The EU’s unnoticed power grab

Just as the rioters are now at the receiving end of severely punitive treatment, so  the licentious members of the eurozone are having similar punishment meted out to them for their financial wickedness.   Under the EU-IMF bailouts Greece and Ireland have hace their domestic fiscal policy-making amputated.   This has been done without anaesthetic by Euro Commission surgeons supervised by the German finance ministry using hacksaws and chisels apparently loaned from Milton Friedman’s Chicago economics department.   This is for the EZ malefactors.   Less appreciated is that the EU as a whole, including Britain, has agreed a package of similar Brussels control over the making of national budgets for all member states from this year onwards.

The legislation already approved allows the European Commission to oversee national budgetary decisions on a regular year-long basis known deceptively as the European semester.   the EC first produces an annual growth survey (AGS) setting out the kind of budgets it wants all member states to produce for the coming year.   It has already been published in January for the 2012 budget year.   There has been no democratic involvement in its drafting, and no stakeholders have been consulted.

Despite the stringent austerity measures already imposed on all member states since 2008-9, the AGS is now demanding more conditionality for benefits and the raising of retirement ages across the continent.   It includes the usual neoliberal prescriptions for more flexible labour markets as well as ‘strict and sustained wage moderation’, i.e. cuts or below-inflation wage increases stretching into the future.   The Commission also wants a further shift towards more regressive taxation, particularly VAT. 

The European Parliament, the only democratic EU institution, can offer its ‘opinion’ on the AGS, but cannot amend it.   Member states must then present their budget proposals to the EU Commission and Council before making them available to their own Parliaments.   If the EC disapproves of the budget proposals, it delivers detailed ‘recommendations’ aimed at that country which can include wage levels and social services spending.   Then if a country refuses to accept the EC prescriptions, the Commission can issue alerts and sanctions, including for EZ countries fines of 0.2% of a country’s GDP.   In the case of Britain that would amount to £3bn.   If a country fails to conform with EC demands for 3 consecutive years, the fines go up to 0.5% of GDP.  

Because Britain is outsize the eurozone, it would not be subject to the fines, but rather to ‘peer pressure’ from other member states – and it was after all the peer pressure, not fines, that forced Ireland into the bailout package it desperately wanted to avoid.   But even without fines there are other effective sanctions, e.g. withdrawal of EU structural funds or even temporary withdrawal of a country’s vote in the Council of Ministers.  

That amounts to being forced to implement EU law, but without any say on the law being produced.   The Commission is emerging, quietly and insidiously, as the European Tea Party movement of neoliberal fundamentalists.   The AGS is an extraordinarily reactionary document, and Britain – and the Labour Party in particular – should be strongly rejecting this slide towards undemocratic government.

4 thoughts on “The EU’s unnoticed power grab

  1. This amazes me Mr. Meacher, it really does. You are one of the MPs who, according to ‘theyworkforyou’, have voted strongly for more EU integration!

    As ye sow, so shall ye reap!

  2. Fat chance of Labour opposing anything proposed by the EU. Labour is just as culpable as the Conservatives in handing over the UK’s sovereignty to the EU – with no mandate from the British people.

    It was Labour, under Gordon Brown, that forced the Lisbon Constitutional Treaty through Parliament, deliberately withholding the Referendum which was promised. It was Labour, Darling as Chancellor, who signed the UK up to pay towards bailing out the Euro AFTER Labour had lost the election.

    The Party which advocates the British people regaining control of their own country is UKIP and the sooner the British people wake up to that fact and ignore the Lib/Lab/CON which has betrayed them, the better.

  3. Ah yes, the EU’s power grab. Which, according to your voting record, you have always fully supported.

    Care to explain the anomaly? How can you ever expect anyone with a brain to forgive your party for their treasonous action in signing the Lisbon Treaty?

    Yours, a former Labour voter of over 30 years. Never again.

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