Schuman Project

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Council2 : 

Without impartial financial rules, all Europe could become PIGS. Why the Commission must become freed from its party cartel to save the EURO.

Posted on 11/02/10

The European Council, called on 11 February to deal with the Greek financial crisis that is undermining the euro, issued a statement. “All euro members must conduct sound national policies in line with the agreed rules,” it said. Fine. The original idea of a European Community in 1950 was to avoid ‘beggar my neighbour’ policies whether military, political, economic, cartel or monetary. That’s what the Schuman Declaration said on 9 May 1950. You can read it on because the Council and the Commission has refused to publish it in its integral version for the last few decades.

But who makes the financial rules that the European Council commends? In the case of Greece, it was the Greek government. They made up their own rules. Bad rules. Many commentators point out that successive Greek governments fiddled the books, and kept fiddling to the tune of about 53 billion euros. So to a varied extent did the other members of PIGS, Portugal, Ireland/Italy and Spain. G is for Greece but the word is probably much longer. Maybe other Member States are mixed up in it too. We don’t know … YET. Governments want to keep such things SECRET.

Why can’t governments keep the books straight? Did they make an honest mistake? Did they spend less money or more than they declared. Need I ask? Of course they overspent. That shows it was deliberate. It wasn’t an honest mistake. Why did they do it? To bribe the electorate. To put it more frankly, they bought votes so they would stay in power. Both politicians and the electorate were silent partners in this corruption. In the past the government always devalued. This offloaded inflation and debts onto external trading partners. Governments and their electorates who benefit from this game export inflation and their costs.

Before the Community was created, governments got into long cycles of competitive devaluations. They tried one cycle of devaluation after another and round again to off-load all the disagreeable consequences of their bad practice on their neighbours. They did not want to balance the budget or cut inflation.

When Schuman was France’s Minister of Finance, he was the first to balance the books for generations. He cut inflation. He accomplished this under the most difficult circumstances with Communists and others in the government coalition. His sound monetary policy started the boom of France’s thirty glorious years after the WW2. Honest money makes sense.

Not all governments have the discipline to do this. They liked to print more money and control the printing presses. What power! Governments have traditionally used the coffers of the State for corrupt purposes. Further, for some while, a good deal of both Greek and European money seems to have stuck to fingers even before it got to the bank.

The Community system was based on Schuman’s principles, including his monetary success. It was designed to put an end to all this dubious practice by making all partners in the Community co-responsible. All sections of society, that is governments, associations and individuals, must have a voice in how money is collected and spent. In that way everybody looks at each other to see if they are cheating.

The real Community system is the way we can get back to sound money, sound ethics and sound politics. It is no use using the policy of ‘Beggar my neighbour’ because we are all each other’s neighbour.

So on 11 February 2010 what is the European Council’s remedy to cheating? The statement says: ‘The Commission will closely monitor the implementation of the recommendations ‘(put forward by Greece). That is fine … if the Commission were an impartial body. But is it any more? In the original Community system the Commission represented the whole of Europe’s citizenry involved in that particular single market. The major feature of this first supranational body was that it had to be independent of interests such as governments, interest groups, party politicians and cartels.

Today things are quite different. Somehow we have now a Commission that is composed EXCLUSIVELY of Government nominees (no elections, no public call for candidates!!), the biggest lobby groups in Europe, and party politicians in a cartel!!! All Commissioners are political buddies of three main groups! Instead of the Commission being composed of a cross-section of impartial Europeans, it is being run by a cartel of the guilty.

The Commission does not reflect the 98 per cent of the population who are NOT card-carrying members of a political party. The Commission is completely composed of members of a 2% minority of Europeans. It comprises the two offending groups: that is national governments and the main political parties. These are the main people who are motivated to fiddle the books. They have a major interest in doing so — if they can get away with it. If the rules are bent, (but appear straight at first glance) they can hoodwink the public to their own advantage.

Just recall. Who is it that got us into the euro crisis, by not observing the growth and stability rules? National governments and politicians. Who pays for their mistakes? The general public. And it is usually the poorer sections of the public. When the dirt comes out, it is certainly not the bankers and international financiers who foot the bill. They are already far away with their tax breaks. The poor then pay their bills for years to come.

We are here not talking about a piggy bank. We are talking about billions of euros that have been used for corrupt purposes. Scads of euros from all Europeans, provided to ‘modernize’ Greece when the country joined the European Communities, have simply gone astray. ‘Gone astray’ that is to the people who provided the funds, not the people who washed it through their bank accounts. Bad accounting? Why? Isn’t a few billion of public money worth a good accounting system?

So who should be the supervisors of the system to make sure that (a) politicians do not cheat by fiddling the budget and that (b) national governments’ budgets and book-keeping are correct?

Certainly NOT the nominees of governments, NOR the card-carrying members of the political parties who have an interest in fiddling the books.

Would it be better for the public, the tax-payers, who are the victims to have the supervisory function?

That is exactly how the original Community system worked. In the first Community, those who put money into the Community budget — that is the coal and steel enterprises who paid a European tax — also had a say in how it was spent. So also did the workers in the industries — who might have got short-changed and the consumers of these products, who also held a close eye on efficiency, low costs and competitive prices. These groups in the Consultative Council, one of the five supranational institutions of the Community, had a power equal and in some ways superior to the Council, because it was their money.

There was no need for multiple committees of bureaucrats. There was no need for a Court of Auditors, either. They all knew were their money came from, and where it was spent. They checked the accounts themselves. Money was only spent on what everyone agreed was a good idea. And it was spent correctly. De Gaulle did not like that. Which is why we have a very secretive Council today and umpteen thousand committees meeting in secret.

With the arrival of de Gaulle, and also the later breed of egotistical and nationalistic politicians, this fine, workable and honest system was put in cold storage. It is still there in the treaties, but politicians do not want to apply it. It would save millions of euros in cost, end graft, manipulation and dubious political practice.

Instead, for the moment, the political cartel are manning the Commission. They are the new servants of the parties. Those who have been found with their fingers in the cookie jar meet across the road at the Council. But greedy people will make pigs of themselves. Eventually, either by disgusted people in revolt or by the Court or some other way, the system will return to the moral centre of a supranational Community.

The markets, the people and the Courts will judge.