Thursday 21 October 2010

No2EU on EU-Inspired Cuts

Remember No2EU? Since its poor showing in last year's European elections it has limped on as an irregular press release machine. As I'm a bit busy this evening and haven't the time for a proper post, I reproduce this latest broadside against the hand the European Union had in yesterday's Spending Review. While I think the emphasis of this piece is wrong in placing the cuts at the EU's feet (the Tories would always cheerfully carve up welfare and the public sector irrespective of what Brussels thought) it does highlight the anti-democratic neoliberal game Europe's governments are playing behind closed doors. Whether you're opposed to the EU, would like to see it undergo root and branch democratic reform, or worship it as the nearest we're going to get to Hegel's Absolute, socialists and labour movement people across the continent need to keep an eye on the EU's cut-happy machinations.

ConDems play Brussels austerity game
Governments across the European Union are putting austerity policies in place which include massive cuts to welfare states, driving down wages and pensions, while raising unemployment by cutting investment and public spending. The public sector is to be handed over to the private sector with loss of service quality and accountability and no regard for the social consequences.

Tory Chancellor of the Exchequer George Osborne has agreed in Brussels that national budgets must be vetted by the European Commission. The budgets must be in line with the EU’s 1996 Growth and Stability Pact where Britain has exceeded the limits on government borrowing of 60 per cent of GDP and deficit of three per cent of GDP - currently and respectively 71.4 per cent and 11 per cent (Office of National Statistics). EU member states are to be fined if their budgets are not brought back into line with the Pact.

Italian economics minister Giulio Tremonti emerged from the meeting of EU finance ministers last month to announce that "budget policies in European countries cannot be national policies any more".

He said that the EU will be slapping economic sanctions and fines on countries which refuse to slash public services in order to cut deficits and maintain “budgetary discipline”.

Marco Buti from the European Commission for Economic and Financial Affairs also explained how the EU plans to slash public sector wages. "When wages in the public sector damage competitiveness and price stability then the country will be requested to change this policy ... And the wage development in the public sector does of course have a great influence on the private economy," he said.

EU Transport Commissioner Siim Kallas also chose last month to reveal more new Thatcherite rules designed to create a ‘Single European Railway Area’, dominated by EU "open access" competition rules, which incrementally remove national governments' power to control their own rail networks. “My aim in all of this is more competition in passenger and freight services. I intend to move forwards as quickly as possible with legislative proposals to open up the market," he said.

In summary unelected EU institutions, without a mandate, are now deciding the budgets of member states, how much public sector workers earn and how fast Europe’s railways can be privatised along the lines that created the dysfunctional transport mess we have in Britain.

That is why over 100,000 trade unionists marched in Brussels last month against unelected institutions like the European Central Bank and the European Commission which are driving up unemployment by slashing public borrowing and investment.

Ignoring the huge protests outside his window like some latter-day Nero, European Commission president Jose Manuel Barroso declared that placing economic sanctions on member states marked “a sea change in the way economic governance is dealt with in the European Union".

Under the plans, fines for countries which fail to meet the Thatcherite Stability and Growth Pact economic criteria will be "quasi-automatic", meaning that they could only be blocked by a qualified majority within the European Council.

George Osborne agreed the need for “credible sanctions” for member states which did not conform with EU budget rules as his own Tory government has announced a Spending Review in line with EU demands.

These EU-backed austerity measures are being repeated in all members states, especially those locked into the disastrous single currency. France is attempting to cut pensions and raise the retirement age to 62 from 60, and force employees to work longer.

The Spanish government has approved an austerity budget after promising the EU to cut its deficit to six per cent of its gross domestic product next year, from 11.1 per cent last year. Public sector workers face a pay cut of five per cent while unemployment has more than doubled to about 20 per cent.

The Greek government has pledged to the EU to slash the budget by £26 billion over three years, privatise the rail network, freeze public sector salaries and pensions for at least three years, raise retirement ages and increase EU-inspired VAT from 19 per cent to 23 per cent.

The Irish government has slashed spending and cut all public sector pay by at least five per cent, leading to GDP falling 1.2 per cent and gross national product dropping by 0.3 per cent.

There is, of course, resistance to these vicious measures which are only deepening and intensifying the nature and depth of the malaise. Yet the EU’s hand to impose its corporate-driven and suicidal neoliberal economic programme has been massively strengthened by the ratification of the Lisbon treaty.

This treaty gives EU institutions all the powers necessary to unleash a free fire zone for finance capital, creating a direct threat to jobs, public services and standards of living.

Minimum standards, legal protection and trade union strength could all be swept away in an orgy of speculation, profiteering and social dumping.

Therefore it is staggering that support for this agent of neoliberal structural adjustment in Europe still wins support from sections of the trade union movement, politicians and even the left.

Writing in the
Morning Star newspaper European TUC John Monks claimed that the EU is not about “dead-end, cruel Thatcherite economics but has a strong social dimension”. While this is wildly at odds with reality for hundreds of millions of workers Monks does, at least, admit that “no-one is acting on this message”. The simple explanation for this is that ‘social Europe ’ and ‘social partnership’ is nothing more than a mirage designed to seduce trade union bureaucracies and trick workers into swallowing the EU’s bitter neoliberal pill.

This sophistry was made clear by the architects of the EU’s internal market and the single currency, the corporate lobby group the European round Table of industrialists (ERT). ERT secretary-general Keith Richardson said long ago that big business did not oppose inserting a ‘social dimension’ into EU treaties “as long as it only remains an aspiration”. Now the trap has been set and workers and their organisations have a stark choice, resist this corporate-backed assault on democracy or continue in the elaborate charade created for them by monopoly finance capital.

No to EU austerity.


Eurogoblin said...

Hmmm... Let's not forget that the UK has an opt-out from the EU's new sanctions regime. Also, why don't those trade unionists marching against the "unelected" European Central Bank march against the "unelected" Bank of England (and let's not forget the UK isn't even IN the eurozone!). How many central banks are elected?! As for the Commission being unelected - it's a bureaucracy appointed by the two directly elected bodies - the European Council and the Parliament.

Ultimately, it's nonsense to blame austerity on the EU. The Stability and Growth Pact (SGP) has been roundly ignored both by the member-states AND by the EU institutions (which have turned a blind eye).

Anonymous said...

Classic EU-apologetics from Eurogoblin [John Palmer]. The UK has no opt-out whatsoever from the EU's sanctions regime (whatever the author is trying to say by that particular canard). The Lisbon Treaty removes the right of national veto from 45 separate areas of public policy and introduces Qualified Majority Voting. Of course, sanctions can be levied by the Commission on all member states found to have breached competition or other rules, whether members of the Eurozone or not. The disastrous, neoliberal Stability & Growth Pact is currently being imposed on the people of Greece by EU institutions in the classic imperialist pattern - forcing through cuts to public spending, pensions, etc and a fire sale of public assets (railways, telecoms, etc).

The job of trying to provide cover for reactionary EU policies is still being faithfully carried out by loyal Euro-federalists like the goblin, but with much-diminished returns.

Anonymous said...

If the EU is 'cut-happy' why is it 'wrong' to criticise it?