The ongoing malaise in the eurozone seems to resist any intents of monetary policy to improve the situation. As Keynes found in his “General Theory”, written in the aftermath of the Great Crash of 1929, in a depression only fiscal policy works. That, however, would change the distribution of income and wealth towards the non-rich, especially so since more employment creates higher wage demands. Both Labour Party in the UK and Social-democrat Party of Germany (SPD) had no mention of fiscal policy in recent years. Now, however, Jeremy Corbyn calls for “full employment and an economy that works for all” (link). Here is how he wants to get there:
We will create a million good quality jobs across our regions and nations and guarantee a decent job for all. By investing £500 billion in infrastructure, manufacturing and new industries backed up by a publicly-owned National Investment Bank and regional banks we will build a high skilled, high tech, low carbon economy that ends austerity and leaves no one and nowhere left behind. We will invest in the high speed broadband, energy, transport and homes that our country needs and allow good businesses to thrive, and support a new generation of co-operative enterprises.
Ralf Stegner, the most left-wing politician in the leadership of the SPD, is not as outspoken. His theses for a more just society do include some things like a public sector to provide work for long-term unemployed, but no mention is made of fiscal policy as a tool to create employment (link). The return of Keynesian ideas to European politics seems to be evolving slowly, step by step.