Manifesto Press has published the EU deconstructed in which analysts from five European Union countries – Ireland, Portugal, Denmark, Cyprus and Germany – show how austerity policies are imposed by membership of the European Union
Reproduced below is the Introduction by Communist Party international secretary by John Foster
THE EU REFERENDUM has seen plenty of material on what the EU has done ‘for’ or ‘to’ Britain. This pamphlet is different. Its focus is on what has been done to other countries in the name of the EU. All the authors are on the Left. All speak with experience and authority – and they do so for a range of countries that covers the diversity of the EU.
Betty Carlsson for Denmark looks at a country outside the Eurozone which was previously a model for the Nordic welfare state. Today all that is virtually gone. Government policies mirror, and impose, the demands of EU neo-liberalism. In the aftermath of the financial crash Denmark’s government voluntarily signed up to the EU’s 2012 Fiscal Compact. The result has been the loss of job security, of the previously generous pension rights and the entitlement to unemployment benefit. In its place Denmark now has workfare, two-tier employment, much higher levels of joblessness and a trade union movement under siege. Income differentials have increased markedly. Racism has gained an ugly foothold.
Three of the countries, Cyprus, Ireland and Portugal, have suffered EU bail-outs and the external imposition of EU reform programmes. In all three the consequences for growth and investment have been dire. In all three the trade union movement has taken a hit. In all three fortunes have been made – though principally by external freebooters coming in to buy up privatised assets. But in each the experience of external intervention has been somewhat different.
Charis Polycarpou brings an analysis from the economic research department of Cyprus’s previous ruling party, AKEL. Up until 2011 Cyprus had a well-balanced economy with strongly developed cooperative and small and middle business sectors. The externally-mandated changes to the banking system have choked off credit, led to widespread bankruptcies and forced the whole economy into long-term recession. As the economy contracts, the government deficit is increasing. Wages have fallen each year since 2011 and are now below the 1996 level. Public utilities and assets, including the health service, are being sold off. Political resistance, however, is now mounting – led by AKEL.
Ireland tells a different story. The collapse of its banking system was far more dramatic – leaving the Irish people, as the behest of the EU Troika, with debts equalling well over 200 per cent of national income. Ireland has also suffered one of the biggest falls in the proportion of national income going to labour.
Eoghan O’Neill rejects the notion that the Irish people somehow brought the crisis on themselves by undue property speculation. The causes, he argues, go back to the origins of the EU and the abandonment of indigenous policies of economic development. Instead Ireland became what he describes as the ‘facilitator between European and US capitalism’. The Irish Financial and Service Centre developed from 1987 as the tax evasion base for both US and EU capital. Membership of the Euro then locked Ireland into an economic system that ended Ireland’s economic sovereignty and imposed interest rates that diverted capital into speculation. However, the real importance of O’Neill’s account lies elsewhere. It is in his description of the recent transformation of Irish politics. Popular resistance was initially slow and patchy but by 2014-2015 grass roots movements had gained momentum, begun to link up with the trade union movement and by the 2016 had changed the electoral face of Irish politics. The spark was the EU-imposed move towards the privatisation of water.
Pedro Guerreiro for the Portuguese Communist Party brings the experience of a country that only recently, and through a popular revolution, gained democracy and, as embodied in its revolutionary constitution, the rights of its people to economic sovereignty and social justice.
When Portugal joined the EU in 1987 labour’s share of national income was 56 per cent. Today it is 44 per cent. Since 2010 EU imposed reform programmes have resulted in investment collapsing and the economy shrinking below its 2000 level. Public assets are being auctioned off, unemployment has risen from 6 per cent to 25 per cent and 600,000 people have emigrated, 10 per cent of the active population.
The Portuguese people have, however, fought back. A coalition government has now come to power pledged to defend the Portuguese Constitution and reject further austerity imposed by the EU. The PCP, though not joining the government, provides it with the required parliamentary majority – on the condition that it continues to resist EU-imposed austerity.
The final contribution comes from Germany. Lucas Zeise previously wrote for the Financial Times Deutschland and is now editor of Unsere Zeit, daily paper of the German Communist Party.
Zeise details the origins of neo-liberal policies in Germany back to their original imposition in the 1970s. These policies then became, with the assistance of Mrs Thatcher and the Single European Act of 1986, the policies of the EU. In Germany they have resulted in a sharp deterioration in the power and position of organised labour. Across the EU they have created massive differentials in development – with Germany’s balance on international trade reaching its highest surplus ever at 250 billion euro in 2015. For German big business these have been the benefits of the EU: the enforcement of neo-liberal debt policies and, and as a direct consequence, record low costs for borrowing alongside low internal labour costs.
Across the EU resistance to these policies, and to the EU itself as the instrument for their enforcement, has been uneven. In some countries the emphasis is still on reform and on somehow democratising the EU. But, as Eoghan O’Neill comments: ‘you cannot democratise that which is undemocratic’. Instead O’Neill cites James Connolly who, somewhat on the same lines as Portugal’s revolutionary constitution of 1976, sees the nation as the ‘protectorate of the people’ – though only to the extent that the people make it so. This is the challenge posed by all contributors to the volume.
John Foster is emeritus professor of Social Sciences, University of the West of Scotland and international secretary of the Communist Party
Theprint version of the pamphlet is shortly available at http://www.manifestopress.org.uk for £2 (plus £1.50 p&p) from Manifesto Press or as a free download here,