Democrat Editorial November-December 2008 (Number 111)
The Way Out of the Crisis
The banking system of capitalism all but collapsed recently and was recapitalised by governments using colossal amounts of public money - £500 billions or half a £trillion - by the Brown government. This follows state control of Northern Rock, Bradford & Bingley and two banks - HSBS and RBS.
The recapitalisation of banks which has taken place in EU Member States is completely contrary to EU rules. The Growth and Stability Pact has been shredded. The Czech Republic, the next EU president, has announced it will not be joining the euro in January. EU Member States in eastern and central Europe are in dire economic circumstances as they do not have huge reserves like Britain. The Hungarian and Latvian governments have asked for help from the IMF not the EU bank system.
At first sight it looks as though the single currency is in deep trouble because it is in recession. However, considerable damage has been done to the public sector and control is exercised directly over national interests and activity by EU Institutions including the Commission, Council of Ministers, ECJ and ECB.
The crisis is being used as an excuse to complete ratification of the Lisbon Treaty. Ireland, the last of three member States to reject the EU Constitution, has been subject to increasing pressure to ratify the Constitution by any means possible.
The important point to bear in mind is that the suppression of public sector spending and downward pressure on wages continues and will worsen in any recession or depression which has not yet been totally avoided.
As an alternative to the Czech presidency of the EU starting in 2009, Sarkozy President of France and current EU President will head up the eurozone in 2009. This eurozone is dominated by Germany, France and Italy.
The general conclusion of the recent G20 meeting was that: "We underscore the critical importance of rejecting protectionism and not turning inward in times of financial uncertainty". They committed themselves not to raise new barriers to investment or trade in goods and services over the next 12 months. Gordon Brown described protectionism as a "road to ruin", citing the experience of the 1930s.
In other words the G20 have an identical policy to the EU which is ‘the free movement of goods, capital and services’ and to hell with the social consequences.
A long time could be spent on discussing the various ways of looking at the crisis and many criticisms of the monetary response put in place so far. CAEF is in existence to draw attention to the implications of EU membership for Britain and its peoples and has the primary objective to seek to regain the right to self-determination, national independence and democracy for Britain outside the EU.
The objective of CAEF entails making the alternative case to Euro-federalism and EU super state.
This alternative has to be put as widely as possible to the labour and trade union movement to end the blind spot on the main purpose of the EU which is the antithesis of democracy, the nation-state and all protectionism.
In a nutshell it is clear that nation states and their governments are the only institutions which can control the movement of big capital and clip the wings of the trans-national corporations and banks. That in turn means state control of the major banks, including the Bank of England, and full public ownership and democratic accountability of railways, postal services, NHS and energy industry.
To revitalise the economy, Britain must return to creating wealth based especially in manufacturing and hi-tech and trade across the whole world. Otherwise what is the working class going to do?
An end must be made of the dependence on service industries including and especially those in the financial sector. To return to an economy based on manufacturing requires massive investment and where appropriate protection of home industries but is the only way of ensuring jobs and a decent safe future for the peoples of Britain.