Europe and the Academy of the Judeo-Christian West

Steve Bannon is establishing an Alt-Right Academy in an Italian monastery, pictured above, in Trisulti, outside Rome, called the Academy of the Judeo-Christian West. He also calls it is “gladiator school,” a place where young far Right leaders will be trained to lead political battles against immigration, progressive liberal values and abortion, etc. in Europe. 

Thus, it is clear that in this EU election, Irish people must elect strongly committed people with progressive ideas because the battle over the future of Europe has begun. It is time to stop electing messers and bland centrists.

In my last blog, I argued that the European Union has been a great success in terms of building peace and prosperity. Many European countries are consistently ranked among the best places to live in the world for reasons including prosperity, peace, and diverse and exciting cultures.

Major Reforms Needed for EU

However, there are major issues which must be addressed if Steve Bannon and his nasty nationalists are not to destroy the project. These are my suggested priorities:

Combat Climate Change

We Europeans like to see us ourselves as enlightened, but we are failing to deal with the existential threat - that of rapid climate change. This issue has to be the greatest priority – ahead of inequality (which is TASC’s main focus).

The world is heating up and if we don’t act effectively soon, climate change, which is created by man, will endanger humanity. European Union, a major block of 28 (pre-Brexit) states acting together, must lead to achieve effective action. Sadly, we are not doing near enough.

Address Inequality in Every Policy

Centrist parties have utterly failed in addressing inequality. In fact, inequality has grown substantially in Europe under their watch. The share of national income going to labour (employees and self-employed) versus Capital has been shrinking each year over the last 30/40 years. Instead of combating this growth in unfairness, European leaders have exacerbated this with policies such as the Growth and Stability Pact.

Reform EU’s Growth and Stability Pact

The “Growth and Stability Pact” is institutionalised austerity. It has imposed an annual, harsh, arbitrary fiscal straightjacket on the elected governments of member states. It is punitive and not in solidarity.

It imposed anti-Keynesian, pro-cyclical policies and also forced states to do things democracies should not have to do. These included eviscerating public services; increasing unemployment by cutting public spending and investment; fire-selling-off valuable state assets; delegating major decisions to “expert institutions”; cutting taxes beyond what was prudent and executing PPPs, privatisations and the wholesale outsourcing of public services. These all cost more in the long-term and are too often inequitable.

These EU rules do not allow states to borrow in tough times to fund investment or provide services. Thus, cuts and austerity are the result. These rules, loosened once, have to be radically amended to suit peoples, not lenders. The regressive impact of austerity is widely known, but not enough focus has been on this Pact, the institutionalised cause of it.

Curb Corporate Dominance

EU leaders need to radically turn from their focus on structural reform and competitiveness (often a code for lower wages and increased profits) and to address falling real wages and worse conditions for workers (zero hours etc) demonstrated unequivocally by labour’s declining share in National Income in most states.

EU reformers need to address the excesses and untaxed profits of many companies especially in the tech sectors. They also need to end the obsecenity of  “shareholder value” where companies’ boards only work for shareholders and to hell with employees, communities, environment etc.

There is a need to move from redistribution policies which work to a limited extent, to predistribution. The first is dealt with by state taxes and welfare but the second is the skewed market, where Capital takes far too much National Income.  This fundamental bias in the market can be addressed by ensuring the right of labour to organise, to collective bargaining, to real social partnership and to greater public ownership of key capital assets, including banks, broadband, water etc. There must be recognition of the “Mixed Economy” where the private sector is often more dependent on public spending and subsidies than is realised.

Finish Financialisation

Globalisation and new technology have enabled the dominance of finance over the real economy. Financialisation was encouraged by governments, including Clinton and Blair and other ‘Progressives’ by de-regulation at the very time they should be reining in finance. Finance took over when its regulation was abandoned by governments. The Crash of 2008 was the result, but obscene payment to many CEOs again today demonstrates that Financialisation is resurgent again, in spite of some reform. Change is also needed to control and tax Financial and Capital Flows.

Tax Reform Means Better Public Services, not Cuts.

The siren call of lower taxes is popular even with some who demand better public services. Thomas Piketty has shown how far taxes on top incomes and wealth have been reduced over decades, from rates over 90% on incomes in the USA, Germany, Britain and France in the 1950s to less than half of that today.

There are also multitudes of tax breaks and so-called “incentives”, many of which are deadweight, which must be ended in all states. Europe must end the Tax Wars called “tax competition” by its defenders where a democratic government fights another for foreign investment by cutting its tax rates and deploying costly tax incentives. Sovereign states lose out and MNCs gain. Ireland led Europe’s Tax Wars and its obstinacy on the issue could lead to the end of unanimous voting.

The solution may be greater tax coordination within bands of rates and agreement on broad tax bases, with poorer or peripheral states being allowed to have lower rates, within the bands. Ireland’s ability to negotiate and lead in Europe is renowned (in dark contrast to our near neighbour) and it must soon cease its defence if its role in corporate tax avoidance.  Joe Stiglitz at FEPs, 27 March 2019, accused “Ireland and Luxembourg of stealing jobs from other EU states with low corporate taxes.”

Taxes on incomes, inheritances and particularly on corporates’ profits have not fallen by themselves, but have been cut by governments competing in in tax wars and under siege from the rich and powerful, their paid, anti-tax lobbyists in the big accounting and law firms and “embedded“experts in the media.

Progressive Europeans must campaign now for higher effective taxes and simultaneously the need for highly efficient and increased public services in the modern, mixed economy.

Boost EU Investment

The EU has an improved Investment Programme called the Junker Plan. Yet it is simply pathetic compared to Europe’s needs. Even in Germany public infrastrcture is falling down. In Ireland, we badly need more health centres, equipped hospitals, public broadband, tram networks (not single lines), schools etc. Besides having a low investment programme for Europe, the EU is stopping national governments from investing by its dangerous Growth and Stability Pact.

Reform the Euro; ECB; the CAP and Structural Funds etc.

Finally, the new European leaders must a) reform the Euro, partly by increasing the EU’s own Budget; b) make the ECB take account of employment as well as inflation in monetary policy, like the US Fed; c) must  reform the CAP  to help rural Europe; d) must increase and reform the Structural and Cohesive funds and and e) must curb EU funds to autocratic state which work against the rule of law and EU values.

Conclusion

I would see these as the essential reforms that next EU Parliament and Council must implement if Steve Bannon and his leaders are not to turn Europe into a xenophobic, impoverished backwater. He is already gathering strong leaders like  Italy’s deputy prime minister, Matteo Salvini, Hungary’s PM Victor Orban and France’s Marion Marechal.

Tagged with: democracy • economicinequality • politicalreform

Paul Sweeney     @paulsweeneyman

Paul Sweeney is former Chief Economist of the Irish Congress of Trade Unions. He was a President of the Statistical and Social Enquiry Society of Ireland, former member of the Economic Committee of the ETUC, a member of the National Competitiveness Council of Ireland, the National Statistics Board, the ESB, TUAC, (advisor to OECD) and several other bodies. He has written three books on the Irish economy and two on public enterprise, including The Celtic Tiger; Ireland’s Economic Miracle Explained and Selling Out: Privatisation in Ireland, chapters in other books and many articles on economics.