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Let's Point the Finger at Those Who Are Really Cheating the System, Not Migrants

19/02/2014 08:43 GMT | Updated 20/04/2014 10:59 BST

I've worked in the 'capital of Europe' for six years now, having forsaken London to jump on the EU gravy train in 2007. Since then, there have been a few changes - not least, a global financial crisis. Out of concern for my own potentially precarious situation as a freelance media worker, I recently went down to my local social welfare office in Brussels (the CPAS) to find out what would happen if I was made redundant. I wasn't exactly prepared for the answer.

"You would be entitled to some assistance," the CPAS advisor told me, "but if you claimed for more than three months, you would run the risk of being thrown out of Belgium. The government is cracking down on foreigners who come here to cheat the system."

"Cheat the system?" I said. "Sorry?"

Somewhat affronted, I explained to him that I've been paying Belgian income tax - a hefty 50% - for the last four years. I'm not exactly a benefit tourist.

"Yes," he said apologetically, "but since the crisis, things have changed."

"Since the crisis". I've lost track of the number of times I've heard those three words used recently as an excuse for injustice - from terrible working conditions to austerity, to blaming migrants for the recession.

Under the EU's governing Treaties, freedom of movement is a fundamental right - and one I have loved exercising; it has enabled me to become bilingual, develop professionally, and broaden my social and cultural horizons. But you do not have genuine freedom of movement if you move to another country, work and pay tax there - not to mention build a life and put down roots there - and are then threatened with ejection at the first sign of trouble. I'm happy to report that I'm still employed, but plenty aren't so lucky. And Belgium is not alone in targeting foreign workers: David Cameron said last month he wants to negotiate a change in the EU Treaties to allow Britain to withhold welfare payments from workers from other European member states.

Austerity measures like these are justified, we are told, because our leaders are trying to rescue our battle-scarred economy from public debt, and we must all pitch in like good sports to set Europe back on its feet. Spanish citizens have apparently demonstrated an 'exemplary' "readiness to accept temporary hardship for the sake of a sustainable recovery", according to Klaus Regling, director of the European Stability Mechanism, which bailed out Spain's banking sector to the tune of €41bn. Meanwhile, George Osborne kicked off the New Year with a cheerful message predicting a further £25bn of cuts to welfare, saying it was time to face "the hard truth": "This country is much poorer because of the economic collapse six or seven years ago, and families feel that. What is the answer? (...) The way the country gets richer and families get richer is by being a competitive country that attracts jobs and investment."

Nowhere in this statement does Osborne address the actual hard truth; that the economic collapse happened because bankers gambled with depositors' money, speculating on risky mortgage loans to create a bubble of obscene wealth for a few incredibly greedy people, and blew up the system. That governments were forced to bail out the banks because they were "too big to fail", and they did so using public money. Now, the onus is on workers to rebuild the economy, and we are also expected to keep on paying taxes while the social rights and benefits our contributions traditionally gave us the right to expect are being whipped out from under our noses. Taxpayers are being asked to accept that under austerity, you pay - but you don't play - especially if you're foreign.

Over the last five or six years, as poverty and hardship have deepened, unemployment soared and inequality increased across Europe, so has xenophobia festered - with the rise of far-right parties such as Golden Dawn in Greece, and uncomfortable parallels can be drawn between the current socio-economic climate and that of the 1930s, which paved the way for Hitler's rise to power. A report on the humanitarian impact of the financial crisis in Europe, published by the International Federation of Red Cross and Red Crescent Societies in October 2013, warns that "increased xenophobia and the lack of confidence in society being able to provide jobs and security may lead to more extreme views and actions, with social unrest as a consequence."

The tragedy is that in many cases, the finger is being pointed at 'foreigners' instead of those really responsible for all this hardship - bankers, who have essentially continued on with the activities that caused the crisis, and will, if nothing changes, cause another.

"We had a tsunami," says Benoît Lallemand from Finance Watch, a European NGO set up in 2011 as a counterbalance to the financial lobby. "The ambition of the G20 was to stop it happening again, and so it built embankments. But it did not ask where the tsunami came from."

That 'tsunami', Lallemand explains, was caused by the interconnected weaknesses of the 'megabanks' - a product of deregulation in the 1990s, which created incentives for risk-taking and transformed the nature and size of banking activities. The heart of the problem, he says, is the need to separate investment banking from retail banking, removing the implicit state guarantee which provides banks with cheap money for speculation, and fuels massive volumes on financial markets (investment banking). This in turn leads to systemic risk, and expensive, taxpayer-funded bailouts. New EU rules capping bankers' bonuses - the focus of much media attention - address a symptom of this problem, not the cause, Lallemand explains.

The EU's Internal Market Commissioner, Michel Barnier, proposed a reform on 29 January that could lead to the separation of investment and retail banking - but nothing will be discussed until after the European elections in May, and it could take years for the EU's 28 member states to agree on such reforms.

"Barnier's proposal is a step in the right direction," Lallemand recognises, "but we need political momentum. There is a risk that the public interest will not prevail - the financial lobby is very powerful. We need to put society back in the driving seat in terms of regulating finance."