In These New Times

A new paradigm for a post-imperial world

Is it really a “Europe of the banks”

Posted by seumasach on December 19, 2011

Cailean Bochanan

19th December, 2011

On a day when one of Britain’s last surviving europhiles, Iain MacWhirter, referred to the eurozone as an “economic suicide pact”, I feel the need to return again to the question of Britain and Europe and , specifically, the state of opinion in this country on the issue.

Many Europeans may think that euroscepticism is the reserve of the right, figures such as the clownish Mayor of London, Boris Johnson, or UKIP’s Nigel Farrage. But the whole gamut of anti-European sentiment from euroscepticism to europhobia dominates the political spectrum, right and left. After all, Britain’s, supposedly europhile, Liberal Democrats are in coalition with the Tories and will likely go along with the trashing of their flagship policies on Europe as they did on PR or student fees. The Scottish National Party is potentially pro-euro, it’s true, but they must tread carefully in the face of a public besieged by negative reporting: only last night I was in conversation with a passionate Scottish nationalist who was an equally passionate opponent of Europe and all its works. For the moment, Alex Salmond’s vaguely pro-European stance is but a drop in an ocean of euroscepticism. wave upon wave of it emananting from every corner of the political spectrum. Rather than a range of different views on a question so central to our future being put forward, as you would expect in a normal democracy, we are given a range of reasons why we should reject the eurozone: it’s dominated by the Germans, it’s a superstate, it’s undemocratic , it’s doomed etc.etc. I wish to focus on just two of these reasons: it’s antagonistic to City of London interests as Cameron and most of the right claim and it’s a “Europe of the bankers” as the far-left and some of the libertarians claim. The question is: which is it?

What happened last Friday was a failed attempt by Cameron to reverse an inexorable trend towards financial regulation in Europe by threatening to veto the proposed fiscal pact. His bluff was called and he walked away empty- handed. This was a dramatic moment when Britain’s opportunistic engagement in Europe, a marriage of convenience, came to an end.

What is the financial regulation in the pipeline which is so toxic to City interests?

Firstly, there is the FTT, Financial Transactions Tax or Robin Hood Tax or Tobim Tax. This is a tax on turnover rather than profit, although at a mere 0.1%, which penalises short-selling and high speed-trading: the speculative hot money flows which the City favours as opposed to the solid long-term investment typical of the German model.

Secondly, a eurozone wide ban on naked short-selling of euro-denominated bonds. Most of that short-selling is. of course, coming from the City or Wall Street via the City and along with the pontification of the already discredited rating agencies and a barrage of black propaganda from the atlanticist press is the main weapon being deployed against the eurozone.

Thirdly, former head of the ECB, Trichet’s plan to restrict dealing in euro-denominated securities of all types to the eurozone itself. This is a counter-offensive measure designed to shut out the City of London: it would force many trading houses in London to relocate inside the eurozone where they could be subjected to greater regulation.

These measures, and others, are a clear threat to City interests and Cameron, as a self-proclaimed representative of those interests, had to try to counter them constituting as they do a decisive break from the Washington Consensus concerning the free movement of capital. Where does this leave the “Europe of the bankers” of marxist and leftist demonology?

Well, not much of a demon. For Europe to become a financier oligarchy of the Anglo-Saxon type it would have to do a number of things which it has no intention of doing. It would have to end the German  marriage of finance and industry and turn finance into a tool for de-industrialization, speculation, bubble-blowing and plain looting. It would have to permanently and unconditionally bailout the banks at the expense of the rest of society as we have done here. This is the quantitative easing programme Wall Street and the City are trying to force on the European Central Bank which would also, as in our case, constitute an aggressive offload of the euro crisis onto prospective strategic partners such as Russia, China and the other BRICS countries. It would have to weaken and decentralize decision-making structures so that no strong executive could emerge as a counterpole to the financier oligarchy.

This would be Cameron’s programme for Europe as it was Blair’s, and this is the programme Europe has rejected. It’s interesting and encouraging that, at just the moment there are stirrings in Britain and the US against the City and Wall Street, Europe is setting off on a path diametrically opposed to that of the Anglosphere. As the European think-tank LEAP, led by that very lucid analyst Franck Biancheri, sees it:

“And, the icing on the cake, the collusion between the City and the British government is now a topic that extends beyond the UK’s borders and reinforces the continent’s determination to finally bring this “outlaw” under control. As we have described since December 2009 and the beginning of the attacks against Greece and Euroland, the City, alarmed by the consequences of the crisis as regards European regulations, launched itself in an attack against an evolving Euroland, putting the Conservative Party and Anglo-Saxon financial media in its service. The episode of the recent Brussels summit marks a major defeat for the City in this increasingly public war, exposing by the way the resentment of a majority of British who are not so much against Euroland than against the City accused of exploiting the country.”

As I’m arguing this remains merely a potentiality but gives at least a glimmer of hope to oppositional forces in this country, in as far as they exist.

The real unfolding tragedy is not Europe, which slowly and painfully is finding a way forward in uncharted waters, but Britain. No society can resolve new problems without new thinking and serious weighing of all options. The British people are being denied that: Britain has become a mature, indeed, an over-ripe oligarchy which doesn’t tolerate dissent on issues which impinge on its vital interests, concentrated to an ever greater degree in the City of London. “La pensee unique’, the obligatory discourse, has found its home here rather than in Europe.We have entered into a suicide pact to rule out the possibility of joining the euro.

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