Re: Euros and Unions

["Per Gunnar Berglund" <pgb@xxxxxxxxxxxxxxxxxx>]

In reply to Dennis R. Redmond:

-----

There is no need for a European super-state in order to pursue Keynesian
policies. It can be done on the national level. International co-ordination
would help a lot (by increasing export demand in a mutual fashion), but I
don't even think co-ordination is a necessary requirement. Vide my
"Abolishing Unemployment" (download .pdf file from
http://www.internetional.se/pgb.html ) for some elaboration of this.

Mind, I am not against a federal European state in principle. My argument is
that a common currency cannot function properly without institutions for
fiscal management on the same, centralised level. Therefore, the
introduction of a common currency will force the establishment of a federal
state. I am firmly convinced that we should do it the other way around (if
we are to do it at all): FIRST a federal structure must be erected, with
fiscal institutions and inter-national transfer systems, THEN a common
currency can be introduced.

Now, the first step cannot possibly succeed as long as the popular support
for a federal state is as low as it is today. I conclude, therefore, that
both the first and the second step must be avoided until there is sufficient
popular support for a United States of Europe. I would be surprised if this
support emerges within the next 20--30 years. So I think the whole project
should be put on ice the next few decades or so.

The cultural differences between countries like Portugal and Sweden, or
Greece and Scotland, are far too large today to be easily bridged over.
There would certainly not be any support for a trans-national WELFARE state.
This is one of my main arguments against Euro-federalism. A United States of
Europe would probably be very much like the USA, with scanty support for
welfare institutions and social security. The English are simply not very
keen on feeding Spanish unemployed, and I don't think that Northern Italians
would like the idea of financially supporting the Arctic regions of Finland.

Not to speak of the complications of an extended EU, including the
impoverished Eastern European and Baltic states. The need for international
transfers would be huge. The project is a beautiful vision which might be
practicable some time in the distant future, but certainly not now.

Best wishes,
Per





-----Original Message-----
From: Dennis R Redmond <dredmond@xxxxxxxxxxxxxxxxxxxxx>
To: POST-KEYNESIAN THOUGHT <pkt@xxxxxxxxxxxxxxxx>
Date: den 24 oktober 1997 23:01
Subject: Euros and Unions



On Wed, 22 Oct 1997, Per Gunnar Berglund wrote:

> For instance, if the 3% of GDP budget deficit limit, and the 60% of GDP
> gross consolidated central gov't debt limit, should stand in conflict with
> the goal of full employment, these clauses may well be unlawful. This is
so,
> because most European countries signed the Council of Europe's Social
> Charter in the 60's. This charter states that countries are obliged to
> pursue an economic policy securing full employment.

Yes, I managed to find a web version of this on the Council of Europe's
site. It's quite a remarkable document, guaranteeing things like health
and safety regulations, decent wages, consultation with unions, the right
to organize/strike, four-week vacations, prohibitions on racism and sex
discrimination, etc. America, by contrast, is wallowing in a kind of
silicon feudalism, to the point where we seem bent on chaining
workers to their CD-Rom machines.

> Today there are no means for implementing such policies (EU budget
> roughly one percent of GDP, no Euro currency, no Bank of Europe, no
Federal
> Government, no adequate inter-country transfer systems, etc). I don't
> advocate Euro-Keynesianism, simply because I am against a United States of
> Europe, and without a USE there will be no means by which to pursue
> Euro-Keynesian policies.

All of which doesn't necessarily mean these won't be created in due time,
or that a bunch of small steps would not, in ten years, add up to a
rudimentary transnational state. I'd agree with you, that a European
superstate is not going to happen right away, and will take years to
construct, assuming the thing is even desireable. This raises the
interesting question of whether coordinated national Keynesianisms could
do the trick -- say, a combined French-Italian-German agreement to
increase deficit spending, tax their rich, spend more on the
Europeripheries and invest in education and environmental protection.
Jospin has at least halted the austerity maniacs in France
for now; who knows what's in store for Italy, but certainly Germany is
shifting to the Left. Still, I'd argue that it's important for the Left to
seize the high ground in Europe, and to call for a multi-cultural and
social democratic Eurosozialstaat, as the German comrades would put it, as
an antidote to local fascisms and neofascisms. I'm not sure that national
Keynesianisms, in short, can be legitimated in the newly postmodernized,
Silicon-trending Europe without playing the European card. Probably 8-9%
of the Western European population are immigrants from Europe or
elsewhere; half of Berlin is Turkish-German, and hundreds of thousands
of well-educated, entrepreneurial-minded Eastern Europeans arrive in the
EU every year. How are we going to sell national Keynesianism to them,
when the nation-states are themselves little more than branch-plants of a
thoroughly transnational Eurocapital? Or is this more of a cultural
question, and irrelevant to the actual economic changes which need to be
made to create a Europe of the people and not of the rentiers? (I'd argue
that the whole mainstream fixation on the euro has created a dynamic in
which, come what may, the debate has to shift to a transnational level,
but of course I could be wrong).

-- Dennis