The EU
is a deeply undemocratic institution enforcing austerity and
privatisation on its member states. In what strange world is this a
progressive institution?
by
Paul Embery
The EU is
now, more than ever, defined by its fanatical commitment to the rule
of market forces, privatisation and the rolling back of the power of
national governments. This ideology of neoliberalism explains the
EU’s enthusiasm for the politics of austerity, which it has imposed
throughout the continent as a response to the global financial
crisis.
But, just as
austerity has failed in the UK, it has failed throughout the EU.
Twenty-three million are unemployed thanks to EU-driven austerity.
Living standards have collapsed thanks to EU-driven austerity.
Far-right groups have gained strength thanks to EU-driven austerity.
Renewed tensions have emerged between nation states thanks to
EU-driven austerity. Public services have been decimated thanks to
EU-driven austerity.
When
economies crashed, the EU’s answer was to impose more crippling
austerity as part of any bailout condition. This served only to
generate deeper impoverishment and social tensions.
The EU’s
commitment to neoliberalism means its laws are designed to encourage
private enterprise at the expense of public ownership. As a result,
we have seen an accelerating transfer of ownership and control of
industry from elected governments to big corporations.
Trade
unionists and socialists make key demands over public ownership. But
many of these demands would actually be prohibited under EU law. So,
for example, renationalising the railways is forbidden, as EU law
compels member states to open up their railway systems to the market.
And the
controversial Transatlantic Trade and Investment Partnership (TTIP)
deal, which would open up public services, including the NHS, to
wholesale privatisation, should be reason enough for anyone who cares
about these things to support a Leave vote.
The recent
Tata steel crisis threw into sharp relief the pernicious effects of
EU law on ownership. Understandably, many trade union leaders and
some Labour MPs demanded the government nationalise the Port Talbot
steelworks. But missing from their demands was any recognition that
such a move would undoubtedly have breached EU law, which prohibits
member states from using public money to rescue failing steelmakers.
EU competition rules dictate that these things must be left to market
forces instead.
Indeed,
earlier this year, the EU took punitive action against the Belgian
and Italian governments after they used public funds in an attempt to
rescue steelmakers in trouble.
That’s why
we shouldn’t get too excited about the recent decision by the UK
government to take some control in Tata. First, the government isn’t
nationalising Tata; it is taking a mere 25% stake. Second, even this
limited step is likely to fall foul of EU law. However, it is
questionable as to whether, against the backdrop of the referendum,
the EU will intervene at this stage to block it. As the Guardian’s
respected economics editor, Larry Elliott, perceptively pointed out:
‘Is Brussels really going to kibosh the government’s rescue plan
if the consequence is that Europe gets the blame and the referendum
is lost? It will see the bigger picture.’
It is
therefore probable that in the case of the government’s
intervention on steel the EU will, for reasons of expediency, choose
to look the other way for a few weeks.
But we
should be in no doubt at all that EU law is ultimately framed to
benefit the privateers and to discourage public ownership of
industry, even in cases where entire communities and thousands of
jobs are at risk.
Trade
unionists and socialists stand for investment in industry as a means
to achieving full employment and economic growth. Investment is
particularly important in tough times, as it stimulates economic
activity, increases tax revenues and aids recovery. Austerity does
the precise opposite.
After the
global financial crisis struck almost a decade ago, EU-driven
austerity prevented many countries escaping recession. Crucially, EU
rules, under the Stability and Growth Pact, prohibit any member state
from running a budget deficit of more than three per cent of GDP.
This means that any government wishing to borrow to invest as a means
to boost the economy faces rigid constraints. This, in turn, means
that recessions and austerity are prolonged. The doctrines of John
Maynard Keynes, which for so long after the Second World War provided
the foundation of economic policy for left of centre governments, are
effectively illegal inside the EU.
One of the
primary arguments deployed by some on the Left against withdrawal
from the EU, is the danger of what is termed a ‘Right-led exit’ –
meaning a withdrawal undertaken on the terms of Tory right-wingers
and Ukip. But this argument is flawed, because it appears to
completely discount the fact that the Remain campaign itself is
dominated by the political Right. Just consider, David Cameron,
George Osborne, the Tory government, the CBI, the IMF, the Bank of
England, the wider banking industry and big corporations are all
fighting desperately to remain inside the EU. They do so in the
knowledge that a ‘remain’ vote would settle the issue for at
least another generation, and with the consequence that for all that
time we would be locked into an institution that is explicitly
pro-neoliberal and anti-socialist. Add to that the restrictions of EU
law that would constrain any incoming Labour government, and with the
EU heading in an ever-more anti-democratic direction, it is obvious
that a ‘Right-led Remain’ poses a much greater threat to workers
than any ‘Right-led Brexit’.
There is
also a view among some on the Left, particularly in the trade unions,
that while the EU’s enthusiasm for neoliberalism and austerity is
an inescapable truth, our interests are best served by staying inside
it because it has delivered some rights for workers. They claim that
these rights would be threatened by a withdrawal from the EU.
In truth,
the picture is far more complex than that. Many of the main planks of
workplace legislation giving benefits to UK workers – such as on
health and safety, equal pay, the minimum wage and trade union
recognition – were won through the UK parliament as a result of
trade union campaigning. They had little or nothing to do with the
EU.
Even today,
the broad sweep of workplace law - such as on pay, terms and
conditions, dismissal, industrial relations and disputes - remains
completely outside the remit of the EU. (This is why, for example,
the Tory government is able to push the Trade Union Bill - the
biggest assault on workers in a generation - through parliament
without any opposition whatsoever from the EU.)
The image of
the EU as some great protector of workers is hard to reconcile when
considering that, in keeping with its neoliberal objectives, it
promotes zero-hours contracts under flexible labour market rules and
deliberately weakened collective bargaining arrangements in the
bailout countries. And let’s not forget that the most fundamental
workers’ right of all – the right to work – has been denied to
millions as a direct result of austerity-induced mass unemployment.
Worryingly,
in two landmark legal cases – Viking and Laval – the European
Court of Justice ruled that collective action by a trade union could
be deemed illegal if it is taken to prevent an employer setting-up
in, or posting workers to, another member state, for example in an
attempt to pay cheaper wages.
And while as
trade unionists we must oppose attacks on immigrants, we must also
recognise that the EU’s policy of open borders has given rise to an
explosion of cheap labour and contributed to the undercutting of
wages (a reason why the policy enjoys the support of big business),
caused real social tensions, placed public services under pressure,
and fuelled the rise of far-right groups. The truth is that
unrestricted movement of labour has the capacity to cause social and
economic disruption just as much as the unrestricted movement of
capital. None of this is to blame immigrants personally. Nor it is to
absolve governments or unscrupulous employers for their actions. It
is simply to recognise the reality that EU-driven mass migration has
impacted on the lives of workers in a real and tangible way.
In the final
analysis, any perceived benefits of EU membership in terms of
workers’ rights must be set within the context of the huge setbacks
suffered by workers as a result of EU-inspired austerity.
Ultimately,
it is a question of what the EU is defined by. Is it defined by its
support for trade unions and workers’ rights? Or is it defined by
its zeal for neoliberalism, austerity and cuts? It is surely the
latter.
We should no
more look upon the neoliberal EU as a friend of workers because it
gave us the Working Time Directive than we should look upon the
neoliberal Tory government in the same way because it gave us the
‘living wage’.
And what of
the small matter of democracy? The EU parliament has no right to
initiate or repeal legislation. Instead, all legislation is generated
by the unelected EU commission. The EU parliament is effectively a
rubber-stamping body for the commission – a fig leaf for democracy.
Throughout
the history of the EU, there has been a gradual but unrelenting
transfer of power away from elected governments and towards unelected
bureaucrats and big corporations. This is an insult to all those who
fought for the vote and the principle that ordinary people must be
allowed to hold their rulers to account.
In Greece
last year, the people voted decisively and explicitly against
austerity in a national referendum. But the EU establishment forced
it on them anyway in brutal manner.
To avoid
further bailouts, the EU is now demanding deeper economic integration
between member states. This can happen only if there is closer
political union. This, in turn, would mean even more power being
transferred from national governments to unelected bureaucrats and
bankers. The EU superstate is no longer a distant threat; it is a
growing reality.
That's why
there is no status quo in this debate. The question of 'stay as we
are' or 'leave' is actually one of 'in even deeper' or 'leave'.
Some argue
that we need to be inside the EU in order to reform it. Such talk is
idle. Government after government has been saying the same thing for
years, even decades. But in reality the EU is unreformable. Indeed,
it has been designed to preclude serious reform.
The EU
commission is unelected and unaccountable. There is no democratic
mechanism by which it can be reformed.
The UK
government recently undertook a ‘renegotiation’ of EU membership
in an attempt to achieve serious reform. It threatened to walk away
from the EU if it didn’t get its way. But even under this nuclear
threat, the EU offered very little in the talks. If the EU isn’t
prepared to reform under threat of withdrawal by a significant member
state, when would it be?
Neoliberalism
and unaccountability are locked into the EU through its treaties and
directives. To reform the EU from being a neoliberal, anti-democratic
institution into being a progressive, socialist, democratic one would
mean that all member states must agree simultaneously to unpick all
of this. There is zero chance of that happening.
Those of us
on the Left must seek to build solidarity between workers in
different countries. But we do not have to be locked into a
highly-bureaucratic, anti-democratic, anti-socialist, supranational
institution to achieve that.
A Leave vote
would not of course put an end to the attacks being suffered by UK
workers in the name of austerity. We would still face at home a Tory
government hell-bent on making workers pay for the economic crisis.
But the EU referendum gives us a clear opportunity to kick away one
of the pillars of austerity which has caused so much suffering to
workers.
We may then
concentrate our efforts on defeating the enemy at home and electing a
Labour government committed to a radical programme of investment,
redistribution of wealth, full employment, defending public services,
improving workers’ rights and reinvigorating our democracy.
The first
step to achieving that is getting out of the EU.
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