Here’s a proposal for a new law that would undoubtedly save money. Every time a politician or economist moans about the minimum wage being too high, he or she should be required to live on it.
The law, I believe, should be applied retroactively so that it will affect Jean-Claude Trichet. When he was still president of the European Central Bank in 2007, Trichet thundered that “excessive wage regulations” were undermining job creation. “Setting minimum wages at levels which are not in line with productivity reduces the employment chances of less skilled workers and the unemployed,” he added.
Under a clause introduced especially for him, my law would forcibly return Trichet to his adopted hometown of Frankfurt, where he would spend eight years on a building site at the lowest level of pay for a migrant worker in that industry. He would not receive his ECB pension or any ancillary benefits during that time; no cost-of-living adjustments would be made to his income because, as he would surely agree, that would involve “excessive wage regulation”.
As some of the intended victims of my proposal appear unburdened by a sense of humour, I feel obliged to admit it is not serious. On second thoughts, perhaps the politicians and economists in question do have a sense of humour, albeit a very twisted one.
Sick joke
Data published at the beginning of February by that number-crunching agency Eurostat show that monthly minimum wages in the EU range from 138 euros in Bulgaria to 1,800 euros in Luxembourg. In all three of the Baltic states, the minimum wage is less than 300 euros per month; in Romania it is 161 euros. Greece stands at 877 euros; Spain at 748 euros. Even when you realise that these statistics don’t take account of differing price levels, any attempts to portray these salaries as extravagant amount to a sick joke.
By seeking to cut pay, the main EU institutions are exceeding the limits of their power. The Maastricht treaty, which came into effect in 1993, stipulates that the Union will leave questions of remuneration up to its national governments. This provision has been maintained by the Lisbon treaty.
Some unsavoury characters in the Brussels bureaucracy have nonetheless invaded this policy domain by resorting to underhand tactics. Writing for New Europe last week, I noted that Charlie McCreevy, the former European commissioner for the single market, is an acolyte of Margaret Thatcher. In 2005, he was even more extreme than the Iron Lady when he visited Sweden and publicly supported the Latvian construction company Laval over its demands that its operations in Sweden shouldn’t have to respect that country’s pay and working conditions. The following year McCreevy whinged about how a minimum wage in Germany’s postal sector of 9.80 euros an hour hampered competition.
He was not acting in isolation. A series of rulings by the European Court of Justice – including one in a case involving Laval - have provided some kind of legal cover for attempts to weaken social protections across the Union.
Broken promises
Still, the assault on wage levels illustrates why political promises must always be treated with suspicion. When Ireland was pressurised into holding a second referendum on the Lisbon treaty in 2009 (having rejected it in 2008), the “Yes” brigade swore that the country’s minimum wage was not at risk. The pledge was quietly forgotten about in 2010. As Dublin froze in a harsh winter its government slashed pay for the least well-off. Who told it to do so? Ireland’s puppetmasters in the ECB, the European Commission and the International Monetary Fund.
True, the new Irish government that came into office a few months later subsequently restored the minimum wage (one of the few election pledges it actually honoured). Yet the EU and IMF have succeeded in driving down basic salaries elsewhere, most recently in Greece.
It is fiendishly clever for right-wing ideologues to exploit whatever opportunity arises to decrease wage levels for average workers. By doing so, they distract attention away from the real excesses in the economy: how a relatively small elite possess more than any human being could ever need. The result of this distraction is that policy makers reduce the minimum wages on which cleaners, restaurant staff and people in other low-paid categories depend, instead of setting maximum wages for the wealthy parasites in the boardrooms of hedge funds and corporations.
Surveys by the investment bank Merrill Lynch (itself a parasite) repeatedly show that the rich are getting richer. According to its latest findings, the number of “high net worth individuals” (a HNWI is essentially a fancy term for millionaire) in Europe rose by 6.3% in 2010. In total, there are 3.1 million HNWIs on this continent (including Russia). Their total net wealth comes to an astronomical 10.2 trillion dollars.
Among the wealthiest people in the EU are Amancio Ortega from Spain (he of Zara fashion fame) with assets worth a cool 31 billion dollars, Frenchman Bernard Arnault (head of luxury goods firm Louis Vuitton Moet Hennessy; value: 41 billion dollars), the German chief of Aldi supermarkets Karl Albrecht (value: 26 billion dollars), the Swede behind the trendy threads of H&M Stefan Persson (value: 25 billion dollars) and Frenchwoman Liliane Bettencourt of L’Oreal (value: 24 billion dollars).
Between them, this quintet sell handbags, cardigans, perfume and biscuits for a living. How does that make them entitled to such fortunes?
●First published by New Europe, 19-25 February 2012.
Showing posts with label European Central Bank. Show all posts
Showing posts with label European Central Bank. Show all posts
Monday, February 20, 2012
Monday, September 26, 2011
Dublin treated with double standards by Brussels elite
Sometimes it is the softly-spoken who can be the most dangerous. Olli Rehn is a case in point.
A few months ago, Ireland’s EU commissioner Máire Geoghegan-Quinn made this observation about Rehn’s initial handling of the financial crisis in her country (and mine): “This was ‘Mr Nasty’ coming in to tell the Irish people and the Irish government what to do. And then suddenly, he gave an interview on television and people said, ‘This guy. Mr Nasty?’ It doesn’t fit with the man at all. He explained everything in a very reasonable way.”
Rehn may be an affable bloke. But as the Union’s economic policy chief, he is implementing measures that have nasty consequences.
I have obtained copies of the briefing notes that Brussels officials prepared for Rehn when he was pondering what should be done about Ireland in 2010 and the beginning of 2011. The stench of arrogance and callousness from these papers is overpowering.
Right now, I am reading a “scene setter” that Rehn perused before a November meeting with Irish opposition leaders and “social partners” (as representatives of bosses and workers are called – misleadingly – in Brussels parlance). It dismisses a call by trade unions to extend the 2014 deadline by which Ireland has been enjoined to bring down its budget deficit to within 3% of gross domestic product (GDP). “Even if this was politically feasible, it would be an arithmetical impossibility,” the document says. “Financial markets will simply not allow Ireland to kick the can further down the road.”
“We know best”
I’m not a huge admirer of Ireland’s trade union leadership, mainly because it has been too eager to curry favour with the powerful. But the EU officials’ attitude of “we know best” is disgusting. The deficit limits they regard as sacrosanct are the result of arbitrary criteria that make sense only to the German government and its slavish followers in the Commission and the European Central Bank.
It is also significant that another internal Commission document contradicts the line from Rehn’s team. This second document is a briefing note prepared for a meeting between José Manuel Barroso, the institution’s president, and Klaus Regling, head of the European Financial Stability Facility (the “bail-out” backstop for eurozone countries), in December. It says that the 3% deadline should be postponed to 2015 as this would be a “more credible target”. Something that was an “arithmetical impossibility” less than a month earlier became feasible with a click of the fingers.
A third paper indicates that a general election held in Ireland during February this year was essentially fought on lies. The centre-right Fine Gael, which emerged as the largest party after that poll, promised voters that it would “burn the bondholders” and that Irish banks would not receive another cent from the state until they imposed losses on creditors. Yet the Commission’s document, dating from January, suggests Brussels had already told senior figures in Fine Gael to rule out that option. “A possible involvement of banks’ senior bondholders (‘haircut’) has been excluded and renegotiating this would run counter to the progamme’s main objective – restoring confidence in the Irish banking sector,” it says.
Callous indifference to suffering
The most disturbing thing about the 11 internal documents I’ve seen is how they call savage cuts to social expenditure “appropriate”, without registering a smidgen of concern for the people affected. The cuts are proving especially cruel to children with learning difficulties. A report shown by the national broadcaster RTE recently illustrated how one school in Wexford – a county in the south-east – has lost five special needs assistants. That story is being replicated across Ireland, hampering children from learning the most basic skills such as the ability to write their own name.
It is a tenet of elementary justice that nobody should be punished for a crime he or she did not commit. Why is Olli Rehn punishing Irish children for a crime of which they are entirely innocent? And why should education be hit at all? Even during its “Celtic Tiger” boom, Ireland was spending proportionately less on schooling than the average for industrialised countries, according to data from the Organisation for Economic Cooperation and Development.
If Rehn’s team had been a little more thorough in its research, it would have realised that despite Ireland’s problems, the country still has a fair amount of wealth. Merrill Lynch (now Bank of America’s wealth management division) has calculated that the country had 19,000 “high net worth individuals” (HNWIs) last year, a rise of 5% from 2009. HNWIs are people with over $1 million in “investable assets”.
It is striking that the Irish Business and Employers Confederation (IBEC) has been demanding all kinds of measures that hurt ordinary people. It has demanded the scrapping of the minimum wage, downsizing of the public sector and reform of social welfare to “incentivise” work. Yet IBEC and its chums in the Irish government and the Brussels institutions won’t contemplate going after the rich. Why can’t a limit be set on the amount of money people can have, so that they are required to hand over anything above that limit to the exchequer?
Paul Krugman, the economist, last week compared Europe’s austerity agenda to bloodletting. Doctors no longer believe that patients can be healed by draining their blood; they will just get weaker. The same goes for economic management, yet Rehn and the blinkered bureaucrats around him are continuing to prescribe medicine that simply doesn’t work.
●First published by New Europe, 26 September 2011.
A few months ago, Ireland’s EU commissioner Máire Geoghegan-Quinn made this observation about Rehn’s initial handling of the financial crisis in her country (and mine): “This was ‘Mr Nasty’ coming in to tell the Irish people and the Irish government what to do. And then suddenly, he gave an interview on television and people said, ‘This guy. Mr Nasty?’ It doesn’t fit with the man at all. He explained everything in a very reasonable way.”
Rehn may be an affable bloke. But as the Union’s economic policy chief, he is implementing measures that have nasty consequences.
I have obtained copies of the briefing notes that Brussels officials prepared for Rehn when he was pondering what should be done about Ireland in 2010 and the beginning of 2011. The stench of arrogance and callousness from these papers is overpowering.
Right now, I am reading a “scene setter” that Rehn perused before a November meeting with Irish opposition leaders and “social partners” (as representatives of bosses and workers are called – misleadingly – in Brussels parlance). It dismisses a call by trade unions to extend the 2014 deadline by which Ireland has been enjoined to bring down its budget deficit to within 3% of gross domestic product (GDP). “Even if this was politically feasible, it would be an arithmetical impossibility,” the document says. “Financial markets will simply not allow Ireland to kick the can further down the road.”
“We know best”
I’m not a huge admirer of Ireland’s trade union leadership, mainly because it has been too eager to curry favour with the powerful. But the EU officials’ attitude of “we know best” is disgusting. The deficit limits they regard as sacrosanct are the result of arbitrary criteria that make sense only to the German government and its slavish followers in the Commission and the European Central Bank.
It is also significant that another internal Commission document contradicts the line from Rehn’s team. This second document is a briefing note prepared for a meeting between José Manuel Barroso, the institution’s president, and Klaus Regling, head of the European Financial Stability Facility (the “bail-out” backstop for eurozone countries), in December. It says that the 3% deadline should be postponed to 2015 as this would be a “more credible target”. Something that was an “arithmetical impossibility” less than a month earlier became feasible with a click of the fingers.
A third paper indicates that a general election held in Ireland during February this year was essentially fought on lies. The centre-right Fine Gael, which emerged as the largest party after that poll, promised voters that it would “burn the bondholders” and that Irish banks would not receive another cent from the state until they imposed losses on creditors. Yet the Commission’s document, dating from January, suggests Brussels had already told senior figures in Fine Gael to rule out that option. “A possible involvement of banks’ senior bondholders (‘haircut’) has been excluded and renegotiating this would run counter to the progamme’s main objective – restoring confidence in the Irish banking sector,” it says.
Callous indifference to suffering
The most disturbing thing about the 11 internal documents I’ve seen is how they call savage cuts to social expenditure “appropriate”, without registering a smidgen of concern for the people affected. The cuts are proving especially cruel to children with learning difficulties. A report shown by the national broadcaster RTE recently illustrated how one school in Wexford – a county in the south-east – has lost five special needs assistants. That story is being replicated across Ireland, hampering children from learning the most basic skills such as the ability to write their own name.
It is a tenet of elementary justice that nobody should be punished for a crime he or she did not commit. Why is Olli Rehn punishing Irish children for a crime of which they are entirely innocent? And why should education be hit at all? Even during its “Celtic Tiger” boom, Ireland was spending proportionately less on schooling than the average for industrialised countries, according to data from the Organisation for Economic Cooperation and Development.
If Rehn’s team had been a little more thorough in its research, it would have realised that despite Ireland’s problems, the country still has a fair amount of wealth. Merrill Lynch (now Bank of America’s wealth management division) has calculated that the country had 19,000 “high net worth individuals” (HNWIs) last year, a rise of 5% from 2009. HNWIs are people with over $1 million in “investable assets”.
It is striking that the Irish Business and Employers Confederation (IBEC) has been demanding all kinds of measures that hurt ordinary people. It has demanded the scrapping of the minimum wage, downsizing of the public sector and reform of social welfare to “incentivise” work. Yet IBEC and its chums in the Irish government and the Brussels institutions won’t contemplate going after the rich. Why can’t a limit be set on the amount of money people can have, so that they are required to hand over anything above that limit to the exchequer?
Paul Krugman, the economist, last week compared Europe’s austerity agenda to bloodletting. Doctors no longer believe that patients can be healed by draining their blood; they will just get weaker. The same goes for economic management, yet Rehn and the blinkered bureaucrats around him are continuing to prescribe medicine that simply doesn’t work.
●First published by New Europe, 26 September 2011.
Tuesday, May 3, 2011
Emigration haunts Ireland once again
One perk of being married is that I have acquired a new grandmother. She is a sharp-witted woman in her early nineties and lives beside a “fairy fort” in rural Ireland; to this day, local farmers will not tamper with that site, lest they upset ancient spirits. Visiting Granny over the Easter break, I was reminded of a bleak past. Her own father came from a family with nine children but never knew some of his siblings. Five brothers and a sister all took the boat to America, never to return.
Emigration is back at epidemic levels in the Ireland of 2011. Each week an estimated 1,000 people leave a country that has raised and educated them but offers no work.
Are those young emigrants supposed to be comforted by a recent assurance from Jean-Claude Trichet that the European Central Bank acts as an “anchor of stability”? According to the official narrative, the ECB has selflessly come to Ireland’s rescue. Where, I wonder, is the stability for families rent asunder by the ECB’s prescriptions of austerity? Skype might make it easier to keep in touch with loved ones; it doesn’t cure homesickness.
Trichet, the ECB’s president, did not cause all of Ireland’s woes but he is exacerbating them. Brian Lenihan, Irish finance minister before a recent change of government, is more directly culpable for the country’s economic collapse. Though he is not trustworthy, I am inclined to believe Lenihan’s “revelation” – published in The Irish Times earlier this month – that the ECB put him under enormous pressure to accept an €85 billion “bail-out”, with excruciating conditions attached, in November 2010.
Also according to the official narrative, Trichet is a master of technical details who does not trifle with the base concerns of elected politicians. His mind is perennially focused on inflation and interest rates, not the interests of his chums in the top layers of the financial system, the spindoctors want us to believe. But who really stands to benefit from the “anchor of stability” he has thrown into our stormy waters? French and German banks have lent €900 billion to countries on the periphery of the euro-zone, including Ireland. The ECB cannot contemplate hurting these bondholders; so the innocent have to suffer instead.
Joseph Stiglitz, the Nobel-winning economist, has called the terms flanking the loan provided to Ireland by the ECB, European Commission and International Monetary Fund a “noose” around the country’s neck. “In effect, the International Monetary Fund and European Central Bank are asking ordinary Irish workers and citizens to bear the burden of mistakes that were made by international financial markets,” Stiglitz wrote recently. “But it is important to recognise that these mistakes are at least partly attributable to following deregulation and liberalisation policies that were advocated by the IMF and ECB and that these policies provided significant benefits to the financial sector.”
Economists of a more conservative hue than Stiglitz have arrived at similar conclusions. Colm McCarthy, a lecturer in University College Dublin, tried to deliver a metaphorical uppercut on the smug face of Nicolas Sarkozy in January. “From an Irish perspective, what looks to him [Sarkozy] like financial assistance from Europe could as readily be characterised as a bail-out of European investors foolish enough to lend to Anglo Irish Bank and other insolvent banks, courtesy of the Irish taxpayers,” McCarthy wrote in The Sunday Independent.
Thumbing his nose at the French president is unlikely to have repercussions for McCarthy’s career, unless perhaps he fancies a secondment in the Sorbonne. It is telling that he has been much more acquiescent towards the Dublin establishment. In a new report for the Irish government, McCarthy recommends that large chunks of the state-owned electricity, broadcasting and public transport services should be privatised. Under the terms of an “agreement” reached with the EU institutions and the IMF, the proceeds from the sale of these assets would be used to pay back the bail-out debts.
McCarthy’s recommendations for a jumble sale of essential services were delivered a few days before the 95th anniversary of the 1916 Easter Rising, that most hallowed event in Ireland’s struggle for independence from Britain. I read the Dublin newspapers carefully on the day the anniversary fell, yet did not see one commentator expressing disgust at how Margaret Thatcher’s poisonous philosophy is now guiding Ireland’s economic policies. The closest I saw was a mildly-worded analysis in The Sunday Business Post noting that the “trailblazing initiatives” of the Thatcher administration had ushered in a worldwide phenomenon whereby $2 trillion worth of assets were transferred from public to private hands between 1977 and 2008.
This is not a problem unique to Ireland; the EU and IMF want numerous countries to swallow the same medicine, with the same toxic side-effects. This week anti-poverty activists will gather in Athens for a conference against the austerity agenda that Europe’s elites are forcing on the masses. Its participants will include representatives of the Jubilee campaign that has mobilised millions to demand that debts crippling African economies be dropped.
The popular rebellions in Tunisia and Egypt earlier this year were in part driven by contempt at the inequality-widening agenda of institutions like the IMF. There is no reason why there shouldn’t be similar mass protests in Europe. As Jim Larkin, a pioneer of the Irish trade union movement, once said: “The great only appear great because we are on our knees. Let us rise.”
·First published by New Europe (www.neurope.eu), 1-7 May 2011
Emigration is back at epidemic levels in the Ireland of 2011. Each week an estimated 1,000 people leave a country that has raised and educated them but offers no work.
Are those young emigrants supposed to be comforted by a recent assurance from Jean-Claude Trichet that the European Central Bank acts as an “anchor of stability”? According to the official narrative, the ECB has selflessly come to Ireland’s rescue. Where, I wonder, is the stability for families rent asunder by the ECB’s prescriptions of austerity? Skype might make it easier to keep in touch with loved ones; it doesn’t cure homesickness.
Trichet, the ECB’s president, did not cause all of Ireland’s woes but he is exacerbating them. Brian Lenihan, Irish finance minister before a recent change of government, is more directly culpable for the country’s economic collapse. Though he is not trustworthy, I am inclined to believe Lenihan’s “revelation” – published in The Irish Times earlier this month – that the ECB put him under enormous pressure to accept an €85 billion “bail-out”, with excruciating conditions attached, in November 2010.
Also according to the official narrative, Trichet is a master of technical details who does not trifle with the base concerns of elected politicians. His mind is perennially focused on inflation and interest rates, not the interests of his chums in the top layers of the financial system, the spindoctors want us to believe. But who really stands to benefit from the “anchor of stability” he has thrown into our stormy waters? French and German banks have lent €900 billion to countries on the periphery of the euro-zone, including Ireland. The ECB cannot contemplate hurting these bondholders; so the innocent have to suffer instead.
Joseph Stiglitz, the Nobel-winning economist, has called the terms flanking the loan provided to Ireland by the ECB, European Commission and International Monetary Fund a “noose” around the country’s neck. “In effect, the International Monetary Fund and European Central Bank are asking ordinary Irish workers and citizens to bear the burden of mistakes that were made by international financial markets,” Stiglitz wrote recently. “But it is important to recognise that these mistakes are at least partly attributable to following deregulation and liberalisation policies that were advocated by the IMF and ECB and that these policies provided significant benefits to the financial sector.”
Economists of a more conservative hue than Stiglitz have arrived at similar conclusions. Colm McCarthy, a lecturer in University College Dublin, tried to deliver a metaphorical uppercut on the smug face of Nicolas Sarkozy in January. “From an Irish perspective, what looks to him [Sarkozy] like financial assistance from Europe could as readily be characterised as a bail-out of European investors foolish enough to lend to Anglo Irish Bank and other insolvent banks, courtesy of the Irish taxpayers,” McCarthy wrote in The Sunday Independent.
Thumbing his nose at the French president is unlikely to have repercussions for McCarthy’s career, unless perhaps he fancies a secondment in the Sorbonne. It is telling that he has been much more acquiescent towards the Dublin establishment. In a new report for the Irish government, McCarthy recommends that large chunks of the state-owned electricity, broadcasting and public transport services should be privatised. Under the terms of an “agreement” reached with the EU institutions and the IMF, the proceeds from the sale of these assets would be used to pay back the bail-out debts.
McCarthy’s recommendations for a jumble sale of essential services were delivered a few days before the 95th anniversary of the 1916 Easter Rising, that most hallowed event in Ireland’s struggle for independence from Britain. I read the Dublin newspapers carefully on the day the anniversary fell, yet did not see one commentator expressing disgust at how Margaret Thatcher’s poisonous philosophy is now guiding Ireland’s economic policies. The closest I saw was a mildly-worded analysis in The Sunday Business Post noting that the “trailblazing initiatives” of the Thatcher administration had ushered in a worldwide phenomenon whereby $2 trillion worth of assets were transferred from public to private hands between 1977 and 2008.
This is not a problem unique to Ireland; the EU and IMF want numerous countries to swallow the same medicine, with the same toxic side-effects. This week anti-poverty activists will gather in Athens for a conference against the austerity agenda that Europe’s elites are forcing on the masses. Its participants will include representatives of the Jubilee campaign that has mobilised millions to demand that debts crippling African economies be dropped.
The popular rebellions in Tunisia and Egypt earlier this year were in part driven by contempt at the inequality-widening agenda of institutions like the IMF. There is no reason why there shouldn’t be similar mass protests in Europe. As Jim Larkin, a pioneer of the Irish trade union movement, once said: “The great only appear great because we are on our knees. Let us rise.”
·First published by New Europe (www.neurope.eu), 1-7 May 2011
Monday, March 14, 2011
Cruel and cunning: Van Rompuy's true face
Conspiracy theorists make me laugh. So when I’m in need of comic relief, I occasionally check out the website of Jim Corr, knowing that its contents are a lot more entertaining than the music of his banal pop group The Corrs. For a number of years, Corr has been spouting pseudo-scientific gobbledegook in an attempt to persuade the gullible that man-made global warming is a hoax and that the collapse of the World Trade Centre wasn’t actually caused by the planes flown into it.
Just because conspiracy theorists are nearly always wrong doesn’t mean everything they say should be dismissed. A dedicated bunch of researchers and bloggers have made it their task to follow the activities of the Bilderberg Group, that bunch of businessmen and politicians which meets in top secrecy on an annual basis. Some of these researchers – like the Italian MEP Mario Borghezio – belong to the extreme-right and should be denounced as racist opportunists. Yet while warnings about the Bilberbergers wanting to create a new world government might be far-fetched, there are solid reasons to be wary of what they are up to.
Any club of the wealthy and powerful which seeks to avoid scrutiny is by definition a threat to democracy. And so it is correct that questions were asked about why Herman Van Rompuy dined at a Bilderberg event near Brussels shortly before he was appointed the first full-time president of the European Council in November 2009. If nothing else, his attendance at the exclusive gathering indicates he is more eager to please Goldman Sachs and Shell than the 500 million mere mortals who live in the EU.
Van Rompuy’s behaviour since taking up office further signals that equality is not high on his list of concerns. Even though he trousers €25,000 per month – more than Barack Obama’s salary – he has the insolence to argue that the wages paid to ordinary workers should be kept under control. In a paper he prepared recently in tandem with José Manuel Barroso, the European Commission chief, Van Rompuy advocates that a system should be put in place whereby wage levels can be reduced if they are viewed as inimical to “competitiveness”. The two overpaid men also hope their system will lead to a higher retirement age.
Reading their plan, I was half expecting it to be titled “A Modest Proposal”. For it bears similarities to the thinking behind Jonathan Swift’s 1729 tract of that name, which recommended that the poor should eat their own children. The key difference, of course, is that Swift was being satirical, whereas the pair of unelected presidents are deadly serious.
It is instructive that their “modest proposal” focuses on the cost of labour. This illustrates that they are only interested in cutting the pay of the average worker, not the exorbitant salaries and bonuses offered to their Bilderberg buddies. And isn’t there something sadistic about how mainstream politicians are so fixated on raising the retirement age? The fact that people are living longer than ever before is one of Europe’s most awesome achievements. But instead of celebrating it, our rulers talk about people who manage to avoid kicking the bucket as a “pensions time-bomb”? Why shouldn’t we be able to draw down our pensions at 65 (or even earlier) and look forward to a lengthy and healthy retirement?
Visiting Budapest in December last, Van Rompuy paid a clumsy tribute to the Hungarian writer Sándor Márai. It was fitting, he said, that Márai had spent time in 1920s Frankfurt meditating on whether there were some intellectuals who identified more with Europe than with their own home countries, given that the German city now hosts the European Central Bank. According to Van Rompuy, the ECB is “the institution at the heart of Europe’s new political identity”.
Is that what Europe amounts to: a vast landmass controlled by a bank? If that’s true, then European citizens need to pay attention to the battle for labour rights in Wisconsin and start demanding back the powers we have ceded to a pin-striped cult.
Jean-Claude Trichet – the ECB head and another Bilderberger, as it happens - has been echoing Van Rompuy. Earlier this month, Trichet told EU governments that the “priority must be to enhance wage flexibility”. In layperson’s terms, that means the working poor should be made poorer.
Economics derives from the Greek term “oikonomia”, which means management of a household. No head of household would be satisfied if the price of keeping costs low was that everyone in the family was miserable. Van Rompuy should be ashamed of himself, then, for using a trip to Bucharest last month to say he is “delighted that Romania has turned the corner economically”. Under pressure from the EU and the International Monetary Fund, Romania has introduced some of the cruellest cuts in Europe recently. Public sector wages have been slashed by 25% and – contrary to the rosy picture painted by Van Rompuy – Romania remains in severe difficulty.
Nigel Farage, the idiotic MEP with the UK Independence Party, provoked an uproar in 2010 when he alleged Van Rompuy had “the appearance of a low-grade bank clerk”. Hurling insults based on how somebody looks is unbecoming of a politician. And besides, Van Rompuy is no low-grade bank clerk. He is a right-leaning ideologue with a lot of influence. And he is using that influence to cause huge pain in the real world.
·First published by New Europe (www.neurope.eu), 13-19 March 2011
Just because conspiracy theorists are nearly always wrong doesn’t mean everything they say should be dismissed. A dedicated bunch of researchers and bloggers have made it their task to follow the activities of the Bilderberg Group, that bunch of businessmen and politicians which meets in top secrecy on an annual basis. Some of these researchers – like the Italian MEP Mario Borghezio – belong to the extreme-right and should be denounced as racist opportunists. Yet while warnings about the Bilberbergers wanting to create a new world government might be far-fetched, there are solid reasons to be wary of what they are up to.
Any club of the wealthy and powerful which seeks to avoid scrutiny is by definition a threat to democracy. And so it is correct that questions were asked about why Herman Van Rompuy dined at a Bilderberg event near Brussels shortly before he was appointed the first full-time president of the European Council in November 2009. If nothing else, his attendance at the exclusive gathering indicates he is more eager to please Goldman Sachs and Shell than the 500 million mere mortals who live in the EU.
Van Rompuy’s behaviour since taking up office further signals that equality is not high on his list of concerns. Even though he trousers €25,000 per month – more than Barack Obama’s salary – he has the insolence to argue that the wages paid to ordinary workers should be kept under control. In a paper he prepared recently in tandem with José Manuel Barroso, the European Commission chief, Van Rompuy advocates that a system should be put in place whereby wage levels can be reduced if they are viewed as inimical to “competitiveness”. The two overpaid men also hope their system will lead to a higher retirement age.
Reading their plan, I was half expecting it to be titled “A Modest Proposal”. For it bears similarities to the thinking behind Jonathan Swift’s 1729 tract of that name, which recommended that the poor should eat their own children. The key difference, of course, is that Swift was being satirical, whereas the pair of unelected presidents are deadly serious.
It is instructive that their “modest proposal” focuses on the cost of labour. This illustrates that they are only interested in cutting the pay of the average worker, not the exorbitant salaries and bonuses offered to their Bilderberg buddies. And isn’t there something sadistic about how mainstream politicians are so fixated on raising the retirement age? The fact that people are living longer than ever before is one of Europe’s most awesome achievements. But instead of celebrating it, our rulers talk about people who manage to avoid kicking the bucket as a “pensions time-bomb”? Why shouldn’t we be able to draw down our pensions at 65 (or even earlier) and look forward to a lengthy and healthy retirement?
Visiting Budapest in December last, Van Rompuy paid a clumsy tribute to the Hungarian writer Sándor Márai. It was fitting, he said, that Márai had spent time in 1920s Frankfurt meditating on whether there were some intellectuals who identified more with Europe than with their own home countries, given that the German city now hosts the European Central Bank. According to Van Rompuy, the ECB is “the institution at the heart of Europe’s new political identity”.
Is that what Europe amounts to: a vast landmass controlled by a bank? If that’s true, then European citizens need to pay attention to the battle for labour rights in Wisconsin and start demanding back the powers we have ceded to a pin-striped cult.
Jean-Claude Trichet – the ECB head and another Bilderberger, as it happens - has been echoing Van Rompuy. Earlier this month, Trichet told EU governments that the “priority must be to enhance wage flexibility”. In layperson’s terms, that means the working poor should be made poorer.
Economics derives from the Greek term “oikonomia”, which means management of a household. No head of household would be satisfied if the price of keeping costs low was that everyone in the family was miserable. Van Rompuy should be ashamed of himself, then, for using a trip to Bucharest last month to say he is “delighted that Romania has turned the corner economically”. Under pressure from the EU and the International Monetary Fund, Romania has introduced some of the cruellest cuts in Europe recently. Public sector wages have been slashed by 25% and – contrary to the rosy picture painted by Van Rompuy – Romania remains in severe difficulty.
Nigel Farage, the idiotic MEP with the UK Independence Party, provoked an uproar in 2010 when he alleged Van Rompuy had “the appearance of a low-grade bank clerk”. Hurling insults based on how somebody looks is unbecoming of a politician. And besides, Van Rompuy is no low-grade bank clerk. He is a right-leaning ideologue with a lot of influence. And he is using that influence to cause huge pain in the real world.
·First published by New Europe (www.neurope.eu), 13-19 March 2011
Monday, November 29, 2010
How the ECB wages class war
Dublin’s Kilmainham Jail is not somewhere you can easily forget. Even though I only recall visiting it twice, I have had a morbid fascination with this cold, dark place for most of my life. More particularly, I am obsessed with its Stonebreaker’s Yard, where the leaders of the 1916 Easter Rising against British rule were executed; James Connolly, a socialist visionary who demanded that all children be cherished equally, was so badly injured that he was carried before the firing squad on a stretcher.
When the centenary of the rising occurs in 2016, any celebrations by official Ireland will be a sham. Far from being independent, Ireland’s destiny is now in the hands of a foreign cabal which is callously indifferent to how the children Connolly wished to cherish are reduced to begging on the streets. (Merchants Quay Ireland, a charity, reported a 17% increase in the number of people using its homelessness services in the first six months of this year, compared to the same period in 2009).
One of the most disgusting things I read last week was a presentation given by Jean-Claude Trichet, head of the European Central Bank, to MEPs. Trichet had the gall to boast of the “achievements” made by his institution over the past 12 years at a time when he was forcing misery on Ireland.
It has become clear that Trichet strong-armed the Dublin government into “requesting” a bail-out from the European Union and the International Monetary Fund. Under its terms, Ireland’s budgets will be determined not by the needs of the Irish people but by the diktats of the ECB and IMF. The new rulers of my country are an unelected and unaccountable elite who use language to obfuscate, rather than illuminate.
Has Trichet spouted so much technocratic gobbledygook that he can no longer speak plainly? What kind of guy can praise cutbacks that will leave the poor even poorer as “confidence-inspiring policies”? Where is the morality in a man who warns that there will be a “lost decade” in Europe unless austerity becomes the norm? Is he happy that there will be a lost generation of unemployed people because of the medicine he has prescribed for millions?
And, of course, this enforced hardship is in no way confined to Ireland. Last week the ECB, IMF and European Commission also concluded a second “review mission” to Greece. It decided that in order to qualify for a €80 billion loan from the euro-zone and a further €30 billion from the IMF, Greece would have to spend less on health. You can be sure that the “missionaries” didn’t trek around inspecting cancer facilities in Thessaloniki before declaring health expenditure in Greece as “inefficient”. As it happens, Greece spends about €225 less per head of population on healthcare each year than the €2,300 average for members of the Organisation for Economic Cooperation and Development. But I doubt that the missionaries worried about the human consequences of applying the cut-throat logic of profit and loss to professions traditionally dedicated to caring and public service.
We journalists are gullible. One falsehood that we have swallowed is that French political figures have an aversion to the unbridled capitalism favoured in the US. This myth becomes untenable when one realises that Frenchmen are in charge of three of the most powerful economic groupings in the world: Trichet in the ECB, Pascal Lamy in the World Trade Organisation and Dominique Strauss-Kahn in the IMF. This inglorious triumvirate are as wedded to the Washington Consensus – that toxic doctrine under which deregulation and market liberalisation should be pursued no matter what the social costs – as any American. In the case of Trichet, he is even more zealous in defending neo-liberal orthodoxy than his nearest US counterpart. Whereas Ben Bernanke, the Republican who heads the Federal Reserve, is injecting $600 billion into the US economy as part of a second round of “quantitative easing” – and has emphasised that the money should be used for fiscal stimulus purposes – Trichet is parroting Margaret Thathcher’s line that “there is no alternative” to punishing the masses for a crime they never committed.
A second falsehood is that the ECB’s economists are simply giving technical advice. In truth, they are class warriors, intent on widening inequality. Indoctrinated in the Ecole nationale d’administration, Trichet hails from a highly privileged milieu. Though ostensibly established by Charles de Gaulle to “democratise” access to the civil service, the ENA serves the same purpose as Oxford and Cambridge in Britain. With few exceptions, its champagne-sipping alumni think they have an innate entitlement to shape the policies that everyone else must live with.
Next year Trichet’s term as ECB head will expire. The frontrunner in the race to success him is Axel Weber, president of the Bundesbank in Germany, although Weber may have damaged his chances by speaking out against the ECB’s decision to buy up government bonds in May.
Regardless of who leads it, the ECB will continue to lack democratic legitimacy. Almost unique among central banks, it is independent of political control and is under no obligation to address what effects its prescriptions may have on employment or poverty. The ECB does not serve Europe’s citizens; it takes decisions solely with the interests of the corporate class in mind. Maybe that explains why it is so contemptuous of the little people in our societies.
·First published by New Europe (www.neurope.eu), 28 November – 4 December 2010
When the centenary of the rising occurs in 2016, any celebrations by official Ireland will be a sham. Far from being independent, Ireland’s destiny is now in the hands of a foreign cabal which is callously indifferent to how the children Connolly wished to cherish are reduced to begging on the streets. (Merchants Quay Ireland, a charity, reported a 17% increase in the number of people using its homelessness services in the first six months of this year, compared to the same period in 2009).
One of the most disgusting things I read last week was a presentation given by Jean-Claude Trichet, head of the European Central Bank, to MEPs. Trichet had the gall to boast of the “achievements” made by his institution over the past 12 years at a time when he was forcing misery on Ireland.
It has become clear that Trichet strong-armed the Dublin government into “requesting” a bail-out from the European Union and the International Monetary Fund. Under its terms, Ireland’s budgets will be determined not by the needs of the Irish people but by the diktats of the ECB and IMF. The new rulers of my country are an unelected and unaccountable elite who use language to obfuscate, rather than illuminate.
Has Trichet spouted so much technocratic gobbledygook that he can no longer speak plainly? What kind of guy can praise cutbacks that will leave the poor even poorer as “confidence-inspiring policies”? Where is the morality in a man who warns that there will be a “lost decade” in Europe unless austerity becomes the norm? Is he happy that there will be a lost generation of unemployed people because of the medicine he has prescribed for millions?
And, of course, this enforced hardship is in no way confined to Ireland. Last week the ECB, IMF and European Commission also concluded a second “review mission” to Greece. It decided that in order to qualify for a €80 billion loan from the euro-zone and a further €30 billion from the IMF, Greece would have to spend less on health. You can be sure that the “missionaries” didn’t trek around inspecting cancer facilities in Thessaloniki before declaring health expenditure in Greece as “inefficient”. As it happens, Greece spends about €225 less per head of population on healthcare each year than the €2,300 average for members of the Organisation for Economic Cooperation and Development. But I doubt that the missionaries worried about the human consequences of applying the cut-throat logic of profit and loss to professions traditionally dedicated to caring and public service.
We journalists are gullible. One falsehood that we have swallowed is that French political figures have an aversion to the unbridled capitalism favoured in the US. This myth becomes untenable when one realises that Frenchmen are in charge of three of the most powerful economic groupings in the world: Trichet in the ECB, Pascal Lamy in the World Trade Organisation and Dominique Strauss-Kahn in the IMF. This inglorious triumvirate are as wedded to the Washington Consensus – that toxic doctrine under which deregulation and market liberalisation should be pursued no matter what the social costs – as any American. In the case of Trichet, he is even more zealous in defending neo-liberal orthodoxy than his nearest US counterpart. Whereas Ben Bernanke, the Republican who heads the Federal Reserve, is injecting $600 billion into the US economy as part of a second round of “quantitative easing” – and has emphasised that the money should be used for fiscal stimulus purposes – Trichet is parroting Margaret Thathcher’s line that “there is no alternative” to punishing the masses for a crime they never committed.
A second falsehood is that the ECB’s economists are simply giving technical advice. In truth, they are class warriors, intent on widening inequality. Indoctrinated in the Ecole nationale d’administration, Trichet hails from a highly privileged milieu. Though ostensibly established by Charles de Gaulle to “democratise” access to the civil service, the ENA serves the same purpose as Oxford and Cambridge in Britain. With few exceptions, its champagne-sipping alumni think they have an innate entitlement to shape the policies that everyone else must live with.
Next year Trichet’s term as ECB head will expire. The frontrunner in the race to success him is Axel Weber, president of the Bundesbank in Germany, although Weber may have damaged his chances by speaking out against the ECB’s decision to buy up government bonds in May.
Regardless of who leads it, the ECB will continue to lack democratic legitimacy. Almost unique among central banks, it is independent of political control and is under no obligation to address what effects its prescriptions may have on employment or poverty. The ECB does not serve Europe’s citizens; it takes decisions solely with the interests of the corporate class in mind. Maybe that explains why it is so contemptuous of the little people in our societies.
·First published by New Europe (www.neurope.eu), 28 November – 4 December 2010
Monday, September 27, 2010
Workers of the world unite: there is no alternative
Every so often the Plain English Campaign in Britain accuses the main EU institutions of butchering Her Majesty’s tongue. As an Irishman, the campaign leaves me ambivalent. I have no desire to defend the purity of a language forced on much of the world by a brutish imperialism. But I loathe how the elite in Brussels deliberately uses words that mislead.
Despite not being typical Euro-jargon, the term “social partners” is especially horrid. It gives the impression that employers and trade unions both act altruistically and that they have equal access to the corridors of power.
This week the concept behind the “partnership” – one that is explicitly referred to in the EU’s treaties – will be exposed as fraudulent. On Wednesday (29 September) trade unionists from across Europe will protest at the cutbacks in public expenditure that our political masters tell us we have to swallow to have any chance of recovery from the economic crisis. Will the bosses of this continent be displaying solidarity with their “partners” on this day of action? You must be joking.
My hope is that there will be a massive turn-out of angry workers and that this will encourage trade union leaders to be more combative towards the EU’s institutions than they have been in recent years. The protesters’ key demands can be found in a policy paper titled “Towards A New Social Deal” published last year by the European Trade Union Confederation (ETUC). While its diagnosis is correct – “the dominance of the neo-liberal economic model over the past 30 years has caused the economic catastrophe that Europe and the rest of the world are now experiencing” – it fails to grapple with ETUC’s own culpability in propping up the aforementioned model.
John Monks, ETUC’s general-secretary, made a strategic blunder over the past few years by campaigning in favour of the Lisbon treaty, which legally obliges the Union to follow neo-liberal precepts. The treaty, for example, commits the Union to fight all barriers to international trade – these include social or environmental standards that irritate multinational firms.
During 2009, Monks’ contention that the treaty benefited workers was regularly quoted by dodgy politicians and other establishment figures who bludgeoned Irish voters into accepting the treaty in a referendum – having rejected the same document a year earlier. The truth was that those politicians hadn’t the slightest interest in defending workers rights and that the treaty merely threw a few crumbs to workers.
Monks now has an opportunity to atone for his poor judgement by strenuously opposing the agenda of the EU’s predominantly right-leaning governments and institutions. Far from having no other option than imposing austerity measures on their populations, these myopic ideologues relish how they can ram through decisions that would have proven unpalatable during a boom.
Mark Weisbrot from the Centre for Economic and Policy Research in Washington has demolished the myth that there is no alternative to cutting social spending and raising the retirement age. He has suggested too that Europe’s policy-makers have presented a false picture of the woes besetting euro-zone economies. Whereas conventional “wisdom” has it that the Spanish had been profligate, the reality is that the ratio between the country’s debt and its gross domestic product fell from 59% to 36% from 2000 to 2007.
“What is really going on is that powerful interests within these countries – including Spain, Greece, Ireland and Portugal – are taking advantage of the situation to make the changes that they want,” Weisbrot wrote in July. “Perhaps even more importantly, the European authorities – including the European Commission, the European Central Bank and the IMF – who are holding the purse strings of any bail-out funds, are even more committed than the national governments to right-wing policy changes. And they are further removed from any accountability to any electorate.”
Unfortunately, we lack economic commentators of Weisbrot’s calibre in Brussels. Instead, the researchers in corporate-funded think tanks that masquerade as independent “experts” have acted as cheerleaders for cutbacks. Ann Mettler, director of the Lisbon Council – a group dedicated to making Europe “competitive” – contradicts herself in her latest “e-brief” (a term that the Plain English Campaign must decry). After arguing that Europe needs more investment in education, she then proceeds to applaud cuts that affect vital services like education. Describing the upheaval in the Greek economy as a “healthy wake-up call” she writes that “in reality, what is today called ‘austerity’ is perhaps nothing more than at last making an effort to live within our means.”
It is instructive that another new Lisbon Council pamphlet was penned by Alessandro Leipold, a former senior official with the International Monetary Fund. Leipold has recommended that joint assistance from the EU and IMF “should become the norm” for economies in difficulty.
His blueprint is frightening. Over the summer, the IMF illustrated that it remains wedded to capitalist extremism when it attempted to bulldoze Hungary into abandoning a planned tax on banks. The Hungarian government was able to resist the fund’s pressure; poorer countries outside Europe have been unable to. Under the conditions of a $1.2 billion IMF loan to Jamaica, no new schools can be built for the island’s children.
The measures being taken in the name of economic recovery in Europe and around the world are manifestly unjust. Calling for workers of the world to unite against them might sound old-fashioned but in this respect at least, there is no alternative.
•First published by New Europe (www.neurope.eu), 26 September – 2 October, 2010
Despite not being typical Euro-jargon, the term “social partners” is especially horrid. It gives the impression that employers and trade unions both act altruistically and that they have equal access to the corridors of power.
This week the concept behind the “partnership” – one that is explicitly referred to in the EU’s treaties – will be exposed as fraudulent. On Wednesday (29 September) trade unionists from across Europe will protest at the cutbacks in public expenditure that our political masters tell us we have to swallow to have any chance of recovery from the economic crisis. Will the bosses of this continent be displaying solidarity with their “partners” on this day of action? You must be joking.
My hope is that there will be a massive turn-out of angry workers and that this will encourage trade union leaders to be more combative towards the EU’s institutions than they have been in recent years. The protesters’ key demands can be found in a policy paper titled “Towards A New Social Deal” published last year by the European Trade Union Confederation (ETUC). While its diagnosis is correct – “the dominance of the neo-liberal economic model over the past 30 years has caused the economic catastrophe that Europe and the rest of the world are now experiencing” – it fails to grapple with ETUC’s own culpability in propping up the aforementioned model.
John Monks, ETUC’s general-secretary, made a strategic blunder over the past few years by campaigning in favour of the Lisbon treaty, which legally obliges the Union to follow neo-liberal precepts. The treaty, for example, commits the Union to fight all barriers to international trade – these include social or environmental standards that irritate multinational firms.
During 2009, Monks’ contention that the treaty benefited workers was regularly quoted by dodgy politicians and other establishment figures who bludgeoned Irish voters into accepting the treaty in a referendum – having rejected the same document a year earlier. The truth was that those politicians hadn’t the slightest interest in defending workers rights and that the treaty merely threw a few crumbs to workers.
Monks now has an opportunity to atone for his poor judgement by strenuously opposing the agenda of the EU’s predominantly right-leaning governments and institutions. Far from having no other option than imposing austerity measures on their populations, these myopic ideologues relish how they can ram through decisions that would have proven unpalatable during a boom.
Mark Weisbrot from the Centre for Economic and Policy Research in Washington has demolished the myth that there is no alternative to cutting social spending and raising the retirement age. He has suggested too that Europe’s policy-makers have presented a false picture of the woes besetting euro-zone economies. Whereas conventional “wisdom” has it that the Spanish had been profligate, the reality is that the ratio between the country’s debt and its gross domestic product fell from 59% to 36% from 2000 to 2007.
“What is really going on is that powerful interests within these countries – including Spain, Greece, Ireland and Portugal – are taking advantage of the situation to make the changes that they want,” Weisbrot wrote in July. “Perhaps even more importantly, the European authorities – including the European Commission, the European Central Bank and the IMF – who are holding the purse strings of any bail-out funds, are even more committed than the national governments to right-wing policy changes. And they are further removed from any accountability to any electorate.”
Unfortunately, we lack economic commentators of Weisbrot’s calibre in Brussels. Instead, the researchers in corporate-funded think tanks that masquerade as independent “experts” have acted as cheerleaders for cutbacks. Ann Mettler, director of the Lisbon Council – a group dedicated to making Europe “competitive” – contradicts herself in her latest “e-brief” (a term that the Plain English Campaign must decry). After arguing that Europe needs more investment in education, she then proceeds to applaud cuts that affect vital services like education. Describing the upheaval in the Greek economy as a “healthy wake-up call” she writes that “in reality, what is today called ‘austerity’ is perhaps nothing more than at last making an effort to live within our means.”
It is instructive that another new Lisbon Council pamphlet was penned by Alessandro Leipold, a former senior official with the International Monetary Fund. Leipold has recommended that joint assistance from the EU and IMF “should become the norm” for economies in difficulty.
His blueprint is frightening. Over the summer, the IMF illustrated that it remains wedded to capitalist extremism when it attempted to bulldoze Hungary into abandoning a planned tax on banks. The Hungarian government was able to resist the fund’s pressure; poorer countries outside Europe have been unable to. Under the conditions of a $1.2 billion IMF loan to Jamaica, no new schools can be built for the island’s children.
The measures being taken in the name of economic recovery in Europe and around the world are manifestly unjust. Calling for workers of the world to unite against them might sound old-fashioned but in this respect at least, there is no alternative.
•First published by New Europe (www.neurope.eu), 26 September – 2 October, 2010
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