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Drive for Fascism at the European Council summit of Dec. 8th-9th in Brussels
9 December 2011
As we are heading towards "the" European Council summit of Dec. 8th-9th in Brussels, it is clear that most of the disagreements remain and that what clearly is lacking is money for any more bailout facilities. Why gargle, summit after summit, about creating the ESM (European Stability Mechanism), which is to replace the EFSF, if Europe is incapable of finding the EU500 billion that is supposed to go in it? France and Germany have sent a letter to Van Rompuy as President of the European Council, outlining the proposals that will be submitted to the 27 EU member-states during this summit. Van Rompuy issued his own statement with an approach by steps to a deeper reform of the EMU than that proposed by Germany and France. The reality of those proposals is that there is nothing new, except more supranational dictatorial measures and more austerity policies. As the European leaders continue to repeat ESM, EFSF, ECB, IMF, like a mantra, the more pragmatic are proceeding with contingency plans for the worst-case scenario with countries either pulling out of the euro, or the Eurozone imploding altogether. The Franco-German proposals: There are five proposals submitted by France and Germany to van Rompuy, as president of the Council "to reinforce the architecture of the European Economic and Monetary Union" (EMU). They include automatic financial sanctions, the adoption of the "golden rule" to control deficits, hyperinflationary measures to pursue the bailout via the ESM, and reinforced integration of the Eurozone. They do not include a fiscal union. 1) Automatic sanctions would be applied to those Eurozone members violating the old Maastricht criteria: a deficit of 3% of the GDP and 60% indebtedness, unless a qualified majority of Eurozone members rejects them. That country would then sign a "European partnership for reform" with the EU until compliance were reached, and the EU would have the right to adopt more and more intrusive measures until the problem were purportedly resolved. 2) A "golden rule" prohibiting deficits above the specified thresholds should be adopted into law by each Eurozone state, "preferably at the constitutional level or equivalent." The EU Commission or a member state would be able, via the European Court of Justice, to verify that another nation had adopted these regulations within its legal code. 3) Devaluation applied to Greek bonds "was singular and exceptional," says this letter. The private sector will only be called upon to contribute on a case-by-case basis, following IMF rules so as not to discourage investors. 4) Clearly a fiscal union as such is not part of the deal, even though they try to go in that direction. They call for more summits, more coordination, and for consideration by the different governments that the "impact of economic and budgetary policies of the euro zone must be considered as a question of common interest," but they stress, "while fully respecting national responsibility" [emphasis added]. Proposed areas of coordination would be "financial regulation," "labor market," "synchronization of taxes on companies," tax of financial transactions or policies for supporting growth. 5) They propose that implementation of the European Stability Mechanism (ESM)) should be moved up to 2012 from mid-2013. Decisions on what country could be bailed out would be made by a superqualified majority, defined as representing 85% of the capital subscribed to the ECB, which means that Italy, France and Germany effectively have a veto right. Discussion is expected to determine the specifics, but already one should note that: 1) Austria stated that it will not adopt the so-called "golden rule"; 2) in France, the Socialist Party is totally against any new treaty, or any golden rule, since this is nothing but a repeat of the Maastricht Criteria which are already in the treaties; 3) David Cameron, under pressure from his sovereignist wing, is threatening not to join a new treaty unless Britain is accorded the right to 1) reject taxes on financial transactions, and 2) to reject the Basel criteria for banks. Just one big happy family, with perfidious albatross around its neck. |
