For an action plan against austerity and the leadership of the financial markets

For an action plan against austerity and the leadership of the financial markets

EL Action Plan

The neoliberal policies have failed in enabling European societies to successfully exit the crisis. The last months have clearly shown that the European Union with all its power and force – and against the democratic decisions of one of its member states – sticks to its neoliberal agenda.

This failure raises a discussion on the need to change the logic behind the European project. The European Union places its treaties, institutions, powers and policies as instruments in service of capitalist globalisation rather than for the European peoples. It is doing this with the mandate and order of national governments, including the social democratic ones. It has become clear how closely it is intertwined with the interest of capital and how strongly its policy harms young people, the workers, old-age pensioners and all people relying on public welfare. Even the European institutions are forced to acknowledge the stalemate at which the EU finds itself. The European Central Bank, for instance, injects 60 billion euros per month into the European banking system; since 2008, 13 trillion euros have been given to the banks without this having any effect on the real economy. If we do not question the use of this money, the spiral of recession and degradation of our economic bases will continue. Furthermore, it is predicted that a new global financial crisis will happen in the short term.

In this context the European Left has decided to draft an action plan that will break away from this logic and propose the solutions that, according to us, are necessary in order to find the paths for an economic, social and ecological development that will benefit Europeans. This will be done within the democratic framework that respects people’s sovereignty.

We also feel that this action plan against austerity and the leadership of the financial markets is the basis for discussion in our countries and at European level, as well as a roadmap for the initiatives to converge and strengthen the greatest number of political, social, citizen forces and trade unions in the common fight for a new Europe.

We need to cooperate closely and every day to defend the interests of the disadvantaged classes, the most vulnerable and the categories in between in their national and European struggles.

Now, more than ever, it’s time for strengthening and expanding our Alliance Against Austerity (AAA).

The EL decides to organize a conference on debt, the fight against austerity and social recovery in the first semester of 2016. During this conference, there will be meetings for anti-austerity militants from all over Europe wishing to step up their joint work and discuss the tools to be used to build an Alliance Against Austerity.

 

1) Restructure debts to allow the people to catch their breath

Debts have become unsustainable, untenable in a number of countries. They are borrowing more just to pay off existing debts. In certain countries, repaying debt is the first or second line in the budget, which greatly restricts any possibility to develop public services and all public economic development policies. 

This situation urgently requires the restructuring of the European states' debts to allow our countries' economies to breathe. Indeed, this measure should be apply to all European countries “under financial assistance” that are over-indebted or about to become so.

The EU should help countries in difficulty to negotiate repayment schedules with their debtors, including suspension of repayments so that the money can be used for investment. The European Central Bank should be able to become a lender of last resort. One possibility would be to devise a new repayment system indexed to countries' development rates. This would constitute a major shake-up that would be based on real situations and help countries pull themselves back up rather than impose unfeasible, counterproductive rules from above that place the people at risk.

At the same time, we must begin a debate on the legitimacy of this debt and examine its legality. We oppose the repayment of illegitimate debts coming from speculation and inflated penal interests. It is not right for the people responsible for the crisis to continue to get rich from these debts. Indeed, we must get contributions from the huge wealth that exists in Europe and has even continued to grow during the crisis. We ask for a European-wide onetime property levy for millionaires and billionaires. The profiteers of the crisis need to be involved in redeeming the debt.

 

2) Getting out of austerity, creating a shared development policy

Placing human beings first

European policies organising privatisations, budget cuts, and deregulation of the labour market are the wrong measures: They do not help against the crisis but instead increase the mechanisms that led to the crisis. We fight for a fundamental alternative: We want to regain a perception of politics that puts the needs of the people before the profits.

The European Left will launch a European platform against austerity, privatisations, and precarious labour, that stands for public services and social welfare systems, that connects trade unions, left parties, citizens’ initiatives and social movements and pursues common actions. We, thereby, build on existing struggles.

We want to build a plan to fight poverty, unemployment and precariousness. The successive waves of liberalising the labour market, and the social and wage dumping cannot be the foundations for a policy to benefit European workers, especially women, the youth and pensioners, who are the ones most affected.

In the 21st century, pay equity between men and women should finally be a reality and we should now open the discussion on reducing work time. We propose to reflect on the best way to fight against social and wage dumping, in part by strengthening the collective laws and agreements that protect paid workers in our countries, and also by developing a method for convergence at European level of social and labour rights towards the highest common denominator.

We wish to develop public services to respond to people’s basic rights and needs. Housing, universal access to care, education, mobility and culture are fundamental human rights essential to a leftist policy in Europe. The business sector cannot meet these needs for all citizens. To develop public services is also to create public employment that is useful for all. 

This policy based on everyone's needs and fundamental human rights is the best protection against divisions and the far right.

Towards a shared European development contract

The only way to enable the recovery of our economies and respond to the social and environmental challenges of our times is by envisaging a new development policy that engages considerable public resources. We believe in a European investment plan for the future that guides investment towards people’s needs rather than profits. States need to intervene actively to create production centres. We support the proposal of the European Trade Union Confederation to have a European investment programme. The investment plan must target the improvement of infrastructure (transport and communication networks such as rail, roads and the internet) and an ambitious and democratic industrial policy, benefit public research and the major products required to create a new social and ecological development model, as well as enable the creation of stable jobs in the public sector.

The concept of shared development should also prevail in the exchanges between Europe and the other regions of the world, to stand up to global challenges. Better quality of life in Europe involves placing our regional cooperation at the service of global change: human development, urgent defence of the climate, taking in refugees and international peace solutions. This is why we reject the TTIP and free trade agreements that just build up competition and general deterioration in social and ecological standards while the multinationals reap the profits.

 

3) Freeing up resources for public investment

Owing to the budgetary rules set by the stability pact, and the new supervision mechanisms set in place following the crisis (Budgetary Treaty European Semester…), nowadays States and local authorities cannot invest in economic development, employment and public services. States and national parliament should maintain control of their budget and the major economic choices of national interest, which doesn’t prejudice the setting up of common policies at European level. Consequently, we wish to renegotiate the treaties that set the EU’s financial rules and get our countries out of the budgetary treaty. It is indispensable, for instance, to break free from the “golden rule” of balancing budgets and the rules of the stability pact in terms of deficit and the debt/GDP ratio.

The EU should first assist the countries in finding budgetary and financial margins. The countries’ budget surpluses should be used for investment and not solely for repaying the debt, as imposed by the European budgetary rules.

Countries should be free to develop a fiscal policy that allows them to increase their resources. Why shouldn’t a democratically elected government have the right to ask multinational corporations, major companies and the richest people for new fiscal resources in order to increase its revenue? Cooperation at European level is equally desirable.

We wish to truly implement the tax on financial transactions, which should slow down currency market speculation and tax super profits. European-level cooperation on fighting tax evasion and fraud could also free up important resources for the general interest. We propose to engage the discussion on a common fiscal policy whereby all revenues and profits would be used for financing.

We want to turn the ECB into an investment and development bank which, based on the economic realities of its member countries will place its funds at the service of their development. Each country should be able to sign with the ECB an economic development and recovery plan. The ECB would lend money to the states and SMEs under social, ecological and ethical criteria (via national central and regional banks) without any counterparts. The creation of a social and ecological development plan tasked with funding the European development plan is immediately possible within the framework of the treaties.

 

4) Transform the European Economic and Monetary Union and regulate finance

Such a new economic path will also call for a new understanding of currency systems. Recent events have demonstrated the power of the financial institutions and markets in European decision-making processes and the unacceptable asymmetry of negotiations between partners in the Eurogroup. Today the European Economic and Monetary Union is a tool of oppression working for finance and the ruling élites, headed by Germany. We wish to transform the goals and ways of functioning. We measure economic success at a social and ecological turning point, the source for the greatest increase in quality of life for the social majority.

The single currency has moved to the centre of contention in the EU today. The European left protests against the automatic link between belonging to the single currency, austerity and neoliberal structural reforms. The euro can be turned into a tool for development as opposed to oppression. More than anything, it's a question of democracy. It’s the heart of a battle that needs to take on a new scale. The Troika must disappear and technocratic institutions must be erased behind democratic instances. There is a pressing need to change the way in which the Eurozone works on the basis of at least two principles: respect for the countries’ sovereignty and adaptation of policies to each country's economic reality.

The European Central Bank may not be used as a tool of political repression against states (e.g. suspension of emergency funding for the Greek banks) and a financial strut for private banks that continue to gamble in the markets without any sort of control. We propose a full revision of the criteria, enabling the allocation of banking credit by the ECB: Very low interest rates for investment in the development project, prohibitive interest rates on speculation. The ECB could at the same time enable the commitment of the necessary resources for changing the means of production and the creation of employment, as well as creating jobs and detoxifying the European banking sector. We propose to change its statutes because its “independence” with regard to the democratic decisions and peoples’ needs makes us all dependent on the uncertainties of the global financial system. Those who are elected and the trade union representatives should have a place in its decision-making processes.

We want to act in the whole of Europe to regulate the financial system: We have not forgotten the causes of the global financial crisis in 2008. The world banking system is sick and is running further and further out of control. The banking system needs to be refurbished and private big banks need to be socialised and strongly regulated. The European Union must lay down rules and ethics (transparency, prohibition of toxic financial products and advice on tax optimisation, separation of banking activities, control of terms of personal loans, prohibition of speculation on essential goods...etc), strengthen financial and legal sanction mechanisms to fight financial delinquency. We don't want the citizens' money to serve as a guarantee for speculation. Shadow banks like off-balance sheet single-purpose companies, hedge funds and private equity associations need to be dissolved.

Starting with these points a new development path for Europe can be set up. It considers the interests of 99% of the employed and old-age pensioners, of unemployed and the young generation. We know who our opponents are.