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September 12 2011

02mydafsoup-01
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The “Change For Europe” manifesto - signed by Jacques Delors and a number of leading European socialist, social democratic and Green political leaders should form a major foundation for a broad campaign by centre left, socialist and Green political forces to insist on radical change in current Euro-area policy while at the same time strengthening the collective governance of the Euro-area. A major publication by the Euromemorandum network of European socialist and Green economists - which I strongly support - sets out in greater detail some of the concrete steps which should form part of a radical economic and social reform strategy. 

The proposals of the Euromemorandum include greater democratic accountability of the European Central Bank, tighter controls on banks, a ban on financial deals that are off-balance sheet, a financial transactions tax. On macroeconomic policy the Euromemorandum proposes that the Stability and Growth Pact should be replaced by a commitment to expand macroeconomic demand to promote full employment; the EU should take over and guarantee a percentage of each member states’ debt; the public debt incurred in rescuing the financial sector should be recuperated from the private sector through a wealth tax.

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The road to Europe: the political battles ahead | openDemocracy 2011-09-12
02mydafsoup-01
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Part of the uniqueness of the present crisis is therefore its abstract mode of destruction. The scope of what is possible in the future (and increasingly in the present) is narrowing in a way that isn’t immediately apparent in our daily actions. So while the welfare state plays an important role in moderating the phenomenological experience of crisis, the abstract structures of contemporary existence are shifting in just as significant ways. The objective forces of economic crisis require an outlet for their effects, and while government programs have managed to disperse some of this force, the remainders are winding their way through our global economy. In the words of James Galbraith, the current crisis may be significant not for its overt destruction but instead for “the pall it casts over life.”

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On the Abstraction of Contemporary Crisis | The Disorder Of Things - 2011-09-12
02mydafsoup-01

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Key agents in this drama were the bank technocracies, both national and international, and the European Commission. The vilains de la pièce are the democratically elected governments (regardless of their political inflection), who  passively transferred constitutionally relevant powers to such technocracies.

The ‘therapies’ based on fiscal austerity are the ultimate outcome of such a chain of decisions. It is said that they will stop speculative attacks. I argue that they will simply prepare fresh bases for new attacks, triggered this time by recession indicators and/or by the absence of relevant improvements in the debt/GNP ratios. There is only one way to frustrate such speculative attacks: rendering the ECB a lender of last resort for sovereign debt, as recently argued by P.De Grauwe, D.Gros, S.Micossi; that is, by restoring a pre-1980 institutional way of organising economic policy making. But the ECB resists such a suggestion, with the support of European governments.

As Susan George puts it bluntly: “The ECB is the obstacle to success, not the Euro per se. The ECB doesn’t lend to governments but to banks, at 1% or less, and then banks lend to governments ... The ECB unlike every other central bank doesn’t issue Eurobonds. So we have government by the banks and the ratings agencies”. And as for the polity abdication she adds: “Now the European Commission wants to examine all individual country budgets before their parliaments vote on them to make sure they meet certain standards. This is a blatant attack on democracy”.

This is a straightforward, though partial, answer to the question raised at the start of the debate on ‘The road to Europe’ by Rossana Rossanda, when she asks: Was starting from the monetary union the right strategy for building the political union of Europe? Mario Pianta has provided a further part of the answer by reconstructing, from a historical economic perspective, what has happened. What I want to explore further in this article is how this absurd process came about; that is, secured by which cultural distortions, wrong reasoning, and false popular beliefs.

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The road to Europe: the eclipse of reason and democracy | openDemocracy - 2011-09-12
Reposted bydatenwolf datenwolf
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