In the dismal reality of the deepening financial crisis in the European Union, exploiting the natural environment is seen by troubled member states as a quick-fix solution for rapid economic recovery. Following decades of massive spending on an unsustainable economic and development model, the EU’s policy response is essentially a recipe for a much deeper and longer-term environmental crisis.

Since the first bailout package for Greece was approved in May 2010 by the EU/IMF/ECB lending trio, the crisis has spread across large parts of the EU. Although the root causes and the impacts of the economic crisis differ among countries, the prescription is uniform: austerity and budget cuts, environmental deregulation, shrinking of environmental public administration, pressures on wages and living standards. More surprising, however, is the reluctance of the European Commission to uphold its own environmental laws. Why were the structural adjustment programmes imposed on heavily indebted countries not reviewed under the EU’s very own strategic environmental impact assessment legislation? Their real impacts on Europe’s natural capital still elude the Commission’s economic radars.

Despite the fact that certain fiscal indicators have indeed shown improvement on many occasions, critical parameters of social welfare and natural capital conservation have dramatically deteriorated.

The WWF was quick to warn of this blind spot in its January 2012 letters to the EU and the IMF: “[i]t is WWF’s strong belief that the crisis unfolding in Greece and the Eurozone countries more widely must be viewed as much more than merely a fiscal crisis. The crisis, in addition to being grounded in mismanagement of national finances, is a reflection of a deficient economic development model built on overconsumption and a steadily increasing ecological deficit and natural resource overexploitation. Until these contradictions in current economic development models are overcome, the measures being imposed on countries like Greece are little more than sticking plasters. Far from healing wounds, they are in fact exacerbating them while storing up longer-term environmental remediation costs.”

A crisis is always a herald to the need for change! The current calamity offers a unique opportunity for an integrated policy roadmap to an ecological transition not only for Greece’s economy, but for the entire EU.

State responses to the crisis

Through the monthly CrisisWatch e-bulletin, the WWF monitors the major environmental rollbacks and shortfalls that have occurred in the EU since the beginning of the crisis, primarily in the states most affected by the crisis, i.e. Greece, Spain, Italy and Portugal. While these countries are suffering an enforced environmental rollback, other countries like the United Kingdom seem hell-bent on entering their own voluntarily imposed environmental solitude. How else do you explain the current Westminster preoccupation of questioning the utility and benefits of EU policies on environment and fisheries and opening up the possibility of the repatriation of jurisdiction in these fields?

In Greece, the policy domains that have been most heavily impacted relate to environmental impact assessment (EIA) and environmental approval of construction and development projects, as well as forest and coastal protection. Budget cuts and political indifference have caused the collapse of the national system of protected areas. Regulatory uncertainty and constant changes in pricing policies have brought the renewable energy industry to near extinction. Emphasis now is on “dirty” projects, such as hydrocarbon exploration – widely advertised as Greece’s black gold future – coal development and gold mining. Recently, the Environment Ministry released a draft law which declassifies vast areas covered with Mediterranean woodlands, opening the way for controversial and highly damaging development on ecologically valuable lands.

This crisis is not simply fiscal; it is the reflection of an unsustainable development paradigm which is based on overconsumption and results in an ever increasing ecological deficit. The imposed corrective measures implemented in a state of panic and explained to a deeply skeptical public as a solution to the economic downturn are narrowly-conceived economic fixes based on highly questionable assumptions. Often their effect is simply to aggravate a longer term and much deeper crisis, with profound ecological, humanitarian and economic dimensions.

Opportunities waiting in the wings

A crisis is always a herald to the need for change! The current calamity offers a unique opportunity for an integrated policy roadmap to an ecological transition not only for Greece’s economy, but for the entire EU. Its aim needs to be the articulation of a new development paradigm, based on comprehensive ecological reform at all levels, which will boost innovative and competitive entrepreneurship and produce good livelihoods for all.

In the case of Greece, a vital step towards the necessary economic shift to sustainability would be to include specific and measurable sustainable development targets and indicators in the country’s economic adjustment programmes. After all, it is the European Union that supports and monitors the progress on these programmes, which are notoriously focused on austerity, rather than putting Greece on the road of full implementation of EU policies. Leaders prove themselves in difficult times and the EU now needs to honour its role as a global sustainability leader.

Greece urgently needs to reorient its restructuring efforts towards the closure of fundamental societal deficits – not simply economic ones. Policy makers need to look at the broader picture: unclear and complex laws and rules, legal uncertainty, social inequality, lack of public participation in policy making, environmental crime, lack of basic environmental knowledge and planning tools, administrative ineffectiveness, non-transparency in the public and the private sector, shortage in vision and new ideas. It is these deficits that are at the heart of the current crisis.

Natural resource security and sustainability, transparency and accountability at all levels, legal certainty, clear rules, and socially equitable and participatory development are principles and values that need to be cultivated and upheld as foundations for a prosperous economy. Economic and development policies need to reflect the environmental costs of consumption and production and support low-carbon entrepreneurial activity. At the sectoral level, Greece’s prospects for a thorough green reform are indeed bright and promising in the areas of tourism, primary production, energy and industry.

A simultaneous economic and ecological transformation offers Greece and the rest of Europe the unique promise of truly sustainable ways out of the crisis and a better quality of life and a less stressful future for all.

Taming the Giant – Towards a Sustainable Financial System
Taming the Giant – Towards a Sustainable Financial System

How to create a financial system that helps, not destroys, the real economy? Seven years on from the financial crisis that heralded the great recession, this question remains unresolved.

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