EU Confrontations Continue
By Staff News & Analysis - October 08, 2010

Economic sanctions? Yes, please … Brussels wants to delve deep into the running of national economies. It should beware of digging too far … THEY came to Brussels this week in their tens of thousands, from Finland to Greece, to say no to austerity. Their message was simple: the poor and the workers are being made to pay for the sins of the bankers and the speculators. To judge from some banners, they may have a new category of enemy: Eurocrats. Jose Manuel Barroso, president of the European Commission, keeps saying that the days of stimulus spending are over; now is the time for budget cuts. To ensure that members of the European Union maintain fiscal discipline, he proposed on September 29th stern new measures to give the commission power to scrutinise their budgets and impose hundreds of millions of euros' worth of penalties on the profligate. Even those that pig-headedly refuse to reform their economies could be punished. – Economist

Dominant Social Theme: The EU may be moving too fast but it is for the good of everyone.

Free-Market Analysis: It is sometimes a little wearying to follow the ins and outs of the austerity measures being pushed in Europe because from our point of view they increasingly are a kind of pre-scripted affair. They do give rise to the idea that those behind the EU knew perfectly well that sooner or later there would be a swift and terrible downturn in the Eurozone. Sub dominant social theme: "This is the way things happened and now we all need to pull together and reimburse the banks."

There are of course plenty of skeptics in the EU community that believe austerity is a necessary part of the economic landscape at this point because many citizens in the PIGS had grown greedy; the benefits they were receiving from the government were therefore undeserved and unsupportable. Others believe that austerity is merely a way to ensure that Europe's and America's big banks are reimbursed.

We have taken the position that the EU did not fully expect the ferocity of the downturn, nor the impact of having it basically play out over the Internet. The stresses and strains were such, so far as we can tell, that France came near to pulling out of the EU over an argument with Germany regarding the creation of an EU-wide fund that would work in partnership with the IMF to ensure that no EU countries went bankrupt.

It is no doubt true that those running the EU expected a downturn. It is no doubt true that there was a plan to introduce what is now called austerity as well. This must be the case as the EU process has essentially been revealed as one of glorified payola. The political and industrial leaders of various EU countries were virtually bribed with boatloads of EU funds that were paid upfront supposedly to settle governmental debts that would bring national affairs into balance with EU financial requirements.

Of course nothing of the sort occurred. The money was booked and the books were balanced, but the real cash found its way into the pockets of those leaders that then campaigned hard for their respective countries to join the EU. Several years later (yesterday and today), it becomes very clear that the funds were not really applied as they should have been. But conveniently, the damage is done. The PIGS are part of the EU along with their burgeoning debts.

As we have pointed out, this procedure has played out on the Internet. Very few of Europe's wrathful tribes are unaware of the "bait and switch" that has taken place. Those running the EU may have hoped – and believed – that as in the past the narrative that they projected through mainstream media would prove convincing. But the reality of the manipulation, in our humble opinion, has been broadcast via the alternative electronic media and now much of Europe begins to smolder.

The article excerpted above makes this statement clearly in its very first paragraph: "They came to Brussels this week in their tens of thousands, from Finland to Greece, to say no to austerity. Their message was simple: the poor and the workers are being made to pay for the sins of the bankers and the speculators." And the article concludes: "The next time protesters hit Brussels, they may not just march past the commission, but right into it."

We think this is the real nightmare that the Eurocrats dread. The idea was probably that the unions would be controllable (the public unions especially) even after a downturn had taken place. The union movement in Europe, after all, often acts as an adjunct to European socialist political parties. But as we have pointed out in numerous articles, the truth-telling of the Internet was bound to affect the rank and file – who fully understand by now that the days of wine and roses are over.

In truth, from our point of view, austerity was to have been another advancement in the growing authoritarianism of the West. In America as in Europe, state power is accumulating by leaps and bounds. Austerity, emphasizing a reduction in all sorts of public works projects including infrastructure and focusing (with IMF-like enthusiasm) on raising taxes is another way of lowering the quality of life for EU citizens while controlling them financially.

Partially in reaction to the pushback, EU leaders are becoming increasingly strident about interfering with the public budgets of the nation-states comprising the EU. Proposed by the obnoxious Herman Van Rompuy, President of the European Council, a new EU strategy has taken center stage. Here is how the Economist article describes it: "To reduce ministers' temptation to protect each other, the commission suggests 'reverse voting': instead of a majority being required to impose sanctions, the penalties would be approved unless a majority votes them down."

To put this in the clearest possible terms, what Rompuy et. al are proposing is that they be given carte blanche to dictate budgetary terms to the EU – decisions that could only be removed by a majority vote. One can only imagine the arm-twisting that would occur to ensure that a majority never voted AGAINST an important budgetary item.

When one regards the kind of mindset emanating from Brussels – along with renewed talk about a muscular EU military and pan-European CIA-like spying operation – one can only shake one's head in disbelief. We would have to speculate at this point that the EU does not have a lot of popular support from many of the nation-states it purports to represent. The more its leaders rush to accumulate additional anti-democratic powers, the less credibility the whole centralizing experiment has in our view.

After Thoughts

We think the anti-"austerity" movement may continue to grow, even as winter settles on Europe. It provides a centralizing focus for a wider disenchantment with the EU. Those who believe that this movement is primarily being whipped up by PIGS's public unions may be underestimating what is actually occurring. The resentment may be broader and deeper than that. For once the Economist may have gotten it right.

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