Tag Archives: germany

The alternative to austerity takes shape

Last night’s vote in the Greek Parliament rejecting the government’s candidate for the presidency for the third time now opens the way for a snap general election on 25 January which could well bring the Syriza party to power (it has a regular 4-7% lead in the polls over the current right-wing government).   If so, it will be because the Greek electorate adamantly refuses to accept any more austerity (shades of Britain, 2015?) and despite the risks is determined to break with the EU orthodoxy which has rocketed unemployment to 40% and laid waste the country with nearly half the population driven below the poverty line.

The significance of this moment cannot be exaggerated.   It is the first time that a political party anywhere in Europe with a real chance of gaining power has repudiated austerity as the central instrument of economic policy.   Fundamentally it is therefore a challenge to the right-wing ideology that has ruled the Western economies ever since 1980, producing the biggest financial crash since the 1930s and the longest and deepest depression since the 1870s, yet still clung to by the EU Commission, the ECB, and the IMF as the source of their power.   If however Syriza succeeds, it will have consequences that ricochet across the EU, not least Portugal, Spain, Italy and perhaps Belgium.   From that point the unravelling of austerity will gather momentum.
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Cameron tries to blame foreigners for UK ‘recovery’ fizzling out

It’s a bit rich for Cameron, in his statement toriseday from Brisbane, blaming the world out there, particularly the eurozone, for the fading UK recovery when those countries are pursuing almost exactly the same economic policies as he is.   That is relentless and unending austerity, which he conspicuously failed even to mention.   Now that the blip in UK economic growth between Q2 2013 and Q4 2014 is manifestly deflating (was this part of the long-term economic plan that Cameron-Osborne continually talk about?), the prime minister needs an alibi.   It’s easy to pick on the eurozone which has indeed only avoided falling back into recession because of a surge in the French government’s public spending (please note, Mr. Cameron), but the reason the eurozone is in such a bad way is that Merkel has enforced unrelenting fiscal austerity – exactly the Osborne programme.   That euro-austerity has crippled the euro southern periphery and has now undermined the German economy itself which depended on that same euro periphery for its export-led growth.
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Race to the bottom on immigration won’t work

The Tory programme on immigration is set to get the worst of all worlds, with disastrous consequences for Britain over the EU.   The Tories now want to restrict benefits to immigrants and to make citizens from future EU member countries wait longer before they are allowed to work in Britain.   Now Cameron is going further still with rhetoric about ‘fixing’ immigration to Britain from the EU, and has even floated the idea of an ’emergency brake’ on immigration beyond a certain level from even existing EU members.   But an ’emergency brake’ is doomed to fail both ways round.   It’s unlikely to placate UKIP supporters since UKIP will always go further in extreme promises about keeping out foreigners.   It doesn’t even get to the heart of the problem since immigration is clearly a scapegoat for wider economic disgruntlements.   That explains why London, the city most changed by immigration, is generally relaxed about it, whilst several of the areas most determined to keep out immigrants have actually seen very few.   An emergency brake will not calm anxieties in the latter areas even if Cameron could deliver it, which he almost certainly won’t be allowed to by the rest of the EU as Merkel has not made adamantly clear.
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Is the EU Commission on the side of Farage?

It is difficult to believe that some senior members of the EU Commission are not secret Ukippers.   To demand that Britain hands over more than €2bn because its economy is doing relatively well compared with the rest of the Eurozone, which is doing appallingly badly, is beyond satire.   The idea that Germany, where the Merkel doctrine of unwavering austerity has brought the eurozone low, should now receive a rebate at Britain’s expense of £780m  is the kind of black comedy normally associated with farce.   The UK contribution to the EU budget is already large at £8.6bn last year, and this surcharge would now make the UK by far the biggest top-up contributor.   What adds salt into the wound is that this surcharge stems from the EU charging the way it calculates gross national income to include more hidden elements such as prostitution and illegal drugs!
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Osborne’s own policies are shrinking tax revenues, yet he demands even bigger spending cuts to compensate

There are now unmistakeable signs that Osborne’s so-called economic recovery is fading, despite all the right-wing think tanks and pro-Tory media to talk it up.   A survey of 7,000 businesses by the British Chambers of Commerce has just found that manufacturers have suffered a sharp slowdown in export orders, and even more significantly domestic sales and orders – the part of manufacturing that has been faring better due to household expenditure based on rising debt – are now also reported to be slowing.   The third quarter growth figures also show the UK economy losing steam, down from ).9% in the second quarter to 0.7%.   The TUC has just reported that not since 1865-7 has there been a comparable squeeze on earnings for British workers, with an 8% fall in real earnings between 2007-14, and the fall is still continuing with the latest figures this year showing annual wage growth of 0.7% against inflation at 1.5%, i.e. a further real wage fall of 0.8%.   There is then a serious knock-on adverse effect in a reduced tax take for the government which is actually this year increasing the deficit (from the current £100bn to around £105bn) when Osborne’s whole object is ostensibly above all else to cut the deficit.   His austerity programme is now beginning to eat itself.
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NHS must be exempted from TTIP

The only way to stop the US-EU trade deal (euphemistically called the Transatlantic Trade and Investment Partnership, TTIP) from interfering with the freedom of an incoming Labour government to reverse NHS privatisation is by demanding that the UK government vetoes TTIP unless health services are clearly and fully exempted.   At present they are not, and the government minister Lord Livingston has confirmed that the NHS will be covered by TTIP.   As a result a US investor such as Blackrock or Invesco) profiting from NHS privatisation could use TTIP to sue the UK government if it could prove to a panel of 3 trade lawyers sitting in secret, one of which would be chosen by the investor, that its rights under TTIP had been breached.   That could occur if, in the words of the EU’s Chief Negotiator, there was a claim”for example by expropriation without compensation, a denial of justice or manifestly arbitrary treatment”.   In such cases the tribunal would be able to award unlimited compensation and there is no right of appeal.
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Stop austerity & cut deficit by printing money & sending cheque to every household (except rich)

Arnaud Montebourg, France’s economy minister who has just resigned, is quite right.   He denounced austerity policies as “absurd” because they had brought about “the most destructive crisis in Europe since 1929”   He rightly attacked the Eurozone’s fiscal stance as “the cause of the unnecessary prolongation of the economic crisis and the suffering of the European population”, and he correctly demanded a major change of policy away from “the extreme orthodoxy of the German right”.   Montebourg is not the only one who has been railing against the absurdity of counter-productive policies which are relentlessly dragging down the Eurozone into deflation.   Renzi, the young Italian prime minister, has rightly been demanding an easing of over-tight fiscal policies and a longer timescale to generate the growth to enable his country to overcome its excessive indebtedness.   Italy, like Japan before it, has now endured nearly two decades of falling living standards and in the absence of growth will soon find maintaining its interest payments unsustainable.
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Cameron is right about Juncker, but for the wrong reasons

Cameron’s relentless drive to block Jean-Claude Juncker’s bid for presidency of the European Commission is driven by his desperate need to be able to negotiate prior to his proposed EU referendum in 2017 with a president who will be sympathetic to his demands for changes in the Britain-EU relationship to try to swing the vote to stay in Europe.   In power terms and given the ungovernability of the Tory parliamentary party because of its turbulent right-wing caucus, this is a logical course for him to take.   But it raises the much more important democratic issue of the process for selecting the head of the Commission which has been pushed to the margins by the overriding drive to block a federalist.

The EPP, the centre-right party in the EU parliament headed by Merkel, claims the right to select Juncker as Commission president because they won the EU elections on 22 May  and Juncker out of the various spitzenkandidaten (or top candidates) was their man.   However it is difficult to accept that the EPP commands the confidence of the European electorate when their vote dropped substantially by 7%.   There is also grave doubt about the claims of the EU parliament that it, as a newly elected body, has the mandate of the European peoples to choose the next president.   The truth is rather that the Euro elections were a golden opportunity for a throwaway vote to kick the government or the whole political class, an opportunity of which very large minorities across Europe availed themselves.   The idea that this was a thoughtful vote about the future of the Europe project is laughable, and indeed it has now ended with the absurd situation in which voters are supposed to have ‘chosen’ a leader they’ve never heard of, and if they had heard of him as an incorrigible political insider at the European court, they would have undoubtedly have rejected him with gusto.
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EU results confirm rejection of austerity is key issue across whole of Europe

Commentators continue to misunderstand and misinterpret the EU election results, totting up the far-Right votes in France, UK, Denmark and elsewhere as mounting an almighty challenge to the ‘European project’.   They miss the point.   The far-Right managed to achieve their breakthroughs, not because their supporters were voting against Europe as such (despite its admitted failures in bureaucratic governance, democratic deficit, remote accountability, agricultural policy, etc.), but because they utterly rejected what now Europe under the dead hand of Merkel and her neo-classical economic model is seen to stand for and be wholly identified with, namely unrelenting austerity.   Otherwise how does one explain that in Greece the radical Left party, Syriza led by Alexis Tsipras, topped the poll 4 points clear of the prime minister’s party (almost exactly the same as in the UK), yet Syriza is not advocating withdrawal from the EU and is utterly opposed to the far-Right?   From opposite poles both the radical Left and far-Right were calling for the abandonment of the EU deadweight which has plunged large parts of Europe into near-destitution and spawned the eurozone crisis which is far from over.
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