Posts By Paul Murphy

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The Euro – exit stage Left?

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Paul Murphy MEP (Socialist Party) contributes to a discussion on what position the Left should take on the euro.

It hasn’t gone away, you know. Although much of the media and political commentary would suggest otherwise, the eurozone crisis is very far from resolved. The economies on the periphery of Europe all face deep economic crisis, the burden for which has been heaped upon working class and poor people, with the devastating social consequences seen at their most extreme in Greece. The situation in much of the rest of Europe is not much better. The political consequences of this ongoing crisis have been seen with near government collapse in Greece, Spain, Portugal and Italy over the course of the summer – with mass disillusionment with austerity a key underlying feature in all cases.

The Irish capitalist class has long tried to separate itself from the other peripheral countries – repeating the mantra that Ireland is not Greece and trying to demonstrate it by more effectively implementing austerity. It has been assisted in that task by the leadership of the trade union movement, which tied to the Labour Party, has attempted to stifle opposition

However, the facts and the crisis remain. The debt to GDP ratio is now at 125% in Ireland and rising. Another dramatic wave of the eurozone crisis could be unleashed at anytime by political or economic developments, the effects of which would be strongly felt in Ireland. The euro will again be at the centre of political developments.

As Ireland moves into primary surplus, the euro could become an important justification for austerity used by the political establishment and a battering ram against the Left. An important reason given not to default on debt or break from austerity policies may be the possible consequence of Ireland being forced out of the common currency. If the experience of Greece tells us anything, it is that an important argument of right wing forces in the next local and European elections, but in particular in the next general elections could well be – if you implement left or socialist policies, Ireland will be out of the euro and economic disaster will result.

Socialists and the Left must prepare to tackle this scaremongering, to demystify the euro and to put forward a left ‘exit strategy’ from the crisis that accepts the possibility of exiting the euro and puts forward radical socialist economic measures to deal with the consequences. There are two pitfalls common on much of the left to be avoided here.

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EU-US Free Trade Agreement: Race to the Bottom of the Atlantic

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A lot of ink has been spilt in the mainstream media, praising the role a free trade agreement between the EU and the US could play in pulling the two economies out of the crisis they are engulfed in. Richard Bruton outdid himself in the Sunday Business Post on 14 April 2013, claiming “abolishing restrictions in the EU’s services sector alone could boost EU GDP by 2.6%.” Three days later a press release from him claimed that the whole deal could boost EU GDP by a mere 0.5%! Of course, these claims of increased growth, together with hundreds of thousands of new jobs, should be treated with a pinch of salt by those with the experience of the ‘Lisbon jobs’ promises. 

These trade negotiations will be carried out in secret, away from any real public or parliamentary scrutiny. Thankfully the draft mandate prepared by the European Commission for the Council has been leaked, although it’s outrageously meant to be kept secret from most MEPs and the public at large. The draft clearly illustrates these negotiations are a means for big business including agri-business on both sides of the Atlantic to push their interests at the expense of European and American working people. They will drive for full liberalisation of public services, and a race to the bottom in terms of regulatory standards. They intend to give privileged access to ‘justice’ to major corporations and may threaten internet freedoms with the potential for ACTA by the backdoor!

The International Trade Committee of the European Parliament will vote on a resolution in April which will most likely voice support for the negotiations. Here, Paul Murphy MEP and Tanja Niemeier (Trade Advisor for European United Left in the European Parliament) provide a critical analysis and explain why  this deal will not be ‘win-win’ for workers on both sides of the Atlantic, as the free trade propaganda suggests.

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EU Austerity Budget – Cuts, Cuts, Cuts

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The Irish government has made much of the fact that it now holds the EU Presidency, chairing meetings of the European Council. It has been proudly proclaiming success in negotiating a new EU budget for 2014 to 2020 (the so-called Multiannual Financial Framework – MFF). What they don't say, however, that in the position of Presidency, they are pursuing the same austerity policies that they implement in Ireland – imposing unprecedented levels of cuts to the EU budget.

Two weeks ago the European Parliament voted for a resolution that rejected, in its current form, the proposed MFF. The proposal comes from the February summit of the EU Council and was a product of horse trading and negotiations between the EU's 27 heads of state.

This Summit was presented as showdown between Hollande on the one hand and Merkel and Cameron on the other. In reality, it was a discussion on how far to stick the knife into workers and poor people, with Herman Van Rompuy, backed up by the Irish Presidency, presenting a draft proposal for a second round of cuts. This was then amended to reflect the various political pressures on the heads of states. Despite these competing pressures, all heads of states feared an open conflict over the EU budget that would rattle the markets at a time they seemed to be calming. They also no doubt feared such open division could give confidence to workers and those opposed to austerity that they face a divided enemy and give impetus to new struggles.

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Action Plan 2013 – ‘The Gathering’ Writ Large

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Paul Murphy MEP and David Murphy of the Socialist Party provide a critical appraisal of the government’s Action Plan 2013 and argue that Ireland needs a radically different action plan.

Another year and another instalment in the Action Plan for Jobs from the government. After the self-proclaimed sensational success that was the 2012 action plan, with 92% of its targets being hit, unemployment still stands at over 14%. Self-congratulation is no congratulation.

With over 87,000 people having emigrated since the last Action Plan was launched, what does Action Plan for Jobs 2013 have to offer? Well, not a lot, despite containing 333 ‘actions’ to build on last year’s 270 ‘actions’. It continues to outline the next steps in the government’s plan to create 100,000 new jobs by 2016 and makes a big effort to be savvy by using the latest business jargon like “Disruptive Reforms”.

It contains some of the government’s favourite catchphrases like “governments don’t create jobs…but create the environment for jobs to be created” and Enda Kenny’s mantra of making Ireland “the best small country in which to do business”.  It contains lots of lofty ambitions, but in effect doesn’t contain a lot of ideas to actually get people back to work. It is a plan firmly anchored within a neo-liberal framework, calling for less regulation and  tax cuts for businesses together making Ireland more 'cost competitive', while hoping for a major increase in Foreign Direct Investment.

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EU Presidency Counter-Summit 2013

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The Counter-Summit Phenomenon – Forums for resistance and alternatives

Since the anti-globalisation movement of the late '90s and early 2000s, wherever the political representatives and economic thinkers of capital met, they encountered protest and opposition. From Seattle to Genoa, tens of thousands turned out to demonstrate against institutions like the WTO, G8 and EU. The anti-worker and environmentally unsustainable implications of their free trade and neo-liberal agenda were exposed.

With the understanding of the limitations of the model of protests at summits across Europe, came the rise of counter-summits. Generally called Social Forums these were an opportunity for socialists, trade unionists, environmental activists and others to meet. They represented an attempt to go beyond simply protesting against these institutions and to formulate alternatives as well as to discuss strategies for resistance.

The World Social Forum in Porto Alegre in Brazil which 12,000 people attended opened the process of the WSFs. It was followed with successful events in Athens, Mumbai, Nairobi and elsewhere. After playing a vital role in mobilising for the demonstrations on 15 February 2003, where tens of millions marched against a war on Iraq, the summits suffered a general decline, becoming somewhat disconnected from the real struggles happening around the world.

The model was successful in opening an important discussion, but it also contained within it an important contradiction that was always present in the anti-globalisation movement. This was the tension between an approach that was fundamentally reformist, aiming to curb the worst excesses of globalisation and capitalism and a more consistent anti-capitalist position. The formal exclusion of political parties did not keep out the various NGOs connected to Social Democracy and the reformist ideas associated with them, while revolutionary socialists were not able to openly organise.

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The Truth about the Deficit

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The following letter was sent on Monday by Paul Murphy MEP to Minister Varadkar, to clarify the facts made on the January 27th episode of The Week in Politics. The program can be watched on the RTE Player for any who missed it.

Dear Minister Varadkar,

I hope you are well. Yesterday on ‘The Week in Politics’, we disagreed over a number of factual issues to do with the level of the primary deficit and the impact of a repudiation of debt. I would like to detail here the sources for my statements, which I stand over. I intend to publish this letter on my website (www.paulmurphymep.eu) in order to allow people to see the relevant figures.

I asserted that the primary deficit for 2013 was, according to government figures, slightly over €3 billion. This is confirmed by the government’s ‘Medium Term Fiscal Statement’ from November 2012. The table on page 26 puts the General Government Primary Balance for 2013 at -€3,250 million, i.e. a primary deficit of €3.25 billion.

A separate figure is also given on that page of an ‘Exchequer Balance’ which gives a primary deficit in 2013 of €8 billion. Which figure is more accurate? Table 1c of the ‘Ireland – Stability Programme Update’ from December 2009 answers as follows:

“The General Government Balance (GGB) measures the fiscal performance of all arms of Government, i.e. Central Government, Local Authorities, Health Boards (prior to 2005 – their replacement, the HSE, is part of the Exchequer), Vocational Education Committees and non-commercial State sponsored bodies, as well as funds such as the Social Insurance Fund and the National Pensions Reserve Fund which are managed by government agents. It thus provides an accurate assessment of the fiscal performance of a more complete “government” sector.” (my emphasis)

It seems to me to be clear that the figure of the ‘General Government Balance’ is the figure that should be used.

In addition, I asserted that if we refused to pay the €9.1 billion in payments and the bailed-out bank bond payments this year, we would not need to borrow on the international markets and could in fact have public investment in jobs. Regardless of your political position on whether this is a viable strategy or not, I believe this to be self-evidently factually true.

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Eurozone Crisis: What Next?

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Recently engaged in a round of backslapping, the leaders of Europe suggested that we were turning the corner out of the crisis. In Ireland despite all the evidence to the contrary, the government is still trying to talk up the prospect of a 'deal' on the bank debt. But on the ground, the crisis is worsening, austerity is destroying people's lives and the economies of Europe. In the first of two articles on the future of the EU, Paul Murphy MEP examines the immediate prospects for the eurozone crisis in the next months.

Once more, the markets were temporarily calmed in September. The road forward to a stable eurozone was pronounced to be nearer than ever. The relatively tranquil summer for the eurozone was followed by a series of declared victories – the new European Central Bank (ECB) bond-buying programme; the German constitutional court positive ruling on the European Stability Mechanism; the announcement of the European Commission's proposal for common supervision of Europe's banks by the ECB; and the victory of the Liberals and Social-Democrats in the Dutch elections, despite the earlier good showing for the Socialist Party. The bond yields for the crisis-ridden states fell to relative lows and Commission President Barroso took the opportunity to spell out a longer-term vision of a move to a “federation of nation states” in Europe.

That this was simply the calm before the unleashing of a mighty storm of crisis in autumn and winter across Europe has already become evident. The measures announced represent new sticking plasters on the crisis. Yet again, the fundamental contradictions facing the eurozone have not been addressed. A series of deep crises in different states are likely to emerge in the coming weeks and months, putting into question the continued existence of the eurozone as is once more.

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