Consolidation of autocratic rule in the EU and opposition - the parallel processes of the Troika’s emergence and the economic governance reforms and how could they be

overthrown

Yiorgos Vassalos Historical Materialism Conference 2015,

Session H "Class Struggles in Europe"

Consolidation of autocratic rule in the EU

The first EU Member State to be bailed out was Hungary in November 2008

Non-euro countries Latvia (12/2008) and Romania (2009) followed

The Troika in their case was composed by the Commission, the IMF and the World Bank

The emergence of the Troika

Official birth of the Troika (Commission, IMF, ECB): Greece, May 2010

Ad hoc mechanism violating the non-bail out clause included in Article 125 TFEU

An amendment was passed in late 2010 to “legalise” it -modifying Article 136 TFEU

4 countries followed: Portugal (5/2011), Ireland (11/2011), partially Spain (11/2011) and Cyprus (2013)

Bail-outs systematised through the adoption of ESM in 2012 on basis of new Art. 136

The Troika in the Euro area

Consolidation of autocratic rule in the EU

1. Massive lay-offs and salary cuts in the public sectors designed to have a severe downward impact in the private sector too

2. Reduction of the size of the public sector through massive privatisations and worsening of welfare state (e.g. health and education)

3. Making lay-offs easier and reducing the collective bargaining power of organised labour in the private sector

4. Increase of retirement age and reduction of employers’ contribution to pension funds

The content of Troika reforms

Consolidation of autocratic rule in the EU

1. One way sharing of sovereignty and no “pooling” of it (eg. task forces in ministries)

2. Overthrowing of social and political status quo

Governments adopting MoUs left office in 2 to 16 months time 3. ‘Renegotiation’ of MoUs proved impossible Troika’s Raison d’être: impose neoliberal restructuring neglecting social consequences and electoral programs/results

Troika’s impact on democracy

Consolidation of autocratic rule in the EU

The Commission being the “guardian of the Treaties” is involved in their violation in program countries -> example: Troika’s CFR violations in Greece

CJEU decision on ECHR accession: it accepts no external control of the failings of the EU

In new EU framework on Rule of Law: decoupling it from human rights

Troika, the EU and human rights

Consolidation of autocratic rule in the EU

Consolidation of autocratic rule in the EU

2010: European Semester 3/2011: Pact for the Euro + 12/2011: Six pack (reinforcing SGP) 2012: Treaty on stability coordination and

governance 2013: Two pack incl. post-program

surveillance (ex. threat to block cohesion funds to Hungary)

2013: Banking Union

Economic governance reforms

One of the 11 indicators: Nominal Unit Labour Cost to real GDP should not increase more than 9% in 3 consecutive years

Outlawing wealth redistribution towards labour through wages

No fines imposed so far but used to push Belgium, Finland and Luxembourg to freeze wages

Six-pack (reinforced SGP): macroeconomic surveillance

Consolidation of autocratic rule in the EU

All member states submit draft budgets by October 15

Commission checks compliance with SGP and may ask for a revised budget

If instructions are not followed this can be used as evidence to launch excessive deficit procedure that can lead to fines

Two-pack: national budgets approval in Brussels

Consolidation of autocratic rule in the EU

Consolidation of autocratic rule in the EU

Radically increases EU clout on wage setting, pension systems, health and education spending - Violates article 153 TFEU

EU recognises that “budgets are at the heart of Member States’ parliamentary democracies”, yet “common interest of the union is” to be “duly taken into account” and “national parliaments are not in the best position to take it”

Budget powers are not given to the European Parliament but to the COM and the Eurogroup

Implications of econ. governance

Create a euro area Treasury (where normally votes are allocated as in a stock company) centralising decisions on revenue and expenditure policy

Euro area system of Competitiveness Authorities to monitor labour costs

Strengthen macro-economic corrective arm and reform implementation (Troika-like)

A purely consultative role of the European and national parliaments on economic governance

The 5 presidents’ way ‘forward’

Consolidation of autocratic rule in the EU

Agrees on: Radically weakening unions Not perm. nationalising banking system Free circulation of capitalWants to: Remove a series of civic and minorities’ rights Abolish supranational EU institutions Turn the EU into an intergovernmental

cooperation, (for most of its parties) through regular EU process

The Far right response

Consolidation of autocratic rule in the EU

Defending labour rights and the welfare state Human, social and minorities’ rights Revitalising democracy by connecting it with the

grassroots Commons BUT through regular EU process… The 1st attempt by Syriza to promote the above

led to complete capitulation and the their abandonment in practice

EU mechanisms demonstrated their ability to isolate and crush any attempt of the kind

Radical left (ELP) stands for :

Consolidation of autocratic rule in the EU

The Far Right project is about less radical change than the Radical Left one

Far right can surf on the reactionary acquis of the EU on unions, immigrants, democracy

A Far Right government within the EU has more margins to pursue its policies than a Radical Left one (think FIDESZ vs. SYRIZA)

But Far right’s discourse is more aggressive towards the EU

Far Right vs Radical Left

Consolidation of autocratic rule in the EU

Disobedience to Economic Governance laws and treaties necessary to organise income redistribution & enforce labour and social rights

Disobedience to the Baking Union and market liberalisation directives necessary to develop the new commons

National currencies necessary to overcome the ECB’s liquidity strangulation

Only option: Deconstruct the EU from a radical left and internationalist perspective

Disobedience & Rupture as the way forward

Consolidation of autocratic rule in the EU

Consolidation of autocratic rule in the EU

4th European Left congress (2013):

“When the question of power becomes a practical reality, this includes consideration of the non-application of austerity policies, refusal to adhere to the European Treaties and intergovernmental agreements such as the Fiscal Compact and the renunciation of them, based on democracy and popular sovereignty”

From consideration to necessity

The UN Charter provides that “in the event of a conflict between the obligations of the Members States of the United Nations under the present Charter and their obligations under any other international agreement, their obligations under the present Charter prevail” And these include respecting self-determination of the peoples, human rights and the objective of raising living standards

Disobedience is legitimate

Consolidation of autocratic rule in the EU