Euro Plus Pact is a threat to democracy

New proposals on economic governance, including the Euro Plus Pact, are an attempt to institutionalise austerity policies at the heart of the EU, writes Paul Murphy, MEP.

Over the past number of years, and in a more accelerated manner in recent times, one of the most significant topics being touted in the Parliament and the institutions of the European Union is that of economic governance.

And on the surface, any discussion on economic governance should seem like a welcome topic, particularly considering the significant role of a lack of governance and of regulation in aggravating the current economic crisis. But for the European Commission, Council and Central Bank, economic governance is something far different than what ordinary people might assume it is – increased supervision of the banks, ending the reckless gambling policies of the financial speculators etc.

For these institutions, economic governance is about further diminishing democracy in the EU by institutionalising European shock therapy to ensure that governments implement neo-liberal measures in the face of major movements of opposition. Speaking at an awards ceremony in Aachen yesterday, Jean-Claude Trichet, President of the European Central Bank summed up the thinking of the European elites when he described his dream of seeing an EU Finance Ministry with a potential veto over national economic policies.

While Trichet’s comments were posed as hypothetical, they are no such thing and only go very slightly further than plans that have already been agreed by the Commission and Council. The thrust of his proposals are contained in the economic governance and Euro Plus Pact proposals that have been agreed to by the Irish government. Under these proposals, national budgets will be subject to the “surveillance” of the European Commission and Council, with budgets being presented there before any debate in national parliaments. The “Stability and Growth Pact”, which mandates Member States to keep their budgets within certain narrow limits, is to be strengthened with fines of up to €700 million for Ireland in case of breaching these limits. Finally, a “scoreboard of austerity” will be used with countries given targets for austerity that must be met or they will face massive fines.

All of this represents a further assault on democratic rights and an attempt to institutionalise austerity policies at the heart of the EU. Neoliberal governments across Europe and a neoliberal European Commission are nothing new. However, the proposals for economic governance are an attempt to make these policies permanent, regardless of movements of mass opposition.

Instead of a race to the bottom across Europe, a Europe based on solidarity is needed. A common response of working class people across Europe is needed to defeat this assault against democracy and workers’ rights. I call on the European trade union movement to prepare a mass campaign against this economic governance including European-wide industrial action.

This Sunday, 19 June sees a Europe-wide protest against the Euro Pact. Demonstrations are planned in Dublin, Limerick, Cork and Galway. See here for more details. 

Paul Murphy is Socialist Part and ULA MEP for Dublin. This piece was originally published on his website,