Last night David Cameron really put the Euro cat among the pigeons. A Franco-German plan for a treaty including all 27 EU Nations was vetoed by him, when he failed to win an exemption from new financial regulations for the United Kingdom. Instead of an EU wide treaty, a new intergovernmental treaty will be negotiated between those countries who wish to take part (23 countries so far).
The response back home has been as expected. Eurosceptics are delighted, as they see it as the UK’s chance to get of the Euro train to the United States of Europe. Europhiles are warning that the UK is isolated, and a worsening relationship with Europe will damage our main export market.
Our Prime Minister invoked the veto due to not getting the exemption for the financial sector that the City wants. It is clear that the deregulation of the financial sector is a very significant issue when tracing the root cause of the current global economic difficulties. Most on the Left believe that the type of new regulation proposed, such as a transaction tax, is desperately needed. I concur with this view, but believe that this should not done as part of the treaty proposed.
However, the treaty as proposed would have introduced other elements that the progressive left should have great issues with:
- A cap of 0.5% of GDP on countries’ annual structural deficits
- Automatic consequences for countries whose public deficit exceeds 3% of GDP
- Tighter rules to be enshrined in countries’ constitutions
These measures interfere with a Nation’s freedom to run its own economic policy. The big concern of myself and others across the political spectrum is that the undemocratic nature of the EU grows. A free market has become a monetary union. The next step is fiscal union. Both Italy and Greece have new Leaders who have not been democratically elected, but put in place to deliver austerity measures demanded by Global Finance. Look at the streets of Greece – does it look like the people support austerity?
The measures proposed further erode the power of National Governments to determine their own future. The truth is that the EU is headed for the only logical place it can. Monetary union cannot work with fiscal and political union. The crisis in Europe is to a large part due to the flawed structure of its Monetary Union. It must do one of two things – abandon the project entirely or head to the United States of Europe. Trying to straddle the two is damaging the whole continent. Nothing in this treaty does anything to fix the current crisis in the Eurozone.
David Cameron sees the two ways ahead. While I do not support his reasons for choosing the path he did, it is the path I would choose for the sake of democracy. It might be an unclear and lonely path, but the other way heads full speed off the edge of a cliff in broad daylight.
David’s move will be very popular with the broadly Eurosceptic British Electorate. I believe that this will seriously boost the electoral prospects of the Conservatives in 2015, and Ed Miliband’s uphill struggle has now got twice as difficult.
UK politics has just got very interesting.
I agree with you Garry. The Merkosy plan to impose fiscal discipline is a long held ambition which has been brought forward because ‘A crisis is a great time to push through unpopular measures’ and is not relevant to the bond market induced ‘sovereign debt’ difficulties. Of course, DC was trying to do exactly the same thing on behalf of the City, but he came unstuck.
As Michael Hudson says: ‘The easiest way to understand Europe’s financial crisis is to look at the solutions being proposed to resolve it. They are a banker’s dream, a grab bag of giveaways that few voters would be likely to approve in a democratic referendum.’
Good post 🙂
This just makes a total mockery of everything Cameron and the commentators say:
Austerity and neoliberalism in Europe or austerity and neoliberalism out of Europe. Not much of a choice, is it? All nominally socialist or labour parties in Europe need to start working out a radical socialist solution immediately. Ideally, these parties would draw up a common programme to be presented at elections so that once the left controls the majority of European governments it can embark on drastic reforms to build the foundation of a socialist Europe. The key point to remember is the Blairism, the Third Way or whatever you want to call it is now utterly irrelevant and for practical purposes is identical to the centre right orthodoxy that’s killing Europe, whether represented by Merkel, Sarkozy or Cameron.
Welcome to Think Left Chris.
You are right about Blairism – it was Neo-Liberalism with some window dressing to make it look acceptable to the left.
We do need an alternative, but under FPTP it can only come from Labour. Therefore, Ed needs to get the courage to set out this alternative clearly.
The PLP is full of Blairites and would give Ed hell for doing that. David Miliband still lurks in the background. Ed has his work cut out.
I am sure that a broad set of common principles could be drawn up that could form the centre of a new European Left. At Think Left we believe it would a socialist/green movement.
Sadly, the forces that benefit from Neo-Liberalism play hard and dirty, wield huge power and have stupendously deep pockets. It will be a hard fight.
Great post by Robert Fisk in the Independent :
Very relevant I thought.
Great suggestion Chris … I’ve been writing much the same thing on various blogs. I agree with you and Garry. We need to forge an international movement to challenge the transnational neoliberal mythologies.
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