Vulnerable workers in the eurozone crisis

The general adoption of austerity policies throughout the EU and in particular in the eurozone is having very adverse effects on the level of employment, on job and employment security and on working conditions. These effects are also highly differentiated, being especially intense in the countries facing sovereign debt crises. The following paper presents some evidence for the countries in question drawn primarily from the stability programmes and national reform programmes which member states are required to submit each year to the Commission. The present paper first gives a brief description of the new policy surveillance system in the eurozone. Then it is suggested that the macroeconomic policies adopted in the context of reinforced surveillance are incoherent. The implications of austerity policies for workers are discussed; young workers are clearly badly affected. Details are given of acute pressures on European social models in the economically weaker countries, taking Portugal, Greece and Ireland as examples. It is concluded that the new policy regime in the eurozone makes social dumping in effect the central social strategy in the monetary union

Crisis in the Eurozone

Analyses the problems for market economies in a monetary union, which centre on the challenge of addressing the divergence in competitiveness or in the general rate of production and employment across the member economies. Grahl argues that EU economic policy does not acknowledge these problems and therefore is doomed to failure. In particular German economic policy continues to make efforts to enhance its dominant position, with the inevitable result that other economics suffer. This has been made worse by the financial crisis, which has hit the weaker economies hardest. Short-term lending will not solve this problem, since the weaker economies may be facing problems of insolvency rather than liquidity. A long-term solution is required, based on a measure of Europeanisation of the debt, by means of establishing a permanent agency with strong guarantees from the EU and member states, to take over enough of the debt to restore clear financial stability. Given that the Eurozone as a whole is immensely rich and powerful, it would be easy for such an agency to borrow on a large scale and at very low interest rates

Financial transformation and social citizenship in the EU.

The transformation of financial relations in the EU has been accelerated by monetary union. 2. The transformation has serious implications for both industrial relations and social protection. 3. The current social policies of the EU are too weak to address these new pressures on European social models. 4. The agenda which is being set for the EU continues to give priority to “marketmaking” over “market-correcting” integration measures. 5. The problem of legitimacy which arises is fundamental to the extent that it takes the form of a challenge to member state participation in European construction

Financial change and European society

The selected works deal with the nature of the financial changes taking place in Europe over recent years and with their social consequences. The approach is critical of many of the financial developments which have taken place, in terms of the dangers they pose to employment relations, to both individual economic security and social security and to economic and employment stability. At the same time, however, it has been argued that many of the most important financial changes have been functionally necessary supports for ongoing developments in the world economy. It is not denied that there are special financial interests which have limited the effective performance of these functions and distorted patterns of economic development; nevertheless it is argued that it is necessary to regard finance primarily as a function and only secondarily as a group of interests. Otherwise the increased power and influence of the financial sector itself becomes hard to understand. Three particular arguments illustrate this general position. Firstly, it is argued that critical and mainstream economists have both failed to understand the relationship between the vast volume of financial transactions today and structural changes in the financial system | misunderstandings which have led to the notion of a \casino economy." In particular, it is incorrect to treat most foreign exchange transactions as speculative. Secondly, it is argued that the very positive assessments that are often made of West European financial systems are out of date, that these systems as historically developed were not well adapted to the emergence of a global economy. Thirdly, and in consequence of the first two assertions, a relatively positive view is taken of the EU's financial integration strategy, a central component of the Lisbon agenda, which is regarded as a necessary response to the emergence of a global financial system centred on the US. On the other hand, a simplistic drive to minimise transactions costs led to the neglect of public goods of great importance to the European social models. The work so described, like most work related to the financial sector, has to be reassessed in the context of the enormous crisis in global finance which broke out in 2007. Many specific assertions will no doubt have to be revised. Nevertheless, the general view adopted seems confirmed in two basic respects: the functionality of a globally integrated financial system has not been called into question in either the academic or the policy responses to the crisis; but the social costs in terms of instability, inequality and inefficiency arising from its domination by narrow interest groups have been brutally revealed

The subordination of European finance

European political leaderships have responded to the emergence of global finance with a sustained drive to integrate Europe's own financial systems on the basis of a switch from classical bank credit to tradable securities. In itself, this was a rational response. However, financial integration was pursued at breakneck speed and in disregard of important public goods including economic stability and social justice. Reforms were undertaken in a climate of moral panic, in the false belief that the EU faced a serious problem of external competitiveness. In consequence, Europe's banks and institutional investors were badly exposed to the sub-prime crisis, the Eurozone has been radically disorganized and the EU has had little influence on the evolution of global financial structures and practices

The call of the open seas

Britain's position in the Brexit negotiations is extremely week and is likely to lead to capitulation on all three of the prelimnary issues: financial payment to the EU, Ireland and the status of EU citizens in Britain. The notion of an independent global trading strategy for Britain was already out of date in the 1950s