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More on decision amidst crisis

Yesterday, I mentioned and linked to a 2015 piece by Yanis Varoufakis clearing outlining how monetary union had inevitably wrought terrible economic destruction in the eurozone. The article argued that nonetheless Europe should be reluctant to abandon the European project. As the UK votes, a post by Mark Weisbrot of the Center for Economic Policy Research argues from a similar perspective, citing Varoufakis’s view. Note the point that EU membership implies that the UK is subject to the strictures of the Stability and Growth Pact, though of course the UK retains the pound. After objecting to attempts by EU officials to influence the outcome with strong-arm tactics, he notes that:

The creation of the euro has clearly been a terrible mistake, and has inflicted mass unemployment and unnecessary suffering for what is about to become a “lost decade,” along with “structural reforms” that have hacked away at European economic and social rights. The UK, of course is not part of the eurozone but the whole EU project has been deeply influenced by the eurozone and the neoliberal ideology that is baked into it. The misnamed European Stability and Growth Pact, for example, applies to the whole EU, not just the eurozone. It builds on the mistakes of the Maastricht Treaty, and is likely to result in more fiscal austerity when the region really needs fiscal expansion to recover; and this at a time when public borrowing is free and the Central Bank can create money without fear of inflation.

There is also a paper trail of thousands of pages of Article IV consultations between the EU governments and the IMF. These show an elite consensus by the EU finance ministries — not just the eurozone governments who have been vulnerable or right-wing enough, or both — to implement these policies.This consensus includes cutting pensions, health care, and other social spending, as well government employment, and spending generally; as well as reducing employment protections and instituting labor market “reforms” to reduce the bargaining power of workers, as is currently being resisted in France.

So, this is a much longer discussion, but to simplify, it seems the question from a pro-human point of view is whether Europe can steer away from its continuing, long-term neoliberal failure more quickly by trying to democratize the eurozone and the EU, and thereby change their policy agenda — as former Greek Finance Minister Yanis Varoufakis is now campaigning to do; or by trying to change the agenda at the national level first, where possible.


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