The neo-liberal Taliban” and Social Europe has a useful post outlining the various positions taken by the EC which justify this term. So, let’s look at the facts:
• According to the Commission’s reading, the deepest financial and economic crisis since the 1930s is simply a state debt crisis and has little to do with the crash of Lehmann Brothers and other banks. Yet, in reality, states were forced to step in to save the banks and their markets due to the meltdown in the financial industry. Many member states with previously reasonable debt levels assumed private debts and thus increased their public debt. But for the Commission, only the last link of the chain is important: austerity regimes must be established all over Europe to counter the “debt challenge”, to introduce “debt brakes” and the name for these austerity regimes is “economic governance”.Another interesting Social Europe post is here
• Under the Troika regime, Greece has been asked to cut debts. The Greeks are willing to save money by cutting the defence budget but the Commission’s reaction has been negative: it recommends cutting pensions instead.
The Troika regime is asking Ireland to cut salaries. The Irish trade unions have challenged the approach as neoliberal but the Commission’s maintains that it’s all just economics!
• The Commission’s country recommendations follow the same pattern: Belgium should see its long existing wage indexation as a cause of the debts and abolish it; Spain should let collective bargaining agreements extinguish without renewal; France should limit the rate of increase of minimum wages. The Commission will enforce these recommendations via a system of fines and sanctions.
• The recent White Paper on pensions claims to support workers’ mobility. What it actually seems to promote is the mobility of insurance companies and the uniformity of insurance products all over Europe.
• There is still no breakthrough on a Financial Transaction Tax, Eurobonds, strict regulation of financial markets, a split of the banking system etc.
• The so-called “reform agenda” is still under the banner of more smart regulation, more labour market reform, more flexicurity etc.
Europe needs to be protected against this neoliberal dismantling. The financial industry brought the system close to a breakdown and the “neoliberal Taliban” are bringing Europe close to collapse. They overlook the symptoms of growing euroscepticism all over Europe and they fail to deliver solutions. Whether or not austerity works, seems not so important for them.