EU commission: Less democracy to facilitate economic shock doctrine

A “silent revolution” is underway in the European Union according to Commission President Barosso. This counter-revolution of “economic governance” involves a further diminution of democracy in order to facilitate the imposition of a European “shock doctrine”.

The proposal is an attempt to institutionalise cutbacks, privatisation and downward pressure on wages.

By imposing “economic surveillance” and a massive fine system for countries that do not meet austerity targets imposed by the European Commission, the plan is to ensure that governments do not wilt under the pressure of massive movements against austerity.

There are three major elements of these proposals. The first is that budgets will now be presented to the European Commission and Council for approval (“surveillance”) in advance of any debate in national parliaments. The reason for this is clear – for the Commission and Council to ensure that the budgets implement neo-liberal policies of cutbacks and austerity while defending the interests of big business.

Secondly, the proposals strengthen the “Growth and Stability Pact” which limits countries’ public debt to 60% of GDP and their annual deficits to 3% of GDP.

Sanctions are to be introduced for countries that miss these targets, with states in breach having to pay 0.2% of their GDP into a non-interest bearing account, which will be lost as a fine if they do not follow the directions of the Commission. This fine can be increased to up to 0.5% of GDP (around €700 million for Ireland).

The final element is a procedure to prevent “macroeconomic imbalances”. The Commission will create a series of parameters (as yet unannounced) and a scoreboard of austerity will be used to measure a country’s progress. If a state fails to meet the targets, which could potentially include deregulation of labour markets for example, further massive fines can be imposed.

These proposals are part of an attempt by the European capitalist classes to resist the tendency towards break-up of the eurozone by having co-ordinated attacks on living standards through a common fiscal policy. This is also an approach that has long been demanded by big business lobby groups in Europe, in particular the European Round Table of Industrialists. They would like to see a race to the bottom in wages and conditions across Europe to maximise their profits.

These attempts are doomed to fail because of the differences that exist between the capitalist classes and crucially because of the response they will face from working people across Europe to their austerity policies.

Just as the bosses and their governments are co-ordinating their attacks across Europe, it is vital that workers link up their response. With the EU/IMF now subjecting Portugal to similar conditions to Ireland and Greece, pressure must be put on the trade union leaderships in Ireland and across Europe for common action, including European-wide industrial action, against the attacks on living standards and against the “economic governance” proposals which aim to make those attacks permanent.

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May 2011