The EU constitution – renamed as the Lisbon Treaty – and public spending rules – such as the Growth and stability pact and now the competitiveness pact – lock EU member states into a deflationary straitjacket.
The global financial crisis is forcing many EU members to pay ruinous interest rates to bond markets. This is being exploited by governments to attack wages, public spending and deregulate collective bargaining across the EU.
The European Commission, IMF and the European Central Bank now directly intervene in national wage negotiations in Ireland, Greece and Romania to weaken collective bargaining.
The EU ‘2020 Agenda’ openly calls for wages to reflect productivity, which means cutting wages even further in so-called ‘peripheral’ countries (Ireland, Greece, Portugal, Baltic states) to compete with the ‘core’, high-investment economies of France and Germany.
The new EU “competitiveness pact” will promote social dumping and outsourcing and increase retirement age at a time of mass unemployment. The Commission is giving itself extra powers to fine member states up to one per cent of GDP to enforce austerity budgets.
EU policies only offer workers more austerity, unemployment, low wages and privatisation.
Workers need to break with the European Union in order to build a future of prosperity and fairness. Elected governments need to re-establish democratic controls over financial markets.
Margaret Thatcher’s first government in 1979 abolished exchange controls in line with EU rules on the free movement of capital. The ‘Big Bang’ in the City of London has enslaved the UK economy to the interests of financial markets and hedge funds.
We need to create a million green jobs in the public sector and nationalise industries that ‘offshore’ production to cheap labour zones. Such policies are prohibited under EU rules as “illegal state aid”.
The response of the TUC and European TUC is just not good enough. While criticising EU neoliberal policies, both call for the EU to adopt reflationary policies for economic growth. This is like asking a cat to bark. To build prosperity and fairness we must break with the EU and re-establish democracy.