Capitalists never like to waste a crisis, and the eurozone debacle is seen as an opportunity to move even closer to a federal Europe. Step by step, the europhiles are trying to draw us into their net...

Who needs elections any more? Just let Brussels choose your government

WORKERS, DEC 2011 ISSUE

The EU is cutting back on democracy and national sovereignty. They call it European integration and David Cameron has the temerity to call for more of it while Britain stays outside.

Photographed on a day in November when the EU appointees for Italy and Greece had yet to take office, the banner draped full-height along one end of the European Commission’s Berlaymont building in Brussels shows a shiny euro with a slogan in three languages about stronger economic governance. We now know what that means: overriding all national democracy. (Oddly, there are only five stars on the banner, instead of the EU’s normal dozen. An omen for a shrinking eurozone, perhaps?)
Photo: Workers

Desperately wanting to be inside “at the heart of Europe”, Cameron has been conspiring with German Chancellor Angela Merkel to bring integration about without any consultation with the people. In return he just wants Merkel to back off from the proposed financial transactions tax. In line with the new approach, we could see our contribution to support the euro through the IMF raised to £40 billion without parliament even being allowed to vote on it.

Sidelined

National parliaments are to be sidelined and unelected bankers put in charge of some governments not considered to be acting strongly enough on EU instructions. The Dutch government has decided not to seek its parliament’s approval for the latest EU deal, fearing that it may lose a vote there, and will simply sign it.

Italy, meanwhile, has agreed to be put under IMF surveillance. It now has an unelected prime minister, an ex-EU Commissioner, and a cabinet of unelected, unknown, “non-political experts”: this is an EU coup. Greece’s two mainstream political parties have agreed a unity government after intense pressure from the EU, which warned that Greece would be left to go bankrupt if this was not achieved. Lucas Papademos, an ex-vice-president of the European Central Bank, is now the unelected prime minister. Another EU coup.

Germany demanded a “durable”, on-the-ground, supervision of Greece’s economic policy-making under the terms of the bailout. The EU said that it will only agree to the next Greek bailout when the unity government is confirmed. The EU wants more bailouts and greater purchases of Greek debt from public bodies, so more and more Greek debt will be held by taxpayers.

The eurozone leaders demand tougher controls on the budgets of all its members, integration of taxation, and a whole new framework for running the eurozone. “Intrusive surveillance of national spending plans will be the norm from now on”, said the Financial Times on 28 October. The eurozone will become more like a state. All the euro members are putting a balanced budget into their constitutions, or legal equivalent.

Merkel’s vision for Europe

Merkel has called for more political and economic integration. She said, “the task of our generation is to complete economic and monetary union, and build political union in Europe, step by step … That does not mean less Europe, it means more Europe … so that the euro has a future.” So she builds a single state to save a single currency, and David Cameron approves.

She called for treaty changes that would allow fiscal discipline to be enforced: “We want to have automatic sanctions if countries violate the European Stability and Growth Pact and the opportunity for real intervention which would be the right to take those countries to the European Court of Justice. We need to amend these weaknesses in the Lisbon Treaty so that we have shared responsibility.”

If a new EU treaty demands any transfer of powers to Brussels, a referendum is a legal requirement. Merkel says a treaty change is necessary. But if a treaty would trigger a referendum here, the EU’s leaders will just avoid calling any agreement a “treaty”, so that they can get what they want without the bother of asking anybody.

Leaked

A leaked memo from the German foreign office sets out moves to create a “stability union” that would be immediately followed by moves towards a political union. The proposals urge that the European Stability Mechanism (ESM), the permanent eurozone bailout fund that will be established by 2013, should be transformed into a European Monetary Fund with “real intervention rights” in the budgets of euro members who have received bailouts. The proposed treaty changes also include “automatic sanctions” and a mechanism to demand action from the European Court of Justice if eurozone rules are “consistently violated”.

What EU/IMF gets you: the case of Greece

Greek unemployment has soared to 17 per cent, with 43 per cent of young people out of work. Its national output is already more than 9 per cent below its 2008 level and industrial production nearly 23 per cent down. Yet still the EU, the IMF, the banks, and Greek MPs (who earn about four times as much as a professor) tell the Greek people to suffer more.

Huge cuts have already slashed the disposable income of the average Greek by up to 50 per cent. Athens soup kitchens are full of the newly unemployed, crime is rising and children are fainting at school because their parents can no longer feed them.

The EU/IMF austerity package is supposed to cut Greek debt by imposing even more public sector pay cuts, tax rises and pension cuts:

• Further cuts in public sector wages and many bonuses scrapped;
• 30,000 public sector workers have been suspended, their wages cut to 60 per cent and they have been threatened with lay off after a year;
• Wage bargaining suspended;
• VAT to rise from 19 per cent to 23 per cent;
• Monthly pensions above 1,000 euros to be cut 20 per cent above that threshold;
• Other cuts in pensions and lump-sum retirement pay;
• Tax-free threshold lowered to 5,000 euros a year from 8,000.

Greece must reject the EU/IMF blackmail. The bailouts should be scrapped, given that they are hugely complex, favour bondholders (largely banks) and won’t work. It should leave the euro, ditch the debts, and regain its sovereignty. ■

The document also examines ways to limit treaty changes to speed up the reforms, which would avoid the need for a referendum in Britain. Cameron will back Merkel’s new treaty to increase economic union, but only on condition that he gets the City protected from EU laws. He will sell our sovereignty to save the City. Senior government officials confirmed that they would not demand that EU powers should be repatriated in return for the changes Germany wants.

Economic destruction

What is the euro doing to its members? The OECD forecasts that next year the eurozone will grow by just 0.3 per cent. So unemployment would, at best, stay the same. Unemployment in the eurozone is already 10.2 per cent. Youth unemployment is higher, 29 per cent in Italy, 48 per cent in Spain. Ireland’s unemployment has soared to nearly 15 per cent. Manufacturing wages there have fallen, and in the past few years its economy has contracted by 12 per cent.

A few leading British Europhiles have noticed the disaster and stopped urging us to join the euro. Lord Adair Turner, Chairman of the Financial Services Authority, co-authored a 2002 paper entitled ‘Why Britain should join the Euro’, which argued that “joining the euro would increase our incomes and our standard of living.” He has now said, “I got it wrong.”

Former Financial Times editor Andrew Gowers recently wrote, “It’s confession time. Exactly ten years ago, I was cheering as the preparations to launch notes and coins for Europe’s bold new single currency reached their climax … In the years that followed, with the euro establishing itself as an instrument of European power and integration, I was one of those celebrating its success and urging Britain to join the party. I now believe I was wrong.”

But Scotland’s first minister and SNP leader Alex Salmond has learnt nothing from experience. He says that an independent Scotland would continue to use sterling as its currency until “it was to Scotland’s economic advantage to join the euro.” ■