"The Fiscal Pact mandates that all national governments in the European Union should achieve a “structural deficit” of no more than 0.5 percent of gross domestic product. I shall not again demonstrate that this concept is nonsense and, even were it not, 0.5 percent would be absurd, implying continuously deflationary fiscal policy. If the Pact is foolish, combining it with a “fiscal czar” (Merkel’s term, not mine) is authoritarian madness. It would abandon the pretense of electoral democracy within the European Union."
Good critical analysis by John Weeks of recent developments in European governance structure. Pro-Europeans who welcome this as "more Europe" are either terribly naive or have a hidden agenda.
"Nations states will have to do it, therefore, either together in some grand conference, or more probably alone, after the crisis has put some radical into power. When this will happen, the European Union will simply vanish as the USSR did after the August Coup and the Belavezha Accords. Those who still nurture the dream of a political Europe, whether it be the Europe of Regions of my own political family or the Europe as civilization of the volkish far right will have to accept, as I did, that Europe has become an hollow shell and that time has run out. It is around nation states, not necessarily the ones we know by the way, that Europe will have to face the long descent, until they too dissolve."
Pessimistic analysis by French blogger Damien Perrotin explaining why the end of growth will also mean the end of the European Union.Worth reading.
Given the interdependence and common interests of the Eurozone member states, those states with the economic power, credit and capital capacity should not have to wait for a new political spectre to emerge from the chaos before they start resourcing programmes for the economic revival of the Eurozone and the securing of the European social model.
Good analysis by Jenny O'Connor of the European Anti-Poverty Network.
The Eurobond scheme only works effectively if taxation and spending powers are transferred to a central authority – “fiscal union”. But bar a series of truly extraordinary backflips by Europe’s divided rulers, spontaneously agreeing to settle their deep differences, this will not happen. Should anything resembling a “Eurobond” eventually be summoned up, it is liable only to be a feeble stop-gap measure. The underlying causes of Europe’s financial crisis will not have been addressed.
Very good analysis by senior economist James Meadway on the New Economics Foundation blog.
As Europe's debt crisis intensifies, top officials say the continent urgently needs a central authority with the financial muscle to fix its broken banks.
The flight forward for EU leaders: a "banking union". Finally full recognition that THIS European "Union" has always been a Europe for capital, never for labour and citizens. As long as things went well, we got the crumbs from the tables of the rich, now they send us back to the poor houses and debtors' prisons.
"... the solution must be a new Constitutional Convention, whose members are invested with the authority to begin again from the foundations and produce a lapidary statement of basic institutions and rights—rather than the ponderous EU treaties Europeans tend to vote down when given the chance in national referendums."
Absolute must-read article by Timothy Snyder in The New York Review of Books on the need for Europe to re-invent EU democracy if it is to prevent further meltdown of the European project.
At Project Syndicate, Jean Pisani-Ferry, director of Bruegel, the international economics think tank, has some reservations over current indiscriminate austerity policies in Europe.
The Achilles heal of all these traditional economists reading of the current debt crisis is that they all still believe this crisis is temporary and we will return to growth in the not too distant future. What if this crisis is more fundamental and we have really entered the post-growth society in Western economies?
Is this it? Have the Euro and the European Union been saved? In all the media noise about the splendid isolation of Britain, one might forget that the EU is facing not one but several crises and that the “fiscal compact “summit might well have postponed or even killed the more essential debate on its political future. This could have been the crisis which the EU should never have wasted.
Within hours of arriving at a fragile treaty deal for the eurozone and nine other EU states, the agreement delivering deeper integration is already confronting the spectre of multiple referendums and a host of legal barriers.
"One of the most striking and least well recognised facts about the crisis is that those who have ultimately benefited from public EU bailout funds are not the governments or citizens of periphery countries but international bondholders. The degree of financial concentration in the world today is unprecedented; bondholders belong to the richest five per cent of people in the world. Yet public bailout money has been used first and foremost to ensure that bondholders are paid in full or with minimal losses. This amounts to a fiscal transfer from taxpayers to private creditors. The cost for the rest of society is enormous: austerity measures in distressed countries have caused unemployment to surge and decades of welfare achievements to be scrapped."
The LSE blog has this good analysis of how rich creditors profit from the bail-outs while taxpayers are paying the bill.
"Our present crisis is one of democracy even more than it is of finance. It is about a lack of honesty as much as it is a lack of growth. Debt and dishonesty are together strangling European democracy.
We should rid ourselves of both."
This article in Open Democracy is like a drop of wisdom in the oceans of economic idiocy.
"Even with the latest bailout and debt restructuring, Greek debt is still projected to be 120% of GDP by 2020. With no access to foreign markets, Greece will have to fund any future deficits by calling on more funds from foreign governments or international institutions. This column suggests a novel solution: force ordinary Greeks to save some of their earnings by purchasing government bonds." (Source: VoxEU.org).
Very interesting article about solutions to Greek crisis.
Great analysis in Open Democracy about the false choice between EU federalism and intergovernmentalism and the need for genuine European politics.
"The incumbent task for citizens is thus clear: to confront the political question directly. The era of ‘output legitimacy’ is over. How boldly Europe embraces new forms of input legitimacy - in which we will have to supply the ideas and the future of Europe ourselves, democratically as citizens - will determine whether and how we overcome the current sovereign debt crisis, as well as our deeper democratic malaise."
Putting the cart before the horse - that's how I interpret this "Manifesto for a more democratic Europe" published in Le Monde.
Where is the VISION for a renewed Europe which can win back the hearts of citizens? In times of shifting global power relations, climate change, resource constraints and continued neo-liberal austerity attacks on the middle classes, how can Europe protect the future wellbeing of its citizens?
And where are the innovative ideas for more democracy? A chosen EU Commission President? Old wine in old bags. What we need is much more than this "business as usual" with a bit more democracy.
"In an interview conducted as he heads into retirement, German Constitutional Court Judge Udo Di Fabio explains why he believes the high court's recent decisions on the European Union will not necessarily hinder further European integration..."
Timothy Garton Ash: The EU will never be the same again.
Although I agree that the 'no' is bad for Britain and Europe, I disagree that the EU will never be the same again. It is more the same than ever before. It is still hooked on its belief in socially unjust austerity to save the myth of the "free market" and still believes "economic growth" will get us out of the sovereign debt mess.