EMU, and many of us have drawn attention to this fact in the past... common currency and monetary policy could offer considerable advantages. But this EMU is governed by timeless criteria and dogmas. determined essentially by circumstances. wrongly discharging you and your colleagues from your precious democratic duty to take responsibility for your political cholces. soever of an adequate response to environmental problems, of impoor or for the defense and extension of the welfare state. co-operation in danger; we are told that we would do better to keep quiet.
"We are firmly convinced, however, that the greatest danger for Europe lles in fact in the design of this EMU, which has already led millions of Europeans to identity Europe and the euro with austerity policies and social suffering. the right to an economy that serves the interests of human beings." Socialist Outlook spoke to Robert Went. SO: Why did the three of you decide to launch this open letter? RW: This European wide initiative followed an initiative that we took four months earlier in The Netherlands.
There was no serious discussion in our country about the social, ecological and democratic consequences of the euro-project and we were horrified by the idea that only the colour and design of the new money provoked discusCOn.
So we decided to try to get Dutch economists to sign an appeal against this project and partially to our surprise 70 signed, among which were several well-known professors and six trade union economists. The Minister of Finance said on TV that we are "dangerous" and other politicians said we were "idiots" and "too late", but our statement provoked a real discussion in the press and in all kinds of meetings for the first time. Since then we have been referred to as "the group of 70 euro-sceptical economists".
Politically this discussion has been very important, because we state that we are not against a common currency in itself, on the contrary, but against this project with these criteria, central bank, policy goals and consequences.
This differentiates us from right-wing nationalist criticisms and helped create the space for a progressive internationalist oppo sition against this project, this "We therefore call on you to reconsider this EMU project. Not that we ask you to put an end to European co-operation; on the contrary. A Wise economic policy must not be replaced by rigid rules, but must be "This Is also a question of democracy: the framework of the EMU Is "Under the current conditions, this EMU offers no perspective whatprovement in the lot of Europe's 20 mlllion unemployed and 50 million "As critics of the EMU, we are reproached with putting European "It is high time that politicians realise: the peoples of Europe have Europe, for a social, ecological and democratic Europe. Our Dutch statement got some press coverage in other countries and colleague economists from other countries contacted us to try to do something similar on a European level just before the Amsterdam summit. As the Dutch held the presidency of the EU, we were asked to coordinate that and so we did, again with a lot of success given the short period in which all this had to be done. SO:Was It easy to get support? Did many that you approached relect what you were saying ? RW: In Holland we were surprised by the support (we now have over 100 supporters) and internationally I was struck by the number of economists that signed from Britain (the biggest group), Greece and also Italy, where our national organizer expected that it would be very difficult. In several countries we did not have enough economists with time to work to collect signatures, otherwise I think we would have had over 500 names.
As for negative reactions, I don't know about other countries, but I find it striking that very few economists tried to defend the existing project publicly.
Many more seem to have doubts and their arguments in favour are also getting more and more catastrophic, to de-politicize the debate. "We cannot stop now after all the work and money invested, or we'll get a big political and economic crisis in Europe", they say. The positive reasons to be in favour (more work, growth, saving of transfer costs) that were given in the beginning for the project are now not credible any more, because we see the results are the reVest.
Since the Maastricht Treaty was signed unemployment in the EU increased with almost 4 million: who wants to explain that 20 mil lion is less then 16 million? SO: Why do you think you were so successful In getting media coverage? RW: More and more people begin to get doubts about the project and it is not at all certain that they can force it As a Green Finnish member of the European parliament recently said to me in a panel discussion in Amsterdam, the importance of our statement is that it makesclear that you can be against the euro without being against Europe. Ithink that position is new for many jour. nalists too and that helped to get a good echo in the press. SO: The debate In Britain has tended to focus on the restrictions set out in the Maastricht treaty and the Impact the rosulting cuts are having and will continue to have on Jobs and services. You seem to argue In the appeal that we also need to pay attention to the further regulations agreed through the Dublin stabllity pact. The debate following Jospin's victory in the French elections In the Very clever: but how many can you fit in your pocket? Bankers are jumping the gun by designing euro coins run up to this summit also tended to focus more on this question. Can you explain where the Dublin agreement fits in to the process? RW: The stability pact that was agreed in Dublin and finalised in Amsterdarn is indeed very important, as it lays out how the future common currency will function.
According to Maastricht all government deficits have to be reduced to 3 per cent Gross Domestic Product (GDP).
The Stability Pact is there to make sure that no country that is allowed to participate in the common currency will ever go over this 3 per cent, which is as we explain in our letter a completely arbitrary figure.
The pact therefore says that all countries must reduce their deficits even further to "close to balance", i.e. O per cent or even +1 per cent. This means that all the cuts and austerity policies that we have had over the last few years will continue until far in the next century.
It also means that new recessions will be even deeper then they already were. This pact is a pro-cyclical straightjacket that in reality prevents reflationary policies in periods of economic ebb.
There are severe sanctions in the pact, including penalties that can go up to 0.5 percent of GDP, for countries that go over the 3 per cent deficit. Socially this is of course totally unacceptable, and even from an orthodox point of view nobody can give an economic justification for it. SO: What assessment do you make of what happened at the Amsterdam summit? To what extent were there real disagreements between Jospin and the rest? What does the employment chapter mean? What do you think about the role played by Tony Blalr? RW: I think there are real differences, but unfortunately Jospin gave in almost immediately. As one of the major Dutch papers said in an editorial: it took Mitterrand two years, Chirac six months and Jospin only two weeks to change their policies.
Tony Blair is one of the main opponents of even the moderate social-democratic changes that Jospin won the elections with. There was a conference of European social-democracy in Malmö in Sweden before the Amsterdam summit and nobody there supported Jospin.
The Dutch minister of social affairs, who is the social face of the government and social-democracy in Holland, said he supported Blair's proposals for more flexibility in the labour market and more competitive policies, and suggested that Jospin would soon have a lot to explain to his voters that he did not dare tell them before.
What happened in the end with the stability pact in Amsterdam is scandalous and an insult for the unemployed and poor in Europe. Nothing is changed in the rigid stability pact and there are only some vague intentions added about job creation, without one penny to do something real. This is the sixth "employment plan" since the mid eighties and again it will create almost no jobs.
Everybody knows this:
Robin Cook asked by a French paper how many jobs this will create said "At least eight"! SO: Do you have plans for any further initiatives ? RW: We are only starting to discuss that now, so I can't tell you what we're going to do. I am sure that after all the support and encouragement that we got, is that there will definitely be new initiatives.