The main political meaning of the Maastricht Treaty (1991-92), which prolongs and goes beyond the Single European Act (1985) is that the German, French and English imperialists bourgeoisies agreed to make a (limited) transfer of national sovereignty to start embryonic structures to create a supranational European state. The introduction of the single currency put the question of state power in the center of the EU: the currency is a key attribute of any state apparatus, so that the euro entailed a waiver of national sovereignty and its transference to supranational institutions (mainly the European Central Bank). From that moment the single currency inevitably would have a decisive influence in the national - state politics of the government, so its introduction supposed the qualitative jump towards a truly central supranational state. However, considering the antagonisms between different national bourgeoisies, accentuated in the context of the present crisis, the European ruling classes have not managed to consolidate completely the project through a fiscal and political union that guarantees the culmination of the European supranational state.
July 14th is French Independence day or the day of the Bastille. France celebrates on this day that the French people liberated themselves from an oppressive and autocratic regime and took their first towards the establishment of a republic. Liberty, equality and fraternity were the battle cries of the revolution. The spirit of the Enlightenment became a tangible reality for the first time in history. In fact, Liberté, Egalité and Fraternité were only officially declared the main goals of policy by the so-called Second Republic in 1848, but July 14 stands out as the main symbol.
Without doubt, we were expecting a better night. The Spanish state elections of June 26, 2016 definitively marked the end of the first stage of the political cycle opened with the eruption of Podemos in the European elections of May 25, 2014, which in turn was a product, not in a mechanical way, of the blast of May 2011. The results for Podemos were unprecedented in retrospective terms, but have been clearly below expectations and possibilities. Why it was not possible to make the much desired sorpasso (overtaking) of the PSOE? The fiasco took us and others by surprise. This is not to draw lessons after the event explaining a failure that no one saw coming, but if at least try to understand why it happened.
Spain’s June 26 parliamentary election has failed to resolve the political stalemate created by the election of December 2015, with no individual party able to muster a parliamentary majority or form a governing coalition. Political uncertainty is expected to continue in a context where the economy remains fragile, and is yet to fully recover from the impact of the financial crisis. Although overlooked amid the turmoil caused by the Brexit vote, it is important to understand the origins and characteristics of Spain’s current political deadlock, because it provides a window into the broader impact of austerity and deflation on Europe’s political and economic stability.
Written by Themis Tzimas, Constantinos Gavrielides
With the implementation of the third bailout agreement being fast-tracked and the groundwork being laid for a new one in the guise of a medium-term framework, the Greek economy is undergoing structural changes that, on the heels of the social insurance and tax legislation, will further impede it in relation to other developed economies. Self-employment in small and midsize businesses, private sector salaried work, and ownership of small and midsize enterprises have been crushed, only to be followed by “renationalization” of public infrastructure and public utilities for the benefit of foreign states.
The problems of the Italian banking system have been public knowledge for quite some time, but since Brexit it seems that these problems have worsened with Italian banks having suffered a dramatic decline in their value on the stock market and the oldest bank in the world and Italy’s third-largest lender, the Banca Monte dei Paschi di Siena, facing serious troubles. As The Economist put it, "another, potentially more dangerous, financial menace looms on the other side of the Channel—as Italy’s wobbly lenders teeter on the brink of a banking crisis". This is a concern shared by other economic newspapers, such as the Financial Times or the Wall Street Journal , and world leading media.
The bank recapitalization demanded by the end of 2015 as a condition of Greece’s third bailout agreement, despite the assurances of both the Greek government and its creditors that the main concern was the banks’ protection, achieved the absolute worst: for the country to lose the control of its systemic banks at a huge cost to the Greek public sector.
The experience of the participation of SYRIZA to government is something that has to be studied very carefully. As the first confrontation of a non-social-democratic left-wing party with the exercise of governmental power, it represents a case-study of the strategic deficits and limits of the Europeanist left and its inability to stand up to the pressures and blackmails by capital and international capitalist organisations. Our starting point is very simple: Greece was not doomed to see an entire sequence of struggles and collective aspirations end up in defeat and despair as a government led by a supposedly left-wing party implements the same aggressively neoliberal policies dictated by the Troika. In contrast, Greece still offers a way to rethink the possibility of a renewal of left-wing strategy provided that we actually attempt to think the possibility of ruptures.
An urgent process in Spain, one recently assumed by the new municipal governments of the left, is guaranteeing universal access to energy at reasonable conditions. This service is essential to enforce basic rights, and it is necessary to democratize it and turn it back into a common good. Recent technological advances in the field of renewable and local generation allow us to think of a model of energy as a public service in a different way to those known in the twentieth century, producing energy in a clean and at reasonable costs. Moreover, thanks to information technology and to new organizational culture management of generation and demand can be carried out through more flexible and distributed networks, which will allow municipal councils to undertake comprehensive and active energy policies, thus democratizing the sector.
The result of the recent British referendum has shown that there is a real and deep class divide in the UK. The same thing can be said about many EU countries as well.
The class struggle has come back and the social composition of Leave supporters in Britain has a clear identity. They are the lower social strata: the working class and the poor. In short, they are the British popular classes whose income, employment, housing, social services etc. has been negatively affected, as evidenced by existing data, due to globalization and austerity policies in recent years.
Apart from certain significant spatial and demographic differences (e.g. the particular attitude of the working class in London, the indirect expression of separatist moods in Scotland and Northern Ireland or the youth’s clear resolve to Remain) which have their own explanation and whose importance is undeniable, the outcome of the British referendum was shaped by all those people who for the past years have been experiencing the effects of a systemic crisis, neoliberal policies and the ensuing decline in democratic process.
The summer of 2015 brought a spectacularly bright ray of progressive hope to the United Kingdom: the increasingly obvious likelihood that a socialist would soon lead the near-moribund Labour Party. After almost 20 years of Thatcher-lite neoliberal policies, the grassroots membership voted overwhelmingly for Jeremy Corbyn to take leadership of the Labour Party. The progressive victory proved short-lived. Less than year later, the far Right would achieve its greatest victory in British electoral history, winning the IN/OUT referendum on the European Union through a campaign of flagrant xenophobia and racism.
June 24, 2016 will go down in history as the Black Friday of European development. But as so often happen in such cases, the historiography remains superficial. If we want to understand what is really going on, we need to delve much deeper into the events. This Friday is not ‘black’ because a majority of the British electorate chose to leave the EU. It is the reaction of the policy-makers and the media on the continent, and especially in Germany, that made the day into a something very dark.
The Leave victory in the British referendum represents a moment of political confusion — a hiatus in the opposition between social classes. No class appears capable of directing events. The ruling class has no clear plans for the future, and seems temporarily stunned. The working class and the poor have expressed great anger at the state of affairs of both society and nation, but are also deeply divided, with contradictory ideas prevailing in their midst. The formless middle class is deeply frustrated at the turn of events and would like a firm hand at the tiller, but has no idea how to achieve this outcome. Such moments call for a decisive political force to alter the social balance.
To a foreigner who has been living and working in the United Kingdom for the last sixteen years, the immediate post-referendum situation appears highly paradoxical. It seems as if the shock has been of such a magnitude that even the most celebrated British virtues — sense of humor, understatement and, above all, solid common sense — have faded away. On the losing side, which includes, of course, most of the media and the economic and political establishment, the impact is as devastating as it is unexpected. The markets are plunging all over the world and the City of London, the economy’s central nervous system, faces disaster. However — and this is where the paradox lies — the fact is that it’s not only the City that looks voiceless and agitated. So does the Left.
Several years after the outbreak of the Eurozone crisis a “consensus diagnosis” is beginning to emerge, as was made clear by a group of economists associated with CEPR (see “Rebooting the Eurozone”, published in VoxEU on 20 November 2015). The consensus puts considerable emphasis on nominal unit labour costs, particularly their divergence among EMU members, in good part due to extraordinary German wage moderation. It is interesting to note that back in 2010 only a few voices associated the Eurozone crisis with divergences in nominal unit labour costs, for instance Lapavitsas and Flassbeck. Servaas Storm’s recent contributions have kindled a brief but intense debate on nominal unit labour costs, including pieces by Bofinger, Lapavitsas, Flassbeck and others. The focus has been on German wage moderation and its role in inducing the profound imbalances prior to the crisis. Much of this debate has occurred on the website of the Institute for New Economic Thinking (INET) in 2016, and is now reproduced on the EReNSEP website.
1. The position of the German trade unions
Gustav Horn recently defended (see here) the unions against my accusation that they hold back too much in tariff policies (see here). Horn argues that if the unions could do as they wish, everything would be fine. In such a situation, they would indeed fight for higher wages, deflation in Europe would disappear and the German competitiveness would be significantly reduced. But, says Horn, the balance of power in the labour market prevents such...
Researchers from the Departments of Political Science and Media and Communications from the London School of Economics published a paper on the journalistic representation of Jeremy Corbyn in the British Press. The very interesting paper can be read here.
Corbyn is an unconventional party leader, who is more left wing than previous leaders of the Labour Party and who contests neoliberalism, austerity and privatisation and is anti-war. The question the paper addresses is to what extent this led to...