The Peoples are missing from EU’s monetary union

The European Economic and Social Committee (EESC), 500th Plenary session - 9-10 July 2014.

The European Economic and Social Committee (EESC), 500th Plenary session – 9-10 July 2014.

The disenchantment of the 28 European Peoples with their Union stems from the special care the EU institutions clearly show for the financial sector aka the banks and not for the unemployed. To put it differently so as the Brussels bureaucrats and the decision makers in Berlin and Paris can understand; the European Economic and Monetary Union (EMU), the most important achievement of the EU after the single market, is now understood by most Europeans to be devised and plentifully financed in order to make sure that the ‘systemic’ lenders will never die. By the same token, there is no money left to be invested in the real economy to counter the unseen before unemployment rates, which torment most member states.

The European Economic and Social Committee (EESC), one of the two EU institutions which authentically express the will of the people (the other being the European Parliament) has grasped this reality. At its 500th plenary session on Thursday 10 July, the EESC adopted an opinion “urging Europe’s new leaders to take action to complete European Economic and Monetary Union (EMU)”. The relevant passage of the Committee’s Press release also states straightforwardly, “Shaken by the economic and financial crisis, Europe needs to emerge stronger by stepping up its fight against stagnation and unemployment”. To be noted, the EESC is not made up by revolutionaries. It represents the EU’s workers, employers and other civil society organisations.

A groundbreaking ‘opinion’

EESC’s opinion puts forward specific proposals and solutions “to achieve a more robust EMU governance structure, leading to more growth and jobs in the short run, to a full economic union as a second step and ultimately to a political union as a necessary point on the horizon. This is a timely call in the light of the reshuffle currently underway in the EU institutions”. Presently, the European Council, which directly voices the choices of governments, at least of the most powerful of them, considers that the EMU has been accomplished, after the agreement reached with the previous European Parliament on the workings of the European Banking Union.

The EESC however thinks differently. One of the two rapporteurs of the above mentioned ‘opinion’, Joost van Lersel (Employers’ Group, NL) warned that, “The Economic and Monetary Union, which is far from being accomplished, is indispensable to re-create confidence in the European project and makes it sustainable”. Van Lersel is not a Eurosceptic or an extremist. He represents the European employers and comes from the Netherlands, a core EU country which irrevocably has tied its future with the Union. Indisputably then, his point that the EMU “is far from being accomplished” carries a very special weight.

One trillion later

Incidentally EESC’s Opinion came only some days after the Governing Council of the European Central Bank decided to hand out to banks one more trillion euro. In view of it, European Sting writer Suzan A. Kane concluded that “the ECB may once more be planning a new covered operation, again to support the Eurozone banks, with freshly printed money at almost zero interest rate cost to the lenders. This sounds very logical, if one considers the real meaning of the fact that today Europe has made depositors responsible of the reckless, greedy and gangster behavior of bankers. If their banks fail due to their insatiable appetite for money, depositors are now asked to foot the bill as it happened in Cyprus. If depositor money is not enough, taxpayers will cover the rest. The Bank Resolution Fund instituted by the European Banking Union and in eight years expected to be capitalized by the banks themselves, is not enough to cover the default even of a small peripheral bank, let alone the holes of the ‘champions’”.

A ‘diplomatic’ bomb

The EESC didn’t go as far as to openly denounce the ECB decision as making a gift of an additional trillion of euro to bankers. The Committee has to follow a more diplomatic line. Still the EESC denounces the EMU as incomplete, which is quite a radical statement. What a better proof of that than the new trillion the ECB just handed out to bankers, at near zero interest rate cost. If the EMU was accomplished and the banking union worked well, why keep handing out to bankers trillions? Mind you that the major Eurozone lenders, mainly of German and French ‘nationality’, have already received more ‘refinancing’ money at almost zero interest rate plus some bulky direct subsidies.

The French and German reckless creditors have been saved by the ECB when the Eurozone financial crisis came to climax in the spring of 2010. The ECB spent then about €150 billion to buy from the bankers their ‘red’ loans to Greece, Ireland, Portugal and Spain at prices much higher than their market values. Not to forget that apart from it Eurozone lenders regularly receive trillions from the ECB in ‘refinancing operations’ at close to zero interest rate cost.

There is no doubt that the European Monetary Union is designed by the EU Council aka governments, and is unbelievably generously financed by the ECB for the sake of banks. At the same time growth and unemployment in real economy are left out in the cold. In half of Eurozone countries unemployment had practically never reached such levels as it has now, at least not after WWII. That’s why the EESC states uncompromisingly that “The Economic and Monetary Union, which is far from being accomplished and is indispensable to re-create confidence in the European project and make it sustainable”.

True, the European project is not sustainable without more investments in growth and jobs.

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