Former TUC and ETUC General Secretary Lord John Monks sets out his views about the challenges facing the European Union and why trade unionists are right to protest tomorrow about the new treaty due to be discussed by Europe’s leaders at the summit at the end of this week.
Tomorrow, hundreds of thousands of trade unionists across the European Union, and especially in the Eurozone, will be demonstrating against the EU’s austerity and for growth, solidarity and employment. Not only are these policies of austerity being forced on Greece, Ireland and Portugal, they are being enshrined in a new treaty coercing 25 EU countries (except the UK and the Czech Republic).
Never was an EU treaty less needed. There are already strict rules for countries in the Eurozone but they were broken and then made irrelevant by the large scale of the economic crisis. We don’t need more rules. That will not power Europe out of this crisis.
But this approach, driven by Germany, is massively counterproductive and is based on punishing sinners against the existing EU rules.
Solidarity has been largely absent in the EU’s response to the sovereign debt crisis, and where it has occurred, the terms of the support have been so draconian that EU ‘help’ has felt more like a punch in the stomach: in Greece in particular, but also in the other distressed countries.
Just when the EU needed to rise to the challenge of handling its worst economic crisis since 1945, it has adopted the approach of President Hoover in the early 1930s and intensified austerity at a time of economic collapse. It is as though John Maynard Keynes, the great economist, had never analysed what went wrong nor that President Roosevelt had not correctly tackled the 1930s crisis by the New Deal policies of growth and employment.
If the lessons of the 1930s are being forgotten, so are the lessons of the post war period. Then General Marshall correctly saw that Europe was broke and needed dollars to re-equip itself and start to grow. The USA stepped forward, first to help Greece, and then the other countries of Western Europe.
This was in contrast to the period after the First World War when heavy reparations were charged by France and Belgium in particular, on the defeated countries, especially Germany, so making their economic and political recovery very difficult, and ultimately paving the way for the rise of the Third Reich.
Today, Greece feels a bit like Germany did after Versailles.
So what can be done? The USA is providing one answer. Its economy is recovering partly because it did not apply austerity policies. In Europe, including the UK, it is vital that similar policies of growth take precedence over the drive to repay debt. The debt must be repaid but the distressed countries need help with the stronger nations carrying some of the burden. This can be done in various ways especially using Eurobonds; by the European Central Bank acting as a lender of last resort, just as the US Federal Reserve and the UK Bank of England have done; and by special measures to tackle the difficult position of the young unemployed.
Not everyone agrees with me when I say that the EU has been a brilliant success up to this particular crisis. But since then, the EU has barely put a foot right. It needs now to listen to the trade union voices of the ETUC. These will resonate across many a square and down many a boulevard on Wednesday.