The European Union against Europe: Disobeying and Walking

8 November by Daniel Albarracín

CC - Flickr - gaelx

The purpose of this presentation is to contribute with some elements of the debate, focusing on the strategies that the progressive political forces in Europe has been developing. Debating with them we will try to build a useful proposal to open a path to break with the straitjacket of the Euro System and the Europe of Capital.

It is convenient to highlight some points of the new political context. Just to mention, concerning the socioeconomic situation:
- We are in a macroeconomic framework affected by low profitability rates, relative stagnation, low investment rates, trends to deflation, huge problem in the balance Balance End of year statement of a company’s assets (what the company possesses) and liabilities (what it owes). In other words, the assets provide information about how the funds collected by the company have been used; and the liabilities, about the origins of those funds. sheet of an important part of the banking system, and a wage depression combined with still high unemployment and instability labour rates. The peripheral countries are more affected, as the design of the Eurozone is capable to export the crisis from the core European countries to them. The recent slight recovery, have not reached the level of production of before of the crisis, and is weak and is going to be short.

Regarding the social and political situation is important to highlight:
- The failure of Syriza Government experience and the submission of Greece to the Troika Troika Troika: IMF, European Commission and European Central Bank, which together impose austerity measures through the conditions tied to loans to countries in difficulty.

IMF : https://www.ecb.europa.eu/home/html/index.en.html
.
- The open process for the Brexit in United Kingdom.
- The emerging of new forces within the hard right in several countries, demanding more protectionism, a xenophobic agenda, and the protection of the privileges in the richer countries.
- The first steps done of the implementation of the Five Presidents’ Report, as a roadmap to recentralise powers into the EU. And the tension of a clear blockade at the European Council, mainly Germany and other Central and Nordic Member States, in order to oblige that any refoundation of the EU is conditioned under the imposing of structural reforms. In other words, austerity measures and a control and monitoring of the peripheral economic policies in the wage, fiscal and budgetary fields by the Central European Countries.
- The desperate monetary policies of the ECB ECB
European Central Bank
The European Central Bank is a European institution based in Frankfurt, founded in 1998, to which the countries of the Eurozone have transferred their monetary powers. Its official role is to ensure price stability by combating inflation within that Zone. Its three decision-making organs (the Executive Board, the Governing Council and the General Council) are composed of governors of the central banks of the member states and/or recognized specialists. According to its statutes, it is politically ‘independent’ but it is directly influenced by the world of finance.

https://www.ecb.europa.eu/ecb/html/index.en.html
, just to support the insolvent private bank system, and useless to boost the investment.
- After turning the private debt into public debt at national level, the new attempts to socialize the debt at EU level, but making to pay to the peripheral of peripheral countries, with a new European Monetary Fund. The EMF would be the whip to ensure the implementation of austerity measures in those dependent countries of the core countries.
- The possible new USA geostrategic agenda and the new role of Russia in the context of an energetic crisis.
- The new militaristic agenda. USA demands to the EU to increase its army capacities, as the USA wish to decrease their investments in the NATO NATO
North Atlantic Treaty Organization
NATO ensures US military protection for the Europeans in case of aggression, but above all it gives the USA supremacy over the Western Bloc. Western European countries agreed to place their armed forces within a defence system under US command, and thus recognize the preponderance of the USA. NATO was founded in 1949 in Washington, but became less prominent after the end of the Cold War. In 2002, it had 19 members: Belgium, Canada, Denmark, France, Iceland, Italy, Luxembourg, the Netherlands, Norway, Portugal, the UK, the USA, to which were added Greece and Turkey in 1952, the Federal Republic of Germany in 1955 (replaced by Unified Germany in 1990), Spain in 1982, Hungary, Poland and the Czech Republic in 1999.
, finishing its role as the Guardian of the world. It could entails that EU should create a new European army, but for the time being, after the exit of the UK, just France has an important army, which it could push to Germany to make concessions in the roadmap of the EU, probably reducing some demands and the blockade of the reforms posed by different sector of the European oligarchy.
- The reinforcement of the security agenda is permanently highlighted by the establishment. They have created a humanitarian crisis with people in situation of forced migration outside and within our borders; appealing to the threat of terrorism, in order to make easier the justification of social control and militaristic investment initiatives. In fact, there is a general acceptation of putting aside the militaristic investment of the public deficit accountability.

These are just a few points to take into account. Even there is a temporary and mutual blockade of the political responses. The consequences are opening the path in the middle of this paralysis of the establishment.

From this point of view, we can identify several stances within the elites and, on the other hand, the progressive forces. Our task today is analysing these strategies, the tension among them, and contributing to find a proposal able to fight against the adversaries and also able to release the paralysis of the left. This lead us to make a political programme for the international and revolutionary forces in Europe, an alive political programme capable to maintain a fruitful relationship with the working and popular classes in an emancipatory perspective.

Of course, our political strategy should be based in the promotion of the popular self-organisation, but also should be thought which governmental measures, in such a case of ruling, could be done.

For the time being, the elites are divided. We can find two lines within the extreme centre, in other words, the establishment forces. On one hand, a technocratic approach, federalist and neoliberal, which is proposing recentralised power for making a European State intervention possible. This line, represented by Juncker and France, try to put order in the markets, stabilising the private financial sector, against the working classes. On the other hand, an ordoliberalist proposal, led by Germany, to keep the EU under its intergovernmental scheme, defending the advantages of the Member States with permanent external surplus. The third player is the emerging far right, which is presented as anti-establishment, and likely is prone to exit of this EU, in order to create a transitory national refuge policies, reordering the globalisation framework in a more regional way and based in the stigmatisation of new “internal and external enemies”.

Nevertheless, these three lines of the elites have a lot of in common. We cannot discard that any possible conflict, could be overcome reaching some agreement in order to reinforce the paper of the State, in a supranational or national shape, with policies which ensure that the capital works more protected, charging against the popular classes the structural crisis of the current capitalist crisis and the failure and the perverse design of the EU. This could reorganise the architecture of the current EU, creating new clubs of countries, for example, using all those instruments and agreements reached outside the EU Treaties to create a Nordic Area or consolidating an institutionalised multiple speed and a more established hierarchy in Europe.


What about the progressive forces in Europe?

On the table we can find at least two poles of the discussion within the left forces.

On one hand there is the stance in favour of reforming the EU . The main points which characterised it are the following:
- They proposed fight in the electoral field, accumulating progressive governments in the European Council in order to reform the EU treaties. They think that posing a minority group blocking the Treaties in the European Council could give them strength to negotiate reforms.
- They support a Federal Approach regarding the EU.
- Regarding the debt problem they propose pooling the debt (Issuing Eurobonds) and promoting a Paneuropean conference of debt to reduce its size (moratorium, debt forgiveness...), repaying the main part of the debt in function of the growth.
- They search to overcome the crisis boosting the investment through a new European Investment Policy, with the EIB and the ECB. For example, they support another monetary policy through a Quantitative Easing for People, in other words, an Expansive monetary policy with other design.
- They are in favour of a Financial Regulation, an increase of the European Budget or developing a redistributive policy, based in a Progressive Tax Reform and new EU taxes, with an automatic damping mechanism to offset surpluses and deficits in Payment Balances.

In sum, it is a paneuropean approach quite naïve. Beyond the short reach of the measures posed, we cannot await for the unanimity in the Council to change the EU institutions and the Treaties, and we cannot await for a negotiation based just in a blockade strategy within of the EU institutional proceedings. If we reach a government, in such a hypothesis, we need to make our political programme from the minute one.

In the other hand, we can find another strategy, based in the Eurozone exit , and in some cases the exit of the EU. Basically, they raise that:
- The Single Currency is not feasible. It jeopardises the peripheral countries development. A single market with a single currency harms those countries with lower level productivity and worse position in the European division of work, creating divergences in the Payment Balances.
- This line proposes re-establishing the Economic sovereignty and implementing a new currency. Depending on the point of view, they could pose to establish a capital movement control, a fiscal reform, a debt restructuration, and some kind of protectionism.
- They do not discard to ally with other countries under a solidarity model, but a bilateral approach prevails in principle.

This strategy is clearly against the design of the EU and particularly the Eurozone. The problems that we see with it is that, just exiting the Eurozone is not enough to defy neoliberalism and the crisis of the global capitalism; the room of manoeuvre of a single country is quite low in the long term; and that the instruments of the Nation State doesn’t provide different tools to make something quite different of a Keynesian and national policy. Besides, the international solidarity conceived by this strategy normally does not go beyond of a bilateral approach.

Thus, what to do then?. We think that there is an alternative strategy, capable to bring the best of the ideas within the left forces into a new perspective. We believe that a strategy based in “disobeying and walking” could be possible. We consider that:
- Nor the EU is amendable in deep (unanimity rule to change the EU Treaties) nor being alone is desirable.
- We cannot wait eternally nor we should precipitate some measures before preparing the conditions to undertake them.
- We can carry out at the same time an antiausterity policy and being internationalist. Although we have to prepare the routes to respond to the adversary’s reaction.
- We have to take into account the horizon, preparing flexibly different routes to take depending on the events and circumstances. It is needed identifying the timing, relationship and order of the measures to implement first.
- The triggering events and the process of change will occur first in the weak links in the chain and not in an abstract blackboard. A structure changes by the weaker point. For the time being, we have seen the cases of Greece or United Kingdom as the first extreme cases, more like them are going to arise. Which are the “weak links in the structure”?: peripheral countries, financial and banking crisis, deflation and investment crisis, new recession, far right tendencies, social and democratic resistance,...

What to do first in the case of reaching a government:
- Halting the implementation of Stability and Growth Pact.
- Establishing a temporary control of capitals movement to prevent capital flight and to pursue fiscal evasion.
- Addressing the question of debt (suspending the payment of the debt). Moratorium and Citizen Audit of the Public Debt. Condoning the public debt and establishing a selective default, protecting social security funds, pension funds Pension Fund
Pension Funds
Pension funds: investment funds that manage capitalized retirement schemes, they are funded by the employees of one or several companies paying-into the scheme which, often, is also partially funded by the employers. The objective is to pay the pensions of the employees that take part in the scheme. They manage very big amounts of money that are usually invested on the stock markets or financial markets.
and small savers.
- Intervening the banking system through a new financial regulation. Reduce its size, charging to shareholders and creditors junior the restructuration cost. Guaranteeing the social function of credit and establish a solvent managing. Create a new public banking system under democratic and social control.

The next steps would related with how to respond to the reaction of the EU. Meanwhile it could be interesting open a negotiation, in order to get time, although also putting in place or get ready the following measures:
- Preparing a Monetary Authority to guarantee the internal economic transactions in case of expulsion.
- Searching new alliances within and outside the EU. Proposing a new solidary framework focused in the cooperation and integration of financial resources, new and fair trade agreements, exchange of raw materials (energy), and investment cooperation. For the future a new common currency with offset mechanisms, for instance a strengthened common budget with a harmonized tax regime.
- Establishing a Progressive Tax Reform (more weight on profits and wealth) to support a new public investment policy, creating employment under an energetic transitional model, and protecting the working classes in case of a temporary decreasing of the national income, to make pay the crisis to the ruling classes.
- Implementing a labour reform to guarantee employment stability, democratic labour organisation, giving powers of human resources selection to an independent and public body, and reducing the working time average.
- Starting a big plan of ecological transition for the industry based in renewable energies, creating more employment.
- Opening a path to an endogenous and international economy, building a new supranational area.


Author

Daniel Albarracín

Es economista y sociólogo, consejero político en el Parlamento Europeo y miembro del Consejo Asesor de la Revista Viento Sur. Miembro del Truth Committee on Greek Debt.


Other articles in English by Daniel Albarracín (1)

  • What to do about the debt and the euro?

    5 May 2013, by Michel Husson , Ozlem Onaran , Francisco Louça , Nacho Álvarez Peralta , Stavros Tombazos , Bibiana Medialdea , Antonio Sanabria , Jorge Fonseca , Daniel Albarracín , Mariana Mortagua , Giorgos Galanis , Manolo Garí , Teresa Pérez del Río , Lidia Rekagorri Villar

Translation(s)

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COMMITTEE FOR THE ABOLITION OF ILLEGITIMATE DEBT

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