Transcript Presentation to Joint Committee on EU Affairs 7 March 2013

Presentation to Joint Committee on EU Affairs 7 March 2013 by Paul Murphy MEP
A 'silent revolution' of
authoritarian neo-liberalism
“What is going on is a silent revolution - a silent revolution
in terms of stronger economic governance by small steps.
The Member States have accepted - and I hope they
understood it exactly – but they have accepted very important
powers of the European institutions regarding surveillance,
and a much stricter control
of the public finances.”
Commission President Barroso at the
European University Institute, June 2010
What does 'authoritarian neo-liberalism' consist of?
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Technocratisation of economic policy making
Making neo-liberalism law and “making socialism
[in reality Keynesianism] illegal” (Martin Callanan
MEP)
Transfer of powers from elected governments to
unelected bodies
A response to the crisis or 'never waste a good crisis'?
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The “shock doctrine”
“at the drafting stage, the implications of national budgets and
of major national fiscal policy measures [should be]
reviewed at the level of the Union”
European Roundtable of Industrialists, 2002
“eurogroup will... have to assume greater responsibility in
improving economic governance in the euro area, and put
greater emphasis on domestic and competitiveness
imbalances, which have proved in most recent developments to
be a major source of fiscal instability”
BusinessEurope, Spring 2010
'Authoritarian Neo-liberalism' so far...
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Non-legislative measures: Removal of elected governments,
ECB 'ransom notes', Troika 'supervision'
Legislative measures: 'Six Pack', 'Fiscal Treaty', 'Two Pack'
Stability & Growth Pact targets (3% deficit, 60% debt to GDP
ratio) binding and subject to fines if not met
Rules in national law (of “binding force and permanent
character”) re structural deficit (0.5%) and S&G targets
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Excessive Deficit Procedure
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Scoreboard system – going beyond S&G
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Change to voting rules in Council – ability to lose vote
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'European Semester'
The 'Two-Pack'
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“Common budgetary timeline”:
“In the exceptional cases where ... the Commission identifies ...
particularly serious non-compliance with the budgetary policy
obligations ... [it] should request a revised draft budgetary
plan, in accordance with the provisions of this Regulation.”
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“Economic partnership programme”:
“detailing the policy measures and structural reforms needed to
ensure an effectively durable correction of the excessive
deficit”
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“Enhanced Surveillance”
Much much more in the pipeline...
'Towards a Genuine Economic and Monetary Union' paper:
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“The reforms introduced … through the creation of the European
Semester … are a step in the right direction. But there is a need to
go further...” (Dec 2012)
“A fully-fledged integrated budgetary framework would require the
establishment of a Treasury function with clearly defined fiscal
responsibilities.” (Oct 2012)
“It is important … to make the framework for policy coordination
more enforceable to ensure that unsustainable policies do not put
stability in EMU at risk. Such a framework would be particularly
important to guide policies in areas such as labour mobility or tax
coordination.” (June 2012)
“arrangements of a contractual nature between Member States and
EU institutions...” (Dec 2012)
What's so bad about authoritarian neo-liberalism?
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Fundamentally undemocratic
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Institutionalised austerity means deeper crisis:
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Eurozone GDP down 0.6% in Q4 2012, 0.9% in 2012
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26 million people (including 5 million youth) unemployed
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But austerity is working: Bondholders protected, profits up
across EU, process of privatisation, wages pushed down
€750 billion in 'excess cash holdings' in listed EU companies
in 2011 (McKinsey: Investing in growth: Europe's next challenge)
Fall in private investment 2007-2011 in EU27 of €350 billion,
4 times fall in GDP, 20 times drop in consumption
Public investment, socialist policies precisely what is needed
What is to be done?