Friday, 1 October 2010

N2E006 - Trade unionists converged on Brussels on Wednesday

N2E006 - Trade unionists converged on Brussels on Wednesday

Trade unionists converged on Brussels on Wednesday 29-Sep-2010 to protest against EU austerity measures as EU unveils plans for EU “economic governance” and sanctions for member states that do not cut budgets

More than 100,000 trade unionists from across Europe to protest against austerity measures being imposed on member states (see attached picture). The protests occurred as Economic and Monetary Affairs Olli Rehn unveiled EU plans to massively centralize economic powers to Brussels.

The first set of proposals envisages financial sanctions for member states that break right wing Thatcherite EU economic policies and is restricted to eurozone member states. Fines for countries which persistently fail to meet the Stability and Growth Pact criteria will be "quasi-automatic", meaning that they could only be blocked by a qualified majority within the Council. Controversially, sanctions could possibly be imposed on countries with trade or current account imbalances.  

European Commission President Jose Manuel Barroso said, "The proposals we are making today represent the biggest step forward on economic governance since we adopted the Stability and Growth Pact. Once approved and implemented by the Member States, they will mark a sea change in the way economic governance is dealt with in the European Union, and in particular in the Euro area".

In the WSJ, Richard Barley argues that the Commission's "proposals still represent something of a transfer of power to the Commission - and for that reason alone, some countries may try to water them down."  A leader in the FT argues, "A well-enforced [Stability and Growth] pact might have stopped Greece's reckless borrowing sooner, but would not have stopped the problems in Spain and Ireland, which were built up by private financial flows." It concludes that EU leaders cannot "stomach the idea of eurozone sovereign default, but an open-ended promise of bail-out weakens the force of the best-laid rules."

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