Italy - The economic crisis becomes a political and institutional crisis

www.socialistworld.net, 11/05/2013 website of the committee for a workers' international, CWI The latest events that have happened in Italian politics mark a new phase of development in the crisis in the third European industrial power. With extracts from Marco Veruggio, ControCorrente (CWI Italy) The economic storm that has wreaked havoc on the economy first transformed itself into a social crisis and now into a veritable institutional crisis. Youth unemployment has gone over 30%; more than 450,000 workers risk finding themselves from one day to the next without any income due to the funds running out for the lay-off pay paid by the regional governments; in 2012 more than a thousand firms a day closed. The phenomenon of suicides is growing; on 14 April, in one day alone, a small fruit seller and two unemployed people took their lives. Against this tragic background, the extreme fragmentation of the Italian capitalist class and the absence of a political representation of the workers is producing an analogous fragmentation and loss of control of the so-called ’political class’. Workers and vast sectors of the middle class accuse the politicians of continuing to demand sacrifices from them and at the same time remaining in possession of their own privileges. While the Italian bourgeoisie on the one hand calls on the parties to carry on with their anti-people measures without listening to what is going on in the streets, on the other they criticise them for not having enough of a consensus to guarantee governability and demand ’class unity’ to carry out the reforms ’Necessary for the country’, that is for them, against the workers and the middle class. The escalation of suicides, just as the extreme gesture of one unemployed man from the South who, during the swearing in of the ministers, opened fire on three policemen of the parliamentary guard, declaring afterwards that his real target was the politicians, indicate the climate of exasperation. But at the same time they show how exasperation, without a political and social outlet, is destined to tranlsate into such gestures - desperate at the same time as merely symbolic. Berlusconi resuscitated by the Democratic Party The Democratic Party, at the end of 2011, with Berlusconi reduced to historic lows of credibility, was afraid of saying no to being the agent in Italy on behalf of the European Central Bank and of going to elections and succeeded from then until today in doing everything that was within their power to restore Berlusconi’s lost credibility and risk their own. They voted together with him for the raising of the pension age, the cancellation of Article 18 (of the labour statutes), the IMU - an odious tax on first homes and, after having governed a year and a half with the Centre-right, carried out an election campaign on the slogan ’No agreement with Berlusconi’. And while the leader of the PD, Bersani, was giving interviews explaining in a confused way what his party would do once it had won the elections, Berlusconi was taking over the talk shows promising the abolition of IMU. Beppe Grillo was filling the squares demanding the abolition of politicians’ privileges, but also the establishment of a citizen’s wage, the nationalisation of the banks and big companies like Monte dei Paschi and Telecom and the cutting of military spending, cancelling Italy’s commitments in Afghanistan and Mali. The result of the election followed the laws of marketing technique: in a market full of products substantially the same and ’costly’, a quarter of the consumers chose not to buy anything; one quarter chose a new brand, original and low cost (the Five Star Movement of Grillo); the rest of the demand was divided equally between the other products, preferring the traditional ones (PD and Berlusconi’s PDL) to ones that were just as costly but with no history (Monti). After the election, Bersani, secretary of the PD, the second force after the M5Star in number of votes, but first by number of parliamentary representatives, employed all his own tactical skills to commit suicide. He asked for the job of forming a government without having the numbers and got it. He continued to repeat that never and once more never would the PD make an agreement with Berlusconi (while he had declared himself ready for a pact with Bersani ’for the good of the country’). He wrote an eight point programme, the fruits of a compromise between the half of the PD that wanted to go with Berlusconi and the half that was against and trusted Grillo to support a PD government to get some points implemented. The first of those points was, ’to reconcile the discipline of the budget with productive public investments and to obtain maximum flexibility in the medium term targets for the public finances’. This was a proposal so ridiculous that even a comic would not have been able to accept it, and Grillo rejected it. It provoked the indignation of the centre-left and the press - ’irresponsible: he’s playing Berlusconi’s game’ - and even the criticism of the leader of the ailing Rifondazione Comunista - Ferrero - who, in his position, would have accepted the eight points without even reading them. Meanwhile, the other delicate institutional game was approaching and that was the election of the new President of the republic. Berlusconi declared that he was ready to vote for a candidate of the PD, provided such a candidate was ’not hostile’ (meaning disposed to guaranteeing the impunity and survival of himself and his businesses). Grillo at this point puts forward an intellectual, with no past and with no high ambition*, from within the PD - Stefano Rodotà, as a candidate, well regarded even in the ranks of the radical chic left as well as the PD electorate. But Bersani meets Berlusconi and together they agree a common candidate - Marini, former Christian Democrat general secretary of the trade union federation CISL and amongst the founders of the PD. A choice that everyone justifiably interprets as the prelude to a ’broad agreement’ government. If Bersani had accepted Rodotà, he would have become president of the Republic with the votes of Grillo and the centre-left, would have given the task of forming a government to certain representatives of the centre-left unacceptable to Berlusconi and at this point it would have become very difficult for Grillo not to support such a government. However, everyone understood, including the PD voters, that the earlier agreement, the choice of Bersani, is due to an objective reality: the PD has more interests in common with the PDL than with M5S and on the other hand for 20 years every time the PD had the possibility of wiping out Berlusconi, it pulled back. The revolt broke out. The PD had to meet and withdraw the candidature of Marini and put forward Prodi, not welcome for Berlusconi, wailed about betrayal. The candidature of Prodi was agreed unanimously, on the same day that 100 PD parliamentarians voted in secret urns for other candidates. The last resort before complete institutional chaos, is the reappointment of Napolitano, also ex PD and extremely acceptable to Berlusconi who was the first to propose his reconfirmation. Bersani accepts and announces, finally, in the end, his own resignation as secretary. Members of the PD occupied several party offices. Dozens burnt their membership cards in the squares. Napolitano and ’national responsibility’ Paraphrasing the title of a film by the Cohen brothers, some students, after the re-election of the President of the Republic, went onto the streets with placards saying: ’ This is no country for young people’. Napolitano, old post-soviet archeological remains, who defined the Soviet Union’s intervention in Hungary as the only to ’prevent it from falling into chaos and counter-revolution’ and ’to safeguard world peace’, then leader of the right wing of the Communist Party of Italy (financed by Berlusconi), friend of the corrupt Craxi and his Socialist Party and friend of America and the first Italian ’communist’ invited to the United States, became the real dominant figure in Italian political life in the last few years. He has been the truest representative in Rome of the interests of Brussels and Frankfurt and the most fervent backer of Mario Monti. Napolitano was acclaimed in Berlusconi’s era as a shining defender of morality. In fact, in 2004, when he was a Europarliamentarian, he was surprised by a German journalist trying to claim EUR800 for a flight from Brussels to Rome that cost EUR88 and reacted by having the journalist identified and taken in by the police. Recently he tried to interfere in the court case of the Palermo magistrates over the state-mafia dealings in the ’90s and managed to get tapes destroyed that had recordings of his phone calls with Nicola Mancino, interior minister at the time and between the main people on trial. After the recent Monte dei Paschi banking scandal broke, Napolitano asked the press ’not to make too much noise’. A few hours after the news of his being re-nominated, thousands of people including many youth, besieged the parliament shouting ’Rodota! Rodota!’ and ’Napolitano, we don’t want you!’. After the vote, the PD and PDL MPs had to be escorted out of the parliament by police. Coins were thrown at the leader of the ’left PD’. The ex-deputy secretary, Franceschini, was besieged by hundreds of people in a Rome restaurant. An episode which is related only to the superstructure, like the election of the head of state, has become for thousands of people, worn down by the economic crisis and disgusted with politics, symbolic of a political class that preaches change but practices conservation, the spark that sets off the fire. Some old woman, interviewed in front of the parliament, said: ‘One month ago I was in Saint Peter’s Square to celebrate the new pope Francis I. The Catholic Church gives us an impression of trying to implement some change. The Italian state is not able to do the same’. Grillo described the re-election of Napolitano as a ’mini coup’ and the same evening invited Italians to besiege parliament, announcing that he would arrive in the late evening. ’We must be in our millions’, he said. But a few hours after, he cancelled the demonstration, suggesting ’the violent ones should be isolated’ and gave the time for meeting in a square on the following afternoon. But the day after he appeared for just a few minutes. The Grillini MPs, the only ones who can walk the streets of Rome without an escort, responded to people calling for a march on the President’s residence - the Quirinale - by saying ’it’s not worth it’. ’In parliament we are many, and we can do ’cool’ things!’. A left with a minimum of credibility would have been able to move into this vacuum and played a political role. Instead, the self-styled leaders of the far left limited themselves to criticising Grillo for not having done what they should have done. National responsibility Napolitano, who is 88 and once again ready to do battle to avoid the country ’falling into chaos’, has given the responsibility of government to Enrico Letta, ’young’ ex-Christian Democrat leader of the PD, liberal, nephew of Gianni Letta - trusted right hand man of Berlusconi and skilful operator in the most difficult negotiations between ’The Cavalier’ (Berlusconi), the centre-left and Italian and international capitalism (sitting on the advisory board of Goldman Sachs from 2007). Letta Jnr has put together a techno-politico government, confirming various ministers of Monti’s (but not Monti), among them the one for European relations - a reassuring signal for Brussels. On the political slopes, while various big names from the PDL are entering the government, in key rolestaking care even of the personal interests of Berlusconi, most of the leaders of the PD - with D’Alema and Bersani at their head, remain outside. There are only Letta and Franceschini, from a Christian Democratic background, some minor ex-PCI leaders and many unknown personalities, women and young people (among them a black woman doctor of Congolese origin and a one-time woman canoe champion from Germany), who owe eternal gratitude to Letta for having got through the casting for the reality show ’New faces at Chigi Palace (home of the government)’. But the ministries that count remain firmly in the hands of seasoned politicians and experienced functionaries of the state, amongst them, at the economy, the ex director-general of the Bank of Italy. Anyway, this is not about a Summer-time government but meant to last long enough for a restructuring of the political system to avoid coming out of elections once more without a governing majority. The social version of the government of ’national responsibility’ is the Pact between producers proposed in Turin by the bosses’ organisation, Confindustria to the union federations - CGIL, CISL and UIL - ’to save the factories and the country’ because ’we’re all in the same boat’ and promptly accepted by the unions. Some weeks later, the unions in Bologna invited Confindustria representatives to speak on the platform at the May Day demonstration in front of no more than 300, many of them trade union bureaucrats and pensioners. Landini, the general secretary of the metalmechanics’ union (FIOM), responded to Confindustria that ’like on the Titanic we are all in the same boat, but those who were in the engine room were the first to drown’, provoking criticism from the CGIL general secretary, Camusso. FIOM has made a call for a national demonstration on 18 May of engineers, of students and the social movements for the right to work, the right to education, to health, and social justice and democracy. It could be the first opportunity to test how much the latest political developments have changed the mood on the streets. But FIOM, without a political focus, risks being crushed in a pincer: Landini has been playing a ‘half political role’, due to the vacuum on the left, creating high expectations, more political than trade union, more amongst activists than metal-mechanics. On the other had, he has to manage a retreat on the trade union front due to sudden defeats, to political and social isolation and even a certain disorientation of the leading group in FIOM, without a clear trade union strategy and politically suspended between certain illusions in relation to the centre-left and the absence of a credible alternative on the left. The left without a plan The PD comes out of these events with its bones broken. Starting out with a centre-right in a coma and victory in its pocket they have succeeded in an enterprise which is something incredible, bringing Berlusconi back to power once more, making a deal with him in front of his electorate, without restraint. It’s like a firefighter who sets fire to his own car in full daylight on the pavement in front of his house, to get money from the insurance. Now a congress is being prepared in which Fabrizio Barca, ex minister of Monti, should be representing the ’internal left’. In the meantime critical voices are being raised in the ruling group and realignments taking place, voting their confidence in Letta. But the real incurable fracture, which indicates the end of the PD, is that with its own social base and its own electorate. A fracturing which will be heavily reflected inside a CGIL which is marching towards the congress in a devastating political, trade union and financial crisis. If the PD has broken bones, Rifondazione and the left parties are by now in a phase of decomposition. Nichi Vendola, of the SEL (Left Ecology Liberty), after an embarrassing electoral result, has been forced to break with the PD and to support Rodotà as President of the Republic. He has announced that he will create a ’constructive and responsible’ opposition to Letta and planned to launch on 8 May a new ’workshop’ of the left, seeking to gather the right of the RC and certain renegades from the PD. To the left of the RC, Cremaschi, former number two of FIOM now retired has launched a new appeal for an ’anti-capitalist and libertarian movement’, with half the forces that belonged to ’No debito’. (ControCorrente did not belong to it, only maintaining discussions with them.) ALBA (’Alliance of work, public assets and the environment’) continues to propose a ’new political force’, but is run by a handful of intellectuals, deprived of any social base, of an organised force and of a clear political programme. The secretary of Rifondazione, Ferrero, resigning after the disastrous election, but in charge until the next congress (fixed with great calm for the end of the year), leads an already virtual party by means of his own Facebook page, commentating on the on the initiatives of others and often giving advice to Grillo on the tactics to use against the PD, which Grillo wisely does not follow. Inside the RC, without his own independent political project, Ferrero follows ALBA with interest, one part of his people have joined Cremaschi’s appeal, while the right tries to have a dialogue with Vendola. The Communist Party of Workers, the only list with the Hammer and Sickle - a symbol which always has a certain appeal for us - at the elections reached an historic low. Critical Left - the Italian section of the United Secretariat of the Fourth International, is living through the nth split in the name of the movements. Falce Martello - the section of the International Marxist Tendency, is enthusiastically preparing for a congress in which Ferrero’s centre and the right will be fighting over the mortal remains of the RC. For the Italian left a real ’trek across the desert’ is starting. The absence of a generalised social response to the offensive of big capital renders the current proposals ’to rebuild the left’ pathetic attempts to put together bits of the political and trade union bureaucracy without a clear political idea and incapable of exercising an attraction for workers and young people, all to the advantage of Grillo. These leaders, always ready to quote Gramsci (usually incorrectly), instead of putting themselves on the terrain of a ’struggle for hegemony’ over ordinary sectors of their electorate, run after him, one day exalting them and the next accusing them of being fascist. On the other side, in a country that has had the biggest Communist Party in western Europe and a lively extra-parliamentary left, against the background of a stagnation of the class struggle and of the crisis of the trade unions, a generation of activists over 40 are living with the feeling of being orphans of the past and don’t manage to be a point of reference for the youngest. With the result that the best part of the activists tend to distribute themselves in a casual way amongst the various discussion tables on the left or limiting themselves to waiting for something to happen. Only an unfreezing, at least partial, of class conflict can unblock the situation, bring into politics new forces and restore enthusiasm to the old militants. The shock represented in the nth compromise between the centre -right and the centre-left by the definitive loss of credibility of the PD and in bourgeois democracy itself, the new wave of anti-people policies that await us could make millions of people understand that nothing remains but to struggle, relying only on our own forces. It would be necessary to try and rebuild with our own hands what the leaders of the left have destroyed: a party capable of giving a voice, programme and organisation to workers and ordinary people in society. * ‘senza infamia e senza lode’ means’: he’s not responsible for big mistakes nor for big victories in the past. He’ s not worth of big criticism nor of big praises.

Italy could reignite Euro crisis

For many the Euro crisis never went away but for the markets there was a period of stability from Christmas till about now when we’ve seen the Italian elections deliver a stalemate and this as a result has thrown the markets into turmoil and panic. The “Tsunami tour” was the name comedian Beppe Grillo gave to his election meetings which filled piazzas throughout the country with tens of thousands of ‘spectators’. Now an electoral tsunami has well and truly rocked the Italian political system with Grillo’s 5 Star Movement, which did not exist at the last election, becoming the biggest single party in the lower house with more than 25% of the vote. Another 25% of the electorate stayed at home, the highest ever post-war abstention rate. The outcome of the election on 24 and 25 February is political gridlock. No party or list having an overall majority and the possibility of fresh elections quite soon. The opinion polls had predicted a victory for the Democratic Party (PD) in the lower house and most commentators expected an alliance of the PD in the senate with the electoral coalition of the outgoing (unelected) Prime Minister, Mario Monti. However, the polls vastly underestimated support for the 5 Star Movements and also for Berlusconi’s PDL, which, on the basis of populist programmes, tapped into deep and widespread anti-austerity and anti-political establishment feelings. Just 120,000 votes separated the PD camp from that of the PDL in the lower house (Camera). The Centre-Left got 29.5% to the Centre-Right 29.2% but the PD lost nearly 4 million votes compared with the last election and the PDL 6 million! Even though the PD as the ‘winning’ party will receive bonus seats to give it a majority in the Camera, it cannot reach a majority in both houses of parliament, even in alliance with Monti. Grillo has ruled out any alliances and a ‘grand coalition’ - embracing Bersani (PD leader) and Berlusconi - although not impossible, could be politically suicidal for the PD. The ‘technocratic government’ card has already been played with the Monti government, so the most likely perspective now seems to be a period of political crisis leading eventually to another election, possibly after a change in the electoral law, in which the support for the ‘Grillinis’ could grow even further. The “worst result possible” was how the Wall St Journal described the election outcome. The repercussions will reverberate far beyond Italy. The day after the election, falls on the Milan stock exchange were so great that trading was temporarily suspended. At the same time the spread (difference between interest rates on Italian and German bonds) began to increase, raising once again the prospect of market turmoil in Europe. The fate of the Euro could eventually be decided not in Greece but in Italy. ‘NO’ to austerity The election results were an overwhelming rejection of Monti’s austerity policies of public spending cuts, tax increases and attacks on workers’ rights. Monti had been dubbed the ‘saviour of Italy’ when he replaced Berlusconi in November 2011 and the markets began to stabilise after months of instability and crisis. In these elections he was the candidate of Brussels, of Merkel and of a section of the Italian capitalist class. They were fearful that a PD government with an overall majority would come under pressure from workers and unions to ditch or water down the austerity policies they had supported under Monti. A PD/Monti coalition was considered the safest option for continuing the ‘Monti agenda’. This strategy failed dismally with Monti’s alliance receiving just 10.5% in the Camera. Before the elections Monti’s personal ratings had been higher than all the party leaders but this was precisely because he was a ‘technocrat’ and not part of the despised political class. Once he became “one of them”, his days were numbered. Grillo and the 5 Star Movement were the real winners. His slogan “tutti a casa” (send them all packing) summed up the absolute disgust and contempt which ordinary Italians have for politicians, establishment parties and an entire rotten political system mired in corruption, scandals and self-enrichment while working people are called on to make more and more sacrifices. Scandals Reports of the huge cover up and fraud at Italy’s third biggest bank, Monti dei Paschi, exploded during the election campaign, tainting the PD, who have been historically closely linked with the management of the bank. It reinforced the deep-rooted feeling that the whole system stinks. Every day pages of the press were devoted to stories of politicians receiving kick backs for economic favours, of public funds being creamed off to fund lavish lifestyles and of company directors (including the director of one of Italy’s biggest and most prestigious companies, Finmeccanica) being arrested for fraud and corruption. The Grillo votes came from across the political spectrum – from the right, from the left and from those with no political affiliation. “I want to give them all a kick up the arse!” was how one voter explained her choice, summing up the mood of many of those who voted for the 5 Star Movement. In the piazzas, Grillo shouted populist slogans and sound-bites about curbing the power and privileges of the political ‘cast’, about a ‘citizen’s income’, a referendum on the Euro, a shorter working week, nationalising the banks, and about improving the environment, all of which struck a chord with those who have had enough of cuts and corruption. There are enormous illusions in the ability of the Grillinis to shake the system up. In reality, the Movement (Grillo refuses to call it a party) has no worked-out programme capable of solving the day-to-day problems of unemployment, low wages, and declining public services which most ordinary Italians are concerned with. It has no real roots in the workplaces or communities, organising principally via the Internet and social media. Grillo himself decides policies and tactics in an ad hoc, off-the-cuff way with no explanation or understanding of how those policies could actually be implemented in practice. His ‘rants’ are confused and inconsistent. Grillo has an ambiguous position with regards to the far-right and immigration. During the campaign he spoke of “eliminating” trade unions although he has also made a distinction between CGIL, CISL and UIL on the one hand and the more combatative FIOM and unions of the base. At a certain stage the limitations and contradictions of the Movement will become clear, ripping it apart. It is likely to disappear as quickly as it has arisen; but for the moment, in the absence of a left-wing, anti-capitalist alternative, it has become the main vehicle for expressing the anger, frustration and disaffection of millions of Italians and its support could grow even more. Economic crisis These elections took place against the background of the longest recession in Italy in the post war period. GDP has declined 7% since the economic crisis began. Unemployment has doubled and more than 37% of young people are now without work. Devastated by rising taxes and declining wages, the average family’s real income is at the same level as it was 27 years ago. Yet with working and middle class people desperate for an end to austerity, the PD was offering a continuation of the Monti agenda with just a few ‘modifications’. They pledged to respect the fiscal compact and balance the budget even though this would entail cuts of 45 billion euros every year. This is behind the massive fall of 11% in their ratings towards the end of the campaign. Berlusconi, on the other hand, was astute enough to understand how supporting Monti’s tax increases and cuts agenda was undermining his electoral base and so he pulled the plug on the Monti government, waging a populist anti-austerity, anti- Europe, pro-tax-cutting election campaign. This included sending a mock-up tax demand to every home pledging to reimburse every penny that people had paid out when Monti reintroduced the IMU household tax. On the basis of this campaign the ‘mummy’, as one French newspaper dubbed Berlusconi, rose like Lazarus from the dead; his PDL alliance clawed back 15 points in support and ended up neck and neck with the PD. What little remains of the Left was electorally crushed. Nichi Vendola’s SEL (Left Ecology Freedom) party, which was allied with the PD, got just 3.2%. Had the party stood alone it would have failed to cross the 4% threshold and would have had no seats in parliament. This was ultimately the fate of Rivoluzione Civile, the heterogeneous electoral list headed by the former magistrate, Antonio Ingroia. New force needed Instead of standing on a clear anti-capitalist/workers’ list, Rifondazione Comunista (PRC), once a semi-mass workers’ party, dissolved itself into Rivoluzione Civile on a vaguely reformist/liberal platform. This was an opportunist move, undemocratically imposed from above in a desperate attempt to get back into parliament. The PRC lost all of their MPs five years ago after entering into a coalition government with the pro-capitalist PD. After every electoral defeat, the PRC leadership, rather than looking to increase its support by involving itself in struggles in the workplaces and in local communities, has sought a new unprincipled electoral alliance, and every time its vote has plummeted. Rivoluzione Civile won just 2.2% of the vote meaning no seats at all.. The unprecedented support for Beppe Grillo can only be understood in the tragic context of the collapse of the Italian Left. But now an entirely new political landscape is emerging. The anger of working class people has exploded in the ballot box rather than on the streets and in the workplaces, but continuing crisis and instability will see the development of new mass struggles. At a certain stage the inadequacy of the 5 Star Movement will be exposed leaving millions looking for another alternative and opening up huge possibilities for the building of a new mass political force based not on confused populism but on the movements of workers and young people, offering a real solution to the problems of working people by challenging not only the politicians but the economic roots of the whole rotten capitalist system. With extracts taken from http://www.socialistworld.net/doc/6180

Paul Murphy MEP writes on diminished democracy in the EU

democracy in the EU .
Thursday, 01 September 2011 14:02 Paul Murphy . .
The continued economic crisis gripping the eurozone has raised questions of the role of democracy in the European Union, writes Paul Murphy, MEP from the Irish Socialist party part of the CWI.

Euro crisis – democracy diminished to facilitate austerity

In scrambling to avoid a break-up of the eurozone, the approach of the elites in Europe has been characterised by two common themes – austerity programmes to make the working class pay, and a further diminishing of democracy to facilitate the implementation of that austerity.

The results of that austerity have been felt by millions of people across Europe, particularly those in the countries that have received ‘bailouts’ for the European bankers – Ireland, Greece and Portugal. The failure of this medicine of cutbacks and attacks to generate economic growth and enable economies to be redeveloped has also been documented.

Here, I want to focus on the sinister and persistent undermining of democratic checks and controls that have been driven by the establishment in Europe in the course of the crisis. In saying that, no one should presume that the EU was a bastion of democracy prior to the crisis. Even within the limited terms of capitalist democracy, the EU is an inherently undemocratic organisation.

Despite the repeated rhetoric to the contrary, the European Parliament, which is the only directly elected body, has relatively little power. It has no power to ‘initiate’ legislation and a large portion of its work simply consists of making recommendations or suggestions in so-called “Own-Initiative reports” that go to the European Commission. It is with this unelected European Commission (President: Jose Manuel Barrosso) and the European Council (made up of the heads of state of the EU countries) that real power lies.

The Commission in particular plays the role of a strategic thinker for the capitalist classes in Europe. Shielded from the pressure of mass movements and not having to face elections in the member states, it is able to baldly put forward a strategy for a neoliberal, militarised Europe like that set out in its “Europe 2020” strategy.

So even in advance of the economic crisis, the level of democracy within the EU structures has been extremely limited. Decision making consciously takes place out of sight and mind and shrouded in technocratic language to make it very removed from public scrutiny and debate.

However, with the advent of the crisis and the consensus of the establishment around the need to impose austerity as a solution, democratic checks are being diminished even further. This attack on democratic rights fundamentally flows from the fact that if given a choice, the mass of people would not choose vicious austerity, cutbacks and mass unemployment! Therefore, to achieve the chosen ‘solution’ of the establishment, the people must not be given a choice. These attacks on democratic rights have taken a variety of forms.

Increased role of the European Central Bank


The European Central Bank is, in line with neoliberal economic logic, ‘independent’. Independent of whom, you might ask? Well, independent from any democratic check or oversight by representatives of ordinary people. It certainly isn’t independent from the interests of big business and the right-wing economics that serves their interests. One of the clear developments in this crisis has been an increase in the role of the European Central Bank, and its President, Jean-Claude Trichet.

The ECB is now an equal partner in the so-called ‘Troika’ of the European Commission, the ECB and the IMF. This means that the central bank for Europe is actively intervening with the governments of Europe to demand certain austerity policies. More than that, however, particularly in recent weeks, it has used its powers as a potential buyer of bonds on the bond markets, to blackmail countries into implementing very specific austerity policies.

It has emerged that Mr. Trichet wrote a secret letter to the Italian government in early August detailing a series of austerity measures to be implemented in exchange for the ECB agreeing to purchase Italian bonds. The letter called for privatisation of municipal assets, liberalisation of various sectors and gave detailed advice on how to relax Italian employment law!

The response was swift, with both the Italian and Spanish governments aceding to the requests, which are in line with the right-wing character of these governments in any case. Berlusconi announced a package which included extra austerity measures worth €45.5 billion. The Spanish government did likewise, and promised a constitutional cap on debt amongst other measures.


This incredible situation – whereby an ‘independent’ ECB dictates, not just the general thrust of policies (which would be bad enough), but also offers detailed austerity proposals – was not commented on widely. However, it is a very clear indication of the diminishing of democracy within the EU as part of the establishment’s response to the crisis.

So much so that Berlusconi (no friend of democracy or workers’ interests) was moved to exclaim: “They made us look like an occupied government.” Of course, it suits the likes of Berlusconi to blame the ECB for the austerity his right-wing government is carrying out. Clearly a genuine left government would refuse to be bullied by the ECB or the markets, by refusing to pay the debt to the international bondholders and instead raising necessary funds by taxing the super-rich and corporations as well as developing economic growth through a democratic plan based on the needs of ordinary people. However Berlusconi’s comment is indicative of the incredible power that this entirely unelected and unaccountable institution has gathered for itself.


Moves towards an “economic government"

Repeated calls have now been made by the establishment in Europe for the creation of some sort of ‘economic government’ or ‘economic council’, to be chaired, if the current wishes of Chancellor Merkel and President Sarkozy are to be met, by Hermann Van Rompuy (the currently unelected President of the European Council). This body would be a sort of economic leadership for the eurozone countries. In other words, its aim would be to ensure that sufficient austerity is applied with sufficient vigour across Europe.

After their recent summit, President Sarkozy announced the aim “to create a real economic government for the eurozone” and Chancellor Merkel announced “there has to be a stronger coordination of financial and economic policy". You can be sure that they are aware that this “stronger co-ordination” (read: common austerity) and economic government will not be welcomed by the mass of people.

Instead, to achieve this move towards fiscal unity, they know they have to diminish democracy further, hence the concentration of more powers and “economic direction” into the hands of an unaccountable “economic government”.

The most boldly-stated version of this proposal has come from the German Foreign Minister Guido Westerwelle who has called for a “stability council” of unelected supervisors for the economies in the eurozone, with the power to impose sanctions on countries that don’t implement sufficient austerity.

Economic governance and the eurozone plus pact


The apex of the current attacks on democracy within the EU are plans for “economic governance”. This series of proposals, which are currently still being fine tuned, amount to a further serious diminishing of democratic checks within the EU.

Budgets will now have to be presented to the European Commission and Council for approval (“surveillance”) in advance of any debate in national parliaments. The proposals also strengthen the “Growth and Stability Pact” which limits countries’ public debt to 60% of GDP and their annual deficits to 3% of GDP. Sanctions are to be introduced for countries that miss these targets, with states in breach having to pay 0.2% of their GDP into a non-interest bearing account, which will be lost as a fine if they do not follow the directions of the Commission. This fine can be increased up to 0.5% of GDP (around €700 million for Ireland). The final element is a procedure to prevent “macroeconomic imbalances”. The Commission will create a series of parameters (as yet unannounced) and a scoreboard of austerity will be used to measure a country’s progress. If a state fails to meet the targets, further massive fines can be imposed.

All of these moves are designed to facilitate the imposition of semi-permanent austerity in Europe. It is being prepared with the awareness that a major movement of opposition to cutbacks already exists in Greece, Portugal and Spain and can easily develop in Ireland and other countries. Conscious of the pressure that such movements can exert on governments that have to seek re-election, this is designed to move decision-making further away from working people and create a counter-pressure on national governments (through the threat of fines and the process of budgetary surveillance) to enable them to resist these movements.

How can the further diminishing of democracy be stopped?


The diminishing of democratic checks is entirely related to the content of the proposals that the undermining of democracy is designed to facilitate. Therefore, the battle against austerity of the Left and the trade union movement needs to take up the question of democracy within the European Union as well.

In Ireland, loud noise must be made to demand a referendum which it is the intention of the government to not grant us, on the amendments to the Lisbon Treaty to facilitate the establishment of the European Stability Mechanism. Fundamentally, the whole undemocratic EU project must be resisted and a struggle for an alternative, socialist Europe, based on the interests of working people across the continent and mass participative democracy, must be waged.

--------------------------------------------------------------------------------

Paul Murphy is the Socialist Party and United Left Alliance MEP for Dublin. He replaced Joe Higgins after his victory in the 2011 General Elections. More information can be found on his blog: http://www.paulmurphymep.eu/.