, in an attempt to gain control over the virus. “The European Commission fought back and fought back well.”
We are now back in a situation where “the EU does freedoms and the member states do the redistributions,” he said. “Let’s keep working at the balance between the state and markets.”
“We need to avoid extreme right and extreme left. I want to see people start cooperating,” Stubb concluded.
Stubb’s arguments were apparently persuasive, although not quite enough to completely reverse the vote. On a second round at the end of the debate, support for the statement had dropped to 60 percent, with 40 percent saying they no longer agreed an expanded role for the state was inevitable or desirable.