Category Archives: Europe

The European future that faces is

It is fairly clear, even among Europhiles who want to stay in, what most people object to about the current state of the EU and what they would like to see changed.   The membership fee is uncomfortably large, some £11bn every year.   Free movement of labour works well between countries of similar living standards, but not between countries at very different levels of economic development.   The Common Agricultural Policy (CAP) and Common Fisheries Policy still take 40% of the entire EU budget, and cause considerable resentment in many countries, including the UK.   Most people, including most businesses, support free trade, but doubt whether the Single Market is worth the bureaucracy it generates.   It is widely felt that the EU is too regulatory and too protectionist.   Not many people in the UK want to see Britain becoming part of a federal United States of Europe, but that’s the direction favoured by many of Europe’s leaders.

Are these aspirations likely to be achieved in the current negotiations?   It seems very unlikely.   There may be a declaration that the UK is not fully tied into the EU goal of ‘ever closer union’.   The benefit entitlements of migrants from the EU to the UK will be restricted further.   There are proposals to strengthen the sovereignty of national parliaments and for the role of the City to be safeguarded against discriminatory EU financial regulation.   But none of this is likely to impact significantly on the concerns that most people have about EU membership, and particularly at a time when the EU is running into deeper difficulties.   The austerity policies to maintain the single currency leave EU living standards, as in the UK, still well below 2007 levels.   The way the Germans treated Greece has heavily undermined the perception of the EU as a force for tolerance and fairness.   Far right parties are on the march across much of the EU and will increasingly put at risk unpopular policies needed to keep the single currency from collapse.

This may explain why the latest polls suggest that 43% of people in the UK wish to leave and only 40% to stay in.   So how is a policy to remain within the EU, which most Labour Party members want, to be combined with renegotiation aims that meet the objections of the majority of British people?   Cameron and Osborne seem only interested in achieving the minimum changes that will persuade a majority of the electorate to vote to stay in.   Nor has the Labour party so far offered a vision much beyond this minimalist goal.   Once a new leader is elected, this must become a top priority.

Just what is Cameron for?

Watching Osborne this morning on the Andrew Marr show answering questions on whether Britain should bomb Syria and other foreign policy matters, one did wonder where exactly Cameron fitted.   Increasingly Osborne, arguably the most formidable politician in the House at the moment, has already assumed the premiership he has coveted for so long.   All the detailed policy-making is now already in his hands, and that may suit Cameron quite well since he, like Blair, has never been one for detail (as PMQs exposes relentlessly week after week).   He prefers to be the front man, running with whatever is the latest story, even if it turns out to be the opposite tomorrow.   There is no-one so slippery as Cameron so as to be able to somersault every day as though that was the most perfectly normal political routine.   But he is no longer the hard man behind it all.  And he’s not even able to perform his diminished role very well.

Cameron’s botched attempt to reconcile a net immigration target of below 100,000, when the actual figure today has reached 330,000, with even a smidgeon of humanity towards the huge and rising death toll in the Mediterranean has earned him nothing but contempt, almost made worse when he was forced abruptly to change his mind, but then only to the minimalist degree ignominious by comparison with the German example.   Again, over the EU referendum strategy, Cameron has boxed himself into a corner largely of his own making,    He’s already had to give up demanding British opt-outs from EU employment regulations because Berlin and Paris predictably wouldn’t grant it, and now he’s being told that Britain should take in more refugees if he wants a hearing for its ‘catalogue of demands’.   At home too he’s been told he has to reverse his plan to put the machinery of government at the service of the In campaign.

Europe was always the Achilles’ heel of the Tory party, and it looks like being so again.   Eurosceptic Tory MPs are demanding to be allowed to campaign for the anti-EU side and already planning to use their conference later this month with criticisms of Cameron’s renegotiation tactics.   Cameron’s post-election honeymoon is over, and his room for negotiation over Europe is shrinking fast.   If in the event the vote over Europe does go against him, it will not only diminish Britain but wreck his legacy.   But Osborne will survive, untarnished.

Cameron puts party before country

Those of us who have had the (dis)pleasure of watching Cameron at PMQs know he never answers a question.   Whatever subject is raised, he has a prepared brief which selectively explains how brilliantly the Tory government is doing on that issue, even if it has nothing whatever to do with the question.   It is of course a complete abuse of Parliament which is to hold the government of the day to account, but he gets away with it because the PM always has the last word.   However, when he doesn’t have the last word and has to see an issue through to the finish, he is exposed as the weakest flip-flopping party-driven prime minister in modern times.   At every move organised by the Tory Right over the EU referendum, he has humiliatingly caved in.

He conceded a referendum he never wanted, in order to keep his Right at bay, then promised sufficient negotiating gains in Brussels to see off his rebels by the time the referendum came, only to find Merkel, his only real potential ally in Europe, adamantly blocking any change in the rules governing the free movement of labour.   He then tried to give himself more wriggle-room by announcing that treaty changes could be postponed till after a deal had been hatched some time in 2016-7, only to be mocked for accepting a post-dated cheque.   He then caved in again to his diehard eurosceptics by agreeing not to have the EU vote on the same day as the devolved and local elections, having already made clear his view that he could see no reason why the public couldn’t decide two things on the same day.   To cap it all, he told his anti-EU ministers that they would have to toe the government (i.e. his) line, then turned turtle and said they were free to campaign as they  wished.   So much for leadership, so much for putting the nation’s interests first.

Now he’s made a further concession – having said that purdah (which bars significant official announcements in the campaign) would now be imposed, flatly contradicting his previous stance that purdah would harm British interests.   The success of the Tory Right in pushing him all over the place can only encourage future rebellions.   The claim to be able to wrest the repatriation of major powers seems doomed before it starts since Britain under Cameron’s continuous vacillation has already shot its diplomatic bolt in Europe.   This is the feeblest leadership that Britain has had to endure since the war, and it will pay the price.

The IMF saves Eurozone from itself, but much more than ‘haircuts’ needed

Who would have thought that the IMF, the pillar of international capitalism set up by the Americans after the war to police the global economies in the interests of the Washington Consensus, should come to the rescue, not of the finally compliant Greeks, but of the triumphalist yet wayward Eurozone (for which largely read Merkel and Schauble)?   Nothing, certainly not condemnations for the Left around the world, could have exposed so ruthlessly the rigidity, greed and intransigence of the German establishment.   Nothing, equally, could have thrown Greek politics into such a vortex of unpredictability, with Tsipras relieved from having to defend the indefensible, and with his party saved from splitting and having to depend on the far Right to win the votes in Parliament.  But the relief may be short-lived as the IMF has itself laid down extremely harsh terms as the price for its consent to the deal.
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The Greek ‘deal’ represents the supplanting of European democracy by neoliberal economics

Arguably the so-called deal that has been forced down the throats of the Greek people represents the worst of all worlds.   It imposes even more draconian terms than were on offer even a week or two ago, with very little conceded in terms of debt relief, but with such added conditions of austerity as will make it nigh impossible for the Greek economy to achieve the growth necessary to pay down the indebtedness which had reached 175% of GDP.   This is not a creative solution of EU solidarity which is the constant refrain of European rhetoric, but a brutal punitive assault which all but turns Greece into an EU economic protectorate, including a requirement to place the country’s most valuable publicly owned assets into a €50bn privatisation fund controlled by the EU.   This is the end of Keynesian economics in Europe and its replacement by capitulation terms reminiscent of those imposed on Germany by the Versailles Treaty after the first world war.
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The Greek problem is insoluble without long-term fundamental restructuring of the euro

It is perfectly possible to see how the impasse over Greece can be resolved, at least in the short term, by the creditors offering a marginally improved offer on the bailout terms just rejected by the Greek electorate, plus a measure of debt relief on the very reasonable grounds that Greece’s national debt currently at 178% of GDP is unpayable with levels of austerity that preclude the growth necessary to repay it.   The obstacles are not economic, but political.   First, there is an entrenched resistance among the hard-line right-wing countries (Germany primarily, but also the Netherlands and Finland) that are determined to ensure that Tsipras is not seen to ‘have got away with it’.   Second, German domestic sentiment is clearly moving against Merkel, who does not want to go down in history as the leader who fractured the euro, and in favour of Schauble who is intransigent against any deal.   Thirdly, the German banks who unwisely lent to Greece without due diligence are now incessant in their demands that they recoup their potential losses estimated at some €87bn.   And fourth, there is the fear that making concessions to Greece over debt will undermine the integrity of the euro and open the way to demands from other crippled economies.
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Truth about EU callousness, intransigence & anti-democratic instincts exposed

?The IMF’s late intervention proposing €60bn plus debt relief for Greece is welcome, though it would have been far more effective if it had been offered 5 months ago when serious negotiations began rather than as a last-minute reprieve to salvage a burgeoning crisis.   It does chime quite closely with what Tsipras himself was proposing only a day before, namely debt relief plus a new 2-year €29bn payment from the Eurozone’s permanent bailout fund.   But what the IMF in particular has done is begin to peel away at some of the underlying dynamics of this elongated debacle.   One aspect is the nature of the austerity measures demanded by the troika which has micro-managed not just the extent of the cutbacks, but specifying in the minutest details how they should be administered.   There are two ways to deal with a debt: either cut expenditure or increase taxes.   Syriza’s instinct was to put up taxes on the very rich, especially their past evasion of taxes has been a major cause of Greece’s indebtedness.   But the troika, driven by a rigid neoliberal ideology, refused to allow this and insisted that the pensions of the poorest should be cut back further.
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Eurozone interference in Greek domestic politics should, and will, backfire

The bullying by Greece’s creditors continues.   The latest ploy is to try, unilaterally, to interfere in Greece’s internal politics by re-defining the terms and purpose of Sunday’s referendum.   It is patently clear that Tsipras called the referendum to ask the Greek people whether they accepted the latest bailout terms laid down by the creditors, yet the Eurozone 3 – Merkel, Hollande, and Juncker – are now claiming, on no evidence at all, that the referendum is about whether or not Greece wishes to stay in the Euro.   It is no such thing.   The technical question Greeks have to answer doesn’t even mention the single currency.   The Eurozone leaders clearly fear that Syriza will win the referendum, and this clumsy attempt at interference is clearly designed to blackmail Greek voters into accepting the latest terms for a bailout extension.   It won’t work.
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The neoliberal mangle Greece is being put though involves unjustifiable interference

Like the structural reform programmes crushingly imposed by the IMF on developing countries which fall heavily into debt (often for reasons beyond their control like the collapse of commodity prices), Greece is now being served with a set of take-it-or-leave-it conditions which sound more like war reparations than serious debt restructuring.   Among these conditions on which the IMF is insisting is that Athens should impose a ‘zero deficit’ clause on pension contracts preventing it from granting a ’13th month’ bonus payment as well as eliminating various early retirement schemes.   Another condition is whether Greece’s minimum wage should be raised as well as changing collective bargaining laws to allow for mass dismissals.
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