Fri Feb 6th, 2009 at 05:49:01 AM EST
What Europe are we working towards?
Well, this is the one we have:
...Last week ended with the Lithuanian police firing tear gas and rubber bullets at demonstrators. Some of them were throwing stones at the Parliament building in Vilnius in protest of the government's austerity plan. Five thousand people had responded to calls from the trade unions. The demonstration was marked by 80 arrests and some 20 injured. The scenes resembled those seen on Tuesday 13 January in neighbouring Latvia. In Riga thousands assembled in front of Parliament in a peaceful demonstration demanding early elections. By the end of the protest clashes had caused injuries to eight people and led to the arrests of 126 more. These demonstrations are the largest the Baltic States have known since leaving the Soviet Union in 1991.
Well, The Baltic countries are, like many new EU entrants, being battered by the Anglo-American financial sector meltdown, having participated, as many former Eastern-bloc nations in deference to US and UK cold war "benefactors," did. As in the US, the UK, Ireland and Iceland, their financial sectors are collapsing, real estate bubbles bursting, and severe recession is setting in.
Time to go after those who drove these poor countries off the cliff, right? Not if French Socialist Party luminary Dominique Strauss Kahn, hand in hand with the European Commission, were to have their way:
The EU will stump up 3.1 billion of the package to the country, the latest European country and second EU member state to be forced to go cap in hand to Brussels and international financial institutions in the wake of the crash. The IMF meanwhile will deliver 1.7 billion, with another 1.8 billion coming from Nordic countries Denmark, Finland, Sweden and non-EU nation Norway...
The monies...will buttress the Latvian economy up to the first quarter of 2011... in return for an agreed package of swingeing austerity measures, which the European Commission and the presidency of the council of economic and finance ministers described in a statement as "the Latvian authorities' firm commitment to implement a major programme of economic adjustment."
Wide-ranging structural reforms and wage reductions, particularly in the public sector have been approved by the country's parliament.
As part of the loan agreement, public sector wages are to be slashed by 15 percent in 2009 alongside deep cuts to government expenditures of 1 billion Latvian lats (1.41 billion) alongside cuts to income tax and increases in VAT rates...
Latvia has opted for the cuts and a maintenance of its existing exchange rate peg, rather than let the lat slide in order to stay on track for eventual euro adoption.
"This will also help meet the conditions for the adoption of the euro," the EU statement continued.
Unbelievable. We're potentially on the cusp of a deflationary spiral, and what do the European Commission and Dominique Strauss Kahn, the economics guru of the French Socialist Party, propose? Hooverism, pure and simple, for Latvia (and Lithuania, and pretty soon Estonia too, not to mention Hungary). All in the name of protecting the wealthy. How else to view the income tax cut coupled with VAT increases, on top of slashing wages of working people if or laying them off? Someone try to tell me the European Commission is not party to anything less than protecting the rich and screwing the poor in these countries. Oh, and the almighty Euro adoption "carrot." (Note to those not in the Eurozone yet: if this is what you have to do, on top of the crazy inflation criterion which will further kill your prosperity, is probably a rotten carrot by the time you get there.)
Something tells me the Euro adoption is going to quickly become unpopular in most places it hasn't yet become popular...With representatives on the left like that, who needs neo-liberal reactionaries?
The result? Riots in the the streets. Surprise, surprise, the logical result of lack of adequate responsiveness to the will of the people. Does one expect more from the European Commission and the IMF? And, after all, we all know how successful the IMF has been...more succesful in transfering wealth from poor to rich, making the former even more destitute while lining the latter's pockets, that is. That we accept this intervention on EU soil is reprehensible; that it come from a so-called "socialist" even moreso.
The proper response to the economic crisis on Europe's eastern border with Russia is not to punish the weak, but to punish those who have profited from the artificial, anglo-American boom. But, that's not what is being done:
As in all three Baltic countries, Lithuania has reduced public spending to 40% of the GDP these last years. At a time when domestic spending is suffering, there is little room to manoeuvre to get it moving again. And worse still, Riga finds itself cutting civil servant salaries by 15%. It's a measure dictated by the IMF's terms, which, along with the European Commission... A measure little appreciated by the Free Trade Union Confederation of Latvia (LBAS). LBAS president Peteris Krigers complained, "The government's and IMF's attitude has neglected Latvian society."
He continued, "Instead of asking the unions and the employers to participate in creating an economic stabilisation plan, and thereby reducing the risk of making incorrect decisions, we are only told about these decisions once they have been made." Moreover a union report accuses the IMF's plan of "breaking collective agreements in hundreds of businesses [...] which is a violation of the recommendations of the International Labour Organization".
What's that? The European Commission is participating in screwing workers rights in Eastern Europe? And people wonder why European institutions are increasing rejected, not just by the nativist Right, but also by the Progressive Left.
And what's that? Dominique Strauss-Kahn, billed by many as a front-runner for the Socialist Party's nomination for President in 2012, actively undermining the interests of vulnerable working people in Europe? And the Parti Socialist wonders why it is severely distrusted by those who should naturally be its supporters.