In some ways this is strange, particularly in Ireland. The Irish Labour Party have said that they will not be bound by the IMF/EU-Ireland bail-out agreement, and it has denounced the conservative consensus in Ireland and in Europe. The stress on investment and growth (though the Labour party would also cut spending and raise taxes to reduce the deficit), is quite similar to the speeches being made at the conference. Growth and jobs; the two words were repeated again and again in Warsaw, with continuous reference to the dominance of the centre-right EPP (European People's Party [centre-right]) in the EP, Commission and Council, and their philosophy of austerity, in contrast to what Greek PM Papandreou termed PES "responsibility".
PES leader Poul Nyrup Rasmussen:
Plenary speeches : Poul Nyrup Rasmussen from PES_Party of European Socialists on Vimeo.
Greek PM George Papandreou:
The two parties who have a chance of winning the next election and electing their leader Taoiseach (Prime Minister), Labour (PES) and Fine Gael (EPP) are pretty much in line with their pan-European parties' philosophies (though it's more doubtful when it comes to the EU's own resources and economic governance). Given the talk of a loss of sovereignty and the control the EU now has over our economy, stressing the influence and links with influential blocs within the EU could have some bonuses, but this possibility isn't explored because that's not how the Europarties are seen by the national parties, and that's not how the EU is represented. It's surprising how much the Commission is represented as purely technocratic, and that Olli Rehn's insistence that the Commission does not "involve" itself in domestic politics passes without real comment. The EU does respond to shifts between the right and the left, as can be seen by the shift in the Commission's composition ever rightwards over the last 10 years as the EPP have gained ground in the Council and Parliament.
The point is that there is the room and the place for political debate and discussion. At the moment a lot of the crisis politics has fallen by default to the European Council - the leaders of the Member States - which favours the voices of those who can shout loudest, and unfortuneately this means that any debate that is going on about the Eurozone is taking place in segmented groups, rather than allowing for an exchange of views across borders. The Irish press, and other European media, can complain that Germany is not being sensitive to the situation of the rest of the Eurozone and doesn't appreciate how much the Euro benefits it, but how useful is that if there's no debate between these different ideas and perceptions in each country? Who is trying to persuade the German public of certain right/left-wing policies that are necessary for the weaker Eurozone states, and who is arguing of the necessity of the largely German and Dutch-supported policies to strengthen economic governance in the weaker Eurozone states?
If we just express outrage at the bail-outs and the running of the Eurozone from different perspectives within our constituencies, then we've little hope of coming to a workable agreement that everyone can at least understand, rather than having another crisis measure hastily agreed at another European Council summit.
[EurActive] "...the centre-left wants to introduce a financial transaction tax of 0,05%, with the revenues going to fight against poverty and promotion of green growth.
Second, the PES wants to introduce an Employment and Social Progress Pact to contrast with the Stability and Growth Pact setting out limits on public debt and deficits for euro zone governments. Instead of strict fiscal discipline, the socialist pact would prioritise job creation, leaving behind the Conservative economic approach based on "punishment and sanctions," said Poul Nyrup Rasmussen, PES President.
Other measures include the introduction of Eurobonds that would add to the EU solidarity budget and setting up a European Debt Agency that would help EU tackle debt problems."
Surely competing ideas like these need to be aired and well discussed?
Where are the MEPs? I have not seen an MEP on Irish TV talking about how the EU should approach these matters. Perhaps nobody in the Irish media thought to grill them on what was going on in the EU, or to ask them what could or should be done differently. If we do not try and influence the EU through our MEPs and their parties, then we are missing an opportunity to exert political pressure and to force "Brussels" to respond. With billions being loaned and transferred across the EU and Treaty change in the air to secure the Eurozone, there is clearly a lot at stake - we should be contacting MPs and MEPs, holding public meetings and TV debates where the different Europarties and national parties debate their different visions of the Eurozone. Force them to take positions; to make the case for their ideas. If MEPs from different Member States joined in, then the different viewpoints of other parties in different constituencies could be discussed and understood.
Experience shows that it's hard to interest people in MEPs and European issues, and it would be undoubtedly difficult to set up public meetings and debates consistency across the Eurozone, but we cannot and should not leave the sole political debate behind the closed doors of the European Council, and we are wasting are time carping ineffectively about the positions of other countries, essentially, behind their backs. If we want to make our political voices heard, we should at least try to use the system we have to its full extent.
The problem is that the crisis isn't even over yet. We're right in the middle of it. The measures suggested by the PES are all long-term, but it's what happens in the short-term that will define the EU's ultimate direction.
ReplyDeleteFor example: it's interesting to see Papandreou up on a podium talking about the tyranny of austerity. He knows full-well that if the markets ever doubted for one moment his commitment to reform then it would quickly become impossible to refinance Greek debt.
What serious alternative is there to austerity? You can't prime the pump if the well's completely dry.
But short-term decisions will inevitably have a huge impact on the long term. It seems that the markets are testing each country one by one until one of them falls, or some pan-Eurozone solution is introduced. So I think that the long term structure and governance of the Eurozone will make an impact on how the markets will treat the Eurozone countries - after all, part of the problem is that the bail-outs are only seen as temporary sticking plasters. The PES, and other parties, haven't necessarily proposed a lot by the way of "economic goverance", but part of confronting all the Europarties with the question is to force them to come up with a plan publically.
ReplyDeleteAusterity would be a major element in any budget, and obviously has to be, but it's not really working in Ireland in terms of employment or increasing tax yields. As a consequence, austerity alone is falling out of fashion - why do what the markets and everyone has told you to do if it doesn't fix the economy, and you still cannot pay off the debt? There needs to be some level of investment going in, and this may require cuts or increased taxes elsewhere. The general opinion in Ireland is that we cannot pay back the debt - and that the almost 6% interest rate is far too high - easing these burdens and trying to find solutions for dealing with the moral hazzard of the banks would have to be pan-European (and even better, with a global element). But these things don't seem to be fully explored.
"Why do what the markets and everyone has told you to do if it doesn't fix the economy, and you still cannot pay off the debt?"
ReplyDeleteBecause the alternative is to default on your debt, which would spread the contagion to Spain, Italy and Belgium and bring the rest of Europe crashing to its knees.
We also can't keep blaming "the markets" for what's happening. Yes, they shouldn't have lent so much to us - and it makes sense that investors should shoulder some of the pain (also to avoid the "moral hazard" you mentioned) but the reason they're refusing to lend more to us at reasonable interest-rates is because they think we'll take the money and just keep on with business-as-usual until we default.
I finished reading "Globalization and its Discontents" recently, and in it Stiglitz criticises the IMF for focusing too much on austerity and stabalisation. He suggests properly sequenced liberalisation and Keynsian pump-priming as an alternative. The problem is - we have been "pump-priming" in the good times for too long.
However, the Eurobonds idea is interesting. Unless there's another major crisis, though, I don't think Germany will go for it.
It definitely is difficult to get citizens to be active citizens on EU matters. Most of those that are active try to bolster their own national interest, which is best done by putting pressure on national parties.
ReplyDeleteI don't see Germany opting for Eurobonds any time soon, nor do I see the Netherlands (or Finland) as likely to support such a proposal. They are, after all, the countries who will have to pay more interest rates were that to happen. As it is now, Merkel is right - investors will need to feel the pain as well, that is only right because they also differentiate between countries based on the risk of sovereign default.
I agree with Eurocentric. What we do now, on the short term, influences how markets will treat us, but the same can potentially be said of long term plans. Spain, for instance, is working on reforms, but it should push harder and come up with a mid or long term fiscal plan to reassure the markets.
There is no cure for Ireland if cuts is the only route we're willing to take, that'll just put them behind on the other Euro countries. Rather a better balance between all Eurozone members should be sought, with maybe temporary transfers of money to create some momentum in Greece and Ireland.
Europe wide solutions to our problems should be explored, not all these ad-hoc solutions that might just lead to a new market-target. I support the bail-out for Ireland, of course, but a bit less of the German (and Dutch)resentment would do a lot to open up new possibilities. Booing the markets or complaining about other member states is something we should have done years ago, now we just need to get out of the mess.
@ Eurogoblin - but surely if you cannot pay off the debt, then by definition you are bankrupt and default? The fact is that these loans are at a very harsh level for us, and are motivated more by the need for the bail-outees to be shown to be suffering for domestic consumption, rather than any reason of ensuring that Ireland reforms (it's not like we were shying away from cutting welfare and public service jobs before).
ReplyDeleteIt just doesn't seem that this strategy will work, it is simply a continuation of the policies that haven't delivered the recovery everyone was hoping for, while adding to the debt. The good thing about the bail out is that it gives the Eurozone time to think about what it will do next. The worry is that we won't reform the Eurozone properly. In that sense you could look at it from the other angle: the markets are worried that the Eurozone as it's currently structured cannot recover on its high-debt-austerity solution and is pressuring for reform.
I disagree that I'm simply blaming the markets. Whether or not I am blaming the markets, however, is beside the point. The question is: is the current Eurozone governance structure and bail-out mechanisms working effectively? If the aim is to stop the crisis spreading, it is failing. If we cannot financially deal with bailing out the other weak Eurozone members, then as a solution in itself, it is failing. It makes no difference who you blame, things have to be changed.
At the moment there is a strategy of austerity in the Eurozone which cuts money out of the economy and at the same time increases the sovereign debt of the weaker Eurozone members. As you said, if Ireland (or Greece) fails, then the European banking crisis that follows would bring down the Euro, and that would surely have a negative global effect too.
It is interesting to note that the IMF interest rate is lower than that of the money lent by the member states.
Debt restructuring, if it takes place, will have to be co-ordinated across Europe to some degree to contain the effects (as the debts are owed across Europe). Lower interest rates for Ireland and Greece would serve the common interest too. Or money transfers for stimulous may be another strategy (there is talk of using money either from the bail-out fund, or some of the savings from cuts to reinvest as a stimulous). Any of these strategies, however, would entail spreading the pain throughout the EU more evenly - a tough thing to sell, but the options need to be debated.
Germany and the Netherlands and perhaps others would be resistant to quantative easing/printing money or Eurobonds or a transfer union - at this point it's almost by definition. But the debate and ideas of what to do is so segmented, that it seems almost pointless to talk about it, unless debate starts across borders.
@ Jurnan
ReplyDeleteThanks. I agree that it's hard to get people to debate EU issues, and even harder to get Germany and the Netherlands to agree to Eurozone reform. Trying to encourage such a debate might not lead to any satisfactory answer, but opening up the lines of communication might make both sides more simpathetic to each other's points, or could force them to be more creative and come up with different solutions or a package of measures.
Maybe I'm just being too optimistic.
It is indeed hard to get people to debate Eurozone issues.
ReplyDeleteBut frankly, no amount of conversation can change the future, as the future was set by God from Eternity Past.
Bible prophecy of Daniel 2:31-35, relates
that the revived Roman Empire, that is Euro- Germany, the Eurozone, is about to be crushed, and simply be dust blowing in the wind, along with the previous four kingdoms:
4) Fourth, Roman, Legs of Iron …
3) Third, Greek, Belly and Thighs of Bronze …
2) Second, Medo-Persian, Chest and Arms of Silver …
1) First, Babylonian, Head of Gold …
The feet of iron and clay, that is the fifth kingdom to govern mankind, is the last kingdom, before the beast system of Daniel 7:7 and Revelation 13: 1-4, rises from the sea of humanity to govern worldwide, through mankind’s seven institutions in ten regions of global governance, as called for by the Club of Rome in 1974.
Soon the beast system of global corporatism will have an apparent fatal wound, Revelation 13:3. This prophecies an apparent fatal death of the world’s economic system. But this catastrophe will be healed.
Such a catastrophe will come out of rising sovereign debt interest rates, further global competitive currency devaluations at the hands of the currency traders, resulting in the common-currency, bank-sovereign debt symbiosis finally imploding, resulting in the European Financial Institutions, EUFN, quickly falling in value, taking the entire global financial system down, resulting in Götterdämmerung, an investment flame out, bringing forth a new age, with a Sovereign-Chancellor, Revelation 13:5-10, such as Angela Merkel or Herman van Rompuy or John Redwood; and a Seignior-Banker, Revelation, 13:11-17, such as Wolfgang Schäuble, Olli Rehn, or Jean-Claude Trichet, having fiscal sovereignty to control deficit spending, enforce internal country devaluations, provide a common EU Treasury for both taxation and transfer payments, assure mutual guarantees of the EU debt, and as Timothy Geithner called for, implement unified regulation of banking globally. All seigniorage, both credit and fiscal will come and go through the Seignior who will make decisions on where money is spent.
I foresee national sovereignty passing away throughout the world, as Leaders’ Framework Agreements establish ten regions of global governance as called for by the Club of Rome in 1974; hence people will no longer be citizens of sovereign nation states, rather residents living in a region of global government.
@ theyenguy
ReplyDeleteI've heard it said that God is a Protestant, but nobody's ever told me that God is a nationalist ;)
@theyenguy No comment...
ReplyDelete@Eurocentric You make some good points. I'll be honest - I'm more familiar with the economies of Greece and Spain than I am with Ireland's... and each of the so-called "PIGS" has a slightly different reason for having the wolves at the door (if you'll forgive me a cheeky "three little pigs" reference).
You're right that a conversation needs to take place. I just have a feeling, unfortunately, that the answer will be austerity - not because it's the best choice, but because it's the only one available...
This comment has been removed by the author.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteFirst of all - The EUobserver is very much an American cheerleader - and that is why you see no coverage. Last week, EUobserver published a propagandized viewpoint from a rabbbi that "Europe is being overrun by Muslims," which is a myth! EUobserver is, at times, nothing more than a propaganda rag for American and far-right causes!
ReplyDeleteNow - I am MAD AS HELL at the treatment of Julian Assange by EU Member States and the use of the European Arrest Warrant against this great hero! This outrage is and the inability to see allegations against him is yet another argument against the European Arrest Warratnt! This is outrageous, but not surprising, as the United States always gets what it wants from both the EU and its Member States. This most change - and change soon - if the EU expects to be taken seriously as an international actor!
The timing of these "rape charges" is also like that of the last "rape charges" against Assange from last August, which were dropped. When there was a release of secret documents, and when a Swedish military officer toured several military bases and met with Pentagon officials.
Sweden was cultivating a reputation of being a place from journalists' refuge from persecution, but that has now been thrown out the window. So- American obsessive interests, as always, come before press freedom and human rights?
Julian Assange needs to be the poster child for what is wrong with "Europe's place in the world." When European governments desire to throw European values and human rights out the window to please American demands - then Europe IS NOT free and independent - but a stooge and a slave to the United States!
As an American, I an not only in danger for writing these views, but fell that I have no advocates for MY human rights, as do people in Burma, Iran and China. From living here in the US, I can tell you that there are NO human rights for people in American prisons and jails, police can arrest people at will - and for the government of Sweden to attempt to send Julian Assange to the US -- should be viewed as participating in violating Assange's human rights to be free from torture.
I have been writing for years about this slavish relationship that Europe is to the US - Europe IS NOT free unless it can free itself from American hegemony!
@ Eurogoblin - no problem! Austerity is going to be the major part of any option; my worry is that our current version is increasing state debt, which makes austerity look a bit pointless...
ReplyDelete@ ESLaPorte - I think I'll stay out of this one. I only mentioned that in one line of the post; I haven't really been following the WikiLeaks story closely.