Over the period of the financial crisis a new centre of European power has developed: the “government” of the euro area. The expression may seem badly chosen, as it remains hard to identify the democratically accountable institution that today implements EU economic policies.
Characterised by its informality and opacity, the central institution of that government, the Euro Group of finance ministers of the euro area, operates outside the framework of the EU treaties and is not accountable to the EU Parliament or more importantly to national parliaments.
Worse, the institutions that form the backbone of that “government” — including the EU Central Bank, EU Commission, EU Council, and Euro Group — operate in combinations that vary from one policy consideration to the next, whether Troika “memoranda,” European semester “budgetary recommendations,” or bank “evaluations” under the Banking Union. #
These different policies are largely the product of a “government,” as a hard core has emerged from the ever closer union of national and EU economic and financial bureaucracies the German and French national treasuries, the executive board of the ECB, and seni or economic officials of the EU Commission. These entities, in their various combinations, are where the euro area is governed from and where the political tasks of co-ordination, mediation and balancing among the economic and social interests are carried out.
In 2012 the ratification of the Fiscal Treaty contributed to consolidating this new power structure. From then onwards this EU executive has only seen its competence expand. Over a decade its scope for intervention has become significant, including “ budgetary consolidation” (i.e. austerity) policies, far-reaching co-ordination of national economic policies (Six Pack and Two Pack), the setting up of “rescue plans” for member states facing financial distress (memorandum and Troika), and the supervision of all private banks.
The elusive government of the euro area evolved in a sort of democratic black hole. You only have to ask: Who controls the drafting process of memoranda of understanding, which impose significant structural reforms in return for the financial assistance of the European Stability Mechanism? Who scrutinises the executive operations of the institutions making up the Troika? Who monitors the decisions taken within the EU Council (of the heads of state or government) of the euro area? Who knows exactly what is negotiated within the two core committees of the Euro Group, namely the Economic Policy Committee and the Economic and Financial Committee?
It is certain that neither national parliaments, which at best simply control their own executive, nor the EU Parliament, which has been carefully sidelined from the governance of the euro area, do so. The euro area government has been dubbed a “post – democratic autocracy,” but it might equally be characterised as neo-feudal.
It is critical to keep in mind that it is not just a matter of principle, nor an issue of “checks and balances,” but has a real impact on the very substance of the economic policies carried out in the euro area. It leads to a form of generalised indifference towards dissenting voices and favours a significant lack of responsiveness to the very pointed signals sent by national electoral processes, which in recent years have persistently featured the rise of far – right populism.
The fundamental fact is that this power structure overstates the importance associated with financial stability and “market confidence” and plays down the issues that are most relevant for the majority: employment, growth, fiscal convergence, social cohesion, and solidarity and that come to the fore only with great difficulty.
And this state of affairs can only be expected to intensify as the terms of the fiscal treaty become embedded in EU institutional practice. And yet a deafening silence surrounds our membership of the euro area, and we quickly forget the treatment undemocratically meted out to us by our “partners” during the past decade.
Similarly, a concise set of EU operating principles can be identified:
- The first is that integration has absolute priority over all other competing values, including democracy.
- The second is that EU decision makers follow, wherever possible, the strategy of a fait accompli – the accomplished fact that makes opposition and public debate useless.
- The third is that ultimate ends are largely irrelevant: what counts are pro cedures and the expansion of EU competence, with the EU Court of Justice playing a major role in that continuing process.
These strategies have been evident in decision making on EU policies, such as the introduction of monetary union and, in particular, through the merger of the final elements of the Western European Union with the EU. This was done through the adoption of its mutual defence clause under article 42.7 of the Treaty on European Union, as amended by the Lisbon Treaty.
They are also exemplified in the traumas inflicted on this state from multiple repeat referendums on the Nice and Lisbon treaties, which were rejected because their foreign – policy elements were seen to violate fundamental principles of Irish foreign policy and neutrality, and from the imposition of a debt of €85 billion on this [Irish] state, which has been used to pay for the reckless behaviour of financial institutions based in Frankfurt, which are still unregulated today.
Newsletter No. 167, 8 May 2017, PDF Download
Ed – This article is extracted from the regular Peoples’ News, www.people.ie newsletter. It is only one of several well researched articles. A download and read of the original is highly recommended.