DG ECFIN is the Commission department responsible for Economic and Monetary Union, involving policy coordination and surveillance of member states’ economies. Let’s just say this Commission department’s handling of the deepest economic recession since World War II has left a lot to be desired.
The financial crisis has devastated not just economies but also has serious consequences for democracy and human rights, especially in the ‘bailout’ countries. Since the financial crash of 2008, major reforms of the EU’s economic governance have been introduced. These are designed to lock in policy at a national level and enforce austerity, constraining the options available to governments in favour of a model that promotes cuts to basic public services such as healthcare and education.
The politics of austerity and neoliberal economic governance aren’t simply the result of a mistaken economic theory; they have been deliberately promoted by, and serve, powerful interests. Austerity advocates at the top of EU institutions and member states preached the need to cut government expenditure after several countries in the eurozone faced mounting public debt as a result of bank bailouts.
Despite the fact that an unregulated financial market was one of the key causes of the crisis, Europeans were forced to foot the bill and endure ‘structural reforms’ and attacks on workers’ and social rights under the new system. This culminated in the Fiscal Compact, a 2012 treaty designed to enshrine austerity into law via a tightening of rules on public expenditure.
Meanwhile Europe’s far right, already feeding off the despair of economic crisis, jumped on the opportunity to exploit dissatisfaction with austerity and redirect it against refugees fleeing violence in the Middle East. “Never waste a good crisis”, the saying goes, and big business, especially via key lobby groups BusinessEurope and the ERT , has used the crisis as an opportunity to put even more of its long-term goals onto Europe’s political agenda. For years before it became a reality, business lobbies had been pushing for a procedure known as the ‘European Semester’.
This is a rolling annual scheme involving the Commission and the Council that forces macro-economic, budgetary and structural policy coordination on all countries. It ends with a set of recommendations for reforms to each member state. At the beginning in 2011, the recommendations were non-binding, but in 2013 industry’s dream came true as a new set of rules went into force to ensure budget controls and so-called structural reforms. Commission and Council policy had become a near perfect mirror image of the corporate wishlist.