n the half decade since the beginning of the economic crisis, global press freedom has declined, and the EU has been no exception to this trend. Reporting on a new survey on press freedom, Jennifer Dunham and Zselyke Csaky find that Greece and Hungary have experienced large declines in press freedom in recent years, with Lithuania, Latvia and Spain also seeing falls. They write that the economic crisis has exacerbated deep-rooted problems across Europe’s media environments leading to a decline in print media circulation and diversity, as well as a greater concentration of media ownership.
Each year in May, Freedom House, a Washington, D.C.–based institute that specializes in research on global democracy, issues a report on the condition of press freedom around the world. The most significant—and disturbing—finding of Freedom of the Press 2013: A Global Survey of Media Independence was that the proportion of the global population that enjoys a free press continued to decline in 2012, falling to less than one in six, its lowest level in over a decade. The press freedom score in the European Union (EU), traditionally one of the world’s best-performing regions, also fell victim to this negative trend, with a further drop in the regional average and declines in both the old member states and those that joined the bloc in 2004 or later.
The year 2012 featured a notable deterioration in Greece and more moderate declines in Spain and other nations. This comes on the heels of a steep decline in Hungary’s score in recent years, and ongoing problems in Italy, Latvia, and Lithuania. As governments and media sectors felt the impact of the economic crisis that began in 2008, the state-run and private media suffered staff and salary cuts, declines in advertising revenue, and even the closure of outlets. This in turn had the effect of exacerbating existing problems, such as declining print circulation, the concentration of media ownership, decreasing print media diversity, and expanding influence on content by political or business interests.
Figure One – Average Press Freedom Scores in the EU, 2008–12
Scores are on a scale of 0–100, with 0 as best and 100 as worst. Categories: Free (0-30), Partly Free (31-60), and Not Free (61-100).
Greece’s score decline was the largest in the region in 2012. It fell from 30 to 41 on the survey’s 100-point scale, triggering a change in the country’s press freedom status, from Free to Partly Free. (The third category in the three-tiered system is Not Free.) While Greek society as a whole suffered from economic and political turmoil, the Greek media endured widespread staff cutbacks and some closures of outlets. Journalists also faced heightened legal and physical harassment and pressure from owners or politicians to toe a certain editorial line. These factors damaged the media’s ability to perform their watchdog role and keep citizens adequately informed about election campaigns, austerity measures, corruption, and other critical issues.
In one prominent example, journalist Kostas Vaxevanis was arrested and charged with violation of privacy for publishing the so-called Lagarde List of prominent Greek citizens who had transferred funds to Swiss bank accounts, allegedly to avoid paying taxes in Greece. Although he was initially acquitted, he currently faces a retrial. Furthermore, there were cases of politically motivated firings and suspensions at both state and private media. Journalists were physically attacked while covering protests against government-imposed austerity measures, and targeted by the far-right Golden Dawn party.
The media environment in Spain has also suffered as a result of the economic crisis and a related series of austerity measures, with its score declining from 24 to 27 points in Freedom of the Press 2013—still in the Free range. Media diversity was affected as the advertising market contracted and a number of outlets closed, cut staff, or reduced salaries. Since 2008, 57 media outlets have closed, around one-sixth of the country’s journalists have lost their jobs, and those who remain receive only about half their precrisis salaries. Público, a left-leaning daily aimed at younger readers, stopped printing and switched to an online-only format in February 2012, leaving El País as the only major left-leaning newspaper in print. In addition, several journalists and staff at RTVE, the state-owned broadcaster, were removed aftervoicing criticism of the government’s controversial austerity policies. These developments raise significant concerns about political influence over content and a lack of diverse viewpoints in the mainstream media.
Latvia’s score has fallen to 28, three points shy of the Partly Free category. Declining advertising revenues since 2008 have caused media outlets’ budgets to shrink, resulting in tabloidization and the use of recycled content. Forced to search for new sources of income, some outlets have engaged in the questionable practice of “hidden advertising,” in which paid content is improperly disguised as news. While the country’s economic recovery has accelerated in the past two years, media ownership is becoming increasingly concentrated. Apart from economic problems, political interference in editorial policies has raised concerns, and the country is battling a growing trend of violence against journalists. The 2010 murder of newspaper owner Grigorijs Ņemcovs remains unsolved, and last year another journalist reporting on corruption and organized crime was badly beaten and shot at.
Figure Two – Largest Score Changes in the EU, 2008–12
Latvia’s Baltic neighbor, Lithuania, was also severely hit by the economic crisis, and its media sector suffered similar setbacks, though it is still ranked comfortably in the Free category. While the economy is currently performing well, Lithuania’s media and advertising sectors have not yet caught up. Media ownership has grown more concentrated over the last several years, and the industry’s recovery has been hampered by rising taxes on media outlets. Banks are barred by law from owning media, but many institutions work around those restrictions by maintaining media holdings through intermediaries, and newspapers controlled by financial institutions often demonstrate bias toward their owners. A number of politicians also have ownership stakes in media outlets.
Figure Three – Press Freedom Scores for Selected Countries, 2008–12
Italy did not suffer a decline in score for 2012, but it has been a regional outlier since 2008, when it fell into the Partly Free range due in large measure to the disproportionate influence of one man—then prime minister Silvio Berlusconi—over the country’s media. Berlusconi is a major private media owner, and his political position gave him control of the state-owned media as well, including influence over the appointment of directors and key journalists. While his resignation in November 2011 effectively decreased media concentration, Italy’s score did not improve significantly. It remained at 33 in 2012, with a Partly Free status, due in part to pressures from the economic crisis. Working conditions for journalists have become difficult in recent years; those with a full-time contract constitute only 19 percent of the workforce, and there is a significant pay gap between professional and freelance journalists. Those hoping to work full-time for one of the major outlets need a license from the journalists’ association, the Ordine dei Giornalisti, and obtaining one entails a lengthy and costly procedure. Other problems include the influence of political parties over nominations to the public broadcaster and the regulatory authority. This infamous phenomenon is called lottizzazione, or “dividing the spoils” between parties, and has long plagued Italian politics. Journalists also face physical threats or attacks from organized crime networks. In one case, investigative journalist Roberto Saviano has lived under 24-hour police protection since publishing the book Gomorrah, about the Neapolitan mafia, in 2006.
Hungary also avoided further score declines in 2012, but it fell precipitously over the previous three years—from a Free environment with a score of 21 in 2009 to Partly Free with a score of 36 in 2011. And as in Italy, the problems in Hungary cannot be attributed to economic factors alone. Press freedom has eroded in the legal and political areas under Prime Minister Viktor Orbán, who took office in 2010. His government adopted a new media law that provided for content restrictions and heavy fines; evidence emerged of a politically motivated licensing procedure that caused a critical radio station to lose its frequencies; and reports of censorship and self-censorship increased, especially at the public broadcasters. A series of rulings by the country’s Constitutional Court and legal amendments to meet objections from the European Commission have mitigated the impact of the government’s initiatives. For example, most of the content requirements in the media law have been removed, and a more balanced appointment procedure has been introduced for the head of the Media Authority. Moreover, the critical radio station, Klubradio, got back its frequency after an almost three-year court battle. Nevertheless, several problematic legal provisions remain in place. Media outlets (including online and print) still have to register with the Media Authority, for instance, and they can still receive large fines for violating human dignity or “discriminating against any nation.”
The relatively young democracies of the EU’s east and south have endured the worst press freedom setbacks in recent years, but even leaders of the democratic world like the United Kingdom are not without problems. The country’s libel laws heavily favor the plaintiff, resulting in significant “libel tourism,” though reforms enacted in 2013 appear to be a step in the right direction. Press freedom advocates are less satisfied with the conclusions of the November 2012 Leveson report, which suggested the adoption of statutory press regulations to solve the ethical crisis revealed by a scandal over illicit phone hacking by journalists. The use of superinjunctions also poses a threat to freedom of expression; these court-issued gag orders are an excessively powerful tool in the hands of those who can afford the legal expertise to secure them. Another issue that sets the United Kingdom apart from the best-performing European countries is the persistence of occasional attacks and threats against journalists, especially in Northern Ireland.
The economic crisis has shed light on, and often exacerbated, deep-rooted problems in the media environments of Europe. These include the cozy relationships between politicians and media owners, government hostility toward critical reporting, and violence against journalists in the course of their work. However, the EU still easily outperforms the world’s other regions, and the recent decline in press freedom has been recognized by European policymakers. As governments contemplate an appropriate response, journalists across Europe are already turning to new media as an outlet for their work. The proliferation of digital media—whether online versions of newspapers, purely web-based news organizations, internet broadcasters, or individual blogs—serves to counteract the contraction of the print sector and often frees journalists from the restrictions and conflicting interests of large public or commercial institutions. In addition to addressing the problems affecting the media offline, policymakers will need to ensure that the legal, political, and economic freedom of online journalism is adequately protected, so that it can evolve into a robust alternative to traditional sources of unbiased information and in-depth investigative reporting on the key issues facing the public.
Irish public to vote on same sex marriage in 2014
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The topic of gay marriage has become increasingly prevalent worldwide, and with several US states and the UK having passed laws to allow gay marriage, the Irish public will now have a chance to vote on the subject. The Constitutional Convention – a …
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Many billions of Euros are being extracted from Europe’s vassal-debtor nations – Spain, Greece, Portugal and Ireland – and transferred to the creditor banks, financial speculators and swindlers located in the City of London, Wall Street, Geneva and Frankfort. Under what have been termed ‘austerity’ programs, vast tributary payments are amassed by ruling Conservative and Social Democratic regimes via unprecedented and savage budget cuts in salaries, public investment, social programs and employment. The result has been catastrophic growth in unemployment, under-employment and casual labor reaching over 50% among workers under age 25, and between 15% and 32% of the total labor force. Wages, salaries and pensions have been slashed between 25% and 40%. The age of retirement has been postponed by 3 to 5 years. Labor contracts (dubbed ‘reforms’) concentrate power exclusively in the hands of the bosses and labor contractors who now impose work conditions reminiscent of the early 19th century.
o learn first-hand about the capitalist crisis and the workers’ responses, I spent the better part of May in Ireland and the Basque country meeting with labor leaders, rank and file militants, unemployed workers, political activists, academics and journalists. Numerous interviews, observations, publications, visits to job sites and households – in cities and villages – provide the basis for this essay.
Ireland and the Basque Country: Common Crises and Divergence Responses
The Irish and Spanish states, societies and economies (which presently includes the Basque country, pending a referendum) – have been victims of a prolonged, deep capitalist depression devastating the living standards of millions. Unemployment and underemployment in Ireland reach 35% and in the Basque country exceeds 40%, with youth unemployment reaching 50%. Both economies have contracted over 20% and show no signs of recovery. The governing parties have slashed public spending from 15% to 30% in a range of social services. By bailing out banks, paying overseas creditors and complying with the dictates of the autocratic ‘troika’ (International Monetary Fund, European Central Bank and European Commission), the capitalist ruling class in Ireland and the Basque region have undermined any possible investments for recovery. The so-called ‘austerity’ program is imposed only on the workers, employees and small businesspeople, never on the elite. The Brussels-based ‘troika’ and its local collaborators have lowered or eliminated corporate taxes and provided subsidies and other monetary incentives to attract multi-national corporations and foreign finance capital.
The incumbent bourgeois political parties, in power at the beginning of the crash, have been replaced by new regimes that are signing additional agreements with the ‘troika’ and bankers. These agreements impose even deeper and more savage cuts in public employment and a further weakening of workers’ rights and protection. The employers now have arbitrary power to hire and fire workers at a moment’s notice, without severance pay, or worse. Some contracts in Ireland allow employers to demand partial repayment of wages if workers are forced to leave their jobs before the end of their contract because of employer abuse. The Spanish economy – including in the Basque country – is subject to a modern form of ‘tributary payments’ dictated by the ruling imperial oligarchy in Brussels. This oligarchy is not elected and does not represent the people it taxes and exploits. It is accountable only to the international bankers. In other words, the European Union has become a de facto empire – ruled by and for the bankers based in the City of London, Geneva, Frankfort and Wall Street. Ireland and the Basque country are ruled by collaborator vassal regimes which implement the economic pillage of the electorate and enforce the dictates of the EU oligarchy – including the criminalization of mass political protests.
The similarity in socio-economic conditions between Ireland and the Basque country in the face of crisis, austerity and imperial domination, however, contrasts with the sharply divergent responses among the workers in the two regions due to profoundly different political, social and economic structures, histories and practices.
Facing the Crisis: Basque Fight, Irish Flight
In the face of the long-term, large-scale crisis, Ireland has become the ‘model’ vassal state for the creditor imperial states. The leading Irish trade union federation and the dominant political parties – including the Labor Party currently in coalition with the ruling Fine Gael Party – have signed off on a series of agreements with the Brussels oligarchs to slash public employment and spending. In contrast, the militant pro-independence Basque Workers Commission, or LAB, has led seven successful general strikes with over 60% worker participation in the Basque country – including the latest on May 30, 2013.
The class collaborationist policies of the Irish trade unions have led to a sharp generational break – with older workers signing deals with the bosses to ‘preserve’ their jobs at the expense of job security for younger workers. Left without any organized means for mass struggle, young Irish workers have been leaving the country on a scale not seen since the Great Famine of the mid-19th century. Over 300,000 have emigrated in the past 4 years, with another 75,000 expected to leave in 2013, out of a working population of 2.16 million. In the face of this 21st century catastrophe, the bitterness and ‘generational break’ of the emigrating workers is expressed in the very low level of remittances sent back ‘home’. One reason the Irish unemployment rate remains at 14% instead of 20-25% is because of the astounding overseas flight of young workers.
In contrast, there is no such mass emigration of young workers from the Basque country. Instead of flight, the class fight has intensified. The struggle for national liberation has gained support among the middle class and small business owners faced with the complete failure of the right-wing regime in Madrid (ruled by the self-styled ‘Popular Party’) to stem the downward spiral. The fusion of class and national struggle in the Basque country has militated against any sell-out agreements signed by the ‘moderate’ trade unions, Workers Commissions (CCOO) and the General Union of Workers (UGT). LAB, the militant Basque Workers Commission, has vastly more influence than their number of formally affiliated unionized workers would suggest. LAB’s capacity to mobilize is rooted in their influence among factory delegates, who are elected in all workplaces, far exceeding all trade union membership. Through the delegates meeting in assemblies, workers discuss and vote on the general strike – frequently bypassing orders from central headquarters in Madrid. Direct democracy and grass roots militancy frees the militant Basque workers from the centralized bureaucratic trade union structure which, in Ireland, has imposed retrograde ‘give backs’ to the multi-national corporations.
In the Basque country, there is a powerful tradition of co-operatives, especially the Mondragon industrial complex, which has created worker solidarity in the urban-rural communities absent among Irish workers. The leading Irish politicians and economic advisers have groveled before the multi-national corporations, offering them the lowest tax rates, biggest and longest-term tax exemptions, and the most submissive labor regulations of any country in the European Union.
In the Basque country, the nationalist-socialist EH Bildu-Sortu political party, the daily newspaper Gara, and the LAB provide mutual political and ideological support during strikes, electoral contests and mass mobilizations based on class struggle. Together, they confront the ‘austerity’ programs as a united force.
In Ireland, the Labor Party – supposedly linked to the trade unions – has joined the current governing coalition. They have agreed to a new wave of cuts in social spending, layoffs of public employees, and wage and salary reductions of 20%. The trade union leadership may be divided on these draconian cuts, yet most still support the Labor Party. The more militant retail workers’ union rejects the cuts, but has no political alternative. Apart from support from the republican-nationalist Sein Fein and smaller leftist parties, the political class offers no clear progressive political program or strategy. [The Sein Fein has made the ‘transition’ from armed to electoral struggle.] According to the latest (May 2013) polls, it has doubled its voter approval rating from under 10% to 20% due to the crisis. However, Sein Fein is internally divided: the ‘left’ pro-socialist wing looks to intensify the ‘anti-austerity’ struggle while the ‘republican’ parliamentary leaders focus on unification and downplay class struggle. As a result of its collaboration with the ‘troika’ and the new regressive tax laws, the Labor Party is losing support and the traditional right-wing party, Fianne Fail, which presided over the massive swindles, speculative boom and corporate giveaways, is making an electoral comeback – and may even return to power. This helps to explain why Irish workers have lost hope in any positive political change and are fleeing in droves from the perpetual job insecurity imposed by their elite: ‘Better a plane ticket to Australia than a lifetime of debt peonage, regressive bankruptcy laws and boss-dictated contracts approved by trade union chiefs who draw six digit salaries’.
The Basque country’s revolt against centralized rule from Madrid is partly based on the fact that it is one of Spain’s most productive, technologically advanced and socially progressive regions. Basque unemployment is less then that of the rest of Spain. Higher levels of education, a comprehensive regional health system, especially in rural areas and a widespread network of local elected assembles, combined with the unique linguistic and cultural heritages, has advanced the Basque Nation toward greater political autonomy. For many this marks the Basques as a political ‘vanguard’ in the struggle to break with the neo-liberal dictates of the EU and the decrepit regime in Madrid.
Conclusion: Political Perspectives
If current austerity policies and emigration trends continue, Ireland will become a ‘hollowed out country’ of historical monuments, tourist-filled bars and ancient churches, devoid of its most ambitious, best trained and innovative workers: a de-industrialized tax-haven, the Cayman Island of the North Atlantic. No country of its size and dimensions can remain a viable state faced with the current and continuing levels of out-migration of its young workers. Ireland will be remembered for its postcards and tax holidays. Yet there is hope as the left republicans of the Sein Fein, socialists, communists and anti-imperialist activists, join the unemployed and underpaid workers in forming new grassroots networks. At some point the revolving doors of Irish politicos in and out of office may finally come to a halt. Unemployed and educated angry young people may decide to stay home, stand their ground and turn their energies toward a popular rebellion. One consequential socialist leader summed it up: “Deep pessimism and the influence of bankrupt social democracy and imperialist ideology within the labor movement are very strong. As you know we can’t start a journey other than from where we are”. The determination and conviction of Irish trade union militants is indeed a reason to hope and believe that current flight will turn into a future fight.
In the case of the Basque country, the rising class and national mass struggle, linked to the legacy of powerful co-operatives and solidarity based worker assemblies, provides hope that the current reactionary regime in Madrid can be defeated. The ruling neo-fascist junta (the ruling party still honors the Franco dictatorship and military) is increasingly discredited and has to resort to greater repression. With regard to the militant Basque movements, the regime has taken violent provocative measures: criminalizing legal mass protests, arresting independence fighters on trumped up charges and forcefully banning the public display of the photos of political prisoners (called ‘terrorists’ by Madrid). It is clear the government is increasingly worried by the strength of the general strikes, the rising electoral power of the pro-independence left and has been trying to provoke a ‘violent response’ as a pretext to ban the press, party and program of the EH Bildu-Sortu and LAB.
My sense is that Madrid will not succeed. Spain as a centralized state is disintegrating: the neo-liberal policies have destroyed the economic links, shattered the social bond and opened the door for the advance of mass social movements. The bi-party system is crumbling and the class-collaborationist policies of the traditional trade union confederations are being challenged by a new generation of autonomous movements.
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It is reported that the Minister Richard Bruton will propose that tax cuts are needed to keep the economy on course. Well, at least this has the virtue of consistency since this is the same Minister who proposed that high-paid company executives should pay hardly any taxes at all. Over the next few months we will get a Goldilocks debate over taxation – is it too hot, is it too cold, is it just right. But there’s an elephant in the room ready to stomp on the poor girl – and this will hardly get a mention.
For we are a low-waged, low-earning economy – and it is getting worse.
According to Eurostat Irish earnings have always been below EU averages. Even in 2008, when Irish earnings peaked, we were still well below average. Today, after four years of wage stagnation, we are falling further behind. In 2012 average earnings for:
- Other EU-15 countries was €38,525
- EU-15 countries not in bail-out: €41,963
- Other Small Open Economies: €45,123
- Ireland: €32,626
Since 2008 Irish earnings have flat-lined. In other EU-15 countries, earnings have increased by 10 percent while in other small open economies, earnings have increased by 13 percent.
To give another perspective, average Irish earnings would have to rise by 18 percent just to reach the average of other EU-15 countries. They would have to rise by 29 percent just to reach the average of core EU-15 countries. And they would have to rise by a phenomenal 38 percent just to reach the average of other small open economies.
Of course, there is that little matter of the ‘recession’. Many might argue that in a recession, what can you expect? Yes, recessions don’t help average earnings. But neither do discretionary pay cuts. To what extent that pay cuts or freezes are opportunistic on the part of the employer is difficult to assess. The rise in profits, however, is not. The EU AMECO database shows profits in Ireland rising by 24 percent since the profit trough in 2009; in other EU-15 countries the rise has been 7 percent – in line with growth in average earnings.
As always, we have to be careful when comparing data like earnings. Much depends on the composition of the workforce. For instance, if more people are working in manufacturing, the wage will be higher than in economies where the number of hospitality workers is high. So one would have to do a sectoral comparison to get more insight.
Further, if there are high levels of part-time workers, this will reduce the average.
However, there is strong support from other data coming on stream for the proposition that our wages and earnings are well below the European averages. The following is from Eurostat which measures hourly labour costs in the business economy, which is essentially the private sector.
Private sector hourly labour costs in Ireland are 14 percent below the average of other EU-15 countries. This falls to 21 percent when compared with the core EU-15 countries; and when compared to the average of other small open economies, it falls to 30 percent below average. Are we seeing a picture here?
We are a relatively low-waged economy, we are a low-earning workforce. And such economies find it hard to generate tax revenue. But you don’t get that perspective to the agenda and you certainly won’t hear it from Government ministers. They are too busy trying to drive down wages – whether it is in the public sector, the banking sector (where 40 percent of bank staff earn €30,000 or less), in the low-paid sectors where many of the protections under the Joint Labour Committee have been undermined under Government ‘reforms’. All this talk about ‘increased competitiveness’? Cut wages.
So when you hear some commentator or Minister, pretending to champion the hard-pressed workers by calling for tax cuts, just remember: the tax cut is a diversion.
The real issue is pay and earnings.
A group of Irish online publishers say draft European laws could force users to register just to see the homepage of a website.
WEB USERS could be forced to register with a website just to see its homepage, if the current draft of an EU regulation on online data is not changed before becoming law.
That’s according to a group of small and medium-sized Irish digital advertising firms, which says a new data protection regulation being put together in Brussels could make it virtually impossible to show content to casual users.
IAB Ireland, a trade association for the online advertisers, says the current draft of the laws would mean websites could only show content to users who explicitly approve the submission of some of their personal data.
It also extends the definition of ‘personal data’ to include non-personal details like an internet user’s IP address and the cookies stored by their browser.
IAB Ireland’s member firms say the rules could mean the end of an era where users can “serendipitously” discover new websites – as they would have to explicitly approve the submission of their personal data simply to see its homepage.
The group said it was important to realise that the laws would be coming in the form of a European regulation – meaning it would automatically become law in each EU member state, and was not subject to national amendment or discretion.
While this has advantages – making sure that online publishers only have to deal with one set of rules, instead of complying with dozens of separate legal systems – it also requires the unanimous approval of all EU member states, and the European Commission and Parliament, to be changed.
Once the laws were in, therefore, it was almost impossible for individual countries to engineer a change – meaning it was vital that the final regulation be workable and fully thought through.
‘Large parts of the web could disappear’
Eamonn Fallon, chief executive of Distilled Media whose sites include TheJournal.ie, said large parts of the web could “disappear behind login walls” if the regulation was not amended before being brought into law.
He added that users would also have to explicitly agree to send their IP address to different sites, whose content might all appear on one page.
So, for example, a website featuring ads controlled by Google would be asked whether they wanted to give Google their IP address, simply in exchange for allowing the ads to appear on the page. Similarly, Facebook users could be asked to explicitly send their IP address to Facebook just so a ‘Like’ button could appear.
Fallon said that if information like a user’s IP address was considered ‘personal’, “the only way companies like ours can legally run web analytics and third party adservers would be to force all our users to login.”
Digitize director John Patten added it would be “extremely difficult, if not impossible, to gather explicit consent on the websites on which ad networks, or site analytics companies, operate.”
This was because the companies delivering ads to users, or compiling readership figures on behalf of a web publisher, “do not have have a direct relationship with the users from whom they would need to obtain explicit consent.”
The group says the regulation’s whole purpose – to try and minimise the data that websites can collect about users – would be totally undermined if it forced websites to actively seek more information from users before allowing them to view content.
Fine Gael MEP Sean Kelly, who attended an IAB media event this morning, is the European Parliament’s rapporteur on the data protection updates. Kelly says he has tabled a number of amendments to the draft regulations, to try and address the concerns of the SMEs.
“We are working hard at an EU level to ensure that the Regulation balances strong protection for consumer rights with the opportunity to facilitate SMEs in Ireland and across Europe to prosper in the digital economy,” he said.
Ministers are fond of telling us that we are 80 percent through the dark austerity forest. Soon, maybe within a couple of years, we will enter into the light where all will be well and normal fiscal policy can be resumed. Just one more push and austerity will be no more. Should we put a lot of faith in this? I would recommend caution – extreme caution.
The Government has published a long-term scenario – stretching out to 2019. This builds on the projections up to 2016 in the recent Stability Programme Update. The Government is at pains to state that this is an illustration:
‘Again it must be stressed that this is purely an illustrative scenario.’
They even underlined it. Yet, it is consistent with the Government’s SPU projections and it is certainly consistent with reports of a new plan being developed by the Minister for Finance.
‘The State’s anticipated exit from the bailout this year will not mean a relaxing of austerity targets as Mr Noonan hopes Government will approve a fresh regime with firm timelines similar to the EU-IMF-ECB programme.’
Minister Richard Bruton was also giving a warning
‘Mr Bruton rejected the accusation that the public had expected the end of the bailout term would signal an easing of austerity by saying no “crock of gold” was available to the Government.’
Mr Bruton suggested that this situation would continue for some time.
So it is worthwhile to look at the Government’s ‘purely illustrative scenario’ as there is a very good chance it will morph into the ‘only scenario’ (TINA will become TIOOS – There is Only One Scenario). Let’s look at primary public expenditure – that is, public expenditure excluding interest. This identifies how much money will be spent on public services, social protection and investment. I have used ‘real’ expenditure – that is, expenditure after inflation using the GDP deflator (the economy wide inflation indicator).
As seen, primary expenditure is expected to fall by nearly 9 percent over the next two years. From 2015 on, primary spending still continues to fall – by 2.6 percent in real terms up to 2019 despite the Government pencilling in GDP growth of approximately 12 percent during this same period.
But it gets worse. In many areas public spending will rise automatically due to demographic pressures. For instance, the number of pensioners will increase so that even if pension payments remain frozen, expenditure will rise. We should also allow for a rise in demand on health services with this aging demographic. And in education, we will have to spend more just to accommodate the continuing rise in our student numbers.
In other words, we will have to spend more on pensions, health and education just to stand still. When this is factored in, there will need to be additional cuts in other expenditure – in other public services, social protection programmes and investment projects.
We are heading into a period of semi-permanent austerity. Why, if by 2015 we have reached the Maastricht target and when employment and economic growth will continue to reduce deficit and debt levels? The Government gives two clues. First:
‘Ireland is on track to correct its excessive deficit by 2015. Thereafter, the public finances in Ireland will no longer be subject to the corrective arm of the Stability and Growth Pact (i.e. the Maastricht guidelines) but subject to the requirements of the preventive arm and the Treaty on Stability, Co-ordination and Governance (the ‘fiscal compact’).’
Ah, the Fiscal Treaty; remember those debates – how Government ministers insisted that compliance with the pact would not necessitate further austerity? We climb one hill only to find there are more hills to climb.
Second, the Government seems determined to drive the budget balance down to zero and then into surplus. In other words, we will be taking in more money than we are spending by 2019. Now there’s nothing wrong with a balanced budget at the appropriate time. But the Government’s scenario estimates (and to be clear, this is not a projection) that unemployment will be 11 percent. How could anyone imagine any scenario where you run a budget surplus with double-digit unemployment?
Is a balanced budget necessary to reduce debt per the fiscal treaty? No – this is an issue we will revisit in a subsequent post.
This is the future that some Government Ministers are planning. After destroying our social and economic infrastructure with irrational austerity policies, what is next? Continuing austerity amidst the ruins.
That’s the current scenario – unless we work for something different; different than what has happened in the past, and different than what is being planned for us in the future.
The Fine Gael-Labour coalition in Dublin is currently discussing a proposal from Finance Minister Michael Noonan, which imposes austerity budgets until 2020.
Although the programme has not yet been published, government officials have made clear that its purpose is to intensify the spending cuts under the bailout agreed with the European Union, European Central Bank and the International Monetary Fund after the programme expires later this year.
Referring to the dictates of the troika, which have ensured the implementation of a large part of the more than €28 billion of austerity measures since 2008, Noonan said, “When we leave the programme we won’t have that kind of discipline within our system any more and I want to make sure that, because of more loose arrangements, that we don’t lose impetus.”
Specific savings are expected to be outlined by the proposal, and fiscal targets will be included. Spending ceilings for the coming three years are to be presented in the 2014 budget, which will be announced in October.
Minister for Jobs Richard Bruton, like Noonan a member of Fine Gael, was explicit that the government’s strategy would be to step up the downward pressure on labour costs in order to build a “competitive economy.”
“There isn’t a crock of gold that you can dip into and create an alternative to building sound enterprises that are oriented to export markets and who sell innovative products,” he proclaimed.
The Labour Party’s Public Sector Reform Minister Brendan Howlin is playing a leading role in slashing government spending. A letter was recently issued by him to each government department, detailing percentages of budgets to be cut in the years 2015 and 2016. These are thought to include annual savings of at least three percent in the budgets of the health and social protection departments. Other departments could face annual targets of five percent.
The state pension fund will be bled dry to offer incentives to foreign investors and private equity firms to come to Ireland. The Financial Times reported that the remaining six billion euros in the National Reserve Pension Fund would be used by the government to create a “co-investment” fund.
There has been hardly any public discussion on these new developments, which will condemn Irish working people to unending austerity for years to come. These policies will worsen the conditions of misery which already prevail, including an unemployment rate standing at 14 percent.
Essential to the enforcement of austerity is the full support of the trade unions, which the government can be assured of. The Irish Congress of Trade Unions (ICTU) has been locked in talks with the coalition since February to reach an agreement to impose the latest round of savings on public sector workers. The successor to the no-strike Croke Park Agreement between government, employers and the unions, which expires next year, aims to save €1 billion by 2016.
The unions are currently trying to force through the Haddington Road Agreement in the face of widespread opposition among workers. In the first vote on the deal in April, a large majority of workers rejected it, including an overwhelming number of teachers, medical staff and emergency service workers.
The bureaucracy then entered new talks on a union-by-union basis in order to divide the emerging opposition. They accepted as good coin the claim from Howlin that the three year agreement would be the last time workers would be asked to sacrifice their wages and working conditions to pay for the collapse of the banks, even as he prepared to outline with Noonan proposals which will see austerity and labour market reforms continue for at least another four years thereafter.
The deal now being voted on by the public sector unions retains all of the cuts demanded by the government. It contains reductions to overtime pay, longer working hours, redeployment measures designed to cut numbers in the public sector, and the freezing of pay increments.
These measures will exacerbate the exploitation of workers who have suffered significant pay cuts since 2008. In the public sector, average wages have fallen by 14 percent, while in other economic areas it is even more. This has been an integral part of the drive by the ruling elite to permanently lower labour costs. According to one study, labour costs in Ireland fell between 2008 and 2012 by 8.4 percent.
On this basis, the Irish stock market is achieving its largest rally since the crisis. Stock values have more than doubled since a low point in early 2009, and companies are predicting that they will secure their biggest profits since that time. One trader bluntly pointed to the source of these renewed gains, telling Bloomberg, “We have to give Ireland credit for actually sticking to the reform programme and taking the levels of painful social adjustment that few countries in Europe have come close to.”
The continued expansion of profits is unsustainable, and there are already clear signs of the danger of another banking collapse. Last week, it was revealed that €3.5 billion of funds loaned to Allied Irish Bank during the near collapse of the banking system in 2008-09 would not be paid back to the state, but would be converted into preferential shares. One press article pointed out that this one move would see the state lose more money than the total savings it had planned in the 2014 budget.
The banks will likely require access to even more financial support from the government, another important factor driving the cuts. Noonan discussed this possibility at his last meeting with the IMF, in the event the banks fail stress tests scheduled for early 2014. The tests, initially planned for autumn 2013, have been pushed back amid concerns over the stability of the banks. Fitch released a report this week stating that “significant risks” still remain in the financial system.
In the absence of agreement within the European Union on allowing the EU’s bailout fund to lend directly to banks, Dublin would be faced with taking even more debt on to the state balance sheet in order to cover the capital requirements of the financial institutions, under conditions in which state debt is already greater than 120 percent of GDP.
In an ominous report released at the end of May which indicates the scale of the developing crisis, Ireland’s Central Bank pointed out that a total of €25.8 billion of mortgages were in arrears by more than 90 days, and small businesses had fallen behind with payments on loans totalling €10.8 billion. The banks have only €9.2 billion in capital to act as a buffer.
While the banks can expect to obtain full access to billions more in state resources, the latest figures point to a sharp rise in severe poverty. One in ten are suffering from food poverty, defined as an inability to afford a meat or vegetarian equivalent meal every other day, or having missed a meal over a period of two weeks because of money problems. The real number of those living under such circumstances is certainly much higher, since the figures from this report were collected in 2010. In a separate study, the Irish League of Credit Unions revealed that almost 50 percent of the population have to borrow money to meet the cost of basic bills.
Austerity kills is the message of a study published by the ‘British Medical Journal’
Austerity measures could mean the dismantling of a large part of the Spanish health system and significantly damage the health of the population, according to a study published in the British Medical Journal on Thursday.
The authors of the report warn that if the trend does not change, there is a risk that Spain will experience a spiral of health problems that could mean an increase in infectious diseases such as tuberculosis and HIV.
One part of the research consisted of interviewing 34 doctors and nurses in Catalonia. The majority said they felt “shocked, numbed and disillusioned” about the cuts, and some expressed fears that the austerity measures would “kill people,” the researchers said.
The report highlighted that healthcare and social services cuts of almost 14 percent at the national level and of 10 percent at the regional level in 2012 had coincided with an increase in demand for care, especially on the part of senior citizens, the disabled and the mentally ill.
Researchers also identified an increase in cases of depression, alcoholism-related diseases and suicides in Spain since the crisis began.
“If no corrective measures are implemented, this could worsen with the risk of increases in HIV and tuberculosis, as we have seen in Greece, where healthcare services have had severe cuts, as well as the risk of a rise in drug resistance and spread of disease,” said Helena Legido-Quigley, a lecturer in global health at the London School of Hygiene & Tropical Medicine, who worked on the study.
EURO Press Release – The G8 summit in Lough Erne (UK) on 17-18 June 2013: the European Union’s role and actions
What are the main topics on this year’s agenda?
The United Kingdom, who is holding this year’s annual G8 presidency, has set out three main topics for their G8 presidency: trade, taxation and transparency (“the three Ts”). The three Ts will feature high on the summit’s agenda together with discussions of the global economy and foreign and security policy.
What are the EU’s role and actions regarding these topics?
The European Union is the world’s biggest trading partner, accounting for 17% of global imports and exports of goods and commercial services. Trade is a key engine to boost growth and jobs in the EU. Almost one quarter of EU growth comes from international trade, and about 30 million jobs in the EU, or more than 10 % of the total workforce, depend on sales to the rest of the world, an increase of almost 50 % since 1995. To foster trade, EU policy translates into following actions: negotiating bilateral and multilateral trade agreements, ensuring that the rules agreed are actually applied, and working closely with the WTO and other multilateral institutions. This allows tackling international trade and customs barriers, backed up where needed with EU legislation.
In the field of bilateral trade agreements, prominent examples are the Transatlantic Trade and Investment Partnership with the United States, on which negotiations will be launched shortly, the free trade agreement that the EU has started negotiating recently with Japan, and the EU-Canada trade negotiations are now in their final stretch. In total, the EU has 28 trade agreements already in place, has finished negotiations on 9 trade agreements that yet have to enter into force, has 11 trade negotiations actively under way and several more trade and development negotiations on-going (for a full list see MEMO/13/282). If the EU was to complete all its current free trade talks tomorrow, it would add 2.2% to the EU’s GDP or €275 billion. This is equivalent of adding a country as big as Austria or Denmark to the EU economy. In terms of employment, these agreements could generate 2.2 million new jobs or additional 1% of the EU total workforce.
Complementing its bilateral trade relations, the EU continues to move forward with the multilateral trade agenda. For example, it is fully engaged to conclude a WTO trade facilitation agreement, on which the deal should be closed at December’s WTO ministerial meeting in Bali. Also, the EU is making the case to further trade in Africa, for example by lowering trade costs, stimulating infrastructure financing and coordinating support better. The EU is the world’s largest provider of development assistance in support of increased international and regional trade (“Aid for Trade”), with around 32% of total Aid for Trade flows – reaching more than €10.7 billion in 2010.
More info on EU trade policy: http://ec.europa.eu/trade/
Every year, around one trillion euros is lost to tax evasion and avoidance in the EU – the equivalent to the EU’s next seven years’ budget. The global losses are much higher. Tax fraud and tax evasion limit the capacity governments to raise money and implement their economic and social policies. Against the backdrop of developments like the so-called off-shore leaks and the need for consolidating public finances, a new political momentum towards greater tax fairness in Europe and globally is gaining ground. Concrete measures of legal, administrative and political nature are deployed to further step up the fight against tax evasion and tax avoidance. The EU is actively promoting and pioneering this agenda, at home, with neighbouring countries and with its global partners in the context of the G8, the G20 and the OECD. Just in May 2013, the European Council of Heads of State and Government marked important progress in this regard: it confirmed that all Member States are committed to adopt the EU savings directive by the end of 2013. After years of stand-still, this would establish the automatic exchange of information as the common standard in the EU. It also will help to promote the automatic exchange of information further internationally in the context of the OECD. The EU, also in May, has agreed the mandates to negotiate agreements on automatic information exchange with its neighbouring countries, including Switzerland (see press release 9487/13). On 12 June 2013, the European Commission proposed the widest possible scope for the automatic exchange of information between EU tax administrations (see IP/13/530 and MEMO/13/533). This proposal paves the way for the EU to have the most comprehensive system of automatic information exchange in the world. The European Council in May also called on the Council to adopt measures to counter VAT fraud by end of June. The measures include the Quick Reaction Mechanism, which will enable rapid intervention by Member States in cases of sudden and massive fraud, and the Reverse Charge Mechanism, which specifically targets carrousel fraud. The European Commission’s Action Plan to fight tax fraud and tax evasion, presented in December 2012 complements this toolbox including action on tax havens and on aggressive tax planning.
International groups of companies use and abuse opportunities to shift taxable profits to low tax countries or tax havens. As a result some big multinationals pay extremely little corporate income tax in Member States, as illustrated by several recent high profile cases. The EU is fully supportive and contributes to the global efforts in the OECD, G20 and G8 to limit base erosion and profit shifting (BEPS), including through the Commission’s December 2012 Action Plan to strengthen the fight against tax fraud and evasion and its Recommendations on good tax governance and aggressive tax planning.
More info on EU fight against tax fraud and tax evasion: http://ec.europa.eu/taxation_customs/taxation/tax_fraud_evasion/index_en.htm
The EU very recently (see MEMO/13/546) updated its transparency and accounting directives on 12 June (see MEMO/13/546), which is a huge step in the global fight against corruption and for more transparency in extractive industries and forestry. This legislation, once fully in place in the Member States, will greatly benefit developing countries, providing them with instruments to reduce corruption and to boost revenues from the exploitation of minerals, fossil fuels or wood.
In the context of this G8 summit’s ‘Land Transparency initiative’ and within the framework of its development policy (the Agenda for Change), the EU has been supporting the implementation of the 2012 Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests through 40 projects and programmes on land issues. Alone for 2013 the EU made a further commitment of €31 million to implement the land governance guidelines in 10 more countries.
On Open government data, the EU is currently finalising the revision of the 2003 Public Sector Information Directive, which will open-up public sector data for re-use across Europe. Developers, programmers, businesses and citizens will be able to get and re-use public sector data at zero or very low cost in most cases. They will also have access to more exciting and inspirational content, for example including materials in national museums, libraries and archives. For the Commission, opening up public data means opening up business opportunities, creating jobs and building communities. (see Vice-President Kroes’ statement: IP/13/316)
Shortly before the G8 summit in Lough Erne will also be the occasion for the EU to announce specific partnerships with African countries to promote transparency.
4) OTHER ISSUES
Other issues likely to top the agenda of the G8 leaders are the discussion of the global economy and how to boost jobs and growth as well as international and security issues. The crisis in Syria will figure particularly high on the agenda. The EU is appalled by the escalating violence and the continued violations of human rights. The EU has also reiterated its support for the American-Russian initiative for an international peace conference on Syria and has announced its willingness to support preparatory efforts. The solution to the conflict lies in facilitating a Syrian-led political process. The EU is also with more than 840 million euros already the largest humanitarian donor for the crisis and will mobilize an additional 400 million euros for Syria and neighbouring countries – in particular Lebanon and Jordan, including the host communities there, which are most severely affected (read President Barroso’s statement of 6 June on the crisis in Syria: MEMO/13/515 or watch the video of the statement). The situation in Iran, the Middle East Peace Process, Mali, the tensions on the Korean Peninsula or the transition process in the Southern Mediterranean through the G8 Deauville partnership are also likely to be touched upon.
The EU is the biggest donor in the world – more than half of global development aid is provided by Europeans. Aid constitutes about 9% of the EU budget (this includes the European Development fund, which is not part of the EU budget).
Since 2004, thanks to the EU support, more than 9 million pupils have been enrolled in primary education, and more than 720,000 primary school teachers have been trained; 5 million children received immunisation against measles; 750,000 persons received antiretroviral combination therapy; 32 million households have been connected to drinking water and 9 million to sanitation facilities; More than 600,000 families were provided access to electricity; The Commission has helped to protect 1.5 million km² of forests and to conserve and 1.1 million km² of protected areas; the EU as a whole helped build and rehabilitate around 36 000 km of roads. (for more info, see http://ec.europa.eu/europeaid/what/index_en.htm)
Boosting agriculture and food security is a top priority of the EU’s development policy: every year around €1 billion is invested to that end. In 2010-2011 alone, the Commission allocated nearly €5 billion to improve food security. A recent report on the EU’s Food Facility – the €1 billion facility set up in 2008 on initiative of President Barroso to counter the negative effects of the food crisis – shows that in three years, the EU food facility has improved the lives of over 59 million people in 49 countries, and provided indirect support for another 93 million others, particularly farmers. On Saturday 15 June the European Commission will be awarded the Food and Agriculture Organisation’s Jacques Diouf prize for its contribution towards to the improvement of global food security. (see http://ec.europa.eu/europeaid/what/food-security/index_en.htm)
Today, 870 million people are still going hungry and malnutrition is responsible for over 3 million child deaths annually. Only a few days ago, at the Nutrition for Growth event of the UK G8 Presidency, the EU announced that it will spend an unprecedented €3.5 billion between 2014 and 2020 on improving nutrition in some of the world’s poorest countries. The policy framework will seek a stronger mobilisation and political commitment for nutrition at country and international level, will scale up nutrition interventions, and will allow the EU to invest in applied research and support information systems. (more info: see IP/13/516)
See also the UK G8 Presidency’s accountability report published on 7 June 2013: https://www.gov.uk/government/publications/lough-erne-accountability-report
At this summit, also the fight against climate change is expected to be on the agenda and provide the global negotiations towards an agreement in 2015 additional momentum.
5) THE EU AS G8 MEMBER
Who represents the European Union at the G8 summit?
The European Union is a full member in the annual G8 Summits and is represented by the President of the European Commission and the President of the European Council. Commission President Barroso, who attended the G8 for the first time in Gleneagles in 2005, is participating for the 9th time, while Council President Van Rompuy has been attending the G8 since the entry into force of the Lisbon Treaty.
Since when does the EU participate in the G8 summits?
In 1977, representatives of the then European Community began participating in the London Summit. The first G8 summit was held two years earlier, in 1975 in Rambouillet (France). Originally, the EU had a limited role to those areas in which it had exclusive competences, but the EU’s role has grown with time. The European Commission was gradually included in all political discussions on the summit agenda and took part in all summit working sessions, as of the Ottawa Summit (1981).
Because the European Union is a unique supranational organisation – not a sovereign Member State – the name G8, ‘Group of Eight Nations’, still stands. For the same reason, the EU does not assume the rotating G8 presidency. The European Union has all the privileges and obligations of membership except the right to host and chair a Summit. The Commission and the Council have all the responsibilities of membership, and what the Presidents of the Commission and the Council endorse at the Summit is politically binding.
Which countries will hold the G8 presidency next?
The UK will hand over the Presidency to Russia for 2014. The Presidency will continue in its rotation to Germany in 2015, Japan in 2016, Italy in 2017, Canada in 2018, France in 2019, and the USA in 2020.
6) MORE NEWS ON THE 2013 G8 SUMMIT IN LOUGH ERNE:
President Barroso’s G8 website: http://ec.europa.eu/commission_2010-2014/president/g20/index_en.htm
President Van Rompuy’s G8 website: http://www.european-council.europa.eu/the-president/summits-with-third-countries?lang=en
UK Government G8 website: https://www.gov.uk/g8
Video material: http://ec.europa.eu/avservices/ebs/schedule.cfm
IP/13/535 The European Union at the G8 summit in Lough Erne (UK) on 17-18 June 2013
MEMO/13/548 Promoting global fairness through trade, taxation and transparency, says President Barroso ahead of G8 Summit
Britain is to push the European Union to relax restrictions on the licensing of genetically modified crops for human consumption amid growing scientific evidence that they are safe, and surveys showing they are supported by farmers. The Environment Secretary, Owen Paterson, is expected to use a speech next week to outline the start of a new government approach to GM to ensure Britain “is not left behind” in agricultural science.
The move comes as 61 per cent of UK farmers now say they would like to grow GM crops after a disastrous 12-month cycle of poor weather that is expected significantly to reduce harvest yields. Senior government officials said that ministers are increasingly concerned that the potential moral and ethical benefits of GM are being ignored by costly and bureaucratic licensing regulations.
With one-twelfth of global arable land under GM cultivation they have privately warned that Britain faces being left behind in an important technology that has the potential to improve crop yields, help the UK’s agricultural industry and provide benefits to human health through vitamin fortification.
Government sources added that GM also had applications beyond food including the potential to combat diseases such as ash dieback and in developing new medicines.
“The point about GM is not simply about food production,” they said. “There are wider potential environmental and economic benefits to the technology both in the UK and internationally.
“What we want to do is start a dialogue within Europe on GM based upon the science.”
Ministers are hopeful of building support in Brussels for a change of heart on GM, with Germany seen as a key swing voter. However, any attempts to relax the rules could face opposition from countries such as Poland which in April became the eighth EU member state to ban the cultivation of GM crops.
Mr Paterson is said to believe that Britain should take the lead in moving the debate on from the knee-jerk reaction against GM for much of the last decade.
The move comes as a poll of over 600 British farmers found a considerable shift in their stance toward GM in the past year, with nearly a third saying they would be more likely to grow GM crops if it were legal now than they were 12 months ago – about half of them a “lot more” so.
On top of the advocated benefits of improving yields and cutting down on costs such as pesticides, the increasingly extreme weather has concentrated farmers’ minds on the need to guard against climate change.
“The weather has definitely had an impact,” said Martin Haworth, director of policy at the National Farmers Union. “Farmers are becoming more and more aware that climate change doesn’t mean a gradual rise in temperatures but rather a stream of extreme weather events. GM technology is one possible way of mitigating this.
“Last summer was disastrous for potatoes, for example. The potential for growing potatoes resistant to blight has had an impact on some farmers’ attitudes,” he said, adding that farmers were “very frustrated” at not being able to grow GM crops.
One of the survey’s respondents said they wanted to grow GM crops because “the terrible weather in the past two years has meant that yields have been down and the cost of fertiliser and pesticides have been rising ever since”.
GM crops can be engineered to grow faster, increase their resistance to weeds, pests and pesticides, produce extra nutrients or survive harsher weather conditions. They are created by taking genes with beneficial qualities from other organisms and injecting them into the plant. A gene from bacteria found in soil has proved particularly effective at warding off pests from cotton plants, for example.
But while they are widely grown in North and South America, GM crops are effectively banned in the UK and Europe where they are considered on an extremely strict case-by-case basis.
Since the first GM food was produced in 1994 – a delayed-ripening tomato, which had a longer shelf-life – the EU has granted just two licences to cultivate GM crops, neither of them grown in the UK. One was for plants engineered to resist corn borers and the other for a starchy potato used to make paper.
Apart from that, Europe’s exposure to GM products has been confined to imports of genetically modified animal feed, while much of the meat, eggs and milk comes from animals that have been reared on engineered grains.
Science Minister David Willetts said that controls on GM crops should be weakened to make it easier for Britain’s farmers to grow them.
“We believe that GM crops can help make agriculture more efficient and also just as importantly more sustainable, by, for example, reducing the use of pesticides and the use of fossil fuels,” he said.
“There are just too m any 21st-Century technologies that Europe is just being very slow to adopt… one productive way forward is to have this discussion as part of a wider need for Europe to remain innovative rather than a museum of 20th century technology,” he added.
A European Commission analysis of 130 research projects carried out by 500 groups over 25 years concluded in December 2010 that there is “no scientific evidence associating genetically modified organisms with higher risks for the environment or food and feed safety than conventional plants or organisms”.
However, the evidence is not conclusive and the technique continues to be highly controversial. Opponents to GM crops argue that it is far too early to conclude that the technique is safe – including many farmers, with a quarter saying they would not cultivate them under any circumstances.
They are concerned that adopting GM crops could foster stronger pests, diseases and weeds as their foes evolve to adapt to engineered plant and that the injected “rogue” genes could cause problems by spreading to other plants.
The report was conducted by Farmers Weekly magazine and the Reed publishing group and commissioned by Barclays.
Our problems are not due to a lack of innovative ideas; they are due to an excess of financial power concentrated in the hands of an elite of bankers.
For years already, the youth of Europe’s heavily indebted periphery has been facing mass unemployment. In Greece and Spain, a respective 59 and 56 percent of young people are now out of work, while youth unemployment in the EU as a whole currently stands at a troubling 24 percent, up from 22.5 percent last year. The “lucky” ones are those waiting tables with PhD degrees in their back pockets. Those who were forced to leave their families and friends behind to join the generational exodus to Germany or Angola don’t even show up in the statistics.
In recent weeks, European leaders somewhat belatedly seem to have become mightily interested in the issue. Italy’s new Prime Minister Enrico Letta called youth unemployment the most serious problem facing his country and called for an EU plan to “combat” it. German Chancellor Angela Merkel, flag-bearer of the European austerity movement, similarly considers youth unemployment to be “Europe’s biggest challenge.” Meanwhile, a new campaign by Big Think somewhat naively asks “what’s causing youth unemployment and what can fix it?”
Apart from the obvious hypocrisy of these concerns — coming from the lips of the same officials whose unrelenting insistence on austerity, neoliberal reforms and full debt repayment largely caused the unemployment crisis to begin with — this newfound sympathy for our generation’s plight hinges on a dangerous assumption that serves to ideologically re-construct youth unemployment as a “problem” that can somehow be “solved” with a magic fix or a continental master plan — without addressing the underlying causes of austerity, depression, and a fundamentally unsustainable debt load, let alone the internal contradictions of the eurozone and globalized financial capitalism more generally.
It should be clear to any intelligent person by now that youth unemployment is not a problem in the ordinary sense of the word; it is a symptom of a much more deep-seated disease that’s breaking down our society from within. Other symptoms include the rise of neo-Nazism and xenophobic violence in Greece; the wave of suicides across Southern Europe; the 400.000 families that have been evicted from their homes in Spain; the thousands of starving horses that have been abandoned by their owners in Ireland; the UK students who had their tuition fees tripled and now face the prospect of either dropping out, studying abroad, or accruing massive student debts; the eurozone record levels of mortgage debt held by Dutch households, etc., etc. — not to mention the thorough discrediting of democratic institutions and the massive riots that have rocked major European capitals like London, Athens, Madrid, Lisbon and Rome.
But European leaders seem blind to the metastasis of misery that has crept into the social fabric of our continent. Wouldn’t it be great, they now seem to tell us, if we could have crippling austerity, an increasing debt load, a devastating social crisis, starving pensioners, the return of fascism, a wave of suicides and mass deprivation — but without the youth unemployment? I’m not buying this story, and I don’t think any of us should. The attempt to cast the current crisis in generational terms serves to drive a wedge between us and our unemployed, indebted and/or retired (grand)parents. It serves to co-opt the youth in the ongoing wave of neoliberal reforms, making us believe it is in our best interest to crack down on the labor rights, jobs and pensions of our parents so we ourselves can better compete for the increasingly precarious jobs of the future.
The real reason European leaders are suddenly so concerned about youth unemployment — while they remain unmoved by the plight of Greek AIDS patients, for instance, who now can’t get their anti-retroviral drugs — is simply that they are terrified by the prospect of social unrest. As the New York Times reported today, “it is clear that policy makers are seriously worried that millions of frustrated young job seekers pose as much of a threat to the euro zone as excessive government debt or weak banks.” German Finance Minister Wolfgang Schäuble literally admitted that “We will have to speed up in fighting youth unemployment, because otherwise we will lose the support, in a democratic way, in some populations of the European Union.” What they fear, in other words, is a continent-wide youth uprising. At its worst, their plans to “fix” youth unemployment serve to distract us from the obvious class dimension at play, promoting the illusion that the social crisis we face is just a series of economic problems that can be fixed without radical changes to the political status quo.
The inconvenient truth is that unemployment is an integral element of the neoliberal policy response to the crisis pursued by the European Union and the IMF. This, in itself, is nothing new. IMF austerity programs in the developing world have long involved dramatic reductions in wages and rises in unemployment. Careful quantitative analysis of the Latin American debt crisis of the 1980s has shown that “the most consistent and statistically significant impact of Fund programs in Latin America … was the reduction in labor share of income.” Even official IMF studies recognize that its austerity programs “boost unemployment and lower paychecks.” Most importantly, the authors of a 2011 IMF report, Painful Medicine, conclude that austerity causes not just short-term but “particularly long-term unemployment.”
In other words, asking for austerity measures without youth unemployment is like insisting on the medieval practice of blood-letting without the blood-loss. It is not only brutal, but also practically impossible. Austerity and unemployment are like Siamese twins, conjoined at the hip, designed to strengthen and reinforce one another. As long as the EU and IMF keep imposing these highly destructive adjustment measures, unemployment will keep on rising. The only genuine “solution” to unemployment, therefore, would be to break free from the shackles of austerity and to default on the foreign debt. This is the reformist vision pursued by SYRIZA in Greece, and despite the lack of revolutionary imagination of this quasi-Keynesian approach, there is certainly something to be said for it from a humanitarian point of view.
At the same time, I have now written some 50,000 words on this question — why not default? – for my PhD thesis, showing precisely why the option of default is often so elusive. In a word, default would greatly harm the interests of foreign private creditors, who just happen to control virtually all the critical resources in the global economy, giving them a disproportionate ability to block the type of solutions that would favor the unemployed. So to get to the phase where we can even realistically start considering genuine “solutions” to the “problem” of youth unemployment, we first have to confront the financial power structures that obstruct the pursuit of such solutions to begin with. This requires much more than a continental master plan to combat youth unemployment. It requires a radical break with the status quo.
Our problems, in short, are not due to a lack of innovative ideas; they are due to an excess of financial power concentrated within the hands of a tiny elite of bankers. This means we have to dramatically reformulate our question. Rather than asking what innovative ideas can solve the problem of youth employment, we should be asking what type of strategies could upend the structural power of international creditors. This leads us away from economics and back into the realm of revolutionary theory and praxis. How could Europe’s downtrodden youth ever possibly conceive of shaking the global financial order? It is to this impossible question that I will turn in my next post.
Earlier this month, I had the opportunity to address the Dail Joint Committee on European Affairs. The topic of the discussion was on the future shape of the European Union and Ireland’s relationship with it.
In the three videos below you will see firstly my presentation to the
, along with a slides, where I outline that what is happening in the European Union is the growth of authoritarian neoliberalism, and that the future direction is one of a less democratic union of fiscal austerity.