Bernard Lietaer - The future of money

Furthermore, there is a growing consensus that this unemployment situation will not be solved through economic growth. 'Full employment can no longer be taken for granted as the automatic outcome of growth-creating economic policies' concludes a European green paper. A French study showed that even the high post-war rates of growth of 5% resulted in an annual employment increase of just 0.2%, and that this trend for jobless growth is getting stronger over time. The introduction of the euro will further reduce the room of manoeuvre for participating countries to decrease their unemployment levels in three converging ways.

1. Each government participating in the EMU is giving the levers of control over the euro money supply to the European Central Bank.

The ECB will by definition be less responsive to the requirements of any one country's unemployment situation.

2. The Maastricht Treaty gives the ECB a single objective: to ensure price stability. Full employment is specifically not one of its official priorities.

3. Finally, the only other traditional tool available - the fiscal one has similarly been put under severe constraints. The maximum limit of 3% of government deficit financing is supposed to be a permanent one and most governments are adopting the euro with their spending at or dose to this straitjacket target limit. In practice this means again that little room for manoeuvre exists to reduce unemployment via the fiscal tools.

To summarise, an unprecedented set of circumstances will converge over the next decade. The shift towards an Information Age and the budgetary constraints imposed by the Maastricht Treaty are at this point inevitable, and have powerful and valid arguments in their favour.