The Hypocrisy of Anti-Austerity Remainers

Tim Black writes:

‘Austerity caused Brexit.’ It’s an argument beloved of left-ish Remainers.

It allows them to posture as protectors of the poor and downtrodden, to sympathise with the plight of those Leave voters ‘left behind’ in the deindustrialised north of England or south Wales, while, simultaneously, still saying to them that they were wrong to reject the EU.

That they made a mistake. That their grievances were misdirected. Or, to paraphrase Remain-supporting Labourites: blame Tory austerity, not the EU.

And yet there is something absurd about this argument. It’s not that the Conservative government’s nine-year-long commitment to austerity (which Labour would also have proudly pursued if it had been elected at the 2010 General Election) hasn’t been damaging.

It has. It has simultaneously resulted in cutbacks to certain public services, from health to education, while, paradoxically, doing nothing to reduce state spending as a share of GDP.

This is largely because the economy, bereft of any productive verve, let alone fiscal stimuli, is stagnant bordering on recessive. Austerity therefore fails on its own terms – to reduce the fiscal deficit – and fails in broader social terms. It is a visionless, dispiriting project that merely reinforces a deep social pessimism.

So austerity, as a policy idea and a lived reality, is rubbish. But those attacking the British government’s austerity policies in the name of overturning Brexit are plunged into absurdity because it is the EU that is, and always has been, in the vanguard of austerity policymaking. 

Leftish EU supporters can invoke EU workers’ rights (despite the EU’s attacks on workers’ right to strike), or blather on about the Social Chapter (despite it immiserating large swathes of southern Europe), all they like. 

But there is no getting away from it: the EU is the cheerleader for austerity. Just look at what has happened in Italy since the Euro crisis erupted in 2009.

An economy which has long suffered from chronically low productivity, and has a relatively large national debt, was forced by the European Union and the European Central Bank to adhere to a severe deficit-reduction programme – that is, to limit a public spending deficit to no more than a few per cent of GDP – in return for support from the ECB and the International Monetary Fund (IMF).

It didn’t matter what Italian citizens wanted – which presumably was not continued impoverishment and zero control over their nation’s own monetary policy – because the EU was prepared to send in its own man to implement austerity, which it did in 2011, when EU technocrat, and darling of the markets, Mario Monti, was appointed, not elected, as Italy’s prime minister. 

The result of the EU’s political and economic colonisation of Italy? A neverending economic and social crisis. Public debt has risen to 130 per cent of GDP, youth unemployment stands at 37 per cent.

As the New York Times reports: ‘Italy’s gross domestic product per capita has fallen. This decline is unique among large advanced economies. (It is even worse than Japan’s infamous lost decades.)’ Last month, things got even worse, as Italy’s economy went into recession, yet again. 

While Italy’s economy was structurally weak even before its membership of the European Union, there is little doubt that the EU’s imposition of strict fiscal austerity, complete with the overturning of Italian democracy, has made its situation much, much worse. 

And incredibly, so committed is the EU to the ideology of austerity that it actually sees Italy as a success story of ‘fiscal discipline’. In 2014, the ECB’s man in Rome, Mario Monti, praised the EU’s ‘precious’ vision, and called on all high-debt countries ‘concretely’ to demonstrate ‘the imperatives of discipline’. 

And then, of course, there’s that other target of EU austerity, Greece, a nation that has been subjected to the harsh fiscal discipline of the EU (backed by the IMF) for nearly 10 years, in return for bailout cash.

This era of austerity officially came to an end last year, and it has left Greece with an economy that has shrunk by a quarter since 2010, youth unemployment at 38.5 per cent, and debt is higher than ever, at 180 per cent of GDP. Payments are still due for decades to come. 

What’s more, Greece is still living under the thumb of the Troika, with the ECB and the European Commission already warning Greece that it needs to implement its post-bailout ‘commitments’ (such as the state auctioning off privately owned homes) or face further sanctions. 

That is the reality of the EU. Strict fiscal discipline, or austerity, imposed on certain indebted nations, at the cost of people’s democratic rights and their material standard of living.

The EU is not, then, a refuge from Tory austerity; it is the embodiment of the ideology of austerity. And the treatment of the EU’s southern member states is austerity’s indictment. 

No doubt, those blaming austerity for Brexit will claim that the EU can be reformed from within. But that misses the point about the EU’s policy of austerity.

It is not an aberration, or the result of certain leaders’ mistakes – it is intrinsic to the EU as a project. Austerity, or the threat of austerity, is built into the EU as an institution. 

Have a look at the EU’s founding document, the Maastricht Treaty (Article 104 and the corresponding protocol). There it is in bold: general government budget deficits must not exceed three per cent of GDP.

This restriction, this order, is reiterated in numerous jargonised regulations and rules, from the Stability and Growth Pact to the European Semester. 

The EU and its crowning achievement, the Eurozone, are premised on forcing economic and therefore political convergence between member states.

The rules are broken of course, as they were famously in 2003 by both France and Germany, both of whom had spending restrictions waived by the EU. 

But austerity is not really for Germany or France – it is for the inflationary, miscreant members like Greece and Italy. It is to keep them in line, to make sure the whole project is not put at risk.

For the EU’s leaders, democracy and standard of living are mere collateral damage, necessary sacrifices to be made at the altar of monetary and political union. 

And this is the EU that many on the left slamming Tory austerity want to stay in. Ostensibly being anti-austerity while championing the EU is a telling form of cognitive dissonance.

It shows that, despite their avowed sympathy for the ‘left behind’ of Teesside and elsewhere, these people don’t care.

They are simply weaponising austerity for their real cause – to undermine Brexit.