For certain media commentators, self-appointed spokespersons for the market, our friends outside the EU and some ministers in some EU governments who should know better, the debt crisis currently engulfing the eurozone has an easy solution. The European Central Bank should just step up to the plate and guarantee the solvency of the euroland member states.
In this black-and-white version of the world, Germany is the obstacle, haunted by its fears of returning to the hyperinflation of the early 1920s when its national bank just printed those much-photographed cartloads of million deutschmark notes. As the situation deteriorates from difficult to dangerous, the blame game has intensified.
And the culprits are now supposed to be found in the shadowy Frankfurt Group, a sinister secret society whose members happen to be the German Chancellor, the French President (i.e. the democratically elected heads of government of the two largest euroland countries) the President of the ECB, the Presidents of the European Council, the Commission and the Eurogroup, with the occasional participation of the head of the IMF and the Commissioner responsible for economic and monetary policy.
In the current hysteria this ‘Gang of Eight’ is assuming the reins of power in Europe, overthrowing democratic governments and parachuting technocrats in their place (worse still technocrats with European experience) , and imposing the fiat of Brussels in the 17 euro countries. Cooler heads might recognise the value in having regular consultations throughout this crisis with a manageable number of people who will in the end have to propose the solutions; and that this is a sensible if partial response to the much criticised leadership vacuum which has bedevilled the crisis.
And those solutions are not so straightforward. First, conferring on the ECB the role of ‘lender of last resort’ for the Eurozone would almost certainly require a Treaty change; anything less would be challenged in the courts, particularly in Germany. It is true that Germany has a federal structure, a multiparty coalition and an assertive judiciary which makes it impossible for any leader to push through proposals which would not only be politically controversial but also legally questionable.
And it would not just be Germany which would shudder at the thought of an open-ended commitment to other euro countries, now that the costs of servicing their debts have spiralled. So they would seek guarantees that would be tantamount to euro countries losing at least some theoretical national control over domestic spending.
And for this to have credibility it would need the same legal sanctity as that which would authorise the ECB’s new role, namely a Treaty change.
There are some who would relish the thought of a new constitutional process for the EU; certain federalists would see this as the defining moment, to complete business unfinished at Maastricht, Nice, Amsterdam or Lisbon ; others, such as the Council’s former top lawyer, Jean-Claude Piris would want a new Treaty to consecrate the schism between the ins and the outs, a hardcore of the 17 virtuous with the other 10 banished formally to the margins; yet others, like at least some in the main party in the UK coalition would want to seize a chance gifted by heaven to repatriate labour legislation powers and other social dispositions back to member states, or at least to organise new opt-outs.
And these are what are already being talked about; who knows what inventiveness will be shown, and what shopping-lists will be drawn up, once the starting pistol is fired on Treaty change? More >
The latest edition of Germinal is available to download here and to read below via Issuu, featuring coverage of branch meetings with Ellie Reeves and Emma Reynolds, and the Labour Party Conference 2011.
PLEASE NOTE: The meeting with Harriet Harman MP, advertised in this issue, has been cancelled.
Brussels Labour welcomed David Lammy MP to its meeting on 24 March on the theme of ‘Labour in Opposition and the days ahead’. David was the youngest member of the House of Commons when elected as MP for Tottenham in 2000. During his time in Parliament he has served as a minister in the Departments of Health, Justice and Culture, before taking the higher education portfolio, a post he now shadows in opposition. Brussels Labour was grateful to David for fitting in a visit while in Brussels to address a European Parliament Conference on Minority Leadership.
In a wide-ranging speech he gave his critique on the Conservative-led Government and his thoughts on the way forward for Labour in opposition and the challenges faced by the Party in securing a route back to power.
He began with the story of his own life and what inspired him to enter politics. Born in Tottenham itself – the constituency he now represents in Parliament – and raised by a single mother, David won a choral scholarship to the King’s School in Peterborough and went on to study at School of Oriental and African Studies (SOAS), the University of London and Harvard. He contrasted his experiences in Tottenham – the constituency with the highest unemployment in London – with Peterborough – in the heart of middle England – to highlight the challenges that Labour faces in recapturing the broad constituency of the British people necessary, in his view, to be a credible alternative for government. More >
The European Commission is neither fish nor fowl. Not quite a government, as such, it is more than just a secretariat or an administration. It proposes, it guards the Treaties, it rules on competition policy and on state aids, and it implements EU policy across the full range of activities.
To pretend as the UK government sometimes does that the Commission is just a technical regulatory body, not a political one, flies in the face of both constitutional theory and confirmed practice. And if this was just an administration then why did successive UK governments appoint Neil Kinnock, Peter Mandelson and Chris Patten as Commissioners? Whatever criticisms may be made of them, not even their worst enemies could describe them as desiccated technocrats.
For a future reforming Labour government, committed to growth through public investment, promoting the green economy, keen to reduce VAT if possible, looking for structural support for regions which are being blighted for the remainder of this Parliament, a strong and constructive relationship with the next Commission, which comes into office in 2014 will be crucial.
The next Commission looks like being less dominated by conservatives as member states incumbent governments pay the price for unbalanced austerity measures, and most incumbents are on the right. If the successors to the Barroso regime recognise that the answer to Europe’s sluggish economic performance cannot be yet more long-term wage deflation and more public spending austerity, then we may see a Europe-wide push for growth. More >
What a good idea it must have seemed to have a European Council which was not just about the sovereign debt crisis and the euro. That was the intention for the most recent meeting at the beginning of February. And it was good that at least part of the discussion was about security of energy supply; and innovation. Although the conclusions were very general, at least certain lines of action emerge. And it was inevitable but quite appropriate that the heads of government should take stock of the situation in Cairo, even if events took their more dramatic turn after the meeting had closed. Regrettably however there was no clear line about engaging with new democratic forces in North Africa; and no decision to move forward on the idea of a special summit on economic and political cooperation with the region as it enters this new era.
In the media of course there was barely a word about the substantive points on the Council agenda. It was all about the ‘row’ over the Franco-German, or more precisely, the Germano-French initiative for a ‘competitiveness pact’ for the Euroland countries. And how could it be otherwise when the French president and the German chancellor held a joint press conference to announce their proposals, almost as the meeting was about to begin? This was a hi-jack, pure and simple.
Of course one can be positive about some aspects of the initiative. It is good to see Germany coming forward with policy ideas to bolster economic governance in the EU. It is sensible to have a debate about guarantees to strengthen the credibility of commitments about spending. It was inevitable there would have to be some extra conditions to make the existing temporary bailout mechanism both stronger, and from 2013 permanent. And some of the squeals about particular proposals seem somewhat exaggerated- is it really unthinkable in the globalised economy for Belgium and Luxembourg to move away from wage indexation? And, perhaps above all, it is reassuring to see Berlin and Paris working together. Over forty years some of us can remember the gripes when the French and the Germans have been portrayed as imposing their will on smaller, weaker or more marginal member states. But when they do not cooperate, nothing happens.
But the ‘Competitiveness Pact’ is a misnomer. Greater European competitiveness will not be achieved by depressing public spending, wage deflation and reducing purchasing power. Yes, public spending must be brought under better control, but competitiveness also requires more and better training, higher levels of educational attainment, far greater R&D expenditure (public and private) and modernising much of Europe’s increasingly decrepit infrastructure. On these issues the French and German leaders were rather more reticent. And as yet they frontally oppose any effort to strengthen the EU’s resources to meet the competitiveness objective.
In terms of consensus building to get a quick agreement on the Germano-French proposals so that the euro might be bolstered, the shock and awe tactics were almost entirely counterproductive. So Herman van Rompuy once again is dragooned into service to try to get some package together by the end of March- first at a Euroland summit in early March, and then at the next European Council before the end of the month. More >
Duncan Enright is a councillor for the Witney East ward on Witney Town Council. The town’s MP is David Cameron. Duncan is son of Derek Enright, who was a Member of the European Parliament from 1979 to 1984 and then an MP from 1991 until his death in 1995.
For the last 15 years I have lived in Witney, a lovely market town in West Oxfordshire. My three children, Katy (15), Lucy (11) and Tom (8) all go to local schools, including the outstanding Wood Green High School where my wife Sally-Ann is a teacher. I’m a publisher and like many of my neighbours I commute. However I enjoy Witney – I play football with other local dads, we go to the local Catholic church, and I work for the local Labour Party and have stood locally for many years. The highlight until now has been having local MP Shaun Woodward defecting from the Tories in 2000 and signing his Labour Party membership card in our sitting room!
Last year the Tory town councillor for Witney East, Louise Chapman, was barred from office because she didn’t turn up for six consecutive months. Odd this – they are adept at managing this sort of situation. One of the other Tories (there are four for Witney East and 15 on the council of 17, one Lib Dem who votes with them) hasn’t been seen for two years, and has got away with it.
The Tories wanted to coopt a replacement. They did the same in 2009 when the only Green stood down (found it too hard going). Despite promises to the gullible Greens, they replaced him with a Tory ex-mayor! Instead I collected the ten signatures needed to force a by-election.
The Tory constituency agent, who is also the debarred councillor’s father, railed against the expense of a by-election, and rather backed them into a corner. I took the opportunity to ram home the need for a local voice on various key local issues, which you can read about at www.duncan4witney.org. It was a great chance to state my platform, and had the advantage of being the absolute truth – these are key issues where the town councillors have done nothing, or worse still the wrong thing.
We started early, posting a letter through all doors before the nominations closed. I have the advantage of being the candidate in every election since 2007, and living right in the heart of the ward. My kids go to the local schools, my wife teaches at one, and I play football with local dads (badly). I was able to press this advantage before the Greens and Lib Dems had even decided to stand. (I did in fact write to them to ask them to stand aside in my favour, so we could challenge the Tories directly on the big local issue of a disputed £20m bypass – I’m against and the Tories are for. Subsequently the Lib Dem candidate, also against, has been abandoned by his County colleagues who voted for unanimously. Same old Lib Dems!)
To be honest, when the list closed I was disappointed not to have a Tory candidate, and also assumed that their support, which is pretty substantial locally, would naturally transfer to their mates the Lib Dems. More >
The sudden and untimely death of Tommaso Padoa-Schioppa, just before Christmas, robs Europe one it’s most articulate and lucid voices. The former Minister of Finance in the Prodi government, and one of the architects of monetary union, was a shrewd commentator of the European scene. Writing in December for Notre Europe, the Paris think tank, founded by Jacques Delors, which he chaired, he talked of ‘the hurricane which had attacked the sovereign debt of the Euroland economies’ having as its real target the euro, rather than the debt of particular member states.
In his view the best means of defending the Euro was attack; complete the reform of economic governance, pursue fiscal union, seize on the review of the own resources system this year with new sources of finance for the EU’s budget from taxing financial transactions and carbon emissions; and finance Europe-wide infrastructure improvements by Eurobonds.
He was deeply critical of the pursuit of austerity as an end in itself. Responsible public finances needed in his view to go hand-in-hand with strong measures to combat unemployment, and harnessing the catalytic effect of the EU budget to this effect.
Such thinking is of course anathema to orthodox leaderships in Berlin, London and many national capitals. And it may be too heady a brew for the European Commission which has been reluctant to show leadership ever since the financial crisis broke in the autumn of 2008.
But the truth of the matter is that the political authorities in the member states and in Brussels have consistently underestimated the nature and scale of the challenge to Europe’s economic sovereignty posed by the crisis. At every stage the European Council, EcoFin and the Commission have been behind the curve. Measures taken in May, October and December 2010 might have stemmed the crisis had they each been taken two, three or six months earlier. But the consistent delay and sometimes the quality of the decisions has rarely provided more than a brief respite before the next onslaught from the speculators. More >
Julian Priestley, former General Secretary of the European Parliament and a good friend of Brussels Labour, has recently published a paper for the Notre Europe foundation (set up by Jacques Delors) which he has agreed to let us put online (click here to read the paper).
Titled ‘European political parties: the missing link’, its central thesis is that Europe’s political parties are failing to make the links between the institutions and the citizen. As a result they bear some of the responsibility for the anti-EU sentiments present in many member states, and these sentiments in turn hinder the development of the parties. The importance of their role in recent EU-level decisions on key posts served only to highlight the untransparent way in which they reached their positions, resulting, as Julian puts it, “in a failure to add any discernible democratic value to the process”. More >
The Brussels Labour quiz, held on Wednesday 10 November, was a great success – 18 teams of four packed into The Staff to hear some fiendish questions read by Michael Cashman MEP.
The raffle raised €313 for the victims of the floods in Pakistan.
A longer write-up of the will follow on brusselslabour.eu in the Germinal section, and in the next print edition of Germinal, due to be published in the new year.
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