Tag Archives: “Democracy in Europe” (DiEM25)

coping with corona: assessing the NHS, the UK govt and Eurogroup responses

Last night’s episode of Novara Media’s Tyskie Sour, with hosts Michael Walker and Aaron Bastani, who were joined by NHS doctor Rita Issa, was such an excellent broadcast that I have decided to post it without further description other than to say it covers all the relevant questions about the coming crisis, focussing on the NHS, but also considering the economic implications in the medium and longer term. Near the end of the show they compare the West’s inadequate response to what has been done in South Korea.

[Warning: strong language]

*

To complement the analysis above, which very much centres around the situation facing Britain, I have decided to republish below the latest piece by Yanis Varoufakis (published today) in which he criticises the failures of the Eurogroup and offers his own solutions.

[All highlights are preserved as in the original.]

*

The Eurogroup fails Europe once again. Brace for a hideous EU recession | Yanis Varoufakis

The Eurogroup met yesterday, Monday 16th March, to hammer out its coordinated fiscal response to the massive recession already in progress following the lockdown of much of Europe’s society. The task they faced is enormous: If sales, tourism, services etc. fall by 50% for just one month (which is certain), and then by 25% for only two more months (i.e. the best-case scenario), then annual growth will be -10%. Across Europe!

So, what was the Eurogroup’s duty to announce? An immediate massive fiscal boost, its purpose being to reassure people that they will not be poorer. E.g. the government of Hong Kong that ploughed $10 billion immediately into the economy by ordering the tax office to credit every household’s bank account with $1250 immediately.

Not expecting such swift action from the Eurogroup, the fact remains that nothing short of a 5% fiscal injection was needed to reduce the calamity from -10% of GDP to, say, -3% (assuming a very large multiplier effect).

So, what did the Eurogroup decide?

Here is their official communique, announcing some impressive numbers. Commentators spoke of a bazooka aimed at the recession. In reality, the bazooka was a pathetic water pistol. Once again, the Eurogroup proved itself to be, not just dysfunctional, but a clear and present danger for Europeans.

The first thing to note is what they did not do. As everyone knows, eurozone governments live in the straitjacket of the so-called fiscal compact that allows next to zero room for fiscal expansion. This fiscal compact does, however, contain a clause that can be activated in times of emergency that released, temporarily, governments and allows them to throw money at an unexpected crisis. Before yesterday’s meeting, almost everyone expected the Eurogroup to announce the triggering of this clause. THEY DID NOT!

What they did do was to announce two things:  First, a bevy of loans for the private sector. Secondly, they referred to the utilisation of the so-called automatic stabilisers and also on unspecified measures of 1% of GDP. Let’s take these two separately:

LOANS

  • The European Investment Bank will offer €8 billion of working capital lending for 100,000 European firms, promising to try to this sum to €20bn
  • The Eurogroup toyed with the idea of calling upon the bailout fund (the European Stability Mechanism) to use its unused lending capacity of €410 billion

Before losing ourselves in the detail of this €430 billions of potential loans, it is crucial that we stick to the important point: Loans are useless when the problem is, not illiquidity but, insolvency. It is a pointless gift to lend money to a firm whose customers have disappeared and which know that, when the customers return, it will be next to impossible to repay the new and old debts. What companies need now is either the government to act as a buyer of last resort or a haircut of their liabilitiesnot new loans.

Looking now at the particulars, the EIB loans are a drop in the ocean. Moreover, they fail the speed test, as anyone who has had to apply to the EIB loan knows. As for the ESM, this would be a joke if the situation were not so serious. Why a joke? Because any loan by the ESM comes with so-called ‘conditionalities’. What are these? The government receiving it will need to sign an MoU (like Greece did in 2010) that involves massive future austerity and, thus, become even more of a vasal state of Brussels. Can anyone seriously see the Italian government signing up to its own decapitation by signing such an MoU?

TAX DEFERMENTS plus a 1% of GDP FISCAL ADJUSTMENT

The headline number that newspapers today lead with is a 1% of EU GDP fiscal measures. But when we look at these measures, we find that they lack any detail. The only tangible thing they mention is tax deferments: letting businesses and households not pay VAT and other taxes until the end of the year. But this is also, like the loans to business, a failed policy. Even when the lockdown ends, and business-as-almost-usual returns, Europeans will not earn enough to pay belatedly the deferred taxes plus the new ones. Especially given that many businesses and jobs will have disappeared by then.

In short, Europeans needed a tax haircut. Instead they got a deferment, a kind of state loan by which to repay their taxes later. Yet more spectacular proof that the Eurogroup has not learned its lesson from the 2010 euro crisis: Loans to the bankrupt do not help!

DiEM25’s answer to: What should they have done?

At the very least, the Eurogroup should have recommended to the European Council that the European Investment Bank is given the green light to issue EIB bonds worth €600 billion with the stipulation that, as part of its ongoing and recently enhanced quantitative easing program, the European Central Bank will support the value of these bonds in the bond markets. That €600 billion should be spent directly to support national health services and also be invested in sectors of the economy badly hit by the lockdown – while also nudging our economy toward greener forms of transport, energy generation etc. Additionally, the fiscal compact should be immediately side-lined and governments should effect a tax haircut for small and medium sized firms, households etc.

The above would probably be enough not to avert but to contain the recession to something like between -1% and -2% of GDP. To avert it completely, the Eurogroup should have decided to mimic Hong Kong and have the European Central Bank mint an emergency fund from which every European household is given between €1000 and €2000.

SUMMARY

Those of us who know how the Eurogroup works were not holding much hope yesterday. Nevertheless, Europe’s finance ministers managed to do even less than what we feared: They failed to use the fiscal compact’s proviso for loosening up fiscal policy across the euro area. They continued with the tragic error of treating a crisis of insolvency as a crisis of liquidity. And they failed to recognise that some countries, in particular those savaged by the never-ending euro crisis, need a great deal more support than others.

In short, the Eurogroup’s bazooka is no more than a pathetic waterpistol. It is time that Europeans pushed for something better than this. It is time that we organise at a transnational, paneuropean level to replace this instrument of austerity-driven recession, the Eurogroup, with an institution that can work for a majority of Europeans everywhere.

APPENDIX: The Eurogroup’s telling reference to “automatic stabilisers”

The Eurogroup communique referred to the “full use of automatic stabilisers”. What did they mean?

Here is an example of an ‘automatic stabiliser’: When people lose their job, they go on unemployment benefit. This means a transfer of money from the better off to the worse off. As the worse off, who are now unemployed, save nothing and, therefore, more of the money of the better off enters the markets. That’s what economists refer to as an ‘automatic stabiliser’ (‘automatic’ because no government decision was needed to activate it – the loss of jobs does it automatically | and ‘stabiliser’ because the higher portion of spending relative to savings boosts GDP ).

Can you see dear reader what the Eurogroup are really saying when confessing to relying to the ‘automatic stabilisers’ in the absence of concerted fiscal expansion? They are saying: Don’t worry folks. While it is true we, the finance ministers, are doing almost nothing to avert the disaster, when the disaster comes your job losses and poverty will trigger some automatic mechanism that will break the economy’s fall. A little like consoling the victims of the plague with their thought that their death will, through shrinking the labour supply, boost future wages…

Click here to read the same piece on Yanis Varoufakis’ official website.

Note that: Not all of the views expressed above are ones necessarily shared by Wall of Controversy.

*

Update:

If you would like regular information on the spread of Covid-19 and the measures being taken in countries across the world, then I very much recommend the down-to-earth daily updates provided by Dr John Campbell. Today he begins by reading one of the most heart-rending letters imaginable from a nurse working on the frontline in Italy:

*

On March 15th, George Galloway invited NHS Consultant, Dr Ranjeet Brar, to speak about the threat posed by a rapidly accelerating number of coronavirus cases and difficulties now facing the health service. He also talks at length about the Malthusian ethos informing the government initial decision to sacrifice numbers of our elderly and infirm for the sake of developing ‘herd immunity’ (something that may not even be achievable for a coronavirus outbreak):

*

On March 18th, Going Underground invited Professor Rupert Read, Associate Professor of Philosophy and spokesman for Extinction Rebellion (an organisation I do not have a great deal of time for – for the record) to discuss the British government’s lamentable response to the coronavirus pandemic.

Read also expresses his dismay at Boris Johnson’s decision to adopt a ‘herd immunity’ response knowing it would inevitably result in hundreds of thousands of Britons dying. They also talked about how the UK government response is completely at odds with the rest of the world and how the British population is actually leading the government in terms of its own response to tackling the spread of coronavirus infection:

*

On March 18th, Novara Media invited Steve Turner, Assistant General Secretary (AGS) of Britain and Ireland’s largest trade union, Unite the Union, to join them in an extended discussion about the potential economic impact of the Covid-19 pandemic, how it impacts working class people, and how organised labour needs to respond:

*

On April 8th, Yanis Varoufakis joined Aaron Bastani and Michael Walker on Novara Media’s Tysky Sour to discuss what he calls “the tragedy of errors”:

Leave a comment

Filed under analysis & opinion, Britain, Europe, Korea (North and South)

this is the EU — so take it or leave it… #5. Greece and the tyranny of Brussels

“In the euro area, the countries in the periphery have nothing at all to offset austerity. They are simply being asked to cut total spending without any form of demand to compensate. I think that is a serious problem.

“I never imagined that we would ever again in an industrialised country have a depression deeper than the United States experienced in the 1930s and that’s what’s happened in Greece.

“It is appalling and it has happened almost as a deliberate act of policy which makes it even worse”. [Bold highlight added]

— Lord Mervyn King, former Governor of the Bank of England. 1

“The Greek people have been living through hell during the last six years, and unfortunately they trusted that Tsipras [PM] would put an end to the extreme austerity measures, which are combined with a total undemocratic regime. Unfortunately, instead of putting an end, he put his signature to a third memorandum, which is even worse than the previous two…

“People are back on the streets protesting for their rights and dignity because right now they’re being asked to pay taxes which amount to almost the totality of their revenue. They’re asked to give up their homes… They’re asked to surrender public property, which is privatized at very, very low prices. And, they’re also asked to give up democracy”

— Zoe Konstantopoulou, lawyer and former Speaker of Hellenic Parliament. 2

*

On 13th July [2015], the democratic elected Greek government of Alexis Tsipras was brought to its knees by the European Union. The “agreement” of 13th of July is in fact a coup d’état. It was obtained by having the European Central Bank close down the Greek banks and threaten never to allow them to open up again, until the Greek government accepted a new version of a failed program. Why? Because official Europe could not stand the idea that a people suffering from its self-defeating austerity program dared elect a government determined to say “No!”.

So begins the call for “A plan B in Europe” put together by a group of prominent European left-leaning politicians from Parti de Gauche (France), Die Linke (Germany), Red Green Alliance (Denmark), Socialist Party (SP) (Ireland), Bloco de Esquerda (Portugal), and Syriza (Greece). Top of the bill is Yanis Varoufakis (a principle author, I imagine, given some of the polemical flourishes within this signed but otherwise uncredited page-long call to action).

The piece continues:

We must learn from this financial coup. The euro has become the tool of economic and governmental dominance in Europe by a European oligarchy hiding behind the German government, delighted to see Mrs Merkel doing all the « dirty work » other governments are incapable of undertaking. This Europe only generates violence within nations and between them: mass unemployment, fierce social dumping and insults against the European Periphery that are attributed to Germany’s leadership while parroted by all the “elites”, the Periphery’s not excluded. The European Union has thus become an agent of an extreme right wing ethos and a vehicle for annulling democratic control over production and distribution throughout Europe. 3

Click here to read the full statement.

*

Now let us go back nine months – back to the eve of the Greek referendum during the dog days of last summer, and just before the extraordinary ‘oxi’ vote which momentarily reverberated across our western hemisphere.

Yanis Varoufakis [3:45 mins in]: Let me tell you something which is probably unknown. Ever since we declared the referendum and we incensed our European partners we had the most interesting proposals coming from Brussels. Perhaps this referendum and the impasse it represents concentrated several minds in Brussels and we’ve had some really good proposals – proposals we would sign on the dotted line for.

Paul Mason: You have a proposal you would sign on the dotted line for?

Varoufakis: Yes, we do.

Mason: Where is it?

Varoufakis: Well, I’m not going to tell you. It’s somewhere in this building. But the crucial part of the story is that before this proposal becomes a genuine negotiating document which we can sign off on Monday, the people have to empower us with a “no”.

From the Channel 4 news interview embedded above broadcast on July 3rd 2015 that is also available here.

You can find the same clip here on Varoufakis’ blog.

Shortly thereafter [July 5th] the people of Greece, perhaps in light of Varoufakis’ advice, went to the polls and voted overwhelming in favour of rejecting the Eurogroup deal with its demands for increasing doses of “austerity” and ‘Washington Consensus’-style ‘conditionalities’ — the enforced privatisation of public services and other forms of so-called ‘deregulation’. To which the response from Brussels was to immediately double down by issuing still harsher neoliberal demands. With this, the mask of European social democracy fell away completely.

Nobel laureate economist, Paul Krugman, was one who helped to promote the hashtag #ThisIsACoup when he wrote in the New York Times:

This Eurogroup list of demands is madness. The trending hashtag #ThisIsACoup is exactly right. This goes beyond harsh into pure vindictiveness, complete destruction of national sovereignty, and no hope of relief. It is, presumably, meant to be an offer Greece can’t accept; but even so, it’s a grotesque betrayal of everything the European project was supposed to stand for.

Left Unity (which has a loose alliance with political parties Syriza and Podemos) also sent a message of support to the Greeks:

The people of Greece have resisted every threat, every piece of establishment propaganda telling them a No vote would mean ruin, and asserted their democratic rights. This will be a No heard around the world.

Now is the time to celebrate – and to step up our solidarity ahead of the Troika’s next move. Come along to what will now be a victory rally at the TUC’s Congress House, organised by Greece Solidarity Campaign.

And the Greeks had indeed empowered their government with a resounding ‘no’, but instead of fighting on, Syriza under Tsipras’ leadership swiftly capitulated in what must be one of the fastest political U-turns of all time. In response, Varoufakis resigned, refusing to criticise his friend Tsipras, and also declining an invitation to join a small breakaway faction who hoped to restore the party’s anti-austerity ticket on which Tsipras and Syriza had stood little more than six months previously.

So there is a mystery here that remains. Varoufakis, who prides himself on openness, has simply never explained what actually happened during those most momentous days in early July. Specifically, what became of that proposal from Brussels he was so keen “to sign on the dotted line”. Surely he owes the Greek people a fuller explanation.

Moreover, while Varoufakis was quick to attribute blame for the Eurogroup failures on the inflexibility of Wolfgang Schäuble and fellow German Karl Lamers, he has to a large extent absolved other key players including, most notably, President of the ECB, Mario Draghi for their part in “the coup” (his words).

I have consistently defended Varoufakis and Tsipras and been scathing of others on the left for being too hurried in passing judgement and unduly hypercritical (as many earlier posts testify). Caught up in the drama, like others hoping Syriza’s election signified the beginning of truly revolutionary reforms, I confess that I became a cheerleader for both.

With the benefit of hindsight it is clear that Syriza and Varoufakis were both tremendously guilty of an over-reliance on the efficacy of “reasonableness” (more here), because ‘reasonableness’ only ever makes headway when it engages with opposition that is principled and reasoned. Against the irrational, it is blunt, and against the unscrupulous it becomes a danger to itself. Yet Syriza and Varoufakis seem incapable of learning this simple lesson. This is what Varoufakis wrote in the abstract to his “Confessions of an Erratic Marxist” [December 2013]:

Should we use this once-in-a-century capitalist crisis as an opportunity to campaign for the dismantling of the European Union, given the latter’s enthusiastic acquiescence to the neoliberal policies and creed? Or should we accept that the Left is not ready for radical change and campaign instead for stabilising European capitalism? This paper argues that, however unappetising the latter proposition may sound in the ears of the radical thinker, it is the Left’s historical duty, at this particular juncture, to stabilise capitalism; to save European capitalism from itself and from the inane handlers of the Eurozone’s inevitable crisis. 4

Throughout the crisis, he and the party he once represented at the Eurogroup meetings have been chewed up and spat out time and again and yet his response has been to remain unruffled and reasonable in his continued fight (hardly the right word) “to save European capitalism from itself”.

Today Varoufakis leads a parallel campaign Democracy In Europe 2025 made up of lecture tours and larger academic-style conferences making speculative calls for a Plan B in Europe. Beyond the well-meaning rhetoric, the movement is entirely bereft of strategy. And my immediate question to Varoufakis is actually this: why must we wait until 2025 to bring democracy (a gift of the ancient Greeks) back to Europe? After all he knows better than most that a week in politics is an exceedingly long time – so a decade might as well be an aeon.

Here then, to redress the balance of earlier posts (at the risk of angering readers and friends alike), I present the condemnatory appraisal courtesy of political commentator James Petras, who in March 2015 (a mere two months after Syriza were elected) wrote the following:

The vast majority of Greeks, who voted for Syriza, expected some immediate relief and reforms.  They are increasingly disenchanted.  They did not expect Tsipras to appoint Yanis Varoufakis, a former economic adviser to the corrupt neo-liberal PASOK leader George Papandreou, as Finance Minister. Nor did many voters abandon PASOK, en masse, over the past five years, only to find the same kleptocrats and unscrupulous opportunists occupying top positions in Syriza, thanks to Alexis Tsipras index finger.

Nor could the electorate expect any fight, resistance and willingness to break with the Troika from Tsipras’ appointments of ex-pat Anglo-Greek professors.  These armchair leftists (‘Marxist seminarians’) neither engaged in mass struggles nor suffered the consequences of the prolonged depression.

Syriza is a party led by affluent upwardly mobile professionals, academics and intellectuals.  They rule over (but in the name of) the impoverished working and salaried lower middle class, but in the interests of the Greek, and especially, German bankers.

They prioritize membership in the EU over an independent national economic policy.  They abide by NATO, by backing the Kiev junta in the Ukraine, EU sanctions on Russia, NATO intervention in Syria/Iraq and maintain a loud silence on US military threats to Venezuela! 5

[bold highlight added]

Click here to read the full article by James Petras.

*

By latest estimates total Greek debt is 384 billion euros, or US$440 billion. That’s approaching nearly twice the size of Greece’s annual GDP.  A decade ago, in 2007-08 before the global crash, Greek debt was roughly half of what it is today, in terms of both total debt and as a percent of GDP.  Greek debt was actually less than a number of Eurozone economies.  So Greece’s debt has been primarily caused by the 2008-09 crash, Greece’s six year long economic depression [that] followed, the extreme austerity measures imposed on it by the Troika during this period which has been the primary cause of its long depression, and the Troika’s piling of debt on Greece to repay previously owed debt.

Contrary to European media spin, it’s not been rising Greek wages or excessive government spending that has caused the US$440 billion in Greek debt. Since 2009 Greek annual wages have fallen from 23,580 to less than 18,000 euros. Government spending has fallen from 118 billion euros to 82 billion.

writes Jack Rasmus in an extremely detailed overview of the state of the Greek crisis in light of the recent parliamentary vote (passed by a narrow margin of 153 to 145) to implement the latest demands of “the Troika” in order to ensure another tranche of unpayable loans. “Bailouts” that, as Rasmus explains at length, are then returned directly to the creditors:

As a recent in depth study by the European School of Management and Technology, ‘Where Did the Greek Bailout Money Go?, revealed in impeccably researched detail, Greek debt payments  ultimately go to Euro bankers. For example, of the 216 billion euros, or US$248 billion, in loans provided to Greece by the Troika in just the first two debt deals of May 2010 and March 2012, 64 percent (139 billion euros) was interest paid to banks on existing debt; 17 percent (37 billion euros) to Greek banks (to replace money being taken out by wealthy Greeks and businesses and sent to northern Europe banks), and 14 percent (29 billion euros) to pay off hedge funds and private bankers in the 2012 deal. Per the study, less than 5 percent of the 216 billion euros went to Greece to spend on its own economy. As the study’s authors concluded, “ the vast majority (more than 95 percent) went to existing creditors in the form of debt repayments and interest payments”.  And that’s just the 2010 and 2012 Troika deals. Last August’s third deal is no doubt adding more to the totals. 6

[bold highlight added]

Click here to read Jack Rasmus’ full article published in Counterpunch.

The cycles of debt-repayment might literally be never-ending, because Greece will never be able to fully repay all of its (odious) debts. It is a situation compounded because Greece’s already floundering economy is completely suffocated by the Troika’s imposed “austerity” regime.

But this disastrous situation is no accident. The trap in which Greece finds itself satisfies two neo-liberal objectives. Firstly, Greece becomes so impoverished that it is forced to sell state assets at rock-bottom prices. Secondly, the sustained wealth transfer from the pockets of the ordinary Greeks into the hands of the bankers helps to prop up a failed financial system.

Setting the bizarre academic justifications aside, and overlooking the deeper reasons Greece became so indebted in the first place, what we see is how the Troika – two thirds of which is the EU – has put the sanctity of debt repayment far above the sanctity of human well-being. So whenever Greece comes up gasping for air, the IMF and the EU repeatedly pushes it back under again:

The media persists in calling the looting of Greece a “bailout.”

To call the looting of a country and its people a “bailout” is Orwellian. The brainwashing is so successful that even the media and politicians of looted Greece call the financial imperialism that Greece is suffering a “bailout.”

writes former Assistant Secretary of the Treasury for Economic Policy and former Associate Editor of the Wall Street Journal, Paul Craig Roberts in a recent article entitled “We Have Entered The Looting Stage of Capitalism”. In the piece, Roberts explains the EU’s role and the IMF’s apparent policy shift as follows:

Having successfully used the EU to conquer the Greek people by turning the Greek “leftwing” government into a pawn of Germany’s banks, Germany now finds the IMF in the way of its plan to loot Greece into oblivion.

The IMF’s rules prevent the organization from lending to countries that cannot repay the loan. The IMF has concluded on the basis of facts and analysis that Greece cannot repay. Therefore, the IMF is unwilling to lend Greece the money with which to repay the private banks.

The IMF says that Greece’s creditors, many of whom are not creditors but simply bought up Greek debt at a cheap price in hopes of profiting, must write off some of the Greek debt in order to lower the debt to an amount that the Greek economy can service.

The banks don’t want Greece to be able to service its debt, because the banks intend to use Greece’s inability to service the debt in order to loot Greece of its assets and resources and in order to roll back the social safety net put in place during the 20th century. […]

The way Germany sees it, the IMF is supposed to lend Greece the money with which to repay the private German banks. Then the IMF is to be repaid by forcing Greece to reduce or abolish old age pensions, reduce public services and employment, and use the revenues saved to repay the IMF.

As these amounts will be insufficient, additional austerity measures are imposed that require Greece to sell its national assets, such as public water companies and ports and protected Greek islands to foreign investors, principally the banks themselves or their major clients. […]

In other words, Greece is being destroyed by the EU that it so foolishly joined and trusted. The same thing is happening to Portugal and is also underway in Spain and Italy. The looting has already devoured Ireland and Latvia (and a number of Latin American countries) and is underway in Ukraine.

The current newspaper headlines reporting an agreement being reached between the IMF and Germany about writing down the Greek debt to a level that could be serviced are false. No “creditor” has yet agreed to write off one cent of the debt. All that the IMF has been given by so-called “creditors” is unspecific “pledges” of an unspecified amount of debt writedown two years from now.

The newspaper headlines are nothing but fluff that provide cover for the IMF to succumb to pressure and violate its own rules. The cover lets the IMF say that a (future unspecified) debt writedown will enable Greece to service the remainder of its debt and, therefore, the IMF can lend Greece the money to pay the private banks. […]

We have entered the looting stage of capitalism. Desolation will be the result. 7

Click here to read Paul Craig Roberts’ full article.

The overarching agenda of the EU – a plan rarely mentioned above a murmur – is to fuse its member nations under unelected technocratic governance for the benefit of a few corporations and the oligarchs who own them. So the notion that sticking by the EU is some sense an act of European solidarity is extremely misguided. Having already sold many of its people down the river, however, we are rapidly approaching a critical and perilous moment.

The far-right is now on the rise in many parts of Europe – Greece being an example, although thankfully Golden Dawn remains very much a minority party. And this swing towards ring-wing extremism is a direct consequence of the EU’s savage economic policies combined with its abject failure to save refugees and resolve the so-called “migrant crisis” (more in a later piece). As this alarming political shift occurs, the EU does next to nothing to address it. No debt relief for Greece or the other struggling member states. No let up on enforced “austerity” or privatisation. Neo-liberalism to the bitter end. But then, after Greece was collectively punished for the insolence of its ‘oxi’ vote last summer, only the most dewy-eyed believers can remain in serious doubt of the EU’s callous indifference towards the plight of its poorest citizens.

*

1 Quote taken from “Euro depression is ‘deliberate’ EU choice, says former Bank of England chief” written by Mehreen Khan, published in The Telegraph on March 1, 2016. http://www.telegraph.co.uk/business/2016/03/01/europes-depression-is-deliberate-eu-choice-says-former-bank-of-e/ 

2 Quote taken from an article entitled “The Ugly Truth Behind the Greek Bailout” written by Robert Hunziker, published by Counterpunch on May 10, 2016. http://www.counterpunch.org/2016/05/10/the-ugly-truth-behind-the-greek-bailout/ 

3 From a statement entitled “A plan B in Europe” from Plan B for Europe. https://www.euro-planb.eu/?page_id=96&lang=en. The statement continues:

It is a dangerous lie to assert that the euro and the EU serve Europeans and shield them from crisis. It is an illusion to believe that Europe’s interests can be protected within the iron cage of the Eurozone’s governance “rules” and within the current Treaties. President Hollande’s and Prime Minister Renzi’s method of behaving like a “model student”, or in fact a “model prisoner”, is a form of surrender that will not even result in clemency. The President of the European Commission, Jean-Claude Juncker, said it clearly: « there can be no democratic choice against the European treaties ». This is the neoliberal adaptation of the « limited sovereignty » doctrine invented by the Soviet leader Brezhnev in 1968. Then, the Soviets crushed the Prague Spring with their tanks. This summer, the EU crushed the Athens Spring with its banks.

We are determined to break with this “Europe”. It is the basic condition needed to rebuild cooperation between our peoples and our countries on a new basis. How can we enact policies of redistribution of wealth and of creation of decent jobs, especially for the young, ecological transition and the rebuilding of democracy within the constraints of this EU? We have to escape the inanity and inhumanity of the current European Treaties and remould them in order to shed the straightjacket of neoliberalism, to repeal the Fiscal Compact, and to oppose the TTIP.

We live in extraordinary times. We are facing an emergency. Member-states need to have policy space that allows their democracies to breathe and to put forward sensible policies at the member-state’s level, free of fear of a clamp down from an authoritarian Eurogroup dominated by the interests of the strongest among them and of big business, or from an ECB that is used as a steamroller that threatens to flatten an “uncooperative country”, as it happened with Cyprus or Greece.

4 From “Confessions of an Erratic Marxist in the Midst of a Repugnant European Crisis” written by Yanis Varoufakis, published on December 10, 2013. http://yanisvaroufakis.eu/2013/12/10/confessions-of-an-erratic-marxist-in-the-midst-of-a-repugnant-european-crisis/ 

5 From an article entitled “Lies and Deceptions on the Left: The Politics of Self Destruction” written by James Petras, published by Global Research on March 22, 2015. http://www.globalresearch.ca/lies-and-deceptions-on-the-left-the-politics-of-self-destruction/5438105

6 From an article entitled “Greek Debt Negotiations: Will the IMF Exit the Troika?” written by Jack Rasmus, published in Counterpunch on May 26, 2016. http://www.counterpunch.org/2016/05/26/greek-debt-negotiations-will-the-imf-exit-the-troika/ 

7 From an article entitled “We Have Entered The Looting Stage Of Capitalism” written by Paul Craig Roberts, published on May 25, 2016. http://www.paulcraigroberts.org/2016/05/25/we-have-entered-the-looting-stage-of-capitalism-paul-craig-roberts/ 

1 Comment

Filed under analysis & opinion, austerity measures, Germany, Greece, neo-liberalism

this is the EU — so take it or leave it… #4. Plan B: or what we are not being offered

We should reject wholeheartedly the fudge that David Cameron came back from Brussels with. He is asking the public to support staying within a reformed Europe, but he has deformed Europe in the process of creating this fudge.

says Economist and former Greek Finance Minister Yanis Varoufakis in response to the question “How should British voters who are dissatisfied with the EU view the referendum?”

He continues:

Yet at the same time we should also reject the Eurosceptic view that Britain should leave the EU, but stay within the single market. I have a lot of respect for Tory Eurosceptics with a Burkean view of the sovereignty of national parliaments. The problem is that they also support staying in the single market. This is an incoherent proposition: it’s impossible to stay in the single market and keep your sovereignty. 1

Which is surely a noteworthy admission (hence the bold emphasis) from the person most prominent in the left-wing half of the campaign to stay.

Click here to read more of the transcribed interview with Yanis Varoufakis in which discusses the launch of his new ‘Democracy in Europe’ movement (DiEM25).

*

When Michael Chessum, a major organiser of the pro-Remain ‘Another Europe is Possible’ (AEiP) movement, is questioned about what concrete ‘changes’ he would like to see in EU, he simply dodges the question. Chessum’s behaviour generalises. To my knowledge, not a single supporter of Remain has presented a satisfying answer to the question of how we are supposed to go about reforming the EU. Even Yanis Varoufakis during his recent ‘Lunch with the Financial Times’ interview confessed that in reality the EU isn’t going to be reformed to anywhere near the extent the Remainers are hoping for (attempts to reform ‘will probably end in failure like all the best intentions’, he claimed). Even Remain supporter Ed Rooksby can write on his blog about how he is ‘not particularly convinced by arguments emanating from [AEiP] in relation to the possibility of transforming EU institutions in a leftist direction’. How is a new, reformed EU possible? How can we change it to break from the Washington Consensus? The answers are, worryingly, not forthcoming.

writes Elliot Murphy in a recently published Counterpunch article in which he deliberates on all sides of the EU referendum campaign.

Murphy’s case is not so much that a ‘Left Exit’ can be delivered, but that ‘Left Remain’ is replete with “airy-fairy proposals” and devoid of “any concrete solutions”. That, as he rightly asserts:

In theory, another anything is possible: Another New Zealand, Another Skelmersdale, Another Isla Nublar, Another Tamriel. It is not as if another EU is inherently unreachable, but rather that without any posited, realistic steps to achieve it, the hopes of the Remain camp will quickly dissolve after June 23rd, no matter which side wins. 2

More from Murphy later.

*

On February 18th, an assorted group of prominent and not so prominent leftists including Caroline Lucas PM (Green), Cat Smith MP (Labour shadow minister for women), Marina Prentoulis (Syriza UK), Kate Hudson (Left Unity), Michael Mansfield and Nick Dearden put their names to a letter that appeared in the Guardian outlining reasons to get solidly behind what they describe as “a radical ‘in’ vote” to Europe:

Our campaign will put the case for staying in the EU independently of Cameron and big business, opposing any part of a “renegotiation” that attacks workers’, migrants’ or human rights. We will combine campaigning for an in vote with arguing for an alternative economic model, maintaining European citizens’ rights to live and work across the EU, and for far-reaching democratic reforms of European institutions. 3

Behind the initiative was a newly-fledged campaign group Another Europe is Possible that one of the lesser known signatories above, Luke Cooper, lecturer in politics at Anglia Ruskin University, helped to establish. In a related piece published a fortnight earlier [Feb 4th], Cooper prepared the ground for the campaign launch on the openDemocracy website. Titled “A different Europe or bust”, Cooper of course makes the case for staying, although he is also quick to concede:

None of us support the status quo; we all recognise radical institutional and political change is needed. Most of us also know, however, that a British exit would leave workers even more vulnerable to a Tory government and would not be a step towards the social Europe we believe in.

Continuing:

Rising nationalist sentiment, the structurally embedded neoliberalism of Eurozone institutions and the new downturn in the global economy all create a significant challenge for how to go about constructing an alternative. Taken together they require the left to construct a political alternative that is, firstly, bold and radical enough to address the systemic causes of the current crises and, secondly, rejects the illusion that a retreat into competing protectionist states offers even a partial answer. 4

What Cooper and others on the left are advocating then is a fresh start to Europe – a plan B:

[B]reaking with austerity and constructing a European new deal based on ecologically sustainable investment in jobs and growth. 5

As a cautious but committed internationalist, I have a great deal of sympathy with their position. Undeniably Europe needs a fresh start founded upon an economic ‘new deal’ that can halt a disastrous economic decline and rescue the poorest partner nations. To be nitpicking, however, such vitally needed investment must be injected into infrastructure projects and to boost productive capacity rather than less intangibly into “jobs and growth”. Without productive activity, creation of “jobs and growth”, irrespective of ‘sustainability’, will not secure long-term economic prosperity.

But the significant and most probably insurmountable difficulty is here comes in the shape of the EU institutions themselves. For these undemocratic institutions are not merely disinclined to make the sorts of ‘new deal’ investments required, but staunchly antithetical to ‘bailouts’ of every kind other than those needed to keep afloat the “too big to fail” banks.

Moreover, without a fleshed out programme of demands for genuine reform, these sorts of advocacy for ‘a better Europe’, are dangerous exercises in building castles in the air. For whose purpose does it really serve to say that although the EU is a monster (as Varoufakis has many times described it) we might coax it into better behaving itself when we have literally no firm ideas on how to force a change? Worse, since beneath the veneer of wishful optimism runs a deep vein of fear-mongering hardly less noxious than in the official Tory-led ‘Remain’ campaign:

A vote to ‘leave’ will not create the political space for a socialist Europe. The fragmentation of the EU would be on a right-wing, intolerant and nationalist basis. It would be a Europe of Le Pen, Farage, Orban and others on the right. 6

Taken from a strident and hectoring post from Left Unity in support of the Another Europe is Possible campaign. The same post ends with words from Felicity Dowling, Left Unity’s Principal Speaker, who says:

‘We stand with those who have most to lose in the EU referendum campaign: with the children of workers who have lost child benefit, with the migrants who face further unjust vilification as the debate rages.

‘We stand with the tens of thousands fleeing war in Syria, Iraq and elsewhere.

‘We stand together with British and European workers.’

It follows by omission (presumably) that whoever wishes to leave, therefore, does NOT stand with the refugees or the British workers. That by default we stand in opposition to both. Indeed, if judged by Dowling’s list then our dereliction is so grievous that a vote for Brexit is tantamount to voting National Front…! 7

As reader Liz Langrick wrote in a heartfelt response to that Another Europe letter in the Guardian:

Your pro-EU stance seems to suggest that leaving the EU is a preoccupation of the Tory right and all voters of the centre-left should be pro-EU because it somehow represents progressive politics and is a vague force for good. But this is a huge betrayal of the sections of society you purport to speak for.

Adding:

Quite clearly an unlimited supply of low-skilled labour – which is what freedom of movement represents – makes it ever easier for employers to offer zero-hours or insecure employment, both for migrants and for British low-paid. This is benefiting only business owners not known for their public-mindedness or even paying any tax. How can anyone on the left be in favour of a system that perpetuates this? Any improvements to workers’ rights the EU may have secured have been and will continue to be fundamentally undermined by this, and arguing that we can change this from within is pie in the sky – as the difficulties Cameron’s negotiations have encountered clearly show.

And aside from the economic impacts on the poorer sections of society, it’s ironic that those on the left, particularly Labour MPs, support membership of an organisation that is so deeply undemocratic and undermines the role of ordinary people in the law-making/representation process.

So please stop clinging to the idea that the EU is progressive and therefore we must stay in at all costs. The EU is fundamentally driven by the demands of Germany and France. 8

To which I simply wish to add a single, small, but important, caveat. The EU is not driven much if at all by the demands of either the French or Germans, presuming that we are speaking of the French and German people (and if it were, then it would bear a better semblance to democracy). It is instead an apparatus serving corporate interests, the most powerful of which are the major banks. So for “Germany and France” it is better to read: Deutsche Bank, BNP Paribas and Société Générale.

*

I shall conclude with a more extended quote from Elliot Murphy’s excellent Counterpunch article which details a few of the many intractable obstructions to this envisaged  “Plan B” – meaning reform in favour of social justice, labour rights and a genuinely more equal society – for the European Union:

This groundswell of support for Remain across substantial parts of the Left is hard to square with the facts. State aid to declining industries, along with renationalisation, are not permitted by current EU laws (under directive 2012/34/EU), and any mildly progressive government which managed to get elected in 2020 would be hindered from the outset by the EU. Considerable reforms of the energy market would also be illegal under EU directives 2009/72EU and 2009/73/EU. Collective bargaining is becoming much weaker across the EU, most vividly in France and Germany.

McDonnell’s plans for People’s Quantitative Easing? Outlawed by Article 123 of the Treaty on the Functioning of the European Union. The series of anti-trade union laws introduced in Britain over the past few decades? The EU has no qualms with these whatsoever, showing no interest in providing even modest forms of protection for workers.

As the Labour Leave campaign points out, the EU would also outlaw an end to NHS outsourcing, tougher measures on tax avoidance, and general improvements to workers’ rights. The soft Left’s talk of international solidarity and the brotherhood of man in relation to the EU is absurd, especially as it continues to drive forward deeply militaristic and undemocratic (or rather, anti-democratic) policies. The EU is, after all, one the world’s major post-war imperialist projects, boasting an inherently and aggressively exploitative relation with the global South. The entirety of the EU parliament could be filled with McDonnells and Iglesias’s and no substantial reform would be forthcoming: The parliament is an institution purely of amendment and all power lies with the civil servants and the unelectable Commission.

And while Cameron, Johnson, Gove and Osborne are not the most admirable men in the world, they cannot be blamed for everything: It is the EU which has been hindering a just and lasting resolution to the refugee problem, not the UK state. A Left argument for Leave is firmly grounded not in the Left Remain camp’s ‘politics of hope’ (Owen Jones’s terminology), but rather in a well-earned sense of pessimism. As Chris Hedges recently told Vice: ‘This kind of mania for hope, that has infected even the Left, is a political pacifier. You know, everybody is addicted to these happy thoughts, and that keeps us complacent’. 9

Click here to read Elliot Murphy’s full article.

*

Additional: Bilderberg and Brexit

This year’s Bilderberg meeting is about to kick-off in Dresden today, and in one of Charlie Skelton’s preliminary sketches published on Monday [June 6th], he speculates on how the men behind the police cordons, the “the high priests of globalisation” as former attendee Will Hutton described them, are viewing the prospect of Brexit:

“A disaster for everyone” is how Henri de Castries [the Chairman of the group], the boss of AXA and a director of HSBC, describes Brexit. But in particular, it is a disaster for his banking and big business colleagues at Bilderberg. Thomas Enders, the CEO of Airbus, who sits on Bilderberg’s steering committee – the group’s governing body – said, in a recent interview with CNBC, that his industry would be “lobbying” against Brexit. […]

Goldman Sachs has two senior representatives on Bilderberg’s steering committee: James A. Johnson, a board member of the bank, and Robert Zoellick, the chairman of Goldman Sachs’ board of international advisors. We know from Charity Commission accounts that Goldman Sachs, along with BP, is one of the key funders of the group, and we also know that they’ve been pumping “a substantial six-figure sum” into the Remain campaign. And Goldman Sachs doesn’t spend money lightly. The Remain campaign is clearly close to whatever they have instead of a heart.

For Bilderberg, as for Goldman Sachs, the idea that there might be any kind of push-back against globalisation is a horrific one. I suspect we’ll glimpse some frowning faces behind the tinted glass as the limousines start rolling up on Thursday.

As Skelton concludes:

The prospect of Brexit “frightens me”, admit Ken Jacobs, the head of Lazard, and another member of Bilderberg’s inner circle. Not much frightens these people. Only two things: sunlight and Brexit. 10

Click here to read Charlie Skelton’s full article.

*

1 From an transcribed interview with EUROPP’s editor Stuart Brown entitled “Yanis Varoufakis: “The UK should stay in the EU to fight tooth and nail against the EU’s anti-democratic institutions” , published by the London School of Economics (LSE) on February 22, 2016. http://blogs.lse.ac.uk/europpblog/2016/02/22/yanis-varoufakis-the-uk-should-stay-in-the-eu-to-fight-tooth-and-nail-against-the-eus-anti-democratic-institutions/ 

2 From an article entitled “Another Tamriel is Possible: Brexit Proposals vs Solutions” written by Elliot Murphy, published in Counterpunch on June 7, 2016. http://www.counterpunch.org/2016/06/07/another-tamriel-is-possible-brexit-proposals-vs-solutions/ 

3 From an article entitled “Divisions on the left over the benefits of staying in the EU” published in the Guardian on February 18, 2016. http://www.theguardian.com/politics/2016/feb/18/divisions-on-the-left-over-the-benefits-of-staying-in-the-eu

4 From an article entitled “A different Europe or bust” written by Luke Cooper

5 Ibid.

6 http://leftunity.org/another-europe-is-possible-left-unity-and-the-eu-referendum/ 

7 Here is my own comment which you can also read by following the link:

With due respect, the choice as you present it is a false one. Firstly, voting to stay inside the EU will automatically mean assenting to Plan A – there is no Plan B. On the other hand, there are many reasons to vote to leave the EU (not mentioned above) that have nothing whatsoever to do with building walls and a fortress Europe – which is something happening in the extant EU. As is the financial ruin of Greece, Spain, Portugal and Ireland. And as is TTIP.

The EU is a technocracy run at the behest of the corporations and big finance that urgently needs to be undone. The current disintegration of Europe is happening largely because of policies of the EU. Certainly the nations of Europe must survive, but if this to happen then it may be necessary for the EU to perish.

Posted on February 24th 2016.

http://leftunity.org/the-answer-to-the-eu-referendum-plan-b-for-europe/#comment-802232

8 A response appended to the main article entitled “Divisions on the left over the benefits of staying in the EU” published in the Guardian on February 18, 2016. http://www.theguardian.com/politics/2016/feb/18/divisions-on-the-left-over-the-benefits-of-staying-in-the-eu

9 From an article entitled “Another Tamriel is Possible: Brexit Proposals vs Solutions” written by Elliot Murphy, published in Counterpunch on June 7, 2016. http://www.counterpunch.org/2016/06/07/another-tamriel-is-possible-brexit-proposals-vs-solutions/ 

10 From an article entitled “Bilderberg 2016: We can expect desperate lobbying against Brexit from Big Business” written by Charlie Skelton, published in the International Business Times on June 6, 2016. http://www.ibtimes.co.uk/bilderberg-2016-we-can-expect-desperate-lobbying-against-brexit-big-business-1563898

2 Comments

Filed under analysis & opinion, Britain, Charlie Skelton