Watch: Clyde Caruana Warns Of Upcoming Death Of EU Welfare States Due To Defence Focus
Malta’s Finance Minister Clyde Caruana delivered a powerful speech in Parliament, in which he shed some light on the complex and behind-the-scenes dynamics of EU defence spending negotiations and the impact these could have on the very future of the union.
After EU leaders agreed on a €800 billion package to mobilise defence spending, EU finance ministers convened to discuss the important fine print – where is all of this money going to come from?
While Malta’s position is that other EU countries can do as they please so long as Malta isn’t forced to participate, the situation appears to be far more complicated for other countries.
Caruana said that a particular minister declared his country has already achieved its defence spending targets by increasing the retirement age, reducing public holidays, increasing taxes and slashing welfare spending. Another minister said the EU’s spending rule should be relaxed, but the first minister warned against this on the grounds that their country would have to step in if the second country’s debt reaches unsustainable levels.
Meanwhile, countries that are already facing financial problems are anxious about getting further into debt as that would make it harder for them to take out loans.
Meanwhile, data shows that the EU economy is barely growing, and the new US trade war is only adding a fresh level of uncertainty.
Caruana said the likelihood is that EU countries will start raising taxes and dismantling their welfare states, which will lead to political unrest.
“Either taxes will increase in a savage manner or EU countries will start dismantling their welfare states, and Social Europe will be no more. These discussions aren’t open to the public, but a number of ministers have already said that Europe must choose its priorities and that the time might have come to slash welfare spending.”
“This means that this continent, which since World War Two has distinguished itself by its generous welfare states, will have to transform itself.”
Caruana warned that this is likely to result in significant political upheaval across Europe.
“The chances are that EU politics and governments will become even more fragmented at a time when they need to be stable. I am concerned that when this arms race begins, the centre will lose popularity while extremist parties on the left and right will rise up and weaken EU governability.”
“Strength isn’t just about owning missiles, but about the economic and political strength of countries, and history has shown us that this is exactly why so many nations and empires have risen and fallen.”
“If Europe wants to have a chance of rubbing shoulders with the strength of the West and East, it needs economic growth more than it needs weapons.”
“No weapon will strengthen the EU if it isn’t economically strong. However, from what I can see around the negotiating table, we are more focused on military strength than economic growth.”
Caruana warned that this “political blindness” and focus on military spending risks isolating the very people of Europe which determine the fate of governments.
“At the end of the day, the lifespan of a government is dictated by its people.”
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