"The Fiscal Pact mandates that all national governments in the European Union should achieve a “structural deficit” of no more than 0.5 percent of gross domestic product. I shall not again demonstrate that this concept is nonsense and, even were it not, 0.5 percent would be absurd, implying continuously deflationary fiscal policy. If the Pact is foolish, combining it with a “fiscal czar” (Merkel’s term, not mine) is authoritarian madness. It would abandon the pretense of electoral democracy within the European Union." (Source: Social Europe Journal)
Good critical analysis by John Weeks of recent developments in European governance structure. Pro-Europeans who welcome this as "more Europe" are either terribly naive or have a hidden agenda.
"This crisis offers a tremendous opportunity for Europe. It has defined the agenda for years to come: banking union, fiscal union, and political union. What remains missing is an economic-growth strategy for the crisis countries; but, given mounting unrest in southern Europe, such a strategy is inevitable. Europeans have reason to be optimistic if they recognize the opportunity that their crisis has created – and act boldly and decisively to seize it." (Source: Project Syndicate)
This opinion piece by Joschka Fischer in Project Syndicate clearly demonstrates how much the former Green rebel has become part of the European elites. No word about the detrimental social impacts of the EU’s neo-liberal ideology, no word about the sustainability crisis which caused global economic disruption in the first place.
EU Commission President José Manuel Barroso held his State of the Union 2012 Address in the European Parliament today.
His call for a "decisive deal for Europe" is nothing more than the usual lithany of neoliberal (growth and competitiveness first) and old-school EU Integration platitudes (more economic and political union, European parties) with a few words added to placate those in Europe who want real "new thinking" and a really convincing new European project: a socially just and green new EU.
O yes and we need a new European public space now that anti-EU sentiment in lots of EU member states is running high. Where have we heard this before? Margot Wallström, please come back!
"The EMU will eventually (that is, within the next few months) either have to endure a monumentally costly break-up, or forge a tighter fiscal union with “debt-pooling,” joint budgets and tax systems, and guarantees against default. The domestic political resistance to the latter would be prohibitive in several nations—and even a single country might be able to torpedo collective efforts to centralize and shore up the euro system. It’s just remotely possible that European political and financial leaders might be able to cobble together one short-term fix after another until some sort of workable long-term solution can be agreed upon—but that’s only possible if there is enough economic growth in the interim to keep all wheels on the tracks. Without growth, it’s difficult to see how a train wreck can be averted." (Source: Energy Bulletin)
Richard Heinberg provides a different and much more convincing narrative of the European debt crisis from the perspective of Europe being the first continent to taste the bitter pil of a post-growth society.
“As Europe’s debt crisis intensifies, top officials say the continent urgently needs a central authority with the financial muscle to fix its broken banks.” (Source: Business Week)
The flight forward for EU leaders: a "banking union". Finally full recognition that THIS European "Union" has always been a Europe for capital, never for labour and citizens. As long as things went well, we got the crumbs from the tables of the rich, now they send us back to the poor houses and debtors’ prisons.
In the end, this Europe will end up on the ash piles of history. Then it will be time for Project Phoenix Europe.
“The Eurobond scheme only works effectively if taxation and spending powers are transferred to a central authority – “fiscal union”. But bar a series of truly extraordinary backflips by Europe’s divided rulers, spontaneously agreeing to settle their deep differences, this will not happen. Should anything resembling a “Eurobond” eventually be summoned up, it is liable only to be a feeble stop-gap measure. The underlying causes of Europe’s financial crisis will not have been addressed.”
Very good analysis by senior economist James Meadway on the New Economics Foundation blog.
Here is Meadway’s solution:
“The first steps to ending the crisis are to end austerity, halting and reversing the suicidal programmes of expenditures that have been launched; to write off debts that are now unpayable, whether owed by states (like Greece) or individuals and firms (as in Spain); and to allow the failure of private banks, nationalising and recapitalising them as needed. Tight restrictions on the movement of capital will be necessary to prevent financial panic spreading, and serious, radical efforts must be made to reverse the growing concentrations of wealth in Europe. For countries in the south, most especially Greece, this will not be achievable without abandoning the euro.”
“After more than 18 months, a dozen and a half summits, multiple rounds of austerity, a trillion dollars of liquidity, and now elections in Greece and France that threaten to overturn the fragile policy consensus in Europe, the Euro-crisis rumbles on.”
Good critical analysis of the Eurocrisis in Harvard Business Review Blog. Why Europe’s elites are trying to save the Euro and will end up losing the European project and, in several countries, democracy.
“Celebrated scientists and development thinkers today warn that civilisation is faced with a perfect storm of ecological and social problems driven by overpopulation, overconsumption and environmentally malign technologies.” (Source: The Guardian)
This absolute must-read report urges political and economic leaders to go beyond GDP, to bury the myth of perpetual growth and to start the fundamental fight against poverty and social inequalities.
Key message of the report which should be forced reading for all the EU “market and growth fundamentalists” who are desperately seeking new growth:
“The perpetual growth myth … promotes the impossible idea that indiscriminate economic growth is the cure for all the world’s problems, while it is actually the disease that is at the root cause of our unsustainable global practices"
“Austerity measures clearly are not working, so why are leaders still forcing it on Greece and others?”
Very good opinion piece on Europe’s myopic austerity policies in the NY Times. "Why are Europe’s leaders so determined to deny reality?"
Great analysis in Open Democracy about the false choice between EU federalism and intergovernmentalism and the need for genuine European politics.
“At the heart of our dilemma is the historical failure of the European Union to legitimate the grounds for its own political existence. In the past, Europe has relied almost exclusively on what Hauke Brunkhorst calls ‘output legitimacy.’ Europe’s citizens have supported supra-national integration because of what it tangibly promised them and, partially, delivered: reduction of barriers to trade, a unified market economy, higher rates of productivity, opportunities to travel freely, greater global influence. We have, however, substituted the practical benefits of closer union for any real debate about the political grounds upon which that union must, in the long-run, firmly stand. We have achieved a Europe of coordinating institutions and open markets but we lack a European citizenry, a pan-European, supra-national public sphere.”…
"The incumbent task for citizens is thus clear: to confront the political question directly. The era of ‘output legitimacy’ is over. How boldly Europe embraces new forms of input legitimacy – in which we will have to supply the ideas and the future of Europe ourselves, democratically as citizens – will determine whether and how we overcome the current sovereign debt crisis, as well as our deeper democratic malaise."