EU countries must reject the impossible dream of export-led growth and instead concentrate on their domestic economies
However adroitly David Cameron picks his way through the mine-strewn battlefield of "in/out Europe" this Friday![ext]()
, what is certain is that he will be ideologically incapable of turning his fire on the strand of the EU's dysfunctional DNA that is wrecking the continent. That is, its neoliberal, export-led growth model and its handmaidens, the utterly unchallenged single market and the increasingly discredited single currency.
From his wing of the party, through to the "Fresh Start![ext]()
" Tories, with their calls for minimal social protection, all are united in thinking that access to the single market is the only bit of Europe really worth fighting for. They relish enforcing austerity and the economic sado-masochism of international competitiveness on to their own people and those of much of the rest of Europe. Some propose that Greece leave the euro, allowing it with one mighty bound to be free to use its shiny new, devalued drachma to export its way to nirvana. Others demand that southern Europe and Ireland continue to impoverish their people until wages and benefits are low enough to enable them to rebalance their economies through more exports.
The much lauded "single market" was 20 years old last year, and its open market emphasis on the free movement of goods, money and people is rarely recognised as being at the heart of the present European crisis. It allowed German banks to lend to Greeks to import German cars they couldn't afford, and then the national debts that resulted are being dealt with by taking money from pensioners and the less well-off. Meanwhile, the flow of migration and the inability of countries to control their borders under the single market are increasing tensions across the continent.
Although it won't appear in the prime minister's speech, it is time for the rest of us to ask the fundamental question: what will all these European countries, newly invigorated with lower social conditions and declining domestic demand, be able to export, and to whom? Of course there still will be exports, but most are likely to be provided by Germany, protected as it is by the undervalued euro exchange rate and its relatively low domestic wages. At this point, the inevitable hi-tech exports straw is proffered to be clutched at, but this last colonial delusion will soon be seen off by China, with its massive pool of cheap but driven labour roaring up the hi-tech skill ladder.
This leaves us with the real nightmare facing Europe: its shrinking full-time job market and hence lack of demand to keep the economy soldiering on. Whatever exports aren't provided by Germany and China won't give anything like the economic and employment stimulus required to solve these fundamental European problems.
The alternative that should be at the heart of the debate about Europe's future is how to transform the EU into a co-operative grouping of countries that provides a secure future for its people. Cross-border issues like climate change, pollution and crime require intra-European co-operation, but the flow of goods, money and people must be slowed dramatically to enable nations to take back control of their future and protect their citizens.
Its time for Europe to have a new goal: rejecting the single market and prioritising the domestic market instead. Making that happen will require ditching austerity in favour of encouraging activity within the member states to rekindle demand, generate jobs and allow an eventual level of taxation to reduce national debt.
Europe has to face up to the fact that it must reject the impossible dream of export-led growth and instead concentrate on domestic-led growth. Face-to-face caring and infrastructural renewal will provide the backbone for a labour-intensive future for most countries. The former can be paid for by the state, particularly once domestic and international tax dodging are tackled.
With some modest state pump priming, the majority of the funding for infrastructure programmes, such as more housing, making every building energy tight, diverse and locally orientated transport systems etc, can be provided by pension and insurance funds and from personal savings via bonds and ISAs. The secure returns that can be earned from such investments are just what such funding sources need. The local jobs and business opportunities provided will help rebuild the tax base and allow at last for a sustainable revitalisation of Europe's economy. Reported by guardian.co.uk 2 hours ago.
However adroitly David Cameron picks his way through the mine-strewn battlefield of "in/out Europe" this Friday
, what is certain is that he will be ideologically incapable of turning his fire on the strand of the EU's dysfunctional DNA that is wrecking the continent. That is, its neoliberal, export-led growth model and its handmaidens, the utterly unchallenged single market and the increasingly discredited single currency.From his wing of the party, through to the "Fresh Start
" Tories, with their calls for minimal social protection, all are united in thinking that access to the single market is the only bit of Europe really worth fighting for. They relish enforcing austerity and the economic sado-masochism of international competitiveness on to their own people and those of much of the rest of Europe. Some propose that Greece leave the euro, allowing it with one mighty bound to be free to use its shiny new, devalued drachma to export its way to nirvana. Others demand that southern Europe and Ireland continue to impoverish their people until wages and benefits are low enough to enable them to rebalance their economies through more exports.The much lauded "single market" was 20 years old last year, and its open market emphasis on the free movement of goods, money and people is rarely recognised as being at the heart of the present European crisis. It allowed German banks to lend to Greeks to import German cars they couldn't afford, and then the national debts that resulted are being dealt with by taking money from pensioners and the less well-off. Meanwhile, the flow of migration and the inability of countries to control their borders under the single market are increasing tensions across the continent.
Although it won't appear in the prime minister's speech, it is time for the rest of us to ask the fundamental question: what will all these European countries, newly invigorated with lower social conditions and declining domestic demand, be able to export, and to whom? Of course there still will be exports, but most are likely to be provided by Germany, protected as it is by the undervalued euro exchange rate and its relatively low domestic wages. At this point, the inevitable hi-tech exports straw is proffered to be clutched at, but this last colonial delusion will soon be seen off by China, with its massive pool of cheap but driven labour roaring up the hi-tech skill ladder.
This leaves us with the real nightmare facing Europe: its shrinking full-time job market and hence lack of demand to keep the economy soldiering on. Whatever exports aren't provided by Germany and China won't give anything like the economic and employment stimulus required to solve these fundamental European problems.
The alternative that should be at the heart of the debate about Europe's future is how to transform the EU into a co-operative grouping of countries that provides a secure future for its people. Cross-border issues like climate change, pollution and crime require intra-European co-operation, but the flow of goods, money and people must be slowed dramatically to enable nations to take back control of their future and protect their citizens.
Its time for Europe to have a new goal: rejecting the single market and prioritising the domestic market instead. Making that happen will require ditching austerity in favour of encouraging activity within the member states to rekindle demand, generate jobs and allow an eventual level of taxation to reduce national debt.
Europe has to face up to the fact that it must reject the impossible dream of export-led growth and instead concentrate on domestic-led growth. Face-to-face caring and infrastructural renewal will provide the backbone for a labour-intensive future for most countries. The former can be paid for by the state, particularly once domestic and international tax dodging are tackled.
With some modest state pump priming, the majority of the funding for infrastructure programmes, such as more housing, making every building energy tight, diverse and locally orientated transport systems etc, can be provided by pension and insurance funds and from personal savings via bonds and ISAs. The secure returns that can be earned from such investments are just what such funding sources need. The local jobs and business opportunities provided will help rebuild the tax base and allow at last for a sustainable revitalisation of Europe's economy. Reported by guardian.co.uk 2 hours ago.