As Europe is locked into permanent austerity, and democracy subverted, Labour’s MEP’s remain shamefully compliant

This post was written by Reuben on December 10, 2011
Posted Under: Uncategorized

In the coming months Keynesianism is to be made illegal across much of the continent. Angela Merkel, the president Europe’s great creditor nation has got her way. Europe’s leaders haver agreed in principal to fiscal union. Under the terms of the accord, budget deficits shall not exceed 0.5% of GDP, while any nation that breaches the 3% limit shall be automatically fined.

Public finances, of course, automatically move into deficit during a downturn – as tax revenues fall and the social security bill rises. The result, as Richard Murphy points out, is that under the terms of fiscal union, govenrments will be compelled not merely to refrain from stimulus packages, but to actually make cuts during a downturn. And   those who have to live with the consequences will not be able to vote for an alternative. Government’s of all stripes will be left absolutely toothless in dealing with cyclical unemployment.

As I have said before, fiscal union, along-side the ejection of elected governments in Europe’s debtor nations, represents the biggest diminution of democratic power in Europe since the 1930s. Meanwhile, the politics of unemployment – of protecting the most vulnerable from the impact of boom and slump – has been fundamental to Labour since its inception – and it is exactly this politics that is to be made ultra vires.

Thus, one could be forgiven for expecting a bit of noise of noise over the last few weeks from those elected to represent Labour in Europe. Yes Britain will not be directly affeced, but these people, in theory are there as representatives of the entire European demos. Shamefully, Labour’s MEP have remained silent and acquiescent.

While Merkel leads the charge against European democracy, our girl Mary Honeyball MEP continues to suck up to the woman she says is the “Euro Saviour”. She has told us in dry, technocratic, terms that “The new measures will enforce greater fiscal prudence as it is now clear that those currently used are not sufficient”. No mention of the enormous fettters these represent both to democracy and to social democracy. And last night she was on the radio, batting for fiscal union yet again. Meanwhile the other labour MEP’s remain equally uncritical or remain silent.

So long as this new accord remains in place, millions of Europeans will be condemned, at every future downturn, to mass unemployment, and with no recourse to the ballot box.. When a right-winger like Farage can call out this  great attack on democracy for what it is, it is shameful to see Labour MEP’s skipping so merrily along.


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Reader Comments

Thanks – that was a very interesting perspective.

Written By Sarah AB on December 10th, 2011 @ 9:08 am

Thank you very much Sarag!

Written By Reuben on December 10th, 2011 @ 10:15 am

Yet another example of undemocratic, unaccountable eltes trying to impose supranational policies onto democratically elected governments. I also thought Toby Young’s point of view on this were interesting.

Written By Owain on December 18th, 2011 @ 4:21 pm

I agree entirely. Not that the EU should do nothing, but that it’s a silly rule. The issue is debt, not the deficit. A Keynesian stimulus during a temporary downturn is a good plan, if it is affordable. The recent unsustainable debts are not the result of budget deficits bigger than 3% now, they’re the result of not running a surplus during the boom time and thus having lots of debt already. Deficits during downturns need to be paid for to ensure they’re sustainable, but when they are they can be great.

Why does anyone care if a country with a debt around 20% of GDP runs a 5% or even 10% deficit? Yet a country with a debt over 100% of GDP probably shouldn’t be running even a 3% deficit. Any rule that bans the former but allows the latter is pretty silly, in my view.

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