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Democrat Editorial - May-June 2010

The EU - National & Class interests

The attempt to solve the chronic crisis in the eurozone has exposed profound disagreements between EU Member States. These arise from very different national interests on how to unravel the mess. However, there is little disagreement amongst them as to who is going to end up paying – those who work for their living.

   One approach includes dictating a policy of austerity to the governments of Greece, Spain, Portugal and Ireland. This would entail real cuts in wages, the welfare state, health services, education and pensions. Although unimaginable sums of tax payers’ money have been thrown at the problem, the crisis persists. The so-called EU Growth and Stability Pact with strict rules and criteria on public spending and government borrowing have dramatically failed. In fact amongst the first Member States to break the rules were Germany and France.

   In the eurozone of 16 EU Member States interest and exchange rates are fixed by the EU’s Central Bank. These are two key levers which national governments could use to control their economies but are unable to because of euro membership.

   Although thankfully Britain is not a member of the eurozone the Stability Pact criteria have been applied and are a large factor behind the problems our country faces. This includes the results of privatisation and a £6billion cut in public sector spending with immediate effect. The “Con-Dem” government will take a class position and press down wages and worsen conditions.

   Proposals have been tabled by Germany for even more draconian criteria including penalties for EU Member States who fail to meet these rules. This is another way to demand further “austerity” and force this on people to bring about a horrendous deterioration in living standards. It is simply a rapid extension of the EU venture to transfer wealth from workers’ pockets to bank vaults and to transnational corporation profits. Simultaneously the chance to further reduce all forms of democracy would be taken by vested interests to benefit the national interests of the larger EU Member States, especially Germany and France.

   The alternative rational and progressive solution would be for Greece to withdraw from the eurozone and devalue her currency. However, the EU political elite and Euro-federalists joined by the IMF would sooner use sticking plaster and yet more tax payers’ money to prevent this happening. Another solution is for Germany, which is the real and major cause of the euro’s problems, to withdraw from the eurozone which it dominates. Either or both these steps would end the Catch 22 endlessloop crisis and spell the end of the eurozone followed by the disintegration of the EU itself.

   Proposed changes tabled by Germany to the EU Constitution/Lisbon Treaty are to further shore up and consolidate the EU itself and Germany’s commanding position within this superstate. This latest move has for the moment been opposed by Britain. The “Con-Dem” Government, and a section of the ruling class it clearly represents, does not want to be further entangled with the deteriorating situation within the EU. Sterling and the City remains a competitor to the euro. Britain has a worse public deficit than any of the EU Member States in financial difficulties. Britain does not have the money to throw around except if the Government presses down wages further and tears up most or all sections of the welfare state.

   One factor the Government does not want to face is a referendum in Britain over fundamental changes to the EU Lisbon Treaty. Such a referendum would provide a further opportunity for the electorate in Britain to decide whether or not it agrees with being in an EU superstate. A referendum was promised by all three main political parties including those forming the “Con-Dem” Government.

   The labour and trade union movement in Britain must become acutely aware of the dangers and then oppose planned massive cuts, and moves to further deepen and consolidate a fiscal and political European Union.