From Socialist Voice, May 2010

EU Commission to decide your budget


Just when you thought it couldn’t get any worse, up pops another opportunity for the EU Commission to take further power away from national parliaments and governments—that means from you.
     On 12 May the Commission will propose a major move in EU co-ordination of the economic and budgetary policies of the member-states of the euro zone. One of the central planks of the new proposals is the creation of a “permanent crisis resolution mechanism,” which would have a more direct say in the possible and continuing financial crisis within the euro zone.
     This may include financial assistance through bilateral loans from other members of the euro zone, with clear terms and lending conditions laid out in advance. No discussion or debate: you take what is given. There will also be the stick of sanctions if you don’t follow through on what you have signed up to.
     It is also proposed that there will be a tightening up of the stability and growth pact: the application of sanctions, such as the withholding of structural funds and reviews of and control of national budgets, for a country that does not accept the prescribed medicine.
     The Commissioner for Economic and Monetary Affairs, Olli Rehn, will propose that finance ministers of the euro zone should vote by “qualified majority” on whether draft national budgets are in line with EU economic guidelines and rules on fiscal discipline. The euro zone would also adopt recommendations about what should be in countries’ budgets.
     It is plain that budgetary priorities will be determined not by national interest, not what each nation and its people believe or decide what economic and social priorities should be, but by the European Central Bank. This is that the prime economic concern of all governments must be a reduction of deficits to the level prescribed in the EU’s growth and stability pact.
     Any reading of the communiqués issued by the ECB and the Commissioner for Competition, Joaquín Almunia, demonstrates that this is the case. The meetings of EU finance ministers lay down timetables for debtor-countries and prescribe how deficits are to be cut: the “focus,” they say, must be “on the expenditure side” rather than on tax increases.
     These measure are all aimed at thwarting the potential of national-democratic class struggle being effective as real power shifts dramatically towards the centre.
     What is being constructed is a new form of internal neo-colonialism. Policies are being imposed on the peripheral member-states, just like those the European Union as an imperial state imposes on external countries that wish to trade with it.
     What is coming more clearly into focus is the real extent of the weakness of the ruling elite in the peripheral countries. While their ideological influence over workers is still very much intact, the material and economic base of the elite in many of the peripheral countries is very weak and very much dependent on the power of the European Union to shore them up. This means in effect that Germany and France will decide and, in particular, German monopoly capital.
     Another feature of the crisis is that the resistance of the Greek working class has frightened the monopolies, and they have little faith in the ability of the Greek elite to hold the line and not to cause terminal damage to the euro and the whole European Union corporate project.
     One side effect of the Greek workers’ resistance is that the European Central Bank has been unable and politically unwilling to put up interest rates. As a result, rates for Irish mortgage-holders have not gone up, easing some of the pressure—temporarily at least—on Irish home-owners and small businesses.
     This unfolding scenario was predicted by the No campaign, particularly by the People’s Movement, during the campaign on both referendums on the Lisbon Treaty. A grab for control would be the consequence, flowing from the major transfer of powers contained in the Lisbon Treaty and other treaties.
     The arguments of the No campaign were dismissed by the establishment and its media, the pseudo-leftists and anti-national left, social democrats of the Labour Party, and many within the upper echelons of the trade union movement. Now the chickens are coming home to roost.
      The Greek working class have shown tremendous courage, and the workers of Europe owe them a debt for standing up and resisting. As Jim Larkin said, “It is better to die on your feet than to live on your knees.” Unfortunately, large sections of our trade union leadership appear happy to live on their knees.
[EMC]

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