Is Labour for or against the Austerity Treaty?


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Speaking to the Dáil on 28 February Labour leader Eamon Gilmore told the assembled deputies that the purpose of the Austerity Treaty was to help build a “thriving and prosperous European economy that has moved beyond the present crisis.” He said that, “It is part of a package of measures being put in place in Europe, to stabilise the situation in the Eurozone”.

In conclusion the Tánaiste said, “Endorsing the Treaty will be another important milestone for Ireland in our road to recovery” and doing so was “vital to our national interests.”

On the basis of these comments it seems pretty clear that the Labour Party believes that the content of the Austerity Treaty is good for economic recovery, will help boost investment and jobs and that you should vote for it come referendum day.

Supporters of the Treaty, including the Labour Party, say that there is really nothing new in it. They say that it is simply a restatement of the existing Stability and Growth Pact rules and some modifications to these rules agreed to by the European Council in 2011.

These modifications, known as the ‘Six Pack’, were approved by the European Parliament and European Council in September and November 2011 and came into force from December 2011.

They are five separate EU regulations and one directive dealing with aspects of economic governance.  They were described by the European Council as “the most comprehensive reinforcement of economic governance in the EU and the euro area since the launch of the Economic and Monetary Union.”

So, given the Labour Party’s support for the Austerity Treaty, including those elements whose origins are to be found in the so called Six Pack, you would think that their MEPs would have supported the Six Pack proposals themselves when they were voted on in the European parliament last September.

Not so. Labour’s three MEPs, Proinsias de Rossa, Phil Prendergast and Nessa Childres opposed the package of measures, voting against four of them, abstaining on one and only supporting one.

The reasons for their opposition to the overall package are quite interesting.

On 28 September 2011 Proinsias de Rossa said that the Six Pack “…legislative package will reinforce the EU austerity programme driving us into recession.” While welcoming the inclusion of the protection of social rights in the one measure they supported (Ferreira A7-0183/2011) the Dublin MEP went on to say that “four of the so called ‘6-Pack’…are economically misguided…” and will “…kill growth, destroy jobs and derail economic recovery.”

On the same day his party colleague Phil Prendergast criticised the European Commission proposals as “missing the most important ingredient: a jobs and growth strategy.”  She went on to say that the, “austerity-only approach is a recipe for the rich getting richer and the poor getting poorer.” The Ireland South MEP noted that, “The six-pack proposal approved by the European Parliament will further isolate weaker member states…” and  described the “fiscal consolidation” demanded by the legislative proposals as “punitive”, “divisive”, “ineffective” and “destabilising”.

Focusing on the impact of the Six Pack on the Irish economy Nessa Childers said that, “At a time when the Irish economy is showing signs of recovery due to increased foreign investment and booming agricultural exports, depressed demand in our European markets will only undermine our recovery.” The Ireland East MEP said that, “To focus only on the side of fiscal austerity will depress demand further and destroy job creation..,.” and called for a “change from this extreme austerity approach.”

Importantly the reason why the three Labour MEPs supported one of the Six Pack proposals was because of the inclusion of what is known as the “Monti Clause” with states that the Regulation will not affect the exercise of fundamental rights or the right to negotiate conclude or enforce collective wage agreements (Ferreira A7-0183/2011).

This commendable clause is of course absent from the text of the Austerity Treaty

So the Labour party in the European Parliament strongly opposed the “irresponsible” “austerity only” approach of the Six Pack on the grounds that it will “kill growth, destroy jobs and derail economic recovery.”

But the Labour Party in the Dáil support the Six Pack inspired Austerity Treaty  on the grounds that it is an “important milestone for Ireland in our road to recovery” and “vital to our national interests.”

In one of his final acts as an MEP before he stood down in February of this year Proinsias de Rossa again called for European political leaders to rethink their support for the “austerity-only” approach contained in the Six Pack and the Austerity Treaty.

The Dublin MEP called on EU leaders to “place greater emphasis on solidarity and growth with jobs in the negotiations on the new inter-governmental treaty”. He advocated a “fiscal stability pact” rather than a fiscal compact.

Unfortunately none of the leaders involved in the negotiations of the Austerity Treaty were listening, not even his own party leader Eamon Gilmore.

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6 Responses

  1. Big Jim

    March 7, 2012 1:19 pm

    I wonder if we could have a moratorium for the duration of the election on LP members and their TU affiliates pontificating about how the crisis is hurting the poorest in our society – while their party is simultaneously out there campaigning for austerity for ever?

  2. vincent wood

    March 8, 2012 11:51 am

    Not forgetting latterday President of the Labour Party and now incumbent in the Pheonix Park – Michael D.

    If this is a key moment in the defence of what ‘Labour’ – ie the Working Class – have gained in the past century, then I don’t know what is.

    If there is any sense of understanding this, let alone any serious attempt to defend what little protections we have under social democracy (whatever about Democratic Socialism) then De Rossa, Prendegast et al would cause a crisis within their party and campaign openly against the copperfastening of neoliberalism. We’ll see.

  3. CMK

    March 9, 2012 10:37 am

    Hi Vincent,

    That won’t happen (De Rossa, Prendergast coming out against the Treaty). I suspect that Childers, who probably knows that she’s burnt her bridges with the Labour Party hierarchy, will come out against it as she seems, unusually for a Labour politician, to actually have a grasp of what the Treaty implies for ordinary people. I don’t think she’s that long in the Labour Party so she seems to have retained, for the time being, an ability to think critically.

    What will be a kicker is when ICTU, SIPTU and some of the other unions come out in favour of the Treaty. If they do advocate a ‘Yes’ it will probably be the only time when the old cliché ‘Turkeys voting for Christmas’ will make sense. As Fintan O’Toole pointed out this Treaty outlaws Keynesianism as a policy platform. There are two consequences of that. Firstly, and obviously, it also outlaws any policy platform left of Keynesianims. And, secondly, outlawing Keynesianism has, as a necessary concomitant, the outlawing of trade unions, who are a key pillar of Keynesian political economy. If the Treaty goes through expect an steady assualt on the unions that will surpass anything we’ve seen thus far and anything that Thatcher or Reagan could have even conceived.

  4. vincent wood

    March 9, 2012 10:48 am

    I suspect that De Rossa et al will, of course, row in behind Gilmour.

    You are right about Keynes. The left find ourselves in the positiion of trying to defend the bare minimum – Social Democracy.

    I lived through Thatcher. It takes a Labour party to implement the worse excesses of Thatcherism – al a Blair and now it would seem, Gilmour.