LMD: “Cheap Euroloans at a high cost”

Seeing as there is a European election under way, from the April issue of Le Monde Diplomatique‘s English language edition:

European leaders considered the introduction of new contractual agreements between the European Commission and member states at a summit in Brussels last December, as demonstrators protested outside about a free trade agreement between the EU and the US (1). If implemented, the new contracts could be the most powerful tool ever granted to the EU’s institutions for dismantling member states’ social welfare provisions.

The contractual arrangements — the Convergence and Competitiveness Instrument (CCI) — are based on a simple principle: in return for financial incentives, European states would be asked to sign up to macroeconomic reforms. These would affect social provisions, the economy and taxation, independently of powers already devolved to EU institutions. Given the Commission’s current priorities, it is easy to imagine that the “financial advantages” might well be conditional on the withdrawal of employment protection and reductions in welfare expenditure or the provision of corporate tax breaks.

The proposal has provoked strong scepticism in some member states, including some of Germany’s traditional allies, and there is strong resistance within the Council too. Even a moderate social mobilisation might find allies within the EU to stop the plan being adopted (or to remove its most problematic aspects). So the EU election campaign offers the European left — who have too often acted too late, and been repeatedly defeated since 2007 — a rare opportunity to act.