Enjoyable video, but I was disappointed that they spent a lot of time on the immigration issue–a basically right-wing critique of the EU (although of course there is room on the left for debate about how much immigration is desirable)–but nothing on the left-wing critique of the EU’s role in forcing privatization and austerity on its member countries. For info on this see this article along with this one. The key is apparently something called the “Maastricht treaty”, the second article discusses how it seems designed to enrich the financial sector at the expense of government spending on things like social services and infrastructure, and is basically the main cause of the Greek crisis:
Maastricht embodied the transition from a social democratic to a neoliberal model. The social democratic model focused on the general wellbeing of the population through full employment and redistributive principles of taxation and welfare. Whilst neoliberalism has seen unemployment shoot up, income and business taxes lowered and welfare cut. In line with the neoliberal model, Maastricht applied monetarist control of inflation. Maastricht also imposed limits on government public spending. This was dictated through limits on government debt and deficit as a proportion of gross domestic product (GDP).
It is no coincidence that John Major’s government ratified Maastricht and introduced the Private Finance Initiative (PFI). The two are intimately connected. Once public spending was curtailed, governments turned to the financial sector for private investment of infrastructure. One of the consequences is that instead of public revenues being reinvested, private profits are siphoned offshore.
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The Maastricht criteria were intended to facilitate the convergence towards the euro and beyond this to ever closer union. In order to qualify for the euro currency, both Greece and Italy turned to the likes of Goldman Sachs, JP Morgan and other banks. The banks advised them to mask debts using derivatives. In return, Greece effectively mortgaged its airports and highways in what The New York Times described as a “garage sale”. Touchingly, these instruments were named after Greek mythological figures. So Aeolos (the mythological god of wind) enabled Greece to hide debts in return for future landing fees at its airports. Whilst Ariadne “devoured” lottery revenues. As we all now know, the results were disastrous. Greece ended up on the hook for $300bn, much of it to banks.
Such logic is still playing out with the austerity crisis in Greece. The Troika of the EU commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) has effectively superseded national sovereignty. The Troika have bailed out Greece with funds whilst imposing austerity policies. This ensures that the economy is starved of investment and that growth stagnates. Thus, debt as a proportion of GDP, continues to increase requiring more bail-outs, which only exacerbates the problem.
What could possibly be the thinking behind this self-defeating logic? Well, for a start, the funds come with structural readjustment strings attached imposing a neoliberal agenda. Greek state assets are opened up to global capital and privatised. Whilst massive cuts erode public services, wages and pensions. Similar IMF programmes have been used in the global south for decades. UK austerity is also comparable to the prescriptions for structural adjustment applied to Greece. Based on such assumptions, it is questionable whether Britain would have been allowed to create the NHS and the welfare state due to the size of its post-war debts.
In the video, the only discussion of economic criticisms and the Greek crisis was at 5:50 when they said “the Euro is the common currency of some but not all of these countries; as the Greek crisis shows, this can be a recipe for disaster. You cannot unify vastly different economies under one currency but leave their economic policies separate. So, should all European countries unite under the common currency or not? Should the weakest links be thrown out of the Euro, or should countries be made to adopt common policies on taxes, health care and social security?” They could have included a bit of discussion about the extent to which the EU already does make member countries adopt a significant degree of “common policies” via the Maastricht treaties, and how from a left-wing perspective these common policies are basically disastrous ones. This is not to say breaking up the EU is the right solution, but plenty of critics think these policies need major reform.
