When the pitre Tsipras and his sorry clique capitulated before the EU neoliberal and monetarist crew, despite a popular referendum, everything was done to quickly deregulate and privatise in the crudest spirit of the Chicago Boys. This was to be done without affecting to the least the incomprehensible constitutional privileges of the big ship owners or the economic and fiscal advantages of the upper-middle class and the rich. The same old monetarist public policy was enforce with a vengeance and therefore tax expenditures – without counting fiscal evasion – increased while the majority of the population was rolled back into unprecedented misery and hardship.
The same strategy is now applied to the 27 member States and this passes as European solidarity, even though not all member States will benefit equally for this « aid package » (1)zz
Aside from the Commission enforcing a stronger Stability Pact with its murderous and economically irrational fiscal consolidation path, the EU Council now has the possibility to decide about the access to this « aid » through the « qualified majority » mechanism, hence de facto giving a veto to the bigger countries among the 27 member States, in particular Germany.
The EU has been transformed into an unworkable hyper-centralised area placing most highly indebted countries under strict trusteeship. This is done in violation of the Treaties and without any consultation of the national Parliaments and even less of the peoples.
Following this route – with the temptation to make this exceptional package the rule without modifying the treaties – the result will be the sure destruction of the European integration process. I send the reader back to the conception of a Social Europe based on a Europe of Nations-States which would democratise its institutions – Council, Commission and Parliament – and adopt an opting out clause within the framework of a revised division of power in order to induce a democratically sustained integration process. This will progress by emulation of the best practices from the bottom up. All Nations-States will preserve its control of public credit – hence of its public debt – through a public bank, leaving the management of money to the ECB. Similarly they will retain the control over socio-economic planning. (See the pertinent essays in the International Political Economy section of my old Jurassic site www.la-commune-paraclet.com )
With the transversal complicity of all the parties now represented in Parliament, this walk toward the Inferno of trusteeship, will be the case for all European peoples and proletariat without exception but mostly most specifically for the miserable philo-Semitic Nietzschean croupion State of Italy. Not only Italy is a ruined society and a ruined socio-economic entity whose bankruptcy is written on the wall, but it is sold out by a transversally incompetent and mafia ruling class – including most unions leaders and pseudo-left organisations (4) – who has no clue about fundamental Human rights, individual or social, or even about the Constitution of the country. It is a failed State.
Here is a quick synthesis :
– It is a special « aid » package complementing the EU Budget. So 750 + 1 074 billion for 7 years, namely the 2021-2027 EU budget.
– 750 = 360 loans + 390 grants – reimbursed in common. This is up to 2023. (2)
– For Italy 208 = 81.4 loans + 127 grants. (3)
– Condition over and above the fiscal consolidation path : A Reform program on pension, labor, public administration, education and health. Also green economy and digitalization.
– We need to know how this package will be finance, will it be new EU taxes or increased individual participation to the EU budget… Note at the end of 2020, Italy will lose some 42-45 billion in EU funds that it did know how to spend …
– While the European council can intervene, the reform program – hence the access to this « EU aid package » – will be monitored by the Commission, just like the Stability Pact which is thus reinforced to take over the exclusive powers of member State, notably Social Affairs. This is worse than the conditionality imposed by the IMF and London and Paris clubs to under-developed countries during the 80s-90s. It de facto transfers all macro-economic levers to the unelected EU Commission.
– Is there an advantage? No! The lower interest rates afforded by the EU triple A rating will be very limited and furthermore will vanish rapidly given the enormity of the post-covid-19 public debt/GDP ratio. The spread will go up and in some case, Italy in particular, the ECB cannot transform into a Bad bank buying junks. This will be aggravated by this blind strengthening of the same old neoliberal monetarist philo-Semite Nietzschean policies, including the fiscal consolidation path which implies the containment of the public debt and its imposed reduction trend of 1/20 every year of the debt over 60 % of GDP!!!
Italy and France and others were not able to comply with this fiscal consolidation path before the current sanitary-economic crisis, there is no chance whatsoever that they will be able to do it now with exploding debt/GDP ratios. Resorting to public credit was the only solution, but the main aid of this package is to rule it out preventively. Italy will now be under the Commission trusteeship but, unlike Greece when it was the « beneficiary » of EU « aid », it has very little to cut in the sectors falling under the reform program and very little to privatise – perhaps around 300 billion at most counting the public domain. Italian pensions and wages are the second lowest in the EU … The country is doomed, unless it goes back to its constitutional and economic arrangements as they prevailed under the First Republic – public credit, mixed economy, national solidarity and strategic planning. Before 1981-1983, when credit was public Italy was able to manage what was called the « Italian miracle » while keeping its debt/GDP ratio negligible. The same is true for France before the Pompidou-Giscard-Rothschild privatisation of the Banque de France in 1973.
– Article 7 opens to a neoliberal conception of the Rule of law as a condition for access to aid, which in effect means ideological cleansing, despite the fact that our constitutions were born form the Resistance.
– For the other «aid » programs, Sure and MES, we already commented in this same site. They are negligible and constitute an illegal invasion of the exclusive power of member States on labor and health policies.
Paul De Marco.
Notes:
1 ) COMMISSION STAFF WORKING DOCUMENT Identifying Europe’s recovery needs (27-05-2020)
P 6 « The support through the temporary State Aid framework also varies widely. Based on data available on 1 May 2020, the approved aid measures in the Member States (and the UK) to address the COVID-19 outbreak totalled about €1.9trn.3 The breakdown of this total by country shows a stark disparity across Member States. For example, Germany accounts for €996bn, equivalent to around 29% of German GDP and 52% of all State Aid provided, followed by France (around €324bn, 13.4% of GDP), Italy (around €302bn, 17% of GDP) and Belgium (around €54bn, 11% of GDP). The aid granted by the vast majority of the other Member States ranges in the lower-single digits of GDP, including Spain with around €27bn (2.2% of GDP). Although partly reflecting national policy preferences, the disparity in support volumes across Member States is also affected by the available fiscal headroom. Leaving normative considerations on individual State aid levels aside, large differences between Member States can exacerbate the divergence of recovery speeds and skew competitive positions in the Single Market. Furthermore, binding financial constraints in some Member States may prevent them from delivering sufficient support relative to the needs of their economy. » https://ec.europa.eu/info/sites/info/files/economy-finance/assessment_of_economic_and_investment_needs.pdf
2 ) Un emprunt de 750 milliards d’euros et une solidarité difficilement forgée : les Européens s’accordent sur un plan de relance historique
Le projet franco-allemand d’emprunt commun a été adopté. Une petite révolution qui permettra d’aider les Etats les plus durement touchés par la crise liée à l’épidémie due au coronavirus.
Par Jean-Pierre Stroobants et Virginie Malingre Publié aujourd’hui à 06h00, mis à jour à 09h26 https://www.lemonde.fr/international/article/2020/07/21/un-emprunt-de-750-milliards-d-euros-et-une-solidarite-difficilement-forgee-les-europeens-s-accordent-sur-un-plan-de-relance-historique_6046802_3210.html and Macron et Merkel arrachent un accord de 750 milliards pour relancer l’Europe, Par Avec AFP | 21/07/2020, 8:12 | 926 mots https://www.latribune.fr/economie/union-europeenne/macron-et-merkel-arrachent-un-accord-de-750-milliards-pour-relancer-l-europe-853186.html
3 ) Recovery Fund, svolta storica: prima volta debito UE comune,All’Italia circa 208 miliardi, ma uso dei fondi sotto la lente. Soddisfatto il Premier Conte: “Tutelata dignità del nostro Paese” , editato in: 2020-07-21T08:21:07+02:00 da QuiFinanza
21 Luglio 2020 https://quifinanza.it/soldi/recovery-fund-fumata-bianca-allitalia-208-miliardi-ma-uso-dei-fondi-sotto-la-lente/401720/
4 ) In a typical Italian mafia-like fashion a law allows union leaders to dramatically raise their salaries a few months before they retire, thus pumping their pensions higher and insuring their class compliance. Thus a pitre like Bonnani who, according to reports, once invented a few millions pensioners in a referendum over pension reform, gets more that 300 000.00 euro a year!!! The same kind of mafia logic applies to most organisations which benefit from State subventions, in particular those devoted to the defense of « Human rights », and thus, not surprisingly, they all sheepishly tow the line. But this is the case outside Italy, too … There does not seem to be any European reform on these crucial democratic issues …