International

On Friday 11th March the heads of EU member states and their governments will meet once again. This won’t keep many people from their sleep, but there is a sizeable chance that the leaders will be taking important decisions regarding European economic governance. Will Brussels soon be laying down the law on the collective labour agreements that currently determine wages and conditions in most Dutch sectors, or on the age at which we will be allowed to retire? There’s a real chance of this happening.

A few weeks ago Merkel and Sarkozy were attracting attention by creating the impression that they wanted to impose a so-called Competition Pact on the other member state leaders. This did not at the time go through, but last week the Chairs of the Commission and of the European Council, Barroso and Van Rompuy, proposed a similar plan.

According to these plans it must be legally established, preferably in national constitutions, that each government must reduce its spending in the event that the budgetary deficit exceed 3% or the national debt 60%. Now, the European statistical bureau recently determined that the Netherlands’ loans to Greece and Ireland must be counted as part of our own national debt. What the statisticians were actually saying here was that we won’t see a cent of this money ever again. If our constitution contained the desired regulation, we would now be obliged to impose drastic cuts, despite the fact that it was the same Brussels authorities which pushed us into making the loans in the first place. In a more general sense, however, it can make sense to invest in such things as education or infrastructure even if this means a temporarily higher deficit and an increase in the national debt. Investments of this kind produce a return in the longer run. Although the SP supports a sound budgetary policy, we don’t want anything to do with the rigid norms that Brussels wants to impose.

Austerity is not the only thing which the heads of state and government have in store for us. They are also looking to conduct a malicious drive to lower wages and impose a higher retirement age. Wages would no longer rise with labour productivity, while retirement ages would be tied to life expectancy. Until not very long ago these were matters over which the trade unions and employers’ organisations enjoyed the biggest influence. In the future Brussels could have a hefty finger in this pie.

A further – and for once, good – proposal from Merkel and Sarkozy was to make a cautious start on agreements regarding taxing profits. The employers immediately instigated a lobby to prevent any such thing. Say that the member states could no longer play off against each other, making impossible the kind of race to the bottom in which some countries impose absolutely no tax on corporations, and Ireland, for example, a mere 12.5%. But this lobby has had its effects, in that Barroso and Van Rompuy did not adopt the proposal, with the result that the European economic governance in reality will mean that only ordinary people will have to pay the bill.

Next Friday is no more than a preliminary discussion, but the end of the month will see the knot definitely sealed. What bothers me greatly is that so much is happening behind closed doors. Barroso and Van Rompuy’s paper is secret, even from Members of the European Parliament. Only via the media are you sometimes able to know something of what’s going on. The Dutch national parliament instructed Prime Minister Mark Rutte to prevent Brussels from acquiring powers over our wages and pensions, yet the talk here in Brussels is that there is a big chance that this is just what will happen. If on Friday Rutte gives way to pressure from others, he will be treating with contempt not only the ordinary men and women who are never kept very well informed, but their elected representatives. He’s quite capable of this, in my view.