The EU’s leaders are about to force austerity on the bloc.
Tomorrow's vote on the EU's fiscal rules could force the majority of member states to implement austerity and decimate just transition policies.
Demonstrators march against Austerity in Brussels earlier this year. Photo taken from: https://www.flickr.com/photos/etuc-ces/53393248450/in/album-72177720313323405/
At the start of this year, activist and member of European Parliament Marc Botenga wrote in Jacobin that Europe’s leaders are addicted to austerity. He warned that the EU will likely put into law fiscal rules forcing the majority of member states to slash public budgets and cut social and environmental budgets - yet again.
While most of the political groups on the Left are planning on voting against the rules, the Progressive Alliance of Socialists and Democrats are currently planning on voting in favor while making up the deciding vote. Groups on the right of the political spectrum are voting in favor of the rules.
Those rules are finally up for a vote this coming Tuesday (April 23rd). Unions have been warning for months that if these rules are signed into law, most of the EU’s economies will depress the economy, public budget cuts will be inevitable, and reaching social and climate investment goals will be nearly impossible.
According to research conducted by the European Trade Union Confederation (ETUC) and the New Economics Foundation, only five of the bloc’s member states would be able to meet their minimum spending requirements for their planned social and environmental policy investments.
This means less ambition for energy transition policies, stalled investments into public health programs, and an inability to fund ambitious infrastructure and public work programs that EU countries desperately need.
The fiscal rules of Europe hark back to the EU’s creation during the peak moment neoliberal policy making hegemony. The rules set firm (and some would argue, arbitrary) limits on countries’ debt and deficit percentages and prescribe guidelines for reducing debt and deficits.
The fiscal rules seem a perplexing return to an economic dogma that placed inflation reduction and debt reduction at the heart as the central objective of fiscal policy making.
It seems that little has been learned by the evidence accruing that public spending is an essential part of recovery, as accomplished across the Atlantic in the US with programs at the heart of Biden’s economic policies such as the Inflation Reduction Act.
The analysis by ETUC found that countries across the EU would have to cut budgets by more than €100 billion over the next year alone.
Public services and collapsing manufacturing
In an email, General Secretary of the European Public Services Union (EPSU) Jan Willem Goudriaan told me that EPSU has argued that the economic governance could jeopardize spending for the European Green Deal, investment in the EU pillar of social rights, industrial policy, and cooperation between public administrations.
According to EPSU, austerity measures in the past have forced countries to slash spending for a broad range of social services, such as elderly care, childcare, and care services for people with disabilities.
This is antithetical to what European voters are calling for. A Eurobarometer poll recently found that the most prioritized topics amongst voters for June’s upcoming elections are poverty and social exclusion, public health, and the economy and job creation. Strict and conservative fiscal rules are an anathema to the social welfare wishes of European voters.
Not only will the social sector suffer, but Europe’s ailing industries will as well. Over the past four years, the EU has lost over a million jobs in manufacturing and investments are urgently needed to help industries transition towards less polluting production. Without intervention, tens of thousands of jobs are on the line.
The European Commission’s own statements reflect baffling hypocrisy. On the same day that the European commission published a report highlighting how essential public funding was to recover from the pandemic-induced recession, it furthered efforts block member states’ capacities to spend.
In an open letter signed by French, Italian, and Spanish trade unions to MEPs, they argue “Other rules are possible. Rules that allow for social investment, green investment, the funding of public services and social protection systems, and public support for just transition and the decarbonisation of our industries.”
In a conversation with an MEP in the past, they told me that sending an email to your representatives really can induce change. If you’re worried about the fiscal rules, consider sending an email to your representatives in the European Parliament, which you can find here.