‘No debt’ campaigners will stage a ‘sit in’ on Wed. April 11 at the Italian Senate as politicians are set to vote on the EU-inspired ‘balanced budget’ law that will force a constitutional commitment on governments to corner shop economics.
The law will transpose into national law the EU Fiscal Compact agreed by Heads of state and government of 25 EU countries, minus Britain and the Czech Republic, on 2 March 2012.
Officially known as Treaty on Stability, Coordination and Governance (SCG), it requires the budget of a country to be in balance or in surplus, which means that in structural terms – that is excluding one-off items and business cycle variations – the deficit is capped at 0.5 percent of gross domestic product (GDP)
Only countries which have debt to GDP ratios significantly below 60% can have a bigger structural deficit, but not more than 1% of GDP. A country with public debt higher than the EU limit of 60% of GDP has to reduce it by one twentieth a year as a benchmark.
Transgressors face penalties of 0.1% of GDP.
The SCG, described by critics as the Permanent Austerity treaty, is set to come into force once it has been passed by the parliaments of at least 12 countries that use the euro currency or at least by 1 January 2013.
According to the organisers of the protest, the changes will ‘serve only to create permanent austerity policies, to make workers, women and migrants pay for the financial and economic crisis. The austerity policies are destroying the lives of millions of people, causing poverty and despair.’
‘The EU, with the Fiscal Compact, wants to introduce this restriction in the Constitution to legitimize the neoliberal policies of the ECB, and to reassure the financial markets.’
Senators from Italy’s two main political forces, the Democrat Party and People of Freedom Party, are expected to back to law.
The campaigners, who include left political activists and trade unionists, have called for a referendum on the matter.
The Senate vote was delayed until April 17-18. (Article updated 13.4.2012)