Presentation to Joint Committee on EU Affairs 7 March 2013 by Paul Murphy MEP A 'silent revolution' of authoritarian neo-liberalism “What is going on is a silent revolution - a silent revolution in terms of stronger economic governance by small steps. The Member States have accepted - and I hope they understood it exactly – but they have accepted very important powers of the European institutions regarding surveillance, and a much stricter control of the public finances.” Commission President Barroso at the European University Institute, June 2010

What does 'authoritarian neo-liberalism' consist of? Technocratisation of economic policy making Making neo-liberalism law and “making socialism [in reality Keynesianism] illegal” (Martin Callanan MEP) Transfer of powers from elected governments to unelected bodies

A response to the crisis or 'never waste a good crisis'? The “shock doctrine” “at the drafting stage, the implications of national budgets and of major national fiscal policy measures [should be] reviewed at the level of the Union” European Roundtable of Industrialists, 2002 “eurogroup will... have to assume greater responsibility in improving economic governance in the euro area, and put greater emphasis on domestic and competitiveness imbalances, which have proved in most recent developments to be a major source of fiscal instability” BusinessEurope, Spring 2010

'Authoritarian Neo-liberalism' so far... Non-legislative measures: Removal of elected governments, ECB 'ransom notes', Troika 'supervision' Legislative measures: 'Six Pack', 'Fiscal Treaty', 'Two Pack' Stability & Growth Pact targets (3% deficit, 60% debt to GDP ratio) binding and subject to fines if not met Rules in national law (of “binding force and permanent character”) re structural deficit (0.5%) and S&G targets Excessive Deficit Procedure Scoreboard system – going beyond S&G Change to voting rules in Council – ability to lose vote 'European Semester'

The 'Two-Pack' “Common budgetary timeline”: “In the exceptional cases where... the Commission identifies... particularly serious non-compliance with the budgetary policy obligations... [it] should request a revised draft budgetary plan, in accordance with the provisions of this Regulation.” “Economic partnership programme”: “detailing the policy measures and structural reforms needed to ensure an effectively durable correction of the excessive deficit” “Enhanced Surveillance”

Much much more in the pipeline... 'Towards a Genuine Economic and Monetary Union' paper: “The reforms introduced … through the creation of the European Semester … are a step in the right direction. But there is a need to go further...” (Dec 2012) “A fully-fledged integrated budgetary framework would require the establishment of a Treasury function with clearly defined fiscal responsibilities.” (Oct 2012) “It is important … to make the framework for policy coordination more enforceable to ensure that unsustainable policies do not put stability in EMU at risk. Such a framework would be particularly important to guide policies in areas such as labour mobility or tax coordination.” (June 2012) “arrangements of a contractual nature between Member States and EU institutions...” (Dec 2012)

What's so bad about authoritarian neo-liberalism? Fundamentally undemocratic Institutionalised austerity means deeper crisis: Eurozone GDP down 0.6% in Q4 2012, 0.9% in million people (including 5 million youth) unemployed But austerity is working: Bondholders protected, profits up across EU, process of privatisation, wages pushed down €750 billion in 'excess cash holdings' in listed EU companies in 2011 (McKinsey: Investing in growth: Europe's next challenge) Fall in private investment in EU27 of €350 billion, 4 times fall in GDP, 20 times drop in consumption Public investment, socialist policies precisely what is needed

What is to be done?