J19 Against the Europact

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As many are no doubt aware this Sunday will see demonstrations in Dublin, Cork, Galway and Limerick in solidarity with the Real Democracy Now movement across Europe. June 19th or J19 is the day that the people of Europe will demand that the Euro Pact is not implemented. They say that the Euro Pact, as envisioned by EU ministers as a new form of Economic governance, will erode the possibilities of democratic participation further and entrench neoliberal economic principles in every aspect of how a country is governed.

See Real Democracy Now Ireland on Facebook and the Real Democracy Now Blog for further details.

Below I’m republishing a piece by Kenneth Haar of Corporate Europe Observatory on the Euro pact, which we originally published on ILR in May.

Thanks to Hugh Green for the link to this impressive Spanish video about J19 and the Europact. Press CC to see the subtitles.

Barroso’s Silent Revolution

If one were to identify successful revolutionaries in crisis-ridden Europe, the European Commission would be a strong candidate. And it’s not social justice and democracy they have at heart.

“What is going on is a silent revolution – a silent revolution in terms of stronger economic governance by small steps,” José Manuel Barroso, the president of the European Commission, June 2010.

Dizzy with success he commented on decisions taken by EU governments.

“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.”

On that occasion, the Council had backed Barroso’s comprehensive list of political responses. Moreover, he had been given a green light to design new legislation that would allow the EU institutions – mainly the Commission and the Council – to intrude into matters which up until this point had been considered too sensitive; the level of social expenditure and wages to name the most prominent among them.

A comprehensive system

Many of those who followed with disbelief these early stages of Barroso’s revolution had their worst fears confirmed when legislative proposals for ‘economic governance’ were tabled in September. This was redoubled when the infamous ‘Euro-plus Pact’ was adopted by all EU member states but four. Austere and anti-social policies are the response of the European Union to the crisis, implemented via deeply undemocratical procedures.

It’s already been made abundantly clear that the Commission is prepared to intervene in loan arrangements to add conditions that squander collective bargaining – as can be seen in Ireland and Greece. But what’s important to stress is that this line of work from the Commission is not ad-hoc. A permanent system is being created that will enable the Commission to intervene in labour markets and social policies at any time in the future.

This model – unsurprisingly – enjoys enthusiastic support from the main big business lobby groups, the European Roundtable of Industrialists and the European employers federation BusinessEurope, and it has been framed in a way that lives up fully to the stream of declarations, letters and statements from these lobbies. The trade union representatives have – in stark contrast – been completely ignored.

Commission at the steering wheel

Among the key demands of big business from the outset was that the Commission should have a strong and prominent role, which was something that observers of the close relationship between business lobbyists and the bureaucracy of the Commission easily understood. Over the past decade, for example, the Commission has been deeply committed to an agenda of slashing social expenditure, commercialising public services, and ‘reforming’ labour markets. And along with big business, the Commission has often lamented that these policies have been hard to implement because of limits on the power of the Commission itself. The crisis, however, has opened a window of opportunity.

But why is the power of the Commission important?

The Commission is a group of 27 persons, selected by EU governments, and somewhere in between decision makers and civil servants. Their main power stems from the fact that the Commission is the only institution that can propose new legislation – not the Council, not the European Parliament.

The official philosophy behind this set-up is – among other things – that in order to prevent the agendas of one or more member states dominating legislative proposals, an independent body is needed. That independence, though, is highly questionable, given the close interaction with big business on all major issues, not least the Eurocrisis. But for others, the Commission is indeed hard to influence. It’s next to impossible to influence the Commission if you’re with a trade union or from another civil society organisation. These days, the Commission routinely turns a deaf ear to general strikes in Southern Europe, to major demonstrations in Brussels, Paris or Athens, and to other popular protests against austerity.

Power tools for austerity

The new system has no less than eight separate components, some of which have been adopted. Six more are due to be approved in June by the Council and the European Parliament. Unfortunately, there is little reason for optimism about the Parliament’s role: in the first debates last months the majority of MEPs voted for the transfer of even more far-reaching power to the Commission.

What role would the Commission itself play in this system? That matter is still being debated, but the following is a non-exhaustive list of what could be the case in only a few months:

  • The Commission will be able to set the agenda for recommendations to member states budgets. This year, already, the Commission is going for pension reforms.
  • It would have the privilege of proposing a member state with too big a deficit on the state budget to lower social expenditure.
  • It would be able to propose fines on member states that don’t abide by a recommendation, and that are not able to lower their deficits at the required pace, and would only be defeated if a qualified majority in the Council opposes a fine.
  • It would have the power to ask a member state to lower wages – be it by intervening in collective bargaining or by lowering wages in the public sector. And it could back it up with a threat of a sanction.

A crossroad

Barroso, the President of the Commission, sees the reforms as nothing short of historic. In January he stated: “If it is not now, in face of the biggest crisis we have since the beginning of the European integration, when are Member states ready to take real steps for economic policy that is consistent with the goals they have themselves stated? If it is not us, at European level, that take an encouraged attempt to take those decisions, who will do it?”

Behind self-confident proclamations like this lies a chilling message: it is not only in times of crisis that the European Commission is being equipped to force through an antisocial agenda via undemocratic means, but into the future. However, let’s not despair. It could also turn out to be an unrealistic project. Resistance has been mounting for the past months, not least in the trade union movement, and there is every reason to expect this to grow further. And once Barroso starts using his new powertools, and his silent revolution stops being silent, he might discover that it could undermine the legitimacy of the European Union as a whole.

Kenneth Haar is a researcher at Corporate Europe Observatory, a research and campaign group working to expose and challenge the privileged access and influence enjoyed by corporations and their lobby groups in EU policy making.

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Donagh is the editor of Irish Left Review. Contact Donagh through email: dublinopinionAtgmail.com

One Response

  1. Tomboktu

    July 1, 2011 1:56 pm

    Does anybody know if there is a report anywhere about the vote in the European Parliament on the package of directives?

    I’ve found the texts they adopted in their first reading on 23 June but don’t fancy ploughing through 83 pages to figure out the main points. (If you too, Herod, wish to come and adore the child that is the draft EU legislation, see the file named “Texts (Part 2)” on this page: http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+20110623+TOC+DOC+XML+V0//EN&language=EN)

    And I can find the voting record. Paul Murphy didn’t vote, which surprises me given the significance of the legislation.

    Here’s a summary of the votes on each of the six legislative proposals:

    Prevention and correction of macroeconomic imbalances
    For: PPE (FG); S&D (Lab); ALDE (FF), Greens
    Agin: GUE/NGL (SP and SF)

    Implementation of excessive deficit procedure
    For: PPE & ALDE
    Agin: S&D, GUE/NGL, Greens

    Requirements for budgetary frameworks of Member States
    For: PPE; most of S&D (incl Childers, Prendergast); ALDE, Greens
    Agin: GUE/NGL, a dollop of S&D (incl De Rossa)

    Budgetary surveillance in euro area
    For: PPE; ALDE
    Agin: S&D; GUE/NGL; Greens

    Surveillance of budgetary positions and surveillance and coordination of economic policies
    For: PPE; ALDE
    Agin: S&D; GUE/NGL; Greens

    Enforcement measures to correct excessive macroeconomic imbalances in euro area
    For: PPE; ALDE; Greens
    Agin: GUE/NGL
    “Formal” abstention: S&D

    What that doesn’t deal with is how votes on amendments went.
    If the number of amendments voted on is an indication, then the controverisal proposals were “Budgetary surveillance in euro area” and “Surveillance of budgetary positions and surveillance and coordination of economic policies”.