The current European Union leaders’ Summit in Brussels marks about the twentieth time in a little over two years, that high level meetings among the EU’s political establishment have grappled with the economic and financial crisis in the Eurozone. If informal and formal EU Summits are hard work then the mountain has certainly laboured over this issue but the product still resembles a mouse.
The fable of the mighty labouring mountain and the tiny mouse originates with the Greek story teller, Aesop. Quite appropriate since his modern day countrymen and women can certainly attest from bitter experience to the abject failure of the economic and political ruling classes in the EU to resolve the crisis that has driven them into penury, and threatens far greater destruction across the continent.
The President of the European Council, Herman Von Rompuy, in a pre Summit report, speaks of ‘a vision for the future of the Economic and Monetary Union and how it can best contribute to growth, jobs and stability.’ It is little more than a rehash of the provisions of the Austerity Treaty, voted on here on May 31. While giving lip service to the need for growth and investment, it is really about giving the right wing Brussels bureaucracy powers to force an ongoing diet of austerity, liberalisation and privatisation on Member States with extremely detrimental consequences for their citizens.
The current Summit is supposed to advance the ‘vision’ referred to above while considering a ‘Compact for Growth and Jobs.’ With 17 million people unemployed in the Euro zone and 24 million in the EU as a whole, a strategy for growth and jobs is desperately needed. Unfortunately this is not it.
What is proposed, the Taoiseach told the Dail on Tuesday, is a €10 billion increase to the European Investment Bank’s capital, ‘an amount that can be converted, with leverage, into €60 billion extra in lending, supporting an additional €180 billion in investment.’ Minister of State for European Affairs, Lucinda Creighton, was not very clear on where the €180 billion would come from when speaking on RTE radio yesterday, merely referring to ‘public/private partnerships’.
Somebody should tell Taoiseach and Minister that any plan that is depending on private investment from major corporations and Europe’s big banks has a big problem. They simply won’t invest in productive capacity and employment because they are not convinced that they will reap a profit against the background of the general economic crisis. That should be very clear from their behaviour over the last year.
Last Autumn the European Central Bank made available a massive €1 trillion in extremely cheap interest rates to big banks around the EU. Instead of lending this on, to for example, small enterprises for investment and job creation, they either bought government bonds or put the money back on deposit with the ECB! A number of articles in the Wall Street Journal and the Financial Times in recent weeks have highlighted the shocking failure of European big business to invest. They point out that in the Eurozone a massive €2 trillion Euro is being hoarded by big corporations in uninvested profits.
Plaintive appeals from the political elite of the EU will cut no ice with the European multinationals or the players in the financial markets. The elected political class have long since abased themselves in front of the economic powers of these unelected forces. At every point of the crisis the political leaders have acted ‘to reassure the markets’, in other words cringe before their speculative and socially destructive profit seeking. Meanwhile millions of ordinary Europeans languish in unemployment and poverty. European capitalism betrays the continent’s youth in particular with a 22% youth unemployment rate in the Eurozone.
Without a plan for economic growth and development to create a significant increase in real wealth, there will be no resolution to the crippling debt crisis. Terrified that they will not get back their speculative loans to countries like Greece, Spain and Italy, the major banks and hedge funds either refuse to extend meaningful lines of credit or demand such extortionate interest rates that these countries will have to apply for a ‘bailout’ to emergency funding mechanisms.
Despite this enormous crisis in European capitalism, and how clear is should be that it is a crisis of the system itself, the discourse in the mainstream media is conducted entirely within the framework of the rules of that system. However, as it becomes increasingly clear that a cure cannot be found by merely trying to manipulate the disease, there will be a growing aspiration for a radical alternative which breaks the destructive power of the markets, socialises the gigantic funds now swirling around in speculative circles under democratic ownership and control and invests them in massive job creation and social regeneration in the interest of the majority.
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