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Posts tagged ‘Eurozone’

Lens on Labour: Capitalism or the Euro – where is the problem?

by Len Arthur

After the pasting that the Tories (both bits of the coalition) received in the local elections and the stumbling incompetence that they have demonstrated in the last few months – lol ! – it was only a matter of time that Cameron would drop his faux and panic stricken PR initiatives and start to try to grasp at the high ground. And a bit like Oceania in Orwell’s 1984, the threat of a foreign land might be enough to keep the masses in line. Only instead of Eurasia it is the Eurozone: not very inventive are they, these Tories.

As we all known from our own political experience and discussion on the door step Europe is currently an easy target and plays well to very deep wells of nationalism, particularly when union jacks are going to appear around the place. So it is just as well to take this new version of ‘not me guv, it’s them’ seriously.

Time and again the argument comes up that we would be better out of Europe. ‘We were before and we can do it’ is the refrain, reflecting back to the Dunkirk spirit and all that; neatly forgetting the rest of the war experience that required the support of America and the USSR to finally beat Nazi Germany. Similarly the current argument ignores our historical integration with the rest of Europe – something which has hardly left any of our families are unscathed –  and that in around of 80% of our current account (international trading revenues) are generated within the EU. Unfortunately that type of riposte does not win the argument. There is clearly a very serious financial and wider economic crisis throughout Europe and we are all experiencing the consequences, so the argument about the cause and the answers are critical and that is the dangerous bit that Cameron is playing into.

It is important to be clear that the EU reflects the tensions of the post war settlement. It is was a compromise between state welfare – the social chapter of workers’ rights – protective national support for weaker parts of the economy such as agriculture, building a strong home market and achieving international competitiveness with the rest of world. As the competitive pressure from the rest of world has increased the internal social and economic protections have been slowly dismantled in favour of market deregulation supported by the economics of neo-liberalism. The Thatcherite Maastricht Treaty of 1992 severely limited state support and the bankers control of the Eurozone is an embodiment of the same theme: we will save capitalism and solve the bankers’ problems by reducing the role of state and squeezing the workers. Moreover, even in classic economic terms the settlement of the rates that currencies would enter the Euro in 2000 was very advantageous to Germany.

What we are experiencing is a crisis in the workings of capitalism as a system which have inter alia increased and exposed the tensions that already existed, not the other way around. The issue we should start to consider is how we can deal with the root failure of how capitalism works not just the symptoms of this problem as revealed in the banking and debt crisis and the current tensions within the Eurozone. I’ve mentioned in the past many writers who in their various ways have explained the crisis in this way such as Richard Wolff from the US and Chris Harman, Stewart Lansley and Michael Roberts from the UK. There are many others but the essential argument is that without tackling the huge inequalities of wealth ownership and income together directing investment on the basis of social need and not simply on the rate of profit, the crisis will not have a sustainably answer. This is where our historical integration in Europe comes back in: we cannot do it alone the EU is at least the basic unit where this can start to be successful.

Well, come on, I hear you say, you are not just talking about being radical in Pontyclun, Wales and perhaps the UK – you are talking about being radical across Europe. Well, er, yes, actually. That is where the election results across Europe, especially those in Greece together with vast demonstrations come in. Working class voters, trade unions and other organisations are saying loud and clear we will not and are not going to pay for the banker’s crisis and if it means re-negotiating the European treaties so that the state works for all the people and not just the rich, so be it. Here is an insightful article on the situation in Greece. It seems to me Syriza may well win the next general election and that will put this radical project on the table for all of us in Europe. Are we prepared to go with it or do we consider that Ed Balls and Peter Mandelson have a sufficient alternative?

Wales and the Brussels Summit

by Nick Davies

As is widely acknowledged, criticisms of Cameron’s negotiating skills at the Brussels summit in December rather missed the point. His priorities were to protect the interests of the City of London and the unity of the Tory party. He knew exactly what he was doing.

Tim Mitchell Top-table Blues

Brazenly dishonest, of course, was his claim to be acting in the ‘national interest’, when the interests of most of England, let alone the other nations of the UK, were notably absent from his concerns.

For Welsh First Minister Carwyn Jones, whatever Cameron’s priority, disengagement from the EU is not in the national interest of Wales: ‘I am seriously concerned about whether the interests of Wales can be advanced effectively by the UK government’.

In one sense, none of this is new. Wales has always been, at best, peripheral to the neo-liberal project. The last thirty years have put into sharp relief the divergence between the interests of the South East of England-based financial sector, and everything, and everywhere else.  The Tory party identification of itself with the ‘national interest’ is as old as the party itself and Euro-sceptic Tories from the south of England tend not to lose much sleep over the problems faced by Wales. By the same token, the EU has generally been more popular in Wales than in England, not least because of the strategic role played by European structural funding in compensating for the malign neglect of the Thatcher-Major years.

What has given this situation a new dynamic is the depth of the UK’s economic crisis, the total failure of Cameron and Osborne’s economic policies to alleviate it, the crisis in the Euro-zone and, last but not least, the continuing devolution process which sees an increasingly self-confident Welsh government refusing to be seen by the rest of Europe as merely a ‘region’ of the UK.

With some of the poorest communities in Western Europe and with over 26% of its working people employed in the public sector,Wales has already had to pay dearly and disproportionately for the greed of those 150 miles up the M4.  Wales has lost 13,000   public sector jobs  in the fifteen months since the coalition took office and the fear is that Wales’ manufacturing sector will lose out as a result of the UK’s semi-detachment from the EU, the destination of  about half of Wales’ exports. The collapse of the Euro zone into low, or no-growth austerity (and the consequent increase in the value of sterling as against the euro) will make a bad situation much worse, threatening the 54,000 private sector jobs with EU based companies in Wales.

The Welsh government’s response to the Cameron ‘veto’ has  been a declared intention to seek stronger ties with the EU and, for the first time, Welsh government ministers are  attending meetings of the EU’s General Affairs Council.

However, the EU in its present form is no safe haven for Wales. The ‘fiscal compact’ that Cameron refused  to sign up to, albeit for his own reasons, modifies the Lisbon treaty with a requirement that Euro-zone states’ budgets be balanced or in surplus and that this provision be incorporated into the various states’ legal systems. Thus deficit budgeting,  the  traditional Keynesian response to a recession, is virtually outlawed. Conversely, the austerity that is already taking  the Euro zone into a downward-spiral is set in stone, threatening jobs, public services and, if the bankers’ take-overs in Italy and Greece are any indication, democracy itself.

Since the 1970s many in the Welsh labour movement have abandoned the traditional hostility to the EU as a ‘bosses market’ and, notwithstanding its inherently free market nature, seen in ‘social Europe’, if not a more enlightened alternative to  the jungle of Anglo-Saxon capitalism, at least a place of safety from it. However bad the government might be in Westminster, European money would develop the economy of much of Wales, and the social chapter would act as a safeguard against super-exploitation.

After the Brussels summit that option seems no longer credible. More austerity is the last thing that Wales needs. However, a ‘left’ anti-EU stance, simply reverting to the ‘Get Britain Out’  position of the 1970s, risks getting caught in the slipstream of the  raucous, well-funded and totally reactionary Euro-scepticism of UKIP, the Tory right and the Daily Express, which sees the ‘repatriation’ of powers as a means of racking up the level of exploitation in the workplace.

Welsh Labour, instead of  simply seeking refuge in the EU must, along with other socialist, green and progressive nationalist movements across Europe, act as an agent of radical change and aim to transform the European Union so that it operates no longer for the benefit of the bankers, speculators and profiteers but is instead based on social justice, equality, democracy, international solidarity and the protection of our environment.

Nick Davies, writing personally, is Chair of Welsh Labour Grassroots and is a local council candidate for Labour in Swansea.

This article also appears in the February issue of Labour Briefing


Lens on Labour: Taking on the EU.

Len Arthur

Misgivings about whose purpose is really served by the EU have been held widely within the labour movement. It was not until the early 1970’s that Labour in part supported membership and the 1980’s when the TUC started to warm toward the Social Chapter following the ravages of the Thatcher governments.

On the left, many both within and outside of the Labour Party do not support the EU either due to the loss of UK or Parliamentary control – I believe Tony Benn has this view – or because it is simply an organisation to support capitalism.

Others in Labour and on the left accept these concerns but suggest that UK history has never been independent of what happens in Europe. The two world wars of the 20th Century demonstrated this and it is therefore better to be involved to try to influence events than think we can avoid the consequences of decision taken in the rest of Europe.

The EU Treaty is also a reflection of the post war social democratic and corporate settlement. Sovereignty was shared, the conflict between capital and labour reflected in reforms covering work and re-distribution of wealth geographically, and certain key industries such as agriculture were protected. At the same time, economic policy has been about opening up the internal market and improving international competitiveness through reducing the role of state, encouraging competition, standardisation, free labour movement and now with the Maastricht Treaty, restrictions on the use of government spending to encourage economic activity.

Tensions within the EU between the different assumptions that underpin these approaches have been restricted by the expansion to new states and the establishment of the Euro. It is now clear that not addressing these tensions has aided the crisis within the eurozone and they are being resolved by moving away from the social democratic settlement and democracy and toward an attack on the working class across the EU under the guise of ‘austerity’, making us pay for the bankers crisis.

Similarly tensions on the left have come to the surface. Some have argued, that we should leave the EU and it doesn’t matter if the eurozone or the EU falls apart. Others have suggested that the EU has always offered the opportunity for workers unity across Europe and now is the time to act together internationally, to resist the policies of austerity.

It should also be clear that the Tory government is no friend of the social democratic settlement, they are only interested in pulling back powers from the EU to remove the effects of the social chapter in the UK and cut back public spending even harder.

Whilst in Brussels a few weeks ago I drafted the following piece which could act as a motion for meetings; you can see where I come down on the debate – what do you think?

‘United front against the Treaty

People of Europe against austerity and the treaty: for an alternative social and democratic Europe

ETUC statement now seems radical. It is a measure of how far and how fast the EU has gone to the right. We are faced with a spectre the spectre of austerity. The workers of Europe are being expected to the pay the cost of the bankers’ crisis and not only are the representatives of the bankers’ being elected to use the state to solve their problems but in countries like Italy they have been handed the state without an election. In the UK a millionaires’ government intends to cut harder than across the EU and is primarily interested in representing the City of London.

Time is of the essence. We have until March. We can stop the Treaty if we mobilise across Europe: what is essential is a united front of workers organisations and parties to initiate solidarity action around the demand no to the Treaty; no to loss of democracy; yes to a social Europe based on equality; and yes to full democratic control of EU institutions.

We should call upon the TUC and the ETUC to launch an EU wide petition supporting these and more detailed demands looking for the widest possible support internationally. We should also call upon them to launch EU wide demonstration and industrial action culminating in time when the Treaty may be signed.

If they don’t take this action, we should do what we can to launch ourselves using social media.

Taking on Euro-austerity.

from Len Arthur

The threat to the working class and democracy in the EU is now so severe that we should be moving toward an active united front with all on the left in Europe who are prepared to argue and act against these trends. The basis is ‘we will not pay for their crisis’.

Given the current situation, the statement below from the European Left seems like something to work with. Alongside organising to follow-up on the 30th November actions in the UK, workers across the EU should have the opportunity to say ‘No!’ to the austerity agreement being planned – and currently being implemented, in an even worse version, by the Tories in the UK.

One aspect could be an e-petition – it would be excellent if the ETUC could organise one but, if not, we could start by distributing a possible wording around all our EU contacts and then launch it perhaps through Avaaz? Then secondly we could perhaps try to coordinate an EU day of action as well as publicise widely action that is taking place, such as the strike in Italy this week.

I know this sounds huge but so is the threat and I’m sure that there are millions across the EU that want to join together and not allow their neo-liberal governments to determine the agenda.

Here is the European Left declaration

Declaration of the EL Council of Chairpersons: “Less “Merkozy”, more social and democratic Europe!”

Resolution of the Council of chairpersons of the Party of the European Left (EL) on tackling the European Economic and Financial Crisis

The European summit of the 8-9 December 2011 marks a very dangerous turning point for the future of Europe. Entering into an agreement on the protection of the European Central Bank independence and the stability pact, imposing budgetary discipline to European countries by automatic penalties, inclusion of the “golden rule” in fundamental laws and creation of a “right of interference” for European institutions in national budgets, heads of states and European leaders are overturning peoples in a chaotic Europe.

The actual European architecture has led to a crisis, but tomorrow’s Europe will be more submitted to markets and will be more harmful for the peoples. They have signed austerity for life and deprived peoples of their budgetary sovereignty. Thus, they have signed the death-warrant of growth, social progress, democracy. It even threatens the existence of the Union. What will happen when powerful countries will dictate to others the reforms they have to organise? We are going to an increase of intra-european tensions, with all nationalist and chauvinist reactions that they could create. European history has already proved that this situation can lead to crisis of civilization.

Gathered for an extraordinary meeting, the European Left member parties’ chairpersons declare solemnly that an exit from the crisis is possible if a breaking-off is made with neoliberal policies – defended by right-wing forces and accepted by social-democrats –  and if people do not choose the populist xenophobic appeals.

Another voice exists, the voice of the EL, trade-unions, associations, social movements, of all forces trying to find solutions for an exit of the crisis which is not austerity, endless rescue and survival of banks, financial markets and big capital owners, but the defence of democracy, social rights, social and ecological development and the welfare state in Europe. Our anti-crisis formula is: less Merkozy doctrine, more social and democratic Europe!

It is urgent to open an alternative to overcome the crisis together. The proposals we want to debate are:

I. The detachment of public finance from the finance markets.We want the European Central Bank to be democratically controlled and to take an active role in fighting speculation with government bonds, the foundation of a European public fund or bank for social, ecological and solidarity development. A common resolution has already been discussed at the Assemblée nationale in France and at the Bundestag in Germany thanks to the Front de Gauche and Die Linke MPs.

II. Reorganization of the banking sector and decrease of the financial markets powers: We want the private banking sector to fall under public responsibility and control. Speculative financial transactions have to be contained by direct or indirect means. We want the creation of a publicly-owned pole of credit that is a key instrument to finance jobs, public services and an ecological transition.

III. Solutions to public debts problems: Why should peoples pay for the banks and finance crisis? We want austerity policies to be stopped immediately. We stand for the adoption throughout Europe of national regulations which rule out both the curtailment of wages, pensions, and social welfare and replace those policies by mass tax increases for big capital owners and millionaires. Because all European countries are threatened, the EL proposes the organization of a European Conference on the Debt, that could discuss the direct redemption of debts by the ECB for threatened countries, the abolition of a large part of public debts related to the results of a public audits. We recommend special protective predictions for social security funds and the radical decrease of military expenditures which is also a precondition for peace and solidarity, the abolition of rating agencies and a big plan of public investments.

IV. Making social Europe: We want Europe to become a protective for its people. For this, minimum standards that ensure a decent life have to be introduced for working hours, wages, pensions, social security, and income taxation.

V. Turning Europe into a union of balance: the central adjusting screw for this is the dismantling of economic imbalances reflected by gaps or surpluses in trade balances. A European coordination of economic, wage and finance policies aimed at eliminating unemployment and creating even trade balances in the medium term is necessary. It involves a development of industry in all countries. The European budget must be uppermost directed to cover such imbalances.

VI. No to EU authoritarianism – Real democracy in Europe: The EL continues its fight for the establishment and the protection of democracy, accountability, transparency and citizens participation. We are firmly opposed to any unilateral restriction of the powers of national parliaments attaining legitimacy through European agreements. We therefore advocate the strengthening of the powers of the European Parliament. Moreover, we demand any kind of fundamental change to the legal bases (treaties) of the European Union to be subject to legitimization by referendum everywhere where the laws allow it.

After the positive results of the Danish and the Spanish Left, it now time for the European Left forces to intensify their work in the movements of resistance. In this framework, the EL Council of Chairpersons proposes all EL member and observer parties to intensify their efforts for the strengthening of communication, common action and solidarity among leftists and among the working classes of our countries. The EL will take initiatives to establish dialogue between all political, trade unions and democratic forces in Europe which are looking for solution to exit the crisis. The demand for another Europe, social and democratic must become a common slogan chanted in all languages spoken in our continent.

Council of Chairpersons of the Party of the European Left

Brussels, 12 December 2011

Len Arthur is a Labour Party Member, Political Education Officer for his Constituency Party, and a former Trade Union Activist and Lecturer.

The EU, Austerity and Resistance to ‘Nationalism’.

Len Arthur 

David Blanchflower argues, in the latest New Statesman, that something very serious happened at the end of August and early September that ‘put the frighteners on UK policymakers’. If he is right, this incident remains a secret. He suspects that a European bank had to be rescued. And he goes on to say that the break-up of the euro zone would be a major risk to the UK economy, possibly as bad as 2008, which saw a 7% or so drop in output. In same edition Pete Wilby points out even more starkly the dangers of such an event.

What is clear is that one way or another EU governments are lining up to make the working class pay for the crisis, under the bland and tendentious euphemism ‘reform’ or the more Dickensian ‘austerity’. Where the right neo-liberals are in control of government – and that seems most of Europe – this fits in with market policies that benefit their rich friends. Even if they are not in control or not bending sufficiently, bond and market pressures are being used to shoe in technocrats that are not elected, such as the new government in Italy where the whole cabinet is now composed of such people.

If this is not enough, ‘The commission’s plans include monitoring of national economies going beyond that meted out to Greece, Portugal and Ireland. In effect, unelected officials would have power to veto national budgets of euro zone members’. If you don’t like my language then take a look a look at this from Left Futures.

It’s very serious: side-lining democracy in order to have the power to attack the working class. Now some people might be tempted to call that fascism, but that would entail arbitrary arrests and the development of a police state, though given what happened to some after the riots, there are indications in this direction. Others, and I include myself, would see a form of a coup d’état, like the coalition in the UK. Whatever the niceties of the language, the rich are gunning for us to solve their problems.

One response has been to turn against the EU altogether. But just look at the Tories who argue this. They are no friends of the trade unions and the working class and only wish to attack UK workers harder than other countries do, with a view to achieving competitive advantage. Another response could be to make links and unite with those under attack across the EU under the call that we will not pay for their crisis. We could argue for a social and workers’ renegotiation of the EU treaties, preserving the right to keep and extend the public sector, an EU living wage and a commitment to full employment. We should argue for the EU parliament to have the ultimate powers to control the commission and appoint ministers. Yet, how do we do this? Answers please, on a postcard to …. or better, on a March and Rally on November 30th.

Len Arthur is a Labour Party Member, Political Education Officer for his Constituency Party, and a former Trade Union Activist and Lecturer.

Spike! – Going on the offensive.

At the Welsh Labour Grassroots Conference, early November, Welsh Economist Steve Davies, in his contribution, raised the unspeakable, the dreaded ‘c-word’, the word now common-place from the lips of news-readers, journalists and economic analysts. Capitalism!
Gordon Gibson closed the debate saying we should go on the offensive against all its propaganda.

News items these days, it seems, are  required to conclude with an update on ‘how the markets responded’. Share prices up: cheer; share prices down: gloom. Qadhafi and thousands of Libyans killed: Buy! Buy!; nuclear disaster: Sell! Sell! Except they even rig the news now by ‘leaking’ bad gossip. Share values fall, they buy cheap, then sell soon after when the price re-stabilises. So overt is the brazen manipulation and greed of the ‘one percent’ that there is even serious discussion in their media on the extent to which world power is in the hands of governments or ‘the markets’, the current rapid vagaries of the Eurozone crisis being a case in point. [For now, we shall set aside the matter of whether the EU or, indeed, most national governments represent ‘the people’ or those same markets.]

Now it may be a bit ultra-left of me but when I hear reports that the markets  responsible for this economic chaos are in pain and suffering, I tend to experience a glow of pleasure. My exuberance is enhanced by markets’ dismay when Greek workers strike, hundreds of thousands of young ‘indignados’ hit the streets in Spain, the Occupy Movement resonates all over the western world and Icelanders vote to ditch their debt. ‘The markets’ quiver in fear and I am pleased.

Shares markets are not the barometer of good and bad in the world, not for me. The true indicators are riots in Tottenham, the popular emergence of the occupy and ukuncut movements, people with disabilities coming on the streets, pension plundering being the occasion for the biggest national strike since 1926. There are personal indicators: the tears of our daughter at work, exasperated by Tory sabotage of the good things that we care about and need, and worse, the volume of tears of those coming to terms with the slashing of public support for their already strained life existence.

Shed no tears for the markets; the only concern of shareholders is their dividend. Their priorities are the very root of the problem. So self-focused are the markets that, despite recognizing the overwhelming need for ‘global solutions’, they are incapable of delivering.

Europe is riven with desperation and division. Only Germany, on a world scale, shows any understanding of ‘working together’ and their interests are driven, in no small part, by their desire to share the load of the bail-out. Britain walks the other way, content to reap the market benefits but rebuff fiscal management and the most modest human rights. I’m a European but the British left still finds itself on the same side of the fence as its hated government, against the EU, even if the best propagandise for  for a United Socialist States of Europe.

That reflects the problem, more for capitalism than for the left: ‘Global solutions’ = socialism! Capitalism can’t stomach that. Short of world domination – and they are certainly giving that a try – capitalism just cannot bring itself to sit down and plan collectively. The imperative of short-term self-interest and the grasping demands of shareholders is just too much. They have been spoiled by high yields, mega salaries and obscene finance market bonuses. The ‘quick-win’ casino culture has blinded them to their own early history wherein their pillage of world resources was invested in the long-term stable returns that built most British cities and still provide the financial underpinning to their vast wealth.

It’s a bit Keynesian to say it but, right now, we could do with some of that. And if they can’t come to terms with it, we may well have to end up taking it, staying put in our mortgaged homes, jobs and businesses, nationalizing the banks, controlling the money markets, stopping the oil-and-arms-economy wars, devolving democracy….

Oops, we’ve ended up talking socialism again.

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