Common Sense First

Over in The Week/The First Post, Neil Clark writes:

You might think that with 23m people out of work in Europe, the EU and its organisations would be doing everything they could to preserve European jobs and help Europe's beleaguered economies. Think again. This week there have been three examples of how the EU is working against economic recovery.

First, there was the collapse of SeaFrance. The French government wanted to bail out the ferry operator to the tune of €200m, but the company was liquidated by a French court after a EU Commission ruled that a state bail-out would be illegal. The result of the decision? The loss of 1,000 jobs, including 127 in the UK. That’s 1,000 people who’ll now be cutting their spending on clothes, restaurants and holidays with the obvious knock-on effects on retailers and other sectors of the economy. Exactly what the French and British economies don’t need.

Second, there’s the EU’s threats made to the Hungarian government for its failure to adopt tougher austerity measures - despite Hungary’s deficit being below the EU’s upper three per cent limit. Unemployment in Hungary is around 10.7 per cent and the government fears that more cuts will only increase it - but this doesn’t seem to matter too much to the EU bigwigs. On Wednesday Ollie Rehn, European Commissioner for Economic and Financial Affairs, said that Hungary could lose EU Cohesion Fund money unless the government does what Brussels wants.

Third, there are the moves to impose an EU-wide oil embargo on Iran. The EU’s three most indebted countries - Greece, Italy and Spain - are, as it happens, the largest importers of Iranian crude. While around seven per cent of total EU oil imports come from Iran, Greece imports around a quarter of its oil from the Islamic Republic - on favourable credit terms - Italy around 13 per cent and Spain almost 10 per cent. Bloomberg reports that the three countries are “concerned that an oil-supply shock would further damage their economies already hit by the European debt crisis” - and it’s easy to see why.

“Given the conditions in Europe, this decision is almost inexplicable,” writes Daniel Larison in the American Conservative. “This is a move that probably will not have any constructive effect on Iranian regime behaviour, but it will likely impose higher energy costs on European economies.” Again, just what we don’t need at the time of Europe’s biggest economic crisis since the 1930s. How can one explain the EU’s commitment to policies that will make unemployment rise - and take us even further away from economic recovery?

First, the case of SeaFrance demonstrates that the EU Commission is hopelessly wedded to a neo-liberal ‘pro-competition’ agenda which frowns on state aid. “The Commission aims at ensuring that all European companies operate on a level-playing field, where competitive companies succeed,” the EU Commission website states. “It ascertains that government interventions do not interfere with the smooth functioning of the internal market or harm the competitiveness of EU companies.”

That’s all very well, but when 1,000 jobs are at stake, surely it’s time to put commonsense first? Back in February 1971, the British Conservative government stepped in to nationalise Rolls Royce when the company went into receivership. Jobs were saved, Rolls Royce recovered and is still going strong today. But if that the collapse had happened today, the neo-liberals at the EU Commission would doubtless have declared the action illegal - and the government would have been prevented from stepping in to save an iconic British company.

The willingness to impose an Iranian oil embargo highlights that when it comes to foreign policy, Europe’s elite are too keen to follow the lead of the US. The EU is supposed to represent European citizens and not adopt policies which will damage Europe’s economies simply in order to please other foreign powers or well-funded lobby groups.

Finally, there’s the fact that the EU elite are so hopelessly out-of-touch with just how hard things are on the ground today. Unemployment is something which happens to other people. Austerity certainly doesn't impact too much in the life of Baroness Ashton, the unelected High Representative of the Union for Foreign Affairs and Security Policy, whose spokesperson said two weeks ago: “The EU is considering another set of sanctions against Iran and we continue to do that.” On the contrary, the woman described as “the best-paid female politician in the western world” received a 5.2 per cent increase in her £383m European External Action Service budget for 2012. Nor is there much austerity in the life of Ollie Rehn, the unelected EU Commissioner currently threatening Hungary, who receives a salary of €19,909.89 a month, plus allowances.

The people making the important decisions in Europe today are a far cry from the generation of post-war European politicians who put full employment at the very top of their priorities. As I wrote here nearly a year ago, Prime Minister Harold Macmillan (1957-63) was determined to prevent any return to the high pre-war levels of unemployment. Austrian Chancellor Bruno Kreisky (1970-83) declared at the time of his country’s 1979 general election: “Hundreds of thousands unemployed matter more than a few billion schillings of debt.”

In order for the EU to tackle joblessness, we need leaders who will put all other considerations aside in a crusade to get Europe working again. If that means state bail-outs, ditching the politics of austerity and diverging from the US on Iranian sanctions, then so be it. But it’s unlikely that help for the unemployed will arrive unless those currently wielding power in Europe lose their jobs.

Pro-Commonwealth Keynesians have been the most consistent opponents of European federalism for 60 years. But there was a media blackout when they banded together with others, some admittedly more desirable than others, at the last European Elections in order to point out that EU directives were forcing the privatisation of our public services, that European Court rulings were oppressing trade unions and encouraging social dumping, and that the EU was forcing grossly iniquitous trade deals on developing countries. The pre-Election edition of Question Time had to be heavily edited because a member of the audience had dared to mention them.