Red C poll: Irish public unaware of how EU makes decisions, unwilling to bail out Euro further

Link to poll report - http://cdn.thejournal.ie/media/2013/12/red-c-poll.pptx

Red C poll finds lack of public awareness of changes in EU decision making process and strong public resistance to pay more for survival of Euro currency

At the launch of a Red C opinion poll in Dublin today the Peoples Movement warned that Irish people were unwilling to make further sacrifices to ensure the future of the Euro currency and that they were unaware of forthcoming fundamental changes to the voting system in the EU Council of Ministers.

The Red C poll was commissioned by the EU Democrats; a Brussels based pan-EU political organization, for the People’s Movement in Ireland.  The President of the EU Democrats, former MEP Patricia McKenna , said that the findings of the poll show a lack of public awareness of forthcoming fundamental changes to decision making at EU level and also shows a strong resistance to any further suggested costs to taxpayers to help bail out the Euro currency. 

McKenna said it was notable that despite two referendum campaigns 69% of Irish people were still unaware of the most significant political change introduced by the Lisbon Treaty - which is that voting in the all powerful EU Council of Ministers will move to a population based system giving a huge increase in voting power to the big States at the expense of small States like Ireland. In 2014 Ireland will see its vote more than halved to less than 1% while Germany will see its vote doubled to 16%.

She said, these findings come as no surprise to members of the Peoples Movement because we have argued consistently that there was a deliberate policy by the Government and the political establishment to keep Irish people in the dark about this fundamental change to the EU law-making process. From November, under the new population-based system, the six largest EU States will increase their share of Council votes from 49% to over 70% while the combined voting share of the 22 smallest States will fall from 51% to less than 30%.

People’s Movement patron and artist Robert Ballagh said, the findings that 72% Irish people would be resistant to any cuts in pay, social welfare or pensions to ensure the survival of the Euro currency should provide a strong health warning to any further plans by Government for continued austerity measures.  It is significant to note that despite Irish people’s current attachment to the Euro a large majority will resist any further pain to ensure its survival.  Clearly Irish people’s generosity will only stretch so far.  The Irish taxpayer has already paid a high price for the Euro’s survival. It is now a well known fact that in order to protect the Euro project the EU and ECB put pressure on the Irish Government to provided the infamous 2008 blanket guarantee for all loans by Irish banks thus ensuring that these debts were transferred onto the backs of the Irish taxpayer.

People’s Movement member, Kevin McCorry pointed out that while Irish public opinion appears polarised in terms how concerned they believe the ECB is with Irish interests, the findings overall show a slight majority, 52% of people have little or no confidence in the ECB’s ability to take account of Irish interests. He said this is a significant finding, in that the main EU institution controlling the economies of all Eurozone countries including Ireland attracts little public confidence from Irish people.  Furthermore, it highlights yet again the serious democratic deficit at the heart of the EU structure because even if 100% of people distrusted the ECB it would be irrelevant as there is no mechanism to hold this vital decision-making institution to account.

For further information phone:

Patricia McKenna 087-2427049

Kevin McCorry 086-3150301

Robert Ballagh 016719075

Findings of Red C poll see at http://cdn.thejournal.ie/media/2013/12/red-c-poll.pptx

RED C interviewed a random sample of 1,003 adults aged 18+ by telephone between the 16^th-18^th December 2013. 

A random digit dial (RDD) method, using both mobile and landline numbers, was used to ensure a random selection process of households to be included – this also ensures that ex-directory and mobile only households are covered. 

Interviews were conducted across the country and the results weighted to the profile of all adults, by gender, age social class and region. The margin of error on this sample size is +/- 3.2%

People’s News 96

P 1 .“…. the welfare of the people as a whole?” “Ireland holds the undesirable position of being the only country currently undergoing a banking crisis that features among the top-ten of costliest banking crises along all three dimensions [..fiscal cost, increase in debt and output loss..].

P 2 . Brussels Summit takes another step towards forming a Euro Army – Lisbon in action! British and French warplanes and other military assets will be handed over to the European Union under sweeping plans to create what many believe will become a “Euro Army”.

P 3. Merkel supports EU treaty change Angela Merkel in a speech to the Bundestag ahead of the EU summit appeared to be calling for EU treaty change.

P 3 . EADS Chief calls for EU Drone budget  Tom Enders, chief executive of EADS, Europe’s biggest defence and aerospace company said that the EU needed to commit money and agree a timeline for developing and building a military drone.

P 4 . Troika consultancies: another fiddle? Alvarez and Marsal, BlackRock, Oliver Wyman, Pimco: ever heard of them? Bet not!

P 5 . Partnership for Profits. As European and Canadian trade officials continue negotiating an investment protection chapter in the Comprehensive Economic and Trade Agreement (CETA), civil society groups are demanding that this chapter be removed entirely as an affront to democracy.

http://www.people.ie/english5.html

We’ll continue to be “good Europeans”!

Recently Senator Marc MacSharry (Fianna Fáil) called for greater scrutiny of EU directives and regulations. He said that last year there were 53 acts of the Oireachtas and 590 statutory instruments, while there were 52 EU directives and 1,270 regulations proposed. “In reality, we only debated the 53 acts of the Oireachtas.”

Introducing a private member’s bill, the EU Scrutiny and Transparency in Government Bill (2013), MacSharry said the democratic deficit often suggested in respect of Europe was a reality.

But the Tánaiste, Éamon Gilmore, let the cat out of the bag, saying there was little point in lengthy debate about the substance of EU legislative measures at the time of their being transposed into Irish law, often by statutory instrument. Vigorously tugging his forelock, he explained that at that stage the policy issues were settled, and Ireland’s obligation was to apply the law agreed at the EU level.

Of course what both MacSharry and Gilmore omitted to mention is that a more potent method of scrutiny involves reviewing the legislation before agreement in Brussels, as is done, for example, in Denmark. We might then mandate our representatives. But then we wouldn’t do that, would we?

 

EU competitiveness pact: time for action!

Our politicians regularly tell us that we must work harder and longer, and for less pay, in order to be more “competitive.” We must reduce or give up our hard-earned social protections, pensions and unemployment benefits in order to be more competitive. We must be more “flexible,” which means we must sacrifice job security for ever more precarious and demanding work practices—in order to be more competitive.

Governments must observe “fiscal discipline,” rather than stimulating economies out of

recession, because such discipline makes us more competitive. Peripheral EU countries must surrender their sovereignty to the Troika in order to “regain competitiveness.” We must sign free-trade deals, such as the Transatlantic Trade and Investment Partnership with the United States, because that will make us more competitive. We must not “over-regulate” the financial sector, or impose “excessive” environmental restrictions on businesses, because to do so would be to make us less competitive.

The competitiveness dogma will not solve the present euro-zone crisis, as it is downward pressure on wages (and therefore consumer demand) and on government spending that has locked European economies into spirals of decline.

More fundamentally, this discourse is really about boosting corporate profits at the expense of the welfare of the population and of the environment. We have the option of distributing work and income more fairly, so that everyone has access to a decent wage and fulfilling work, as well as high-quality public services; but to do so requires that we redistribute income away from financial capital and corporate profits more generally and towards the mass of the population, towards public services and towards environmental protection.

The true agenda behind this talk of “competitiveness” will be evident at the European Council meeting on 19 December, which will debate a proposed new competitiveness pact. To help draft this pact the chancellor of Germany, Angela Merkel,

 

invited the president of France, François Hollande, and the president of the EU Commission, José Manuel Barroso, to a meeting in Berlin in March with fifteen members of the European Round Table of Industrialists, all of them chief executive officers of large corporations, two of whom were asked to chair a “working group on competitiveness.”

The report of that group called for, among other things, reduced taxes, a rolling back of (limited) bank regulation, further erosion of labour protection, the streamlined facilitation of mergers and acquisitions, and privatisation. As Corporate Europe Observatory, put it, “the demands of the ERT appear to amount to nothing less than putting the European Union entirely at the service of corporations.”

The TTIP, if adopted, would constitute another contractual arrangement between member- states and the Commission—a form of “troika for all”—that would see the further weakening of national labour laws, downward pressure on wages, and more ERT-style “business-friendly” regulation (or the lack of it).

This last element will increase the likelihood of another economic crisis erupting in the future. To avert such a crisis we need more, not less, regulation, especially of the financial sector.

The TTIP also features yet more intrusive mandatory rules on the economic policies of member-states, building on the Austerity Treaty and related measures that serve to reduce democratic control over vital areas of economic governance.

The pact must be rejected, for three main reasons. Firstly, it would deepen the European economic crisis by further depressing domestic demand and government spending at a time when stimulus measures are desperately needed for recovery. Secondly, it would take still more economic policy tools out of the hands of national governments and transfer them to unelected technocrats. And thirdly, in line with the aggressive “competitiveness” agenda long pursued, it would further degrade the quality of life of workers by forcing them to work longer hours for less pay in conditions of ever greater insecurity while simultaneously cutting the public services on which they depend. This is being done in the name of “competitiveness,” but in reality it is for boosting corporate profits at the expense of ordinary people’s rights to a decent life.

 

More at http://www.people.ie/news/PN-95.pdf

First published on Indymedia.ie http://www.indymedia.ie/article/104377

Brussels nervous on public reaction to EU-US trade talks

The EU Commission has discussed with member-states how best to communicate to the public the pending EU-US trade deal called the “Transatlantic Trade and Investment Partnership.” The meeting was attended by national officials in charge of dealing with

media relations. A paper accompanying the meeting, called “Communicating on TTIP,” obtained by the Danish magazine Notat outlines the EU’s media strategy during the talks.

Formal talks on the agreement began in July, but the scope of the talks and what it could mean for consumers has been the subject of controversy. “The aim is to define, at this early stage in the negotiations, the terms of the debate,” the paper states, “by communicating positively about what the TTIP is about rather than being drawn reactively into defensive communication about what TTIP is not.”

However, the first notes of concern were sounded before the last round of talks held in Brussels earlier this month. A series of consumer groups and NGOs expressed fears that an agreement could water down EU standards on environmental protection and food safety, including genetically modified products. The charge was swiftly rejected by the EU’s chief negotiator, Ignacio Garcia Bercero.

Although the negotiations are held behind closed doors, the Commission says that 350 representatives of NGOs, business and consumer groups met the chief EU and US negotiators for an update on the talks earlier this month. 

France goes to war in Africa “to save lives”

The president of France, François Hollande, has just announced another military intervention in Africa, while the plan to send an EU battle group is still under consideration.

“This operation will be swift: it does not have the vocation to last long,” Hollande said on the plan to send troops to the Central African Republic. With six hundred French soldiers already in the country, he pledged to double their number “within days, if not hours.” France is a former colonial power in the resource-rich country, and French companies own uranium mines there.

The Myth of Military Aid: The Case of French Military Cooperation in Africa, Philippe Vasset

SAIS Review Volume 17, Number 2, Summer-Fall 1997 

pp. 165-180 | http://muse.jhu.edu/journals/sais_review/summary/v017/17.2vasset.html

Meanwhile a proposal to despatch an EU battle group to the Central African Republic is subject to approval by other EU states. Britain is in charge of the standby unit of 1,500 soldiers but is reportedly not keen on backing the venture.

According to a paper drafted by EU security experts, “an EU military force could make a meaningful contribution to the restoration of a secure environment for the civilian population, thereby facilitating humanitarian and development assistance operations from the EU due to its central role as donor.” 

Peoples News No. 95.

 

Link: http://www.people.ie/news/PN-95.pdf

A Banking Union - out of the frying pan; into the fire

The bulk of the Irish elite are sleep walking the country into an Eurozone banking union

“Ireland holds the undesirable position of being the only country currently undergoing a banking crisis that features among the top-ten of costliest banking crises along all three dimensions [..fiscal cost, increase in debt and output loss..], making it the costliest banking crisis in advanced economies since at least the Great Depression. And the crisis in Ireland is still ongoing”
(Laeven and Valencia, 2012: 19-20)

“That in what pertains to the control of credit the constant and predominant aim shall be the welfare of the people as a whole”
Bunreacht na hÉireann, Article 45, Directive Principles of Social Policy

The bulk of the Irish elite are sleep walking the country into an Eurozone banking union. A European Council meeting on 19th and 20th December is expected to take significant steps towards the creation of this union which has been correctly described as the most significant step in EU integration since the introduction of the Euro.

Such a union would mean that control of banks and banking would be shifted to the supranational level so that big banks in the big EU countries could more easily gobble up the small banks in the smaller, while simultaneously taking another step on the road to fiscal and political union. Having given up the power to issue money by joining the Eurozone, advocates of banking union would pass control of credit in Ireland to banks outside the country.

An Eurozone banking union would progressively deprive national states of the ability to make banking and credit creation serve national developmental goals. It would make it impossible to insist that Irish banks should subscribe to its State debt.

Irish people do not need to be educated about the fact that we live under a system in which the interests of peoples and states are subordinated to those of bankers by the bulk of national politicians. This is now manifest in an immense burden of debt which now rests on governments, private citizens and business firms in countries such as Ireland. This situation has not altered by the country’s exit from the Troika programme.

Low-income workers, for instance, are heavily concerned about pensions, savings, and insurance. The burden of debt - both mortgage and personal - has become a permanent fixture of modern life. Meanwhile, inequality has been exacerbated by bankers and financiers earning astronomical incomes while the costs of crisis continues as a burden on society. 

The crisis has been a systemic upheaval rather than just the result of poor regulation, or of speculative excesses of finance. It was a crisis of financialised capitalism. Thus it will not be solved by the creation of a Banking Union. The traditional role of the capitalist financial system is to support development by mobilising loanable capital, which is then advanced to industrial enterprises. Contemporary finance mobilises idle money across society to earn a large part of its profits by concentrating on financial transactions or lending to individual workers. Under financialisation the circulation of money penetrates into every niche, even the most minor, of social and personal life. Banks have transformed themselves. They have rebalanced their lending toward individuals; they have also turned to fees and commissions from operating in open financial markets, rather than earning interest from outright lending. Thus, banks have added investment banking to their usual commercial banking activities. 

Meanwhile, public provision in pensions, housing, education, health, and so on, has retreated, forcing people to seek private provision from banks and other financial institutions. Attitudes to debt and private financial gain have also changed, encouraging workers to borrow as well as get caught in housing bubbles. 
Also large corporations in Ireland and more generally have been financing investment largely out of retained profits, while also being able to obtain external finance in open markets. They have become less dependent on banks; indeed, they possess independent capacity to engage in financial operations for their own profit. Small and medium sized businesses have not had this facility.

Rethinking the financial system is an urgent systemic and political task for what is left of Irish Democracy. Given the financialisation of our economies reorganising finance could have major ramifications for both economy and society. There could be immediate benefits for workers and others in terms of employment, housing, education, health and consumption. More broadly, finance could be restructured in ways that facilitate greater popular control, thus helping the struggle to transform the economy in a progressive direction.

It is glaringly obvious that democracy is absent from the financial sphere, with financial institutions being based on unbridled greed. The results for society have been catastrophic. A Banking Union would perpetuate this state of affairs rather than laying the basis for a progressive and humane alternative. As such it should be vigorously opposed.

Kevin McCorry

Check out more news and analysis in the latest Peoples' News:
http://www.people.ie/news/PN-95.pdf

First published on Indymedia.ie http://www.indymedia.ie/article/104369

Graphic from http://www.indymedia.ie/attachments/may2010/irish_pyramid_of_crony_capitalism.png

A Banking Union - out of the frying pan; into the fire

The bulk of the Irish elite are sleep walking the country into an Eurozone banking union

“Ireland holds the undesirable position of being the only country currently undergoing a banking crisis that features among the top-ten of costliest banking crises along all three dimensions [..fiscal cost, increase in debt and output loss..], making it the costliest banking crisis in advanced economies since at least the Great Depression. And the crisis in Ireland is still ongoing”
(Laeven and Valencia, 2012: 19-20)

“That in what pertains to the control of credit the constant and predominant aim shall be the welfare of the people as a whole”
Bunreacht na hÉireann, Article 45, Directive Principles of Social Policy

The bulk of the Irish elite are sleep walking the country into an Eurozone banking union. A European Council meeting on 19th and 20th December is expected to take significant steps towards the creation of this union which has been correctly described as the most significant step in EU integration since the introduction of the Euro.

Such a union would mean that control of banks and banking would be shifted to the supranational level so that big banks in the big EU countries could more easily gobble up the small banks in the smaller, while simultaneously taking another step on the road to fiscal and political union. Having given up the power to issue money by joining the Eurozone, advocates of banking union would pass control of credit in Ireland to banks outside the country.

An Eurozone banking union would progressively deprive national states of the ability to make banking and credit creation serve national developmental goals. It would make it impossible to insist that Irish banks should subscribe to its State debt.

Irish people do not need to be educated about the fact that we live under a system in which the interests of peoples and states are subordinated to those of bankers by the bulk of national politicians. This is now manifest in an immense burden of debt which now rests on governments, private citizens and business firms in countries such as Ireland. This situation has not altered by the country’s exit from the Troika programme.

Low-income workers, for instance, are heavily concerned about pensions, savings, and insurance. The burden of debt - both mortgage and personal - has become a permanent fixture of modern life. Meanwhile, inequality has been exacerbated by bankers and financiers earning astronomical incomes while the costs of crisis continues as a burden on society. 

The crisis has been a systemic upheaval rather than just the result of poor regulation, or of speculative excesses of finance. It was a crisis of financialised capitalism. Thus it will not be solved by the creation of a Banking Union. The traditional role of the capitalist financial system is to support development by mobilising loanable capital, which is then advanced to industrial enterprises. Contemporary finance mobilises idle money across society to earn a large part of its profits by concentrating on financial transactions or lending to individual workers. Under financialisation the circulation of money penetrates into every niche, even the most minor, of social and personal life. Banks have transformed themselves. They have rebalanced their lending toward individuals; they have also turned to fees and commissions from operating in open financial markets, rather than earning interest from outright lending. Thus, banks have added investment banking to their usual commercial banking activities. 

Meanwhile, public provision in pensions, housing, education, health, and so on, has retreated, forcing people to seek private provision from banks and other financial institutions. Attitudes to debt and private financial gain have also changed, encouraging workers to borrow as well as get caught in housing bubbles. 
Also large corporations in Ireland and more generally have been financing investment largely out of retained profits, while also being able to obtain external finance in open markets. They have become less dependent on banks; indeed, they possess independent capacity to engage in financial operations for their own profit. Small and medium sized businesses have not had this facility.

Rethinking the financial system is an urgent systemic and political task for what is left of Irish Democracy. Given the financialisation of our economies reorganising finance could have major ramifications for both economy and society. There could be immediate benefits for workers and others in terms of employment, housing, education, health and consumption. More broadly, finance could be restructured in ways that facilitate greater popular control, thus helping the struggle to transform the economy in a progressive direction.

It is glaringly obvious that democracy is absent from the financial sphere, with financial institutions being based on unbridled greed. The results for society have been catastrophic. A Banking Union would perpetuate this state of affairs rather than laying the basis for a progressive and humane alternative. As such it should be vigorously opposed.

Kevin McCorry

Check out more news and analysis in the latest Peoples' News:
http://www.people.ie/news/PN-95.pdf

First published on Indymedia.ie http://www.indymedia.ie/article/104369

Graphic from http://www.indymedia.ie/attachments/may2010/irish_pyramid_of_crony_capitalism.png

Austerity stripping away Europe’s human rights: Council of Europe

“Austerity” measures imposed by international creditors on member-states are eroding the social and economic rights of people, says the Council of Europe.

Cuts in public expenditure and selective tax increases aimed at curbing public deficits have not achieved their stated aims. Instead the rights to decent work and adequate standards of living have rolled back, contributing to deepening poverty in Europe.

 The report notes that civil and political rights have also been eroded as some governments exclude people from having any say in austerity proposals, provoking large-scale demonstrations.

The latest twist is a revised draft law on public order in Spain that cracks down on civil disobedience. The law, if adopted, would mean that people could be fined up to €30,000 for insulting a government official, burning a flag, or protesting outside the parliament without a permit. Covering faces or wearing hoods at demonstrations would also be an offence. Judges would be able to impose fines of up to €600,000 for picketing at nuclear plants or airports or if demonstrators interfere with elections.

The EU Commission says it is unable to comment on the draft law because it is a national issue.

The Council of Europe in a report in October also condemned the Spanish police for their disproportionate use of force against anti- austerity protests. Undercover police at demonstrations are not held accountable for their actions, it says.

The report says that most national deficits did not result in unsustainable public expenditure from before the crisis but from the public rescue of financial markets. The rescue cost an estimated €41⁄2 trillion between 2008 and 2011. The economic downturn and historical unemployment rates means that the worst- affected member-states lost out on vital tax revenue. Those worst affected include children and young people, the disabled, the elderly with low pensions, and many women. 

“MALE” and “FEMALE” drones—what next?

The German government is promoting the production of combat drones by European arms industries. Seven EU countries, including Germany, have decided to accelerate the development and production of these highly controversial weapons by companies in EU member-states.

Production is scheduled to begin by 2020. The recent decision to waive the purchase of American and Israeli drones shows that Germany aims at the EU consolidating its own independent arms industry—the prerequisite also for an independent global military policy. Germany is also increasing its arms exports to countries outside the EU and NATO, as documented by the government’s recent Arms Exports Report. This is designed to counterbalance cuts in the European and North American military budgets and to consolidate its arms industry.

At the recent meeting of the European Defence Agency in Brussels seven EU member-countries agreed to accelerate the production of combat drones. The objective is to produce “medium- altitude long-endurance” (MALE) drones for various purposes, including warding off migrants in the Mediterranean Sea as well as for military strikes. This project is to be discussed further at the next EU defence summit on 19 December.

Germany is one of the seven countries in this group, which the French minister of defence, Jean-Yves Le Drian, calls a “club of drone-using countries.” The group also includes not only the Netherlands and Poland but also crisis- ridden Spain, Italy, and Greece, whose populations are suffering draconian austerity measures.

The decision to embark on the independent European production of drones shows that more than Germany is planning the use of combat drones. Major-General Jörg Vollmer, commander of German troops in northern Afghanistan, recently pressed for the use of combat drones by the German army. An “unarmed drone” can be used for surveillance but not for intervention; an “armed drone,” however, can be used for “immediate reaction.”

Beyond this decision, the competition for contracts between various European consortiums also reveals the power rivalries within the EU. The French Dassault Group is testing a stealth combat drone, “Neuron,” in whose development Spanish, Italian, Greek, Swedish and Swiss companies are also involved.

Dassault and British Aerospace are also working jointly on the development of a stealth drone, “Telemos,” to be ready for use by 2018, a project that Germany is observing with apprehension. In November 2010 France and Britain launched a far-reaching military and armaments co-operation, which would enable them to conduct military operations without German approval, thereby overcoming German dominance within the EU, at least in the military field. German government advisers are already speaking of a new “Entente Cordiale.”

In the field of drone production Germany is countering the British-French “Telemos” project with, at the core, a German-French project. Last summer EADS, builders of the Airbus, presented the “future European medium-altitude long-endurance” (FEMALE) drone programme, with EADS, Dassault and the

Italian firm Finmeccanica participating. The government-sponsored BICAS project, based in the premises of EADS at Ottobrunn, near Munich, is said to play a significant role in the development of the EADS combat drone.

An report issued in October by the EU high representative for foreign and defence policy, Catherine Ashton, reiterated the appeal to member-states to develop drones with co- operative projects. And EU leaders will call for more co-ordination on drones when they meet in Brussels this month, according to a draft of the summit’s conclusions seen by the business site Bloomberg. The meeting, on 19 and 20 December, will endorse the call by Ashton for the building of a community of states that use remotely piloted aircraft, as established last month by France, Germany, Spain, Italy, Greece, the Netherlands, and Poland. The EU will encourage “close synergies” between states and the EU Commission on regulating these aircraft, along with “appropriate funding from 2014,” the draft says. 

What a load of baloney! The claim of a successful Irish programme is complete rubbish.

After the burst of the property market bubble, following the post-2008 credit crunch, the EU Central Bank demanded that the government shift the losses of five Irish banks, worth €60 billion, onto the shoulders of the taxpayers— citizens who had neither a legal nor a moral duty to bear the burden of that load.

Why? To shield the German banking system from the repercussions of taking large losses and to prevent “contagion,” which had the potential to derail the political project dearest to the hearts of all Europhiles: the euro.

We took our wrath out on that government and elected another one that nonetheless saw as its priority the full implementation of the savage “austerity” policy that came attached to the huge loans the government accepted in order to repay the banks’ losses. The result was a catastrophic downward spiral for Ireland’s economy and the well-being of its people.

Now the media are full of the “good news” that this “fiscal consolidation” scheme has succeeded: that Ireland has returned to the markets; that we now have the first tangible proof that the bail-out worked; that Ireland is about to regain its sovereignty, and Irish people can once more look the Germans, the French and the Dutch proudly in the eye, restored to the land of the free and the creditworthy.

So the EU elite have decided to declare victory, with Ireland as exhibit A, to declare that the combination of bail-out loans and severe austerity works. And if that requires being economical with the truth, so be it.

For those who don’t wish to be economical with the truth, and those who are bearing the burden, let’s look at some numbers:

• Number of people employed: Down by 13 per cent since January 2008.

• Number of people unemployed: Up from 107,000 in January 2008 to 296,300 today.

• Annualised domestic growth rate: –1.2 per cent.

• Net emigration: The number of people leaving the country is higher than the number coming in by 35,000. Gross emigration was more than 80,000 last year alone. In six years it went from the highest net immigration level in Europe to the highest emigration, overtaking the Baltic states and Kosovo. Meanwhile a group of students and other young people in Dublin has launched a campaign called “We’re not leaving” after the Government sent out letters encouraging young people to seek jobs abroad.

• Government deficit as a proportion of GDP: 7.3 per cent.

• Public debt: 121 per cent of GDP in 2013, up from 91 per cent in 2010 and 105 per cent in 2011.

 • Household debt: 200 per cent of GDP. There are people living on €50 per week or less after paying their bills. We have had eight austerity budgets since 2008; in the community sector there have been cuts of 35 to 40 per cent.

• Value of assets underpinning household debt: –56 per cent since the crisis began.

•Mortgages in arrears for more than six months: 17 per cent of all mortgages.

How can anyone claim that this constitutes a “success story” and a cause for celebrating the end of the debt-deflationary spiral?

There are two arguments on which EU triumphalism is built: firstly, Ireland’s spectacular export performance (annual exports exceeding GDP), and secondly, the collapse of its ten-year government bond yields to levels that make it possible for the country’s return to the money markets, rather than a return to the ESM for more bail-out loans.

When we turn to exports we find that Ireland is the largest floating tax haven on the planet. Companies like Google and Apple famously launder their income through the International Financial Services Centre in Dublin in a manner that massively reduces their tax payments while at the same time bolstering Ireland’s GDP to ridiculously fictitious levels. (Anyone who disputes this must offer an alternative explanation of the fact that each of Ireland’s Google employees produces €4.8 million annually!)

All this means that the wonderful export statistics translate neither into corporate taxes nor into a significant number of jobs from which the government could claim income tax and indirect taxes so as to service its debts.

Turning to the government bond yields, an interesting question arises: Why are they so low when the data above reveals that Ireland, in view of the sluggish domestic economy, remains quite incapable of refinancing its gargantuan public debt? Why are bond dealers no longer dumping Irish government bonds?

The answer is simple: because they have concluded that the ECB and Germany will never let Ireland default, given the EU’s desperate need to proclaim the country as “proof” that their policies are working. Bond dealers, put simply, trust that the European Central Bank, either by means of Mario Draghi’s “outright monetary transactions” (a scheme under which the ECB makes purchases in secondary, sovereign bond markets, under certain conditions, of bonds issued by euro-zone states) or otherwise, will find ways of allowing Ireland to redeem its bonds, even if the Irish people and their government remain firmly lodged in debt prison.

Ten-year government bond yields were at approximately 5 per cent in Ireland until early 2010, before the 2010 bail-out. They then spiked about the beginning of 2011, because of the bail-out and the uncertainty surrounding that action. But they quickly came down as investors realised that the country wasn’t going to go bust, thanks to its access to the said bail- out funds.

By 2012 the interest rates were close to 6 per cent. And with the announcement of the “outright monetary transactions” that year they crawled down to below 4 per cent at the beginning of 2013.

Now investors are convinced that (a) the Troika and ECB would back the country so long as it adheres to the rules and (b) Ireland would indeed adhere to those rules. If we assume that these two hypotheses are true—which they probably are—investors are looking at a 4 per cent yield for almost no risk in an environment where yield generally is completely dead.

This has nothing to do with “recovery,” as the government is falsely proclaiming—quite the opposite, in fact. The recent growth figures, for what they are worth, are totally skewed by foreign profits being laundered through the country. (Have a look at the “Fixing the Economists” blog: http://fixingtheeconomists.wordpress.com/ )

 The claim of a successful Irish programme is complete rubbish. The government has got its interest rate down through a mix of Troika-ECB backing and confidence in the government’s ability to follow the rules; but all the underlying economic problems are still there, and will not go away. The Irish debt-to-GDP ratio will continue to rise in the foreseeable future.

Since the 1980s Ireland has tried to run its economic policy essentially by appealing to the rest of the world—that is, by “sucking up.” Whatever everyone else is saying, the Irish government will do with gusto. Mix this with a little bit of clever behind-the-scenes diplomacy and you have Irish economic policy.

After the crisis the Fine Gael and Labour Party government essentially followed the formula that is supposed to have worked so well in the 1990s and 2000s. So when the Troika said, Get your bond yields down through compliance ... the government did exactly that.

There is a widespread belief that this will automatically lead to economic growth. This belief is entirely irrational, but that matters little. The politicians have convinced us that, as long as they achieve this target, all else will be well.

There is a profound sense of injustice but also a feeling that we can’t do anything about it: that we’re a small country on the periphery of the EU, powerless against the EU Commission, the ECB, and the IMF. And as long as we avoid the fundamental questions of membership of the euro and our continuing relationship with the EU, it will remain so.

A national debate on these issues would be a first but necessary step to empowering the Irish people once again. 

And NATO chips in!

The secretary-general of NATO, Anders Fogh Rasmussen, has called on EU countries to step up co-operation on defence, arguing in favour of moves towards a borderless EU defence market and intensified integration on military matters. He joined EU defence ministers, including Alan Shatter, for an informal meeting in Lithuania two weeks ago, where defence co- operation featured high on the agenda.
“I intend to bring the issue of co-operation between NATO and the European Union on defence matters and the need for Europe to intensify its efforts in capability development and invest more in security,” Rasmussen said at the alliance’s monthly press briefing in Brussels. “It is important for Europe and it is important for the transatlantic alliance, because a strong Europe is also a strong Alliance.”
 In Lithuania the EU ministers discussed a policy paper tabled by the European Commission in July that called for a relaunching of industrial co-operation on defence, including co- operation on drones, where Europe lags behind the United States and Israel.

EU heads of state and heads of government will revisit the matter at their December summit in Brussels. But the Commission believes that deep cuts in national defence budgets following the financial and economic crisis make a case for pooling resources. From 2001 to 2010 EU defence spending declined from €251 billion to €194 billion, while defence budgets increased significantly in emerging markets, according to the Commission.
“In times of scarce resources, co-operation is the key,” said the president of the Commission, José Manuel Barroso, “and we need to match ambitions and resources to avoid duplication of programmes.”
Rasmussen echoed this sentiment, saying at his monthly address that, “for all of us, the key is co-operation: to work together to make us all strong, not to duplicate each other’s efforts and thereby make us weak.”
Rasmussen sketched a vision in which the EU had “effective and modern defence industries, where competition drives innovation, where national borders are no barrier to international co-operation, and where effective equipment is developed in a cost-effective way.” And he went further, saying that closer co-operation on defence “is a vital part of Europe’s ability to ensure its future security.”

On 19 November EU defence ministers will meet, and on 19 and 20 December the EU summit will discuss, and possibly endorse, the Commission’s communication. 

Fine Gael and EPP beat the drums

Europe should create a civilian and military crisis operations HQ under EU command, according to a report by centre-right members of the EU Parliament.
The proposal, contained in a policy paper by deputies of the European People’s Party, of which Fine Gael is a member, says that “heads of state and government have to start building stand-by forces under Union command.” It calls for EU leaders to commit themselves to defining the union’s security interests, giving priority to its strategic objectives and linking these with operational deployments. This should include a definition of European defence interests and its geographical priority zones.
Launching the paper, Michael Gahler, Arnaud Danjean and Krzysztof Lisek stated that “deepening the EU’s security and defence co- operation will help slash procurement costs and allow the EU to react faster to international crises.”
Leaders will debate the idea of EU-level military integration at a summit in December.
Enda Kenny is a vice- president of the European People’s Party, and Fine Gael has been selected to host the congress to launch the election campaign of the EPP. The congress will take
place in Dublin on 6 and 7 March 2014 at the Dublin Convention Centre. Two thousand delegates are expected from member-parties throughout the EU.
The EPP is the largest political grouping at the EU level, with thirteen heads of government,

thirteen members of the EU Commission, the largest group in the EU Parliament, and seventy-three member-parties in forty countries.
Meanwhile a report by the European Commission in July warned that the bloc’s military strength was diluted by overlapping capacities and defence procurement at the national level. In a nod to this, the EPP described it as an “unacceptable situation to have 10 different versions of one European attack helicopter or to have six different versions of one European military transport aircraft.”
The Commission’s “ideas paper,” also designed to feed into the summit talks, called on member-states to review national defence capabilities and to identify the hardware needed for the protection of EU countries’ interests.
Between them, EU governments spent €194 billion on defence in 2011 (down from €251 billion in 2001). Defence R&D spending was €9 billion. 

EU military spending: the “elephant in the room”

At a time of harsh cuts in social services, it is morally unjustifiable to spend money on weapons instead of investing it to create jobs and tackle poverty, argues a new report by the Transnational Institute. High levels of military spending by EU states have played an important part in the unfolding EU debt crisis, continuing to undermine efforts to resolve that crisis.
The Transnational Institute was established in 1974 as a group of researchers committed to providing intellectual support to movements struggling for a more democratic, equitable and environmentally sustainable world.
The report, Guns, Debt and Corruption: MilitarySpending and the EU Crisis, demonstrates how military budgets throughout Europe have been largely protected, at a time of severe social cuts. Military expenditure totalled €194 billion in 2010, equivalent to the combined annual deficit of Greece, Italy, and Spain.

The latest data published by the Stockholm International Peace Research Institute suggests that there is little change in these trends. The report reveals how high levels of military spending in such countries as Greece, Cyprus and Spain, which are at the centre of the euro crisis, played a significant role in their debt crises. And much of the military spending was tied to arms sales by creditor-countries, including Germany and France.
In Portugal and Greece, several major arms deals are being investigated for serious irregularities. Yet creditor-countries continue to hawk new arms deals to debtor-countries while demanding ever more stringent cuts in social services.
The report argues that resolving the debt crisis will require cancellation of the debt tied to corrupt arms deals and a redirection of military spending towards social needs. It shows that spending on education and public transport creates twice as many jobs as investment in defence.
The author of the report, Frank Slijper, said:
“Global military spending was still at a record €1.3 trillion in 2011 despite the global economic crisis. Even in Europe most countries still spend more than ten years ago. The only austerity that Europe really needs is one imposed on the military and the arms industry.
“It is time for Brussels and EU member states to publicly acknowledge the ‘elephant in the room’ of the current EU debt crisis and that is the role of military spending. At a time of harsh cuts in social services, it is morally unjustifiable to spend money on weapons that should be invested in creating jobs and tackling poverty.”
 Frank Slijper will speak in Dublin in October at a conference on EU militarisation jointly sponsored by the People’s Movement and the Peace and Neutrality Alliance.

■ www.pana.ie
■ www.stoparmstrade.org 

Historic reform of CAP?

Just how historic is the common agricultural policy “reform deal” that wound up the Irish EU presidency of the EU? The full text will not be available until the autumn, and it has still not  received the final approval of the European Parliament and the member-states, but that has not stopped the minister for agriculture, Simon Coveney, from claiming that the deal “represents a hugely significant development in the history of the CAP.”

The policy reform will cover the years 2014–2020, gobbling up nearly 40 per cent of the EU’s €960 billion multi-year
budget during that time. Its centrepiece is a requirement that 30 per cent of the roughly €278 billion in direct subsidy payments to farmers—the programme’s biggest share—be conditional on their satisfying new environmental rules. But environmental groups complained that agribusiness interests succeeded during negotiations in watering down these standards to a point where they are meaningless.
Historically, CAP supports have been tied to volume of production, and therefore have benefited big farmers most. Significantly, the deal does not include the cap of €300,000 on payments to large landowners sought by the EU commissioner for agriculture and rural development, Dacian Cioloş. Also, proposals that would prevent certain landowners, such as airports, golf courses, and campsites, from claiming EU farm subsidies remain provisional and may never become policy.
At present the CAP is based on a “two-pillar” structure. Pillar 1 is mostly composed of direct payments to farmers and landowners in the form of the single payment scheme (SPS) and accounts for about four-fifths of total CAP spending.
Pillar 2, known as “rural development,” aims to promote economic, social and environmental development, with a rationale similar to that of the EU’s structural and cohesion funds—but with a specific emphasis on rural areas—and accounts for a fifth of total spending.

Pillar 2, therefore, has more of an environmental focus, requiring each rural development scheme to ensure that natural resources and the landscape are safeguarded. In addition, a quarter of the funds must be spent on improving the countryside and the environment.
Promoting “rural employment” is another CAP objective, and through pillar 2, support can be given for the “diversification of the rural economy.” But it has always been far from clear whether the CAP is the best vehicle for bringing about rural economic development and the creation of employment.
An OECD report stated: “Pillar 1 reforms create changes in the mindset of farmers who adopt a strategy of alterations in land use aiming to reach the maximum level of revenue. This has negative consequences for rural employment.”
Equally, a number of studies have pointed out that the CAP has had a limited or outright negative effect on rural employment. The OECD analysis found that the 2003 reforms “have not increased jobs in the regions, at best they manage only to maintain the existing level,” while a report on farms in Eastern Germany in 2010 found that CAP support gave rise to “few desirable effects on job maintenance or job creation in agriculture.”
The effect of rural development aid was non- existent, while parallel CAP measures resulted in job losses; for every €1 million spent on supporting processing and marketing on East German farms, seven jobs were lost in the short term and a further five in the long term.
The study concluded that “the relevant decision makers should reconsider whether the CAP ... is a useful policy to promote job creation in agriculture.” Pillar 1 is provided directly through the EU budget, while pillar 2 is subject to joint financing from the EU and national governments. The CAP’s internal subsidies are complemented by external tariffs and quotas on imports from third countries.
 The CAP is irrational in how money is raised and how it is spent. There remains no clear link between the wealth of a country and how much it receives from the CAP. Latvia, for example, gets £115 per hectare from the EU’s direct subsidies, the least of all member-states, despite average farmers’ income being only 35 per cent of the EU average. Lithuania, whose farmers are the poorest in Europe in absolute terms, receives the third-smallest amount from the scheme.

In contrast, wealthier member-states, such as France and Ireland, continue to do well out of the CAP. Nevertheless the president of the IFA, John Bryan, has dismissed the spin that is being put on the reform deal, saying: “The reality is over 75,000 farmers will have some level of cuts imposed on them. Over 50,000 farmers are facing severe cuts to their incomes, ranging from 15 to 35 per cent, when you take into account other compulsory deductions that farmers will face as part of the CAP Reform and the overall MFF agreement.”
Bryan also says the CAP deal fails totally to deal with low incomes in vulnerable sectors. Europe’s biggest agricultural producer, France, will continue to scoop the largest share of CAP funds, at about €8 billion a year, followed by Spain and Germany, with about €6 billion each. So it’s another case of “reform” EU-style.