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Challenges for the European elections of 2014 on the eve of the European Council of 27 and 28 June 2013

At the end of June, as usual, a European Council meeting will be held in Brussels. Once again, economic governance is on the agenda, as well as the ‘social dimension’ of the Economic and Monetary Union (EMU). For those who might think this is a step in the direction of the so often claimed ‘social Europe’, disappointment will be inevitable. What can we expect, then, of this Council meeting?

 

With ups and downs but steadfastly, the financial and economic crisis has increased the pace of work concerning the ‘economic governance’ of the EU. After the publication by the European Commission of an ‘Annual Growth Survey’, the European ‘Semester’ starts to run and ensures a coordination of fiscal policies of Member States; the legislation of the ‘sixpack’ and the ‘twopack’[2] gives all details of the way the European Commission organizes the surveillance of national policies. The ‘Fiscal Treaty’ institutionalizes a ‘golden rule’ (fiscal balance) and sanctions in case of non-implementation. The Euro+ Pact, which is the most amazing part of it from an institutional perspective – national governments giving recommendations on issues that admittedly are no European competences -, shows that there are no limits to what Member states are willing to do in order to impose their neoliberal austerity policies. A ‘Compact for Jobs and growth’ was adopted with very few concrete or new measures. Finally, there also is a ‘Banking Union’ in the pipeline.

This week the ‘Roadmap for a genuine Economic Monetary Union’ is on the agenda. This roadmap had been adopted at the European Council meeting of December 2012, but some aspects as well a its ‘social dimension’ was planned to be discussed[3].

Let me briefly mention the ‘Roadmap’ in order to leave space for a more in depth analysis of the ‘social dimension’. What is aimed at is  a ‘more resilient and integrated EMU’ in order to protect the Euro against external economic shocks, preserve the European model of social cohesion and maintain Europe’s influence at the global level. ‘More Europe’ is not an end in itself, according to the authors, but a means for serving the European citizens and increase their prosperity. Deeper integration, then, needs democratic legitimacy and accountability.

In synthesis, what it comes down to is that Member States can reach contractual arrangements with the European Commission so as to bring even more policies under the surveillance mechanisms and to aim for more ‘convergence’. As an incentive, sanctions have been replaced by financial support for countries that respect their commitments. Therefore, funds will be set aside – outside of the EU budget – so that e.g. unemployment allowances could be paid for a short period to countries suffering from a shock. This is called a ‘solidarity mechanism’. Social expenditures will at any rate fall under the surveillance of the ‘Semester’. Which means, in a nutshell, that the coordination and surveillance of policies no longer is limited to macro policies, but can now also include micro policies and social expenditure.

There are three ways to react to this. One can adopt this logic because of the necessary preservation of the EMU and the Euro; one can reject this logic because of the transfer of even more competences to the European Union, thus threatening national sovereignties; or one can reject this logic because of the neoliberal ideology that sustains it. My choice goes to this third option.

 

The ‘social dimension’

What can a ‘social dimension’ mean in this framework?

The European Trade Union has made many proposals this past year in order to avoid a social catastrophe. This goes from a ‘Social Pact’ with priority for social rights instead of for economic freedoms, to investment programmes, strengthening the social dialogue, the introduction of a European minimum wage, and maintaining national competences for wage negotiations and collective bargaining.

To no avail. The only concrete measure that has been taken this year is a ‘youth guarantee’ in the framework of an ‘Employment Package’. Young people who lose their job or do not find any job after   leaving school should receive within four months a quality offer for a job, a training, apprenticeship or internship. A budget of 6 billion Euro has been reserved for the period 2014-2020. Half of it should come from the European Social Fund. However, this is only a ‘recommendation’ to the Member States and is not legally binding[4].

Last week, the draft conclusions of the coming European Council have leaked and the text shows that the ‘social dimension’ remains very vague and will not be discussed in any detail. Member States clearly feel no need to do more.

However, in the meantime, the Council of the European Union has adopted the Commission’s proposal for an ‘Social Investment Package’[5]. Contrary to the academic proposals for social investments, the European Union again interprets this as a tool for further ‘structural reforms’ and cuts in social expenditures - more particularly pensions and health care. The possibility of bringing this under the surveillance mechanisms of the Semester is also mentioned.

In other words, the ‘social dimension’ clearly does not change the logic of the ‘economic governance’. Social policies are being tied to the economic perspective and are put under surveillance. It is a confirmation of the earlier conclusion that social policies are now at the service of growth and competitiveness.

 

A social catastrophe

According to the most recent report of the European Commission[6], unemployment in the EU stands at 10,8 % (26,2 million people) and at 11,9 % in the Eurozone (19 million people). 23,6 % of young people – nearly 6 million - have no job. In Spain and Greece youth unemployment reaches more than 55 %. More and more people are discouraged and leave the labour market. More and more families live in financial stress and do not know how to survive. They have more and more debts. Almost one quarter of the EU population lives in poverty.

This explains why also migration patterns are changing. Immigration to the EU is slightly decreasing, migrants are twice as vulnerable as EU-nationals to be unemployed. Emigration is growing. Young, highly qualified people are leaving Spain and Portugal for the former colonies in Africa and Latin America. Others, also from Greece and Italy, are heading North, mainly to Germany. This increases competition on the labour market and puts pressure on wages.

In spite of these social problems, most governments continue to reduce their social expenditures. Whereas in the first years of the crisis social expenditures rose proportionally to the rising needs, this trend has now stopped. The situation differs from country to country, but the income distribution did change indeed. Today, social protection does not play its role of ‘economic stabilizer’ anymore[7]. Add to this that wages are falling in many countries and economic sectors and that labour markets are more and more flexible. Economic or social security hardly exists.

In 2012 the European Trade Union Institute published a study on the changing labour law[8]. It clearly shows that national governments do not wait for the ‘Diktat’ of the European Commission but are introducing flexibilization almost everywhere. It is an illusion, then, that national competences will change anything if the dominant ideology does not change.

In January 2013 a number of labour lawyers published a ‘Manifesto’[9] recalling the many solemn promises of heads of state and government at many international summits. Nevertheless, they see that labour markets are deregulated, that mechanisms for collective bargaining are dismantled, and trade unions are weakened. They call upon the governments to respect their legal commitments, the Treaty of Lisbon and the Charter of fundamental rights. According to them, the spirit of the Declaration of Philadelphia[10] is no longer applied.

We should have no illusions. Our governments are not planning to respect the basic principles of our welfare states - citizenship and equal rights, universalism, de-commodification and organic solidarity. They are using the European institutions to introduce more or less binding measures to put social policies at the service of the economy and to give people but a minimal protection. It is more than ironic that this happens at a moment when international organisations – including the European Commission – are promoting ‘social protection’ in third world countries.

 

From European integration to globalization

It is obvious that a project for European integration that has no economic or social security to offer to its people but only dismantles all protection mechanisms, opposes poor people to workers and workers to poor people, can have no popular support. It also lacks democratic legitimacy, not only because of the deficiencies of European procedures, but also because of the hypocritical attitude of governments that adopt measures a the European level and condemn them at the national level.

In this way, the  European project is deprived of its substance. Slowly slowly, our leaders are becoming aware of the dangers this entails for the coming European elections in 2014. If an important minority of Euro-sceptical members or of the extreme right enters Parliament, they may be able to block all legislation. Some people may think this is not that bad at all, such as people on the left who never believed in the democratic input of the European Parliament, or others at the right of the political spectrum who may be happy to get rid of the only democratic representation of EU citizens.

Nothing is definitely lost, as yet. But time is running. Therefore, it is necessary to stress the responsibility of the left.

Social-democracy and trade unions have made many proposals that could save our welfare states and our ‘social model’. Unfortunately, social-democracy has been shifting to the centre and has lost a lot of its credibility. The difficulties of the current French government to introduce any change in the neoliberal logic is telling. Also, the text of the European social-democratic party for next year’s elections certainly contains many good points, but practice has not been corresponding[11].

The European radical left looks like a battle field. Apparently it is extremely difficult to create any clarity on European positions, let alone to reach any convergence. Some are radically against the EU and against the idea of European integration, whereas others are against the transfer of sovereignty. They mostly have problems to make a distinction between policies and institutions. All want ‘another Europe’, a ‘social’ and ‘democratic’ Europe without being able to say what this means.

The focus is on ‘lobbies’, ‘European Round Tables’ and a ‘bureaucracy’ and one is blind to the fact that all European governments, in or out of the EU and in or out of the Eurozone, are dismantling democracy and welfare states. One refuses to see that the European Union is only the addition of 27 national governments. But is there anyone who pretends that a welfare state can be saved if neighbouring countries are dismantling theirs? Then why be against social convergence? The same goes for taxes. Can high tax rates be maintained if neighbouring countries are lowering theirs? Then why be against tax harmonization?

The enemy of the left should not be the European Commission or other European institutions, but an ideology that destroys societies, that bans redistribution and solidarity from its discourse, that makes a dogma of competitiveness. Most national governments are working today with exactly the same logic as the European institutions and give them a mandate to do what they are doing.

 

Conclusion

Let me end with three conclusions.

First, if one wants to save the ‘social dimension’ of the European project and save national welfare states, legally binding European standards are necessary. This is not only necessary for the protection of people, but also for the legitimacy and the support of the European project itself. A monetary union cannot exist without solidarity mechanisms, not in the sense of the current ‘Roadmap’, but solidarity for managing debts, solidarity between regions and countries, and solidarity between people.

The argument of the non-affordability is not correct. A limited financial transaction tax, a serious fight against tax avoidance and evasion, abandoning tax havens are sufficient to give the EU a decent budget fit for genuine European policies.

Second, if we want to achieve this, the perverse neoliberal ideology that has been undermining the European integration project for several decades, has to be abandoned. This is not because of any romantic or nostalgic dreams about ‘Europe’, but because of a realistic and pragmatic awareness that individual states in a world with a globalised economy – including production processes themselves – are no longer relevant. We also have to be realistic when we think of the consequences of intensive competition between people, regions and countries. Falling back on competing nation states can, in the long term, only mean more conflicts. Reducing the European Commission to a role of secretariat of the European Council may be the silent wet dream of many liberals and leftwing people, but in the best of cases, it only leads to an impasse.

Third, it is an illusion to think that political leaders still believe they are ‘solving the crisis’. Some of them are totally at a loss and do not know any longer what to do. Others know very well what the opportunities are in these changing times. They are inspired by those who think one can totally dismantle welfare states by introducing some minimal social protection for the poor, thus ‘promoting growth’. They are listening to those who, as was written in last week’s article[12], claim that our democracy – however imperfect it is - is no longer compatible with neoliberal globalisation. They are the ones preparing the conflicts of tomorrow. They think a ‘new era’ is beginning.

At this moment of time when young people are taking to the streets everywhere to reclaim their ‘commons ‘ – a clean environment, protection, public services …’ neoliberals and conservatives have decided that time is over. This explains the hard repression of all movements. It cannot be attributed to the ‘Turkish’ or the ‘Brazilian’ governments alone.

Not only our welfare states and our democracy are threatened. The European integration itself runs serious risks. Those who always saw the European Union as an internal market – such as the British – will have to learn that even this era comes to an end. The free trade agreement that is now being negotiated between the EU and the US will make the EU totally irrelevant and redundant. It can mean the end of a Eurozone with proper economic and social policies that can serve as a model for the rest of the world. It can mean the end of a project where common European solutions are found for global challenges. This may become the triumph of global neoliberalism.

These points are certainly not on the political agenda of the EU. But they are developments that may become reality when European policy makers – our governments – do not react decisively in order to find economic and social solutions that can make an end to the crisis and the social catastrophe.

This is the challenge for the European elections in 2014.

 

 



[2] The ‘sixpack’ is a package of five regulations and one directive on macreconomic imbalances and the surveillance work of the Commission. The ‘twopack’ (two regulations) concerns more in detail the fiscal policies of Member States and their surveillance by the European Commission. Regulations are directly applicable in national legislation.

[3] Conclusions of the European Council of 13 and 14 December 2013: http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/134353.pdf; Towards a genuine economic and monetary union, http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/ec/134069.pdf

 

[4] Council Recommendation for establishing a Youth Guarantee, http://register.consilium.europa.eu/pdf/en/13/st06/st06944.en13.pdf

[6] European Commission, EU Employment and Social Situation, Quarterly Review, March 2013.

[7] European Commission, Social Protection in the crisis in the EU, Working Paper 1/2013.

[8] ETUI, The Crisis and National Labour Law: a mapping exercise, Working Paper 2012.04.

[9] ETUI, Manifesto … Call on the EU to respect and promote fundamental social rights in particular in respect of all crisis related measures, http://www.etui.org/Networks/The-Transnational-Trade-Union-Rights-Experts-Network-TTUR.

[10] The Declaration of Philadelphia was adopted in 1944 confirming and strengthening the mandate of the International Labour Organisation.

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