Christian Democrats Old Pals’ Act in the eurozone

18 October 2015

Christian Democrats Old Pals’ Act in the eurozone

This week it was announced that, despite having violated all of the agreements on the budget, Spain would receive no punishment. German Christian Democrat Finance Minister Wolfgang Schäuble was amongst those urging that Spain be given more time. Commission president Jean-Claude Juncker, also a Christian Democrat, did everything to prevent a punishment being imposed on Spain. How differently these politicians comported themselves in relation to Greece, which was forced to destroy itself with still more budget cuts in order to reach the targets set. But of course Greek Prime Minister Alexis Tsipras isn’t a Christian Democrat, but rather represents the left slice of the electorate. In my view this is a shameful example of the Old Pals’ Act at work.

The SP has always opposed the rigid norms for budgetary deficit – 3% - and state debt -60%. Most economists now admit that these norms are far too strict and that, for example, in times of crisis additional spending cuts simply drag the economy still further into the mire. In Greece, Syriza Prime Minister Alexis Tsipras tried to renounce extreme austerity policies, but under the leadership of people like Dutch Finance Minister Jeroen Dijsselbloem, in his capacity as chair of the Eurogroup, which brings together Finance Ministers from the countries which use the common currency, and Schäuble, he was forced into deep spending cuts. Juncker stood by and looked on: excellent work from the Eurogroup!

In the case of Spain things are completely different: the Spanish Christian Democrat Prime Minister Mariano Rajoy is being handled with kid gloves. The budgetary deficit must, according to the agreements, come in under 3%. Otherwise you have to redo your budget and if you don’t you get fined. But in contrast to what was done to Tsipras, a single telephone conversation between Rajoy and Juncker sufficed: with Schäuble’s support the whole thing went through, because suddenly Spanish tax revenues appeared to fall.

The European Commission is always banging on about integrity, but the time honoured tradition of nepotism is something that Juncker and his ilk evidently find is sufficient integrity and feel they can now continue in their own sweet way. Only a tug to the left in even more member states than is already the case can put an end to the power of the Brussels establishment. The voter knows therefore what he or she has to do. Vote the establishment out and who knows? Perhaps one day a more intelligent sound will issue forth from Brussels and this increasingly shameless application of the Old Pals’ Act will come to an end.

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