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. 

EU threatened Greek broadcaster days before it went off the air

Revelations about a dispute with the Greek national broadcasting corporation, ERT, over the pro-EU news channel Euronews have cast doubt on the EU Commission’s claim to have been an impartial bystander in the decision to close the station.
The Commission threatened to take “action” against ERT for failing to broadcast pro-EU news days before it was taken off the air. The vice-president of the Commission, Viviane Reding, told a member of the EU Parliament that the Commission planned “action at European Union level” against ERT after it cancelled a contract to broadcast the subsidised Euronews.
The EU Commission, which effectually rules Greece as part of the so-called “Troika,” which also includes the European Central Bank and the International Monetary Fund, claimed last week that it had “not sought the closure of ERT”—even if Greece is under constant pressure to sack government employees. The Commission admits, however, to a dispute with ERT over Euronews, which the ERT manage- ment forced off the air in December 2012.

Greece’s highest administrative court subsequently ruled that the government must reopen ERT immediately until a replacement station is ready to go on air.
In a blow to the conservative prime minister, Antónis Samarás, who sought to replace the state with a reduced operation named NERIT, the Council of State ordered the competent ministers to take all necessary action to return ERT’s world, national and regional television and radio signals to the airwaves and to restore its web sites. Sacked ERT employees continued broadcasting by live-stream hosted by the European Broadcasting Union, which has demanded that the station be reopened.
The latest proposal by Samarás would see all 2,600 ERT employees being rehired on fixed two-month contracts, after which the new slimmed-down station would take over.
Meanwhile the Turkish channel Hayat TV is also to be closed down, because it broadcast the Taksim Square protests. The Radio and Television High Commission says it investigated “the complaints received for our coverage of the Taksim Gezi Park protests” and made a decision to close it. Four other television channels have been fined by the radio and television commission because of their coverage of the recent events.
All of which is unlikely to happen here, as RTE continues to broadcast uncritical Brussels- speak. 

EU Austerity kills!

EU Austerity kills! People’s Movement chair, former MEP Patricia McKenna, says:

‘The Government is understandably hesitant about marking “Europe Day” on 9th May with any great fanfare.
Two of the central assertions of the “Europeanism” that the day is supposed to honour – the EU as a “peace project” and that small states by “pooling” sovereignty increase their influence over larger ones and in the world – stand exposed as ideological cover for political and economic interests that have been the engine of EU integration.
There has always been a neo-imperial dimension to the EU integration project.
The establishment of the European Coal and Steel Community in 1951 was to facilitate German rearmament at the start of the cold war. In December the EU will discuss further militarisation. German chancellor Merkel and other EU leaders have compunction in presenting plans for a “European army” within wider EU integration.
In addition the EU which purported to unite Europe is now dividing its peoples and nations from one another in an unprecedented way.
The doctrine about “pooling” sovereignty is equally dubious. For EU members, most laws come from Brussels and the reality is that sovereignty “pooled” is in fact sovereignty surrendered.’
People’s Movement patron Robert Ballagh says:
‘As people face into years of misery and impoverishment to make the euro-currency work and keep the EU “project” on the road, EU President José Manuel Barroso has announced that the unelected EU Commission will set out a range of EU Treaty changes by early next year that will be of such a far reaching nature as to seem like “political science fiction” and that these changes “will be reality in a few years time, sooner than we might think”.
The vision of the unelected Eurocrats is that the peoples of the euro-zone countries must completely abandon their national independence and democracy, reversing centuries of democratic and social gains in order to try to save the euro. 

The prospect ahead is one of stagnation as the euro zone prevents peripheral member states like Ireland from dealing with the immense burden of debt which now rests on their governments, private citizens and business firms, imposing instead a continuous assault on living standards and a pro-cyclical austerity regime that is geared to ensuring that creditor banks, investors and governments are compensated to the maximum for their improvident lending during the bubble years.
“Europe Day” is part of an elite rather than a democratic project and should be marked as such.’ 

It’s time to say No!

We can be certain that the overwhelming majority of the population will be worse off as a result of budget 2013. The policy of austerity has been a disaster for people on low and middle incomes. Yet some people have gained during this austerity period. The latest ‘Survey on Income and Living Standards’ reveals that the lowest 10% of our population suffered a fall of nearly 20% in their income while the richest 10% saw their income rise by 8%. Meanwhile, the government predicts that real wages will continue to fall for the next three years.
But that notwithstanding, between now and 2013 the Government has agreed to pay in the ‘greater interest’ of the European banking system and the euro €31 billion plus €17 billion interest on the now defunct Anglo-Irish and Irish Nationwide alone. This is at the insistence of the EU’s European Central Bank. The cost to the state in terms of direct transfers to the banking sector is approximately €64.1 billion. This is equivalent to 40 per cent of GDP making the Irish bank bailout the costliest bank bailout in Europe since the Second World War if measured as a proportion of national GDP.
In addition, the European Stability Mechanism Treaty commits Ireland to ‘irreversibly and unconditionally’ contribute €11 billion in various forms of capital to the ESM Fund, a fund for which there is no guarantee that we could access if it was to prove necessary.
There is no sign that the country faces any other condition but further social and economic devastation in the coming years with a succession of severe government budgets of which budget 2013 is merely the latest.
Budget 2013 is planned to suck about €3.5 billion out of the already shaky economy, putting more jobs at risk and deepening stress, poverty and anxiety for many in our society.
It might be excusable if the money were to be used for productive social measures but €3.1 billion – that’s €3,100 million – is to be blown on the Anglo promissory notes on March 31st next. That is the greater part of the take from the new taxes, charges and cuts introduced in the budget and it will be spent on a bank that no longer exists and that was bailed out under pressure from the EU/ECB to ensure that ‘no bank should fail’.
The then government made a political choice to ‘save the euro’ and ‘prevent contagion’ and the present governing parties, before they came to power, assured us that they would not, unlike the previous administration, support Anglo bondholders . Who could forget Joan Burton, night after night telling of the big bonfire she would build for them or the self- assurance of Enda Kenny as he proclaimed ‘not a penny for Anglo’, a sentiment echoed by even Leo Varadkar!

Well, another austerity budget is upon us, as we head into Ireland’s austerity presidency. No doubt this one, like budget 2012, was written in Brussels and Frankfurt and approved by the Bundestag before the Irish government had sight of it. They were just more careful this year and avoided leaks.
Of course, most of the Anglo bondholders have been paid off by now on the strength of the promissory note (a sort of government IOU). So effectively, on March 31st, we will be paying €3.1 billion to the Irish Central Bank – which we own – and it will then engage in a balance sheet exercise, effectively burning the money and, in a supreme if painful irony, burning the people of Ireland instead of the bondholders.
This must be halted because this burning of the Irish people will be an annual event carried out at the behest of a government we elected to stop it. The government doesn’t have to pay this €3.1 billion – there is no way of legally compelling them to, should they choose not to do so.
It’s time to say No! 

It’s time to say No!

We can be certain that the overwhelming majority of the population will be worse off as a result of budget 2013. The policy of austerity has been a disaster for people on low and middle incomes. Yet some people have gained during this austerity period. The latest ‘Survey on Income and Living Standards’ reveals that the lowest 10% of our population suffered a fall of nearly 20% in their income while the richest 10% saw their income rise by 8%. Meanwhile, the government predicts that real wages will continue to fall for the next three years.
But that notwithstanding, between now and 2013 the Government has agreed to pay in the ‘greater interest’ of the European banking system and the euro €31 billion plus €17 billion interest on the now defunct Anglo-Irish and Irish Nationwide alone. This is at the insistence of the EU’s European Central Bank. The cost to the state in terms of direct transfers to the banking sector is approximately €64.1 billion. This is equivalent to 40 per cent of GDP making the Irish bank bailout the costliest bank bailout in Europe since the Second World War if measured as a proportion of national GDP.
In addition, the European Stability Mechanism Treaty commits Ireland to ‘irreversibly and unconditionally’ contribute €11 billion in various forms of capital to the ESM Fund, a fund for which there is no guarantee that we could access if it was to prove necessary.
There is no sign that the country faces any other condition but further social and economic devastation in the coming years with a succession of severe government budgets of which budget 2013 is merely the latest.
Budget 2013 is planned to suck about €3.5 billion out of the already shaky economy, putting more jobs at risk and deepening stress, poverty and anxiety for many in our society.
It might be excusable if the money were to be used for productive social measures but €3.1 billion – that’s €3,100 million – is to be blown on the Anglo promissory notes on March 31st next. That is the greater part of the take from the new taxes, charges and cuts introduced in the budget and it will be spent on a bank that no longer exists and that was bailed out under pressure from the EU/ECB to ensure that ‘no bank should fail’.
The then government made a political choice to ‘save the euro’ and ‘prevent contagion’ and the present governing parties, before they came to power, assured us that they would not, unlike the previous administration, support Anglo bondholders . Who could forget Joan Burton, night after night telling of the big bonfire she would build for them or the self- assurance of Enda Kenny as he proclaimed ‘not a penny for Anglo’, a sentiment echoed by even Leo Varadkar!

Well, another austerity budget is upon us, as we head into Ireland’s austerity presidency. No doubt this one, like budget 2012, was written in Brussels and Frankfurt and approved by the Bundestag before the Irish government had sight of it. They were just more careful this year and avoided leaks.
Of course, most of the Anglo bondholders have been paid off by now on the strength of the promissory note (a sort of government IOU). So effectively, on March 31st, we will be paying €3.1 billion to the Irish Central Bank – which we own – and it will then engage in a balance sheet exercise, effectively burning the money and, in a supreme if painful irony, burning the people of Ireland instead of the bondholders.
This must be halted because this burning of the Irish people will be an annual event carried out at the behest of a government we elected to stop it. The government doesn’t have to pay this €3.1 billion – there is no way of legally compelling them to, should they choose not to do so.
It’s time to say No! 

Significance of ECJ decision in Thomas Pringle case

Even before today’s adverse judgement of the European Court of Justice concerning the legality of the European Stability Mechanism Treaty under EU law, this country had already paid over €500 million euro in October as a first instalment of Ireland’s legal obligation under the Treaty to ‘irreversibly and unconditionally’ contribute €11 billion in various forms of capital to the ESM Fund. Now further payments will be required.
The judgement does not bode well for the future integrity of EU treaties, the Commission and the institutional framework of the 27-member EU that has been built up over the years and which the ECJ is supposed to exist to uphold. The set-up that the ECJ has apparently endorsed will inevitably move the 17 member states that use the euro down a different legal- political path than the rest of the EU.
In his dissenting judgement in the Supreme Court, Judge Hardiman said that the ESM has introduced a new point of reference for the exercise of Irish government power in addition to the ‘common good of the people of Ireland’ and ‘the aims of the EU’. The new point of reference is the interest of ‘the euro area as a whole or of its Member States’. The other side of that equation is that the interests of members of the euro zone – especially the smaller ones – are completely submerged under the interests of the euro zone.
For example, there is no fixed commitment by the ESM to support Ireland should its assistance be required. The judgement is brutally frank: ‘stability support may be granted to ESM Members which are experiencing or are threatened by severe financing problems only when such support is indispensable to safeguard the financial stability of the euro area as a whole and of its Member States and the grant of that support is subject to strict conditionality appropriate to the financial assistance instrument chosen’ (Para 142).
In addition such assistance, ‘in no way implies that the ESM will assume the debts of the recipient Member State. On the contrary, such assistance amounts to the creation of a new debt, owed to the ESM by that recipient Member State, which remains responsible for its commitments to its creditors in respect of its existing debts’ and any financial assistance granted must be repaid and ‘the amount to be repaid is to include an appropriate margin’ (Para 139).
Although 27 judges heard Deputy Pringle’s application, only one judgement was delivered and we do not know if there were any dissenting judgements. Nevertheless, we owe Deputy Pringle a debt of gratitude for his courageous and public spirited action in undertaking this case. History will show how important it has been in re-asserting principles of democracy accountability and the rule of law.

 

Significance of ECJ decision in Thomas Pringle case

Even before today’s adverse judgement of the European Court of Justice concerning the legality of the European Stability Mechanism Treaty under EU law, this country had already paid over €500 million euro in October as a first instalment of Ireland’s legal obligation under the Treaty to ‘irreversibly and unconditionally’ contribute €11 billion in various forms of capital to the ESM Fund. Now further payments will be required.
The judgement does not bode well for the future integrity of EU treaties, the Commission and the institutional framework of the 27-member EU that has been built up over the years and which the ECJ is supposed to exist to uphold. The set-up that the ECJ has apparently endorsed will inevitably move the 17 member states that use the euro down a different legal- political path than the rest of the EU.
In his dissenting judgement in the Supreme Court, Judge Hardiman said that the ESM has introduced a new point of reference for the exercise of Irish government power in addition to the ‘common good of the people of Ireland’ and ‘the aims of the EU’. The new point of reference is the interest of ‘the euro area as a whole or of its Member States’. The other side of that equation is that the interests of members of the euro zone – especially the smaller ones – are completely submerged under the interests of the euro zone.
For example, there is no fixed commitment by the ESM to support Ireland should its assistance be required. The judgement is brutally frank: ‘stability support may be granted to ESM Members which are experiencing or are threatened by severe financing problems only when such support is indispensable to safeguard the financial stability of the euro area as a whole and of its Member States and the grant of that support is subject to strict conditionality appropriate to the financial assistance instrument chosen’ (Para 142).
In addition such assistance, ‘in no way implies that the ESM will assume the debts of the recipient Member State. On the contrary, such assistance amounts to the creation of a new debt, owed to the ESM by that recipient Member State, which remains responsible for its commitments to its creditors in respect of its existing debts’ and any financial assistance granted must be repaid and ‘the amount to be repaid is to include an appropriate margin’ (Para 139).
Although 27 judges heard Deputy Pringle’s application, only one judgement was delivered and we do not know if there were any dissenting judgements. Nevertheless, we owe Deputy Pringle a debt of gratitude for his courageous and public spirited action in undertaking this case. History will show how important it has been in re-asserting principles of democracy accountability and the rule of law.

 

Ordinary Germans also suffer to pay the bankers!

Anti-German feeling is prevalent in Ireland. One hears it vehemently expressed in the most general terms at public meetings dealing with the economic crisis and even in everyday conversation.
A greater amount of caution needs to be exercised concerning such sentiments. The ordinary German citizen is not responsible for the actions of the German banks and their political representatives in government. Germany’s working people are not benefiting from the policies of Merkel and Co., even though many of them might gullibly believe the propaganda of their masters.
Visit Germany’s capital city, and poverty is plain to see—not just people begging on the streets and in the underground but also well-dressed individuals of both sexes and all ages rummaging through street bins in search of returnable bottles.
Supermarkets pay 8 cents for certain glass bottles, 25 cents for plastic ones. Germans are indeed resourceful. Many of these bottle-hunters travel the city on bikes, carrying a number of large bags for their glass and plastic booty.
There is an element of surprise when one first becomes aware of the poverty. Unemployment in Germany may be at a relatively low 6.6 per cent, but a recent study carried out by the the German Trade Union Congress, the DGB, found that of those in full-time employment 29 per cent of West Germans and 34 per cent of East Germans receive social welfare assistance to supplement their inadequate wages in order to survive. In total, this costs the German taxpayer €6 billion per year. In other words, many German employers are being heavily subsidised by the state.
There is no minimum wage in Germany, and the average wage in the low-wage sector is €6.50 per hour. Another study carried out by the German Institute for Economic Research (DIW) showed that 22 per cent of the work force is employed in this sector—7.3 million people in total. The report reveals that low wages inevitably means that these workers have to work long hours—an average of 50 hours per week—to earn a basic wage.
The authorities have made eligibility for unemployment benefit or social welfare extremely stringent. The unemployed are put under constant pressure to take on “mini-jobs” and part-time work at extremely low rates of pay or else face the loss of benefits.
As in Ireland, the ruling political class want the ordinary person to pay for the economic crisis. In late June the German parliament, the Bundestag, debated the ESM and Fiscal Pact Treaties in the one session. Only Die Linke (Left Party) opposed both treaties. The Green Party and the Social Democrats supported the governing coalition proposal to pass both.
Sahra Wagenknecht of Die Linke spoke against the treaties. She argued: “You are behaving like puppets. The puppet-masters are the bankers, and the result has been treaties in which citizens are short-changed in order to rescue the fortunes of the richest and keep the financial market casino rolling along . . . This is a project for the smashing of employees’ rights and a project for the reduction of wages and pensions. It is a project by Deutsche Bank, Goldman Sachs and Morgan Stanley for the plundering of European taxpayers.”

ECB calls for “further sharing of sovereignty"

EU Observer reports that a member of the board of the European Central Bank, Jörg Asmussen, has said that euro-zone states need to give up more sovereignty in order to fix the construction flaws of the euro, with the bail-out fund possibly turning into a budget authority further down the road. “We have construction mistakes of Economic and Monetary Union, and it is time to correct them. It is clear that the core of the current debate has a name: further sharing of sovereignty,” he said.
Part of the vision—which the ECB is shaping in a report drafted by Herman van Rompuy—is a cap on how much debt countries can issue, intervention in national budgets, and fiscal corrections imposed if a country deviates from the deficit and debt limits imposed in the euro zone. A common budgetary authority could also be formed, Asmussen said, with the forthcoming ESM a “starting-point.”
“The ESM is a fiscal authority by definition, because it deals with taxpayers’ money,” he explained, adding that it would have to be put under the scrutiny of the European Parliament—or a subdivision of it, pooling members from euro-zone countries only. The ESM is yet to be set up, pending a ruling of the Constitutional Court in Germany, due on 12 September, and in Ireland the outcome of Thomas Pringle’s appeal to the Supreme Court.
Under the existing rules the Parliament has no say over the ESM. Asmussen said this needed to change and that the ECB itself should be under more scrutiny from the EU Parliament, as it will acquire new supervisory powers over banks in the euro area. “Deeper euro-area integration can only be sustainable if there is progress on democratic legitimacy.
And it should not be only the ECB continuously emphasising it,” he said, adding that already national parliaments could be involved more, so that they “internalise” what it means to be an economic union.
Asked if he thought all present euro members were “willing and able” to go this path of further concessions of sovereignty, he said it was “worth fighting for,” and that majorities in those countries needed to be convinced that it is the only way to achieve prosperity.
Asmussen, a former official of the German ministry of finance, also defended the sometimes criticised stance of the ECB when giving advice to politicians on how to change the structure of the euro zone. “It is clearly not beyond our mandate. If we can’t answer where we want to be ten years from now, no-one will buy a ten-year bond from us, and that is very much an issue for the ECB,” he said.