I’m sure Milton Friedman would have appreciated the irony. The neoclassical economic prescriptions developed by him and others in the name of competition and freedom of choice is about to be awarded a continent-wide ideological monopoly, by force of state decree.
If Merkel and Sarkozy get the new treaty they need to save the euro, balanced budgets and minimal deficits will become mandatory, and any variety of expansionary fiscal policy will simply be against international law.
As Henry Ford might have put it, voters will still be allowed to pick governments of any colour they like, so long as they limit themselves to Chicago School precepts. In economics terms, at least, the EU will find itself forcibly relocated to suburban Illinois.
Of course Cameron did not veto EU involvement in this scheme through any laudable desire to keep everyone’s economic options open. Few can doubt that he wholeheartedly backs such constraints, on point of principal.
Nor is there any realistic prospect of internal challenge to this drift from within the EU. Currently some 97% of its population of is ruled by the centre right. Such leaders are genuinely persuaded that there is no other way.
That situation will not obtain forever. Eventually there will emerge a government with a popular mandate for something more radical. That would most likely be a party of the social democratic or former communist left, or some popular frontist formation elected against a backdrop of mass unemployment. But in circumstances of crisis, fiscal expansion might have its appeal to the populist or authoritarian right as well.
What happens next would depend on balance of class forces. But if such a government attempted to proceed, it would at the very least be subject by the concerted efforts of the financial markets to wreck its plans, and in all likelihood could expect expulsion.
I am part of that minority on the left which never bought into the identikit ‘it’s a bosses’ club – Britain out now!’ denunciation of the EU, and have preferred to stress the progressive aspects of supranational unity and the possibility of democratisation instead.
But that support is not unconditional. If Merkel and Sarkozy get their way, I would at the very least find myself forced to reconsider. This one is a gamechanger, as much for the left as for the right.
The author fails to prove that changes taking place in the EU are not my a reflection of changes taking place in the wider political economy of capitalism – therefore he fails to justify why his correct attitude or anybody else’s should change
The so-called ‘fiscal-integration’ is long-held plan of Merkel which is being rushed through in the name of saving the EZ but in fact will do nothing to solve the financial crisis or stop the second banking credit crunch going global. This is a ruse, making ‘good’ use of a disaster. The left have very good reason to resist this undemocratic ideological treaty which will prevent any sort of future Keynesian type stimulus to create jobs and growth.
The reality is that the gross speculation of the bond markets with sovereign debt, the new sub-prime, is still highly likely to implode and all of this ‘playing chicken’ may well be irrelevant. The LP should reject both Cameron’s non-regulation of the shadow banking system, and the Merkosy ‘fiscal integration’. Linking together with the opposition across the EU is the way forward.
The EU and its fore runners were established under US tutelage not to prevent war but to contain, surround, stifle and strangle socialism. Now it is falling apart having bankrupted itself in the process. It cannot prevent war in Europe. The booming post-War economy did that along with the existence of a common enemy. The question is what political-economic arrangements are needed now to establish the basis for a sustainable, functioning, human-centric mode of production. What is going to replace US-sponsored globalisation and its collapsing peripheral institutions like the EU?