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Europe, Italy

European Summit: Monti wins, the Italian people lose, and austerity and recession continue

The latest ‘crunch’ EU Summit on 28-29 June has landed citizens with a huge bill to bail out the banks yet again, argue Italy’s communists. But it will not end speculation against the Euro nor the blackmail of financial markets, forcing governments to continue pursuing failed austerity policies.

Paolo Ferrero, leader of Italy’s Communist Refoundation party, said ‘citizens will pay the debts of private banks throughout Europe. This is a massive, unprecedented socialization of losses.’

Ferrero added that ‘speculators will not  have to pay for their own gambling’ because that it going to be paid for by the European Stability Mechanism (ESM), the bail out fund which was previously restricted to lending to national governments but will now be able to lend directly to Eurozone banks. And this bailout fund, Ferrero pointed out, will be paid for by ‘citizens all over Europe’ through their taxes.

‘This is an enormous weight around the neck of the citizens if we think only of  the private banks in Spain that have been earmarked 100 billion euros.’

The Italian communist leader also slammed the continued backing by EU leaders of the Fiscal Compact, otherwise known as the Permanent Austerity Treaty, agreed by EU leaders in March, and that was ratified after massive international pressure by Ireland in a referendum, and on Friday by Germany’s parliament, with the support of Social Democrats and Christian Democrats.

The Fiscal Compact, or Fiscal Pact, which forbids governments to have public deficits greater than 0.5%, will ‘drain the Italian state 45 billion euros annually for the next twenty years’, by enforced austerity. ‘Recession is assured,’  Ferrero remarked, adding that the Euros 120 billion investment fund also agreed at the summit will only be used for large infrastructures projects that in Italy, at least, have proved hugely controversial, open to massive corruption and organised crime,  and, ultimately,  ‘useless’,  as Ferrero argues, pointing to  the high speed train project (TAV).  Meanwhile welfare will be cut, further undermining domestic demand and so growth in a viscious downward spiral in which austerity begets yet more austerity.

Finally, argue the Communists, instead of allowing the European Central Bank (ECB) to buy government bonds directly or create Eurobonds to pool Eurozone debt -thus spreading the risk and allowing Italy and other countries currently facing massive speculation against the debt to take advantage of Germany’s credibility among private investors – or indeed convert the ESM bail out fund into a public bank, a system has been devised by EU leaders in which only governments that have already moved agains their welfare state and commit to continue doing so, will be assisted and only then under the ‘tight control of the Troika (ECB, IMF and EU) and by signing a memorandum in which the country is in effect under tutelage.’

‘It is a measure – quantitatively little different from what has been done by the ECB until now – that is quite insufficient to avoid speculation against the Euro, but very effective at allowing the continuing blackmail of individual countries, forcing them to adopt austerity policies  that dismantle welfare and workers rights.

‘The liberal technocrat Monti emerges a winner from the summit, the Italian people lose, and austerity and recession continue.’



About revoltingeurope

Writer on Europe's Left, trade union and social movements @tomgilltweets or @revoltingeurope


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