Stop Euro-federalism
A new treaty for the EU
The European Stability Mechanism to create a two tier EU
giving the national exchequer PIN numbers to the ESM institute
John Boyd*
A partial default for Greece cooked up over the past few days by the EU, IMF and European Central Bank is an attempt to save both the banks who own the debt and the euro. The sum involved is a staggering £2.6 trillion equivalent to £7,800 per person in the eurozone or £230,000 per person in Greece. This scheme will not prevent a dire and miserable future faced by the peoples of Greece or those living in Ireland or Portugal.
A crucial objective of the EU elite is to force through a fiscal, monetary and economic union of the 17 euro Member States as Commission President has stated:"The only right way to stop the negative cycle and to strengthen the euro is to deepen integration, namely within the euro area. This is the way to go. It is also the only way for the euro area to really play the role that investors and global partners expect it to play. What we need now is a new, unifying impulse - a new federalist moment. Let's not be afraid of the word - a federalist moment is indispensable". J.M. Barroso, European Parliament (Irish Times,15.9.11). Following this he said: "We have a monetary union, but we have not yet the instruments of a full fiscal economic union. It takes time, yes."(Irish Times 22 September 2011)
The short and long term plans are already in place to prop up the eurozone which have serious implications for the peoples of Britain. These plans include changing the Lisbon Treaty – the EU Constitution – and to put in place yet another Treaty for the eurozone, - the European Stability Mechanism (ESM) designed to form an economic and monetary union governed centrally.
The proposed ESM is fundamentally undemocratic and outside EU treaties. The European Constitution (Lisbon Treaty) makes clear there cannot be a bail out of any of the 27 Member States which defies the partial default plan. So alongside the bailout the ESM is the proposed solution to the dilemma and specifically designed to finance what is in reality a slush fund. The ESM will be based in Luxembourg with a board of Governors appointed by the 17 eurozone states and operate outside the EU. ESM is part of the two tier 'Europe' which the ConDem government has not only accepted but promotes.
In the run up to all EU treaties there were at least some discussions at national level. The ESM has been concocted in great haste with misleading publicity by the leaders of France and Germany. These leaders are dictating to the eurozone members that they have to make national balanced budget rules by next summer. This includes the assault on public sector spending and severe austerity policies. In other words national sovereignty, parliamentary democracy and the separation of powers in the EU are to be suspended by mutual agreement between France and Germany.
The proposed ESM measures are an attempt to salvage the wreckage of the monetary union. Which are to say the least highly unpopular and opposed by a growing number of people and labour movements. These measures will not bring about real stability to an unstable monetary union as daily evidence makes clear. To try and make 17 different economies work in cohesion is totally impractical as EU critics have forecast from the beginning.
On 9 September the German Chancellor told Germany's parliament that the current European Constitution "offers no effective foundation" for the euro zone in the longer term. "The common currency can only be preserved if there is further integration and more reliability," adding: "We won't get around making further treaty changes." German officials have stressed that treaty changes would take a long time to negotiate and ratify, however, and that the euro zone will have to solve the current debt crisis on the basis of the existing EU treaty. Hence the plan for a partial default for Greece.
Immediately after at the G7 summit of finance ministers, Mr Osborne, Chancellor of the Exchequer, said: "It's on the cards that a treaty change may be proposed". "This would be to further integrate the euro zone, further strengthen fiscal integration. I have said there is a remorseless logic from monetary union to fiscal union, and it's in Britain's interests that the euro zone is stable".
Mr. Osborne indicated Britain would support a new treaty - which requires ratification from all 27 EU Member States - but made clear Britain's interests must be considered. "It's crucial that Britain's interests on financial services, on the single market, on competition are protected, that we're not out-voted by the euro zone, that there is not an in-built euro-zone caucus in the system." Hence the financial sector which led Britain into the current fiscal mess is to be protected and the austerity and attack on the public sector by common EU policies is to continue.
On 25 March 2011 the European Council agreed to add a third paragraph to Article 136 to the EU Constitution: "The Member States whose currency is the euro may establish a stability mechanism to be activated if indispensable to safeguard the stability of the euro area as a whole. The granting of any required financial assistance under the mechanism will be made subject to strict conditionality". This is a fundamental change and that is why the EU political elite class are rushing around to amend the Lisbon Treaty and in the meantime have in place the ESM. In other words the ConDem government knew about these moves but have failed to explain them to either parliament or electorate in Britain.
An ESM fund to be put in place is expected to be £430 billion and separate from the £2.6 trillion but would not be enough to bail out other states beyond Greece, Ireland and Portugal. Article 10 of the ESM permits an extension of the fund by a decision of the governors who are national finance ministers. They do not have to ask their parliaments for the approval. That would turn parliaments into open ATM cash points. Although national parliaments have to approve the transactions, in practice this is most likely to have been handed to the ESM governors along with the PIN code.
Article 27 and 30 of the ESM Treaty grants the institution and the officials "immunity from every form of judicial process". The ESM and staff will be exempt from taxation and normal rules for financial institutions. In other words the ESM will be a law unto itself and a parallel government to the EU in Brussels over the eurozone and national budgets normally the prerogative of parliaments.
This Treaty is due for ratification by the end of the year without any meaningful discussion in the 17 parliaments. Above all else it will not resolve the financial problems of the eurozone or wider EU.
With the bailout, which is still a loan, further extreme pressure on Greece is being exerted by Germany, France, ECB and the IMF to get out of debt and for further austerity and privatisation. At the same time the interest to be paid on loans is currently 15%, the economy is shrinking not growing and practically everything bar the sun and sea has been privatised and taxed.
The outcome of all this bullying is not clear except for the partial default plan as France and Germany in particular do not want the euro to collapse. French banks own much of the Greek debt and want their money back. Germany wants to keep the dominant political and economic position in the EU and eurozone.
What must happen for the sake of the peoples not only in Greece, Ireland and Portugal and other EU Member States is for the euro to be disassembled and for nation-states to go back to their national currencies, to retrieve the sovereign right to control their own budgets, interest and exchange rates. That means ending the new thrust to Euro-federalism and ditching the neo-liberal 'free' market. There is no need for a European Union. For Britain the immediate alternative must be to withdraw from this anarchic chaos, get out of the clutches of financiers and bankers, avoid bailing them out and stop the common EU austerity policy.
*John Boyd is secretary of the Campaign against Euro-federalism and is speaking at the Morning Star conference on Building the Alternatives on 22 October in Salford. Other speakers include Michael Meacher MP and Prof. Prem Sekka
This article was published in the Morning Star on 29 September 2011
and based on the original piece in the Democrat in the September-October 2011 issue.
The draft ESM Treaty
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Democrat Editorial September-October 2011 (Number 125)
Trashing nation-states,
sovereignty and democracy
This process isn't inevitable
We live in an era of the European Union and near complete global domination of transnational capital which has been misnamed globalisation as though this phenomena was inevitable and an irreversible development of the world. Alongside this we have recently witnessed military action over Libya in the latest example of NATO, US and EU vested interests to consolidate a policy to dominate totally nation-states. The declaration by the NATO Secretary General near the end of the bombing in Libya on behalf of the 'rebels' was a "NATO victory".
The same strategy was conducted in Yugoslavia in support of the upstart Kosovo Liberation Army against the Serbs. Serbia as a nation-state ended up partitioned with Kosovo a client state of the EU. No doubt Libya will rapidly become subservient to the "West" as discussed and lined up at the special summit in Paris.
Labour's maverick multi-millionaire Lord Mandelson and a former EU Commissioner for trade boasted a couple of years ago from the rooftops that: "The age of pure representative democracy is coming to an end". We can now clearly see this with the subjugation of first Greece and then Ireland and Portugal to the EU Commission, European Central Bank and IMF. This appears to be the tip of the money involved. But, like all icebergs the mass of the object is out of view. All Member States in the eurozone are subjugated to the centre in Brussels and Frankfurt. Without the use of military force these nation-states have lost important powers. Officials now dictate to national governments economic and social policies. This takes away the sovereignty powers of these nation-states and along with it the right to self-determination and national democracy.
Those Member States outside the single currency are also subjugated to a lesser extent so far to the EU by the Growth and Stability Pact and a host of other EU common policies. These policies include CAP for agriculture, CFP for fisheries, Common Foreign and Security Policy and a horde of directives and regulations from privatisation of railways, health and postal services to liberalisation and competition in a "free" and liberalised European Single Market.
One instance of the above is the award of the Thameslink railway stock contract to Siemens of Germany which indicates the subservience of the Government to EU procurement policies. On 7 September the Government stated it was not going to change this suicidal decision instead of standing up for national interests by protecting a crucial industry and the thousands of jobs involved.
Further, the fact that the Chancellor of the Exchequer has first to get approval of the EU Commission for the national budget before presentation to Parliament proves beyond doubt that national independence and democracy have been set aside.
Despite this and many other examples, there are some, including a few in the labour and trade union movement, that say the nation state is out of date and is a 19th century anachronism. This is in contradiction of the fact that nation states are still being formed and others being campaigned and fought for by political and military means. These include the removal of the partition in Ireland, a state for Palestinians, the removal of old imperial borders in Africa and Asia. Above all is the imperative need to re-establish international law to prevent one nation state interfering in the affairs of another nation-state which currently is the cause of most problems in the world.
Some people admit they cannot get their heads around the national question and lean on the phrase "workers of all countries unite" coined by Karl Marx which is misquoted as "workers of the world unite". It is clear that Marx was not ignoring or against nation states. Stretched to the ultimate conclusion according to those opposed to nation states the latter phrase appears to mean we can do nothing until all workers across the globe are united. The latter is clearly a practical impossibility.
An old demand in Ireland for Home Rule and not EU rule
What is required is for democrats and the labour and trade union movement to join in an international campaign in defence of the nation-state as the fundamental focus of political democracy which is the only mechanism which history has evolved for imposing social control on private capital. This requires the retrieval of the right to self-determination, national independence and democracy. These are required to exercise the sovereign powers of a nation-state to pass laws to put in place controls over private capital. Simply put Britain must leave the EU superstate and have the power itself to make bilateral and international arrangements for trade and commerce across the world.