Blueprint for a deep and genuine economic and monetary union Post author By Philip Lane Post date November 29, 2012 The European Commission’s blueprint is here. Categories In Uncategorized 23 Comments on Blueprint for a deep and genuine economic and monetary union ← Report on SME Credit Demand → Output and Value Added by Activity, 2002-2009 23 replies on “Blueprint for a deep and genuine economic and monetary union” Budgetary and economic surveillance, regulation and supervision, surrender of sovereignty. Everything coming from the viewpoint of the banking system to the exclusions of all other social, cultural, and national concerns. I realize that those who yearn for a return to Church Rule, or British Rule in Ireland will be drooling at the prospect of EU Rule re-infantalising Ireland once again. However as someone who did not spend their days in school praying for the conversion of England and Russia, and who actually at one point had modest aspirations for the country they lived in, I find the proposals of this document to be, well, offensive. A European Redemption fund for debts above 60% of your GDP is not worth giving up control of your own country for. If the Government endorses policies like this, then I think it will lose its legitimacy. Ireland had/has a banking crisis. Spain had/has a banking crisis. Greece falsified its statistics. Portugal might possibly eventually need a minor default. The solution? ALL nations in the EU to give up sovereignty. Seems like the diagnosis in the document is based solely what is needed to get the preferred treatment – Centralising even more power to EU-level. The Soviets tried with a centrally planned economy, how did that work out? The european commission recommends giving more power to the european parliament which in turn uses the commission as its executive. Anyone surprised that they recommend each other to be given more power at the expense of someone else entirely? “The Soviets tried with a centrally planned economy, how did that work out?” I think your reference to the USSR is extreme. Would an alternate comparison not also be the union of states in the US or UK? It seems to me like the UK is evolving into a pretty good template for the Eurozone. Devolved local government with significant taxation and local legislative powers combined with a strong central government, central bank and a truly centralised banking system. It was not left to the Scottish parliament alone to deal with RBS’s issues in recent years for instance. In any case, the Eurozone is a long way from either the USSR or UK template yet. Shorter version: Centralized, unaccountable, rules based monetary policy has developed not necessarily to Europe’s advantage. This can only mean we need to have centralized rule based fiscal policy as well. Shorter shorter version: Non adherence to neoliberal dogma will be made a crime. Sweet Suffering Jesus but that is one excrement pit of a document – it is a raving neoliberal restatement of faith. The damn thing could have been written by Schauble and it holds entirely to the creditor nation position that the European component of the global financial crisis was due to moral and governmental failings in the periphery enabled by insufficient mechanisms for disciplining them. Try this on for size: By the time of the eruption of the financial crisis in 2008 some euro area Member States had accumulated large private and public debts, losses in competitiveness, and macroeconomic imbalances. This rendered them particularly vulnerable when the crisis struck, with considerable contagion effects across the euro area once it turned into a sovereign debt crisis. The build-up of these vulnerabilities was partly due to an insufficient observance of and respect for the agreed rules underpinning EMU as laid down in the Stability and Growth Pact (SGP). In good part these vulnerabilities stemmed from features of the original institutional setup of EMU, in particular the lack of a tool to address systematically macroeconomic imbalances. Of course Ireland, among the worse effected by the consequences of the global financial crisis, was in complete compliance with the “stupidity pact”, as I seem to remember was Spain. Never mind. This document is a fact averse political treatise by the far right and shows how awfully wrong the European project has gone. Our long-term choice in Europe is between a loose free-trade area with our own individual currencies and economic sovereignty or a USA type federation with a single currency and todays countries having the freedom of California or Rhode Island? In a global scenario I could be persuaded to support a federation with proper democratic institutions. Ireland’s days as a stand alone republic of around 5 million population relying on its status as a corporate tax haven is quickly coming to and end and we need to come up with a model to serve the next generation with both freedom and economic security. In the words of Thomas Davis: “We hold the Ireland in our hearts more the land our eyes have seen And love the goal for which we start more than the tales of what has been We would no Irish sign efface and yet our lips would gladler hail The first born of the coming race than the last splendour of the Gael” @Tom Paine In the words of Thomas Davis: I think this what you might call patriotism trolling, I distinctly remember one of this board’s frequent posters exclaiming that Ireland could only fulfil the dreams of our ancestral revolutionaries by doing whatever the hell we were told to. I will just repeat myself: Of course, of course. Many of the figures instrumental in Ireland’s long path to independence would completely agree that only by finally accepting the primacy of foreign political interests over Irish ones and resigning ourselves to insignificance could we ever be truly free. It is on a plaque somewhere. The Faustian Bargain or only bargain was made a few decades ago after De Valera’s bleak version of sovereignty lost its appeal. The model since has been farm welfare mainly provided by Germany and a base for American multinationals. During that period the gombeens twice wrecked the economy. Each time, they later lived in superannuated bliss. There will be no federal state but better external supervision should be welcome by anyone without the benefit of collective power. The individual citizen counts for little in the misgoverned country, despite the illusion of access provided by clientism. ‘Grab what you can while you can’ is the national motto! For example Labour TD Eamonn Maloney is the only TD in the Dáil who claimed no expenses at all in 2011 – – despite many TDs claiming more than €50,000 in expenses in less than a year. Left or right, he is a rare public representative. Many I would suspect would think he’s a fool given the culture — and we want more leeway to mess things up again! @Michael Hennigan There will be no federal state but better external supervision should be welcome by anyone without the benefit of collective power. The individual citizen counts for little in the misgoverned country, despite the illusion of access provided by clientism. This “My enemies enemy is my friend” approach to economic policy making bemuses me. Why exactly do you think an EU elite is going to provide better guidance than a local one, especially given that this very same EU elite has a strongly expressed preference for faith (or strong determination if you will) over fact in economic affairs? Given the political bent of the European Commission right now it simply fantastical to imagine that their prescription for Ireland will lead to individual citizens somehow “counting for more”. This is is essentially the logic of imperialism, it would not have been out of place in Tory musings about the unsuitability of the Irish for self government pre independence. Blueprint for a deep and genuine … sounds like marriage counselling. A deep and genuine economic and monetary union?…..not while Germany is in control… http://www.telegraph.co.uk/finance/currency/9709882/Germany-displaces-China-as-US-Treasurys-currency-villain.html Genuine monetary union would mean having rendering systems in place for failed banks rather than shafting the voters . I think your reference to the USSR is extreme. Would an alternate comparison not also be the union of states in the US or UK? Not really. The Soviet Union was the one that collapsed. The current version of EMU is not sustainable for the periphery, pre-Euro currency bands might have been enough to keep going until political integration was further along, a Euro-Bancor would have been a terrific idea. However what we have now is a disaster. The current EU method of individually tailoring national fiscal policy (often under duress) to fit a centrally set monetary policy with a strong idealogical bias is immoral and impractical. It suits only the German bloc and the banks. The lack of proper popular democratic controls on EU central policy making should also rule out giving away more sovereignty. Economic policy made by neoliberal technocrats under German guidance will be economic policy that chiefly suits German neoliberals. Frankly the periphery of the EU would be a lot better off if Frankfurt and Brussels were destroyed in amusing twin natural disasters – through we would lose some excellent cafes. fyi Steinbrück’s “Tallaght Strategy” bad newz for EU Social Democrats & the ABM Brigade … Last summer, Germany’s opposition Social Democrats said they were through blindly following Chancellor Merkel’s euro-crisis course. But on Friday, the party is once again set to support a package of aid measures for Greece. The lack of an alternative does not bode well for the party in next year’s elections. http://www.spiegel.de/international/germany/german-opposition-spd-party-lacks-a-clear-course-on-the-euro-crisis-a-869988.html Our future in 51 pages – spose I better read it first. BTW Blind Biddy is working with her high level technical group on a Redprint! ‘According to the Treaties, the aim of the European Union is to promote peace, its values and the well-being of its people. It shall work for the sustainable development of Europe based on balanced economic growth and price stability, a highly competitive social market economy, aiming at full employment and social progress, and a high level of protection and improvement of the quality of the environment. It shall promote economic, social and territorial cohesion, and solidarity among Member States.’ (p.1) I’ll take a break now. Something must have happened in the other 50 pages. Back tmro. Ambrose says the Greek deal is fraying…. http://www.telegraph.co.uk/finance/financialcrisis/9712612/Greek-deal-frays-as-IMF-threatens-walk-out-on-debt-buy-back-impasse.html Current government strategy is to crawl forward grovelling for forgiveness No meaningful reforms have been made since the crisis – same faces still behind the same institutions Wealth is still going from the bottom to the top The EU doc looks like enlightened reasoning by comparison. At least the EU is suggesting change. Ireland is maintaining the status quo. I do the some benefits to a banking union in Europe but I don’t see how it resolves the debt crisis. Bear in mind, as it stands money can only come from bank loans and people may not be willing or able to organise bank loans regardless of whether there’s a banking union or not. As well as this even if people take out bank loans it brings more debt to the economy than it does money. Of course there’s no reason why money can only come from bank loans and allowing central banks to create some digital money for their governments as well as cash could lead to a resolution. Occurrences of various words in the European Commission document “Blueprint for a deep and genuine economic and monetary union” Banks/bank/banking: 81 Stability: 37 Surveillance: 32 Competitiveness 27 Democratic/Democracy: 21 Discipline/disciplining: 12 Unemployment: 5 Popular/public: 0 (in the sense of involvement) Financialization: 0 Equality: 0 Inequality: 0 Poverty: 0 Redistribution: 0 Fair/fairness: 0 Just/Justice/equitable: 0 (in a moral sense) Mods. Something wrong here..20 posts in and nobody has yet blamed the public sector for whatever random thought crosses their mind. Can someon please rectify @Anewdawn 0 posts in and nobody has yet blamed the public sector for whatever random thought crosses their mind. Can someon please rectify I blame the public sector. We need to reduce the wages of the European Commission, reduce their number and makes their terms of employment “more flexible”. They are chronically inefficient and they support failed policies (eg: EMU, collective austerity). Seriously though, this should have been a busy thread. It is an important and revealing document and yet the usual suspects do no appear too busy to open discussion on it.  CARTOON OF THE DAY Euro: Autumn in Brussels 30 November 2012 Der Standard Vienna On November 28, the President of the European Commission José Manuel Barroso presented his “blueprint for a deep and genuine economic and monetary union” which details the steps necessary to perfect an economic and fiscal banking union for the eurozone. Welcomed by many economists, the project provides for the creation of a eurozone “Minister of Finance” and “eurobonds” to pool the debt. http://www.presseurop.eu/en/content/cartoon/3099871-autumn-brussels Economists such as Sinn et al I presume!  Major weakness in this ‘BluePrint’ is the failure to precisely note the origin of the crisis in ‘dodgy unregulated capital flows’ from mainly Germany, France, Die Netherlands and the UK to weaker states leading to housing bubbles in Ireland and Spain and runaway Fiscals in Greece and Portugal. As Shay succincltly puts it above “Non adherence to [ordo]neoliberal dogma will be made a crime.”  as for Qualified Solidarity Squabbling in the Bundestag German Parliament Rubber Stamps Aid for Greece Despite serious doubts over Chancellor Angela Merkel’s handling of the euro crisis among the center-left, German parliamentarians on Friday voted to approve a new round of aid measures for Greece. Most Germans, however, would prefer to see the country go bankrupt. http://www.spiegel.de/international/germany/german-parliament-votes-to-approve-new-greece-aid-package-a-870259.html Comments are closed.