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The EU’s unnoticed power grab

Just as the rioters are now at the receiving end of severely punitive treatment, so the licentious members of the eurozone (EZ) are having similar punishment meted out to them for their financial wickedness. Under the EU-IMF bailouts, Greece and Ireland have had their domestic fiscal policy-making amputated. This has been done without anaesthetic by Euro Commission surgeons supervised by the German finance ministry using hacksaws and chisels apparently loaned from Milton Friedman’s Chicago economics department.

This is for the EZ malefactors. Less appreciated is that the EU as a whole, including Britain, has agreed a package of similar Brussels control over the making of national budgets for all member states from this year onwards.

The legislation already approved allows the European Commission to oversee national budgetary decisions on a regular year-long basis known deceptively as the European semester. The EC first produces an annual growth survey (AGS) setting out the kind of budgets it wants all member states to produce for the coming year. It has already been published in January for the 2012 budget year. There has been no democratic involvement in its drafting, and no stakeholders have been consulted.

Despite the stringent austerity measures already imposed on all member states since 2008-9, the AGS is now demanding more conditionality for benefits and the raising of retirement ages across the continent. It includes the usual neoliberal prescriptions for more flexible labour markets as well as ‘strict and sustained wage moderation’, i.e. cuts or below-inflation wage increases stretching into the future. The Commission also wants a further shift towards more regressive taxation, particularly VAT.

The European Parliament, the only democratic EU institution, can offer its ‘opinion’ on the AGS, but cannot amend it. Member states must then present their budget proposals to the EU Commission and Council before making them available to their own Parliaments. If the Commission disapproves of the budget proposals, it delivers detailed ‘recommendations’ aimed at that country which can include wage levels and social services spending.

Then if a country refuses to accept the Commission prescriptions, it can issue alerts and sanctions, including for EZ countries fines of 0.2% of a country’s GDP. In the case of Britain that would amount to £3bn. If a country fails to conform with EC demands for 3 consecutive years, the fines go up to 0.5% of GDP.

Because Britain is outsize the eurozone, it would not be subject to the fines, but rather to ‘peer pressure’ from other member states – and it was after all the peer pressure, not fines, that forced Ireland into the bailout package it desperately wanted to avoid. But even without fines there are other effective sanctions, e.g. withdrawal of EU structural funds or even temporary withdrawal of a country’s vote in the Council of Ministers.

That amounts to being forced to implement EU law, but without any say on the law being produced. The Commission is emerging, quietly and insidiously, as the European Tea Party movement of neoliberal fundamentalists. The AGS is an extraordinarily reactionary document, and Britain – and the Labour Party in particular – should be strongly rejecting this slide towards undemocratic government.

8 Comments

  1. Jim Denham says:

    This is the perfect example of the need for the European Paliament to be given more power – for instance to amend or veto the AGS: would you be in favour of that?

    No, thought not.

    You’re little-England xenophobes who probably think “we” should leave the EU altogether: am I correct?

    Forward to a United States Of Europe! A United *Socialist* States Of Europe would be good: but for now I’ll settle for a United States Of Europe, even under capitalism.

    1. Jon Lansman says:

      Jim… I don’t think you should assume Michael opposes more power for the European Parliament. His comment

      The European Parliament, the only democratic EU institution, can offer its ‘opinion’ on the AGS, but cannot amend it.”

      if anything implies the opposite. We’re not xenophobes, here, we’re internationalists and socialists. We’d like to see more europe-wide democracy, including more power for the European Parliament (though fewer expenses and lower wages). We are, however, opposed to more powers without accountability, especially when those powers are designed only to pursue a neo-liberal austerity agenda.

  2. Brian Paice says:

    Ooo, perhaps Michael Meacher should become the latest Labour MP to move to pushing for an EU referendum then….opportunistic though they may be, even the likes of Tom Harris have jumped on board (he a former Transport Minister!)

  3. Mike Stallard says:

    I am from the right and I am so glad that AT LAST decent people from all over the place are beginning to wake up and see the dangers of the EZ.
    Thank you for your courage and passion for the truth.

  4. Jeremy Poynton says:

    What? Check Meacher’s voting record on the EU and you will see that he always votes for the EU. This article is hypocritical in the extreme. The lack of democracy in the EU is the result of people like you. Shame on you and shame on your party for your treasonous actions over Lisbon.

    Ex-Labour voter, 1970 until Iraq (1997 until Iraq with Toynbee’s proverbial nosepeg. If I knew then what I knew now, that I had helped to elect a Fifth Column, inimical in every sense to all Britain once stood for, I would not have made this error. If Labour are elected again, we will be leaving the country of my birth).

  5. Robert Eve says:

    Meacher finally wakes up to the EU.

    We should have left it years ago.

  6. Northern Worker says:

    Michael, have you been asleep during your 40-odd years in Parliament? All this happened on your watch!

    Perhaps you could speak up for the people whom you represent who want an in/out referendum on the EU.

    Can we leave please?

  7. Martin C says:

    Archbishop Cranmer has it exactly right. A fine response to the above article, worth reading in its entirety, see http://archbishop-cranmer.blogspot.com/

    As a taster:
    “Just where has Michael Meacher been for the past 40 years? He was elected to Parliament in 1970 and would have heard all the fractious debate surrounding UK accession to the EEC in 1973. He would have witnessed (and been party to) the 1975 referendum. He would have listened intently to the speeches of Enoch Powell on the implications for political sovereignty; his own party would still have been reverberating with the warning of Hugh Gaitskell that EEC membership would mean ‘the end of Britain as an independent nation state… the end of a thousand years of history’.

    Yet Michael Meacher sat meekly by throughout the Blair years, climbing the greasy pole of ministerial responsibility, all the way to the Cabinet. He was mute through the Maastricht mêlée and noiseless through the Nice negotiations. He was silent through Lisbon, and completely quiescent on the Constitution. And now he stirs from his speechless slumber to warn us all of the EU’s ‘unnoticed power-grab’.

    O, please.”

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