Delors has had far more to say!

Manus O'Riordan: “Euro doomed from start, says Jacques Delors” was the front page headline of Britain’s “Daily Telegraph” on Saturday December 3, dutifully regurgitated on RTE news bulletins throughout the course of the day. But this was a gratuitous eurosceptic editorial embellishment of the story underneath penned by deputy political editor James Kirkup, whose opening sentence fell somewhat short of such a joyful dance of death: “The euro project was flawed from the start”. Still less did such a headline accurately reflect the text of the Delors interview with Charles Moore printed on page 4 of that paper. While undoubtedly a eurosceptic himself, Moore accurately described Delors as follows:

“Mr Delors, who was President of the European Commission from 1985 to 1995, is the only foreign bureaucrat ever to have become a household name in Britain. In 1988 he enraged Margaret Thatcher by coming to address the British TUC on the joys of the European ‘social dimension’. Her famous Bruges speech later that month was her attempt to stand against the tide of European integration that he represented. It was Mr Delors whose report produced the plan for what we now call the euro… (but) the Delors version of what that co-operation should produce (included) the harmonisation of most taxes, plans to deal with youth and long-term unemplyment, and the social dimension for which he always called.”

As for the euro being “doomed”, Moore’s eurosceptic report of what Delors actually said is far more circumspect: “So will the euro survive? Mr Delors does not, of course, deviate from his belief in the European single currency. He is also very conscious of the danger of someone in his position saying anything that might help to destabilise the situation. I am struck, however, by his downbeat interpretation of events… ‘You must be very vigilant to make sure that you do come out of a crisis in a better state … I am like Gramsci (the Italian Marxist philosopher): I have pessimism of the intellect, optimism of the will’.”

Not that Delors is or was ever a Marxist. He suggested to Moore a different combination of factors to explain Thatcher’s antipathy towards him: “I think for Mme Thatcher I was a curious personage: a Frenchman, a Catholic, an intellectual, a socialist.” And it is undoubtedly his own brand of socialism, so firmly inspired by a radical interpretation of Catholic social policy, that explains some of the language he employs to assess responsibility for the failure to act in the face of the enormity of the current political and economic crisis: “He thinks that ‘everyone must examine their consciences’. He identifies ‘a combination of the stubbornness of the German idea of monetary control and the absence of a clear vision from all the other countries’.” But Delors also goes on to firmly finger British Government hostility, no less than that of the current German government, as a key factor obstructing the development of eurobonds: “Mr Delors adds that Britain, though not in the euro and therefore not ‘sharing the burden’, is ‘just as embarrassed’ as the Europeans by the financial crisis. ‘I can see Mr Cameron’s worries’, he goes on, ‘It is a big worry for the British if we can create and trade eurobonds in Paris and Frankfurt’.”

Since I first became a member of the Workers’ Group of the European Economic and Social Committee in October 2010, my reports published on SIPTU’s “Liberty Online” have constantly emphasised the critical need for a eurobonds initiative. (See here for the first and here for my most recent report on December 1). The politics of it all, of course, boil down to issues of EU governance. On this, Delors has had far more to say than featured in the “Daily Telegraph” interview conducted by Moore on November 30. For, exactly one day previously, on November 29, Jacques Delors had addressed us on the crisis at an extraordinary meeting held by the EESC Workers’ Group in Paris.

Delors criticised France itself for having insisted on a merely symbolic Stabilty and Growth Pact (whose terms, in any case, both France and Germany had themselves violated), while ignoring the need to both monitor and regulate the snowballing of private debt. He railed against what he called “the dictatorship of the instantaneous”, warning that “without memory, there can be no future”. He recalled that at the outset of the euro project, meaningful meetings of the euro group of 17 member states had preceded economic meetings of the 27 EU member states as a whole, but that this practice no longer had any substance. The Community method had been replaced by the inter-governmental one, and he maintained that Angela Merkel’s token gesture of support for a so-called “Union” method of governance would amount to little more than a continuation of the inter-governmental method with just an add-on of Council President van Rompuy. Delors maintained that for a European Commission to be up to the job, it had to take risks, and not just earn cushy salaries. It should even be prepared to resign if necessary. As an illustration of the type of confrontation required, he recalled his own spats with Margaret Thatcher during the UK Presidency, as she had always made a point of addressing him as “Mr”, in order to underline her contention that the office of Commission President should be one of no consequence. But when she sought to obstruct the development of the Erasmus programme, he told her he would publicly inform their joint press conference that only a UK veto stood in its way, and she backed down.

Delors denounced the retreat from Social Europe, arguing that there could not be a valid EU democracy without the twin pillars of representative government and social dialogue. He maintained that the euro crisis was being availed of in order to effect what would amount to a social counter-revolution. Welfare rights that had been pillars of Western European society since the immediate post-War years were being called into question, as were established systems of collective bargaining. Member states were being told to unravel sectoral agreements. But unemployment would have disappeared long ago if the “solution” was to be found through differentiated firm-by-firm wage setting. The call for “decentralisation” was a strategy designed to weaken trade unions, pure and simple. Neo-liberalism only measured “value creation” through stock exchange quotations. But how could markets could deliver without regulation? The spirit of so-called “free competition” was polluting everything, from the economy itself to educational systems. If social dialogue with unions disappeared, European democracy itself would end up blunted.

There were, however, other remarks of Delors that might put the frighteners on the present leadership of the Irish Labour Party. I must confess to having been flabbergasted when I heard Eamon Gilmore boast at the Desmond Greaves Summer School in August 2007 that “We’re the Party that gave you the 12.5 per cent corporate tax!” As the “Irish Independent” rather uncharitably reported: “Labour leader hopeful has his comrades up in arms… Down the back, a delegate interjected with a ‘Point of Order’ that Mr Gilmore should have given a different speech to one he would ‘give to the American Chamber of Commerce boasting about reducing corporation tax’.” Indeed, last week’s reports of the Tanaiste’s comments on Sarkozy’s Toulon speech hardly amount to an adequate response: "The position of the Irish Government is absolutely clear. We are retaining our rate of corporation tax… The President said last night things that the President and the French Government have been saying for some time. There's nothing new in that." But it is not on the French Right that he faces his toughest opponents on corporate tax, but the French Left. (See here for “Liberty Online” last June, where I argued that “while the bullying behaviour of French President Sarkozy should be steadfastly resisted, a more balanced examination and evaluation of corporate tax regimes cannot be kicked to touch ad infinitum”.)

Yet even I myself was totally unprepared for the vehemence of Delors himself on that issue. At the Paris meeting I expressed my total agreement with his emphasis on the need for cohesive action by the 17 member euro group in its own right, without being undermined by the UK. I further argued that the type of competitive devaluation that the UK had pursued in 2007-2009 was equivalent to imposing tariffs of 26 per cent and was incompatible with the concept of a Single Market. Moreover, it had a devastating impact on Irish manufacturing. Delors responded to me by agreeing that Ireland had very justifiable concerns about the stability of the euro/sterling exchange rate. But then he immediately proceeded to launch a blistering attack on Ireland for having vetoed any progress on tax harmonisation. He said that as Commission President he had alternated between “spoiling” and “teasing” Ireland in respect of regional and cohesion funds, in the hope of securing a breakthrough, but there was no give. Since Ireland had explicitly aligned itself with the UK in opposing any Treaty provisions on tax regimes, it became clear to me that Delors still viewed Ireland as somewhat of an Anglo-Saxon Trojan horse in the euro area. He was echoed on the tax harmonisation issue by French union speakers. The Irish Labour Party leader may have once said, without much success, “No!” to capitalist Frankfurt. But when Francois Hollande defeats Nicolas Sarkozy for the French Presidency, how long will the Tanaiste be able to continue saying “No!” to socialist Paris?
Manus O'Riordan was Chief Economist of SIPTU until 2012. He is currently a member of the Workers' Group on the European Economic and Social Committee. Manus O'Riordan is a member of the TASC Economists' Network

Posted in: Europe

Tagged with: Euro crisis