It's often presumed that the target of austerity is government deficits. I'm not at all sure I agree. As the FT notes this morning:
The Spanish government has announced its fifth round of budget cuts and tax increases in just nine months, as part of a reform package that could pave the way for an EU bailout and sovereign debt purchases by the European Central Bank.
And:
Under Madrid's revised budget plans, government spending will be slashed by 8.9 per cent. Next year's tax receipts are forecast to rise from €170bn to €175bn, helped in part by an increase in sales tax.
Alongside the spending cuts, the government said it would pass 43 new laws over the next six months and establish a new independent budgetary authority to monitor government spending.
The sting is in that tail: a new unelected body is going to preside over these cuts, and presumably be accountable to the EU.
Greece and Italy have lost governments to austerity and democracy with it as the EU has moved in. Now Spain in going that way. How the right wing must love this: they say they're the enemies of the state. Actually they're the enemies of democracy. It is for governments to be accountable: passing the job to the great and good is ne0-feudalism.
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Very true, the right wing claim that they are opposed to an “oversized state” already falls apart when you consider their policies in other areas, but when it comes to economics their target is a state that provides for the welfare of its citizens and provides the basis for a sound economy.
If they didn’t have the excuse of Government deficits they would have done this anyway using some other excuse. After all they are doing it in a time of economic crisis when one would have thought cutting State Spending alongside Private spending would be the last thing to do.
As an internationalist I ought to be able to support European Unity, but the sad fact is that the EU is an institution designed to force neoliberal policies, even when national Governments do not want to pursue them.
The Right are desperately seeking any evidence that they can lay their hands on to support the argument that austerity works. Here’s an example:-
http://www.cityam.com/forum/estonia-proves-it-s-possible-cut-spending-and-continue-grow
I worry that the “headbangers” in the Tory government will try and use this to adavnce their agenda for the UK. Untold misery for millions (Thatcher on steroids), while the elite few enjoy even more benefits!
The Estonia defence again…Estonia: population 1.3 million (same as the number working in financial services more or less in UK); 25% of whom are Russians (this might mean something for the country considering there are 150-ish million Russians living next door); shale oil currently being exploited to arguable environmental damage; Estonia also has rare earth deposits making up 2% of global market; plus a lotta lotta trees which I’ve heard are quite useful for stuff or whatever.
UK: 62 million people, living in a very old but modern economy with at least a dozen world class universities, speaking THE global language, with oil resources, great renewable potential and so on but with near feudal system of land ownership, national elite culture/pastime of rent-seeking, and a school system that attracts the children of parents from countries with terrible human rights’ records.
Since starting to write this I’ve begun to see things more clearly. Estonia is clearly much more advanced than Britain will ever be. Time to get learning Estonian. I’ve heard it’s related to Finnish a bit. Well that shouldn’t be difficult. That lot are always sounding off about profligacy, so it must be easy.
(Takes quick look at Wikipedia)
Oh God…30 grammatical cases for Finnish.
Guess I’ll just have to get used to feudalism after all.
I also read (c/o http://hat4uk.wordpress.com/ ) that the European Stability Mechanism is near ratified and scheduled to come into force early October, and that its constitution includes these:
Article 32, para 3: The ESM, its property, funding and assets, wherever located and by whomsoever held, shall enjoy immunity from every form of judicial process.
para 4: The property, funding and assets of the ESM shall, wherever located and by whomsoever held, be immune from search, requisition, confiscation, expropriation or any other form of seizure, taking or foreclosure by executive, judicial, administrative or legislative action
para 8: To the extent necessary to carry out the activities provided for in this Treaty, all property, funding and assets of the ESM shall be free from restrictions, regulations, controls and moratoria of any nature
Article 35, para 1: In the interest of the ESM, the Chairperson of the Board of Governors, Governors, alternate Governors, Directors, alternate Directors, as well as the Managing Director and other staff members shall be immune from legal proceedings with respect to acts performed by them in their official capacity and shall enjoy inviolability in respect of their official papers and documents.
So the sack is getting sewn up tight at both ends, the national and the supranational. Get yourselves out of that, Europlebs.