A new international treaty is currently being negotiated by the leaders of the EU. This treaty, currently called the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, is a treaty to effectively institutionalise austerity across the European Union.
It entails a significant shift of powers over budgets from elected governments across Europe to unelected technocrats and bans governments from running deficit budgets. The Socialist Party is campaigning for a referendum on this fundamental transfer of powers and for a No vote.
From the pronouncements of government representatives so far, it is clear that they have a dual-pronged approach. The first is to try to avoid a referendum where people would have an opportunity to give their opinion on the austerity that has been enforced by the IMF and the EU in Ireland so far and the prospect of that being institutionalised.
Their second approach is to begin a campaign of fear that will put the campaigns around the Lisbon and Nice Treaties in the shade. Minister for Finance Michael Noonan has said that any referendum would effectively be a vote on membership of the euro. This is an argument and tactic simply designed to frighten people into accepting this Austerity Treaty rather than debating the merits of the Treaty.
The austerity policies of the capitalist establishment in Ireland and across Europe have dramatically exacerbated the crisis. In Ireland, Greece, Portugal, Spain and Italy in particular, cutbacks and slashing of public services have pushed the economies into downward tail spins. Working people’s living standards are being destroyed, while the interests of the bankers and hedge funds are protected.
In order to ensure that the bondholders continue to be paid, this treaty proposes to effectively enshrine austerity at a constitutional and European level.
If the treaty were to pass, countries could no longer legally run budget deficits greater than 0.5%. This means that instead of borrowing to invest, states would continue to engage in slash and burn policies. This would dramatically diminish the ability of a state to invest in a public works programme to create jobs and redevelop the economy. Relying on the private sector to create jobs and eliminating the option of deficit state spending would be disastrous, particularly in the context of the investment strike by big business.
This Treaty is part of the same process that has seen elected governments replaced by a variety of bankers, technocrats and right-wing politicians in Italy and Greece. These are governments by the bankers, for the bankers. Their mandate is to ensure the maximum return for the bondholders who are owed by these countries.
Attack on democracy
This treaty will take the power to decide on budgetary strategy away from elected governments and put it in the hands of the unelected European Commission and Court of Justice. Governments who refuse to go along with their dictates will face fines of up to hundreds of millions of euro.
Basic democratic rights are being undermined by the political establishment across Europe because they are scared of mass movements against austerity. Mass movements and strike action like in Greece can put governments under significant pressure to change their policies. It is therefore the approach of the capitalist establishment to move decision making further away from working people, with massive fines to ensure that austerity is implemented.
All across Europe, austerity is being rammed down the throats of people. Now, there is an attempt to institutionalise it. The Socialist Party has already started campaigning for a referendum and a No vote. A European-wide struggle against austerity and policies for the bankers and rich is needed. That means building for common protests across Europe and particularly for common industrial action, like a 24 hour European general strike against austerity. Fundamentally, it means fighting for a Europe where the needs of the millions come before the profits of the millionaires – a socialist Europe.