Where Europe is going, Britain will follow

April 24th, 2012

The 1st round Socialist victory in the French presidential elections on Sunday, the collapse of the Right-wing Dutch government on Monday, the probable demise soon of the Right-wing Czech government , and the likely election on 6 May of an anti-Merkel government in Greece point conclusively in one direction.   Across Europe the democratic backlash against extreme deflationary policies is now unmistakeably gathering force.   It has now brought down 7 EU governments in Greece, Portugal, Ireland, Spain, Finland, Slovakia and Italy, and is set within two weeks to claim 3 more – France, Netherlands, and the Czech Republic. By far the most important country where the tumbrils are rolling is France, and by far the biggest loser is – Germany.   The Merkel attempt to impose a hard-line monetarist straitjacket on the Eurozone is fast unravelling, and the Hollande socialist programme will administer, if not a coup de grace, certainly a dramatic change of direction in favour of growth.   That is the right policy.   Can a Miliband Britain be far behind?

It is an extraordinary indictment of Left-wing parties across Europe that they have been so slow and timid to learn the obvious lesson of the financial crash and the ensuing slump, that a policy of ever-tightening financial squeeze and prolonged austerity could only produce a self-reinforcing downward spiral when all other sources of growth were blocked (exports) or inhibited (private sector investment).   This failure, so far, on the Left is a tribute to the suffocating grip of 30 years’ hegemony of neoliberal ideology plus the dominance of Right-wing governments across the EU which this culture produced.

Now that these governments are going down like ninepins, the overwhelming need is for the Left to emerge from a decades-long hibernation and to propagat loud and clear the policies in which they have always believed, but which they have been hitherto too cowardly to proclaim.   The centrepiece of the whole strategy, which the present state of Europe cries out for and which the ballot box is finally reclaiming, is a growth policy built around public sector investment and job creation.   Hollande’s manifesto includes employing 150,000 young people in State-subsidised jobs over 5 years, funded partly by significantly increasing taxation on the rich (raising income tax to 75% on incomes over €1 million a year).

Labour is clearly going to make substantial gains in the local elections on 3 May.   The biggest single reason for this will be the repudiation of the government’s ultra-austerity policies, exactly as in the rest of Europe.   Labour’s response must now be to acknowledge that ‘cutting less far, less fast’ is an inadequate and probably self-defeating response to the crisis, and that a jobs and growth strategy is a desperately needed goal whose time has now come.

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