Tag Archives: France Economy

The British left needs to discuss more than the UK’s membership of the EU.

As the EU debate swings into life in the UK we’ve so far heard the most from the business sector who have been most pro in their advocacy of the UK’s continued membership. It is perhaps quite natural that big business would like the EU to remain as it is. Those on the traditional left would say that’s because they want to have a large pool of unemployed workers to keep wages down and maintain worker discipline!

Are they correct in saying that? As things are at the moment it is hard to say they aren’t. It is hard for big business to argue that they only want the EU for its expanded, but much depressed, market.

The modern supposedly progressive left has been seduced by the powers-that-be in the EU into thinking the EU to be a socially progressive organisation too. Recent events in Greece, for example, are shaking that view. That needs  to be shaken  some more. A first step would be to get them to actually discuss the problem. We might well think the election of Syriza in Greece, with its band of ex-Maoists, ex- Trotskyites, ex-Communists would be a topic of interest for them. Not so. They are shell-shocked into silence at the moment. The main Labour websites have nothing at all to say on that.

Anyone believing in a united Europe, as many of our EU advocates clearly do, should feel as passionately about unemployed young people in Spain or poverty in Greece as they do about it in the UK. The progressive left  say they like everything about the current level of EU integration, and like the EU as it is. If they ever remember to make a critical comment, it is not because they wish to change anything or intend to vote against any of its measures.

If the UK today had ultra high levels of youth unemployment as the south of the EU currently suffers,  the progressives would never let anyone hear the end of it. Rightly so. There would be marches  from the most depressed areas to London to demand some action.

If the UK had Greek levels of unemployment, and a Greek cost of living crisis which has depressed average real incomes by almost a quarter since 2007, again we would not hear the end of it, as the ‘progressives’ would rightly think it completely unacceptable. If the unemployment in Greece or Spain had been brought about by a right wing military coup, again there would be uproar. So why is it that these people who believe in pan European solidarity have nothing to say about the scandal of poverty and joblessness in large areas of Euroland? Why are they not insisting on new policies for the EU?

Now’s a good time to be saying something about that in connection with the EU referendum. The British left needs to discuss more than the UK’s membership of the EU. It needs to discuss the EU itself too.

The EU: Progressive or Reactionary?

The French seem to be in trouble again over their 4.5% budget deficit.


Unemployment is 11% and rising in France. Unemployment among their under 25 year olds is 25%, so why is the EU fussing about its budget deficit? For some strange reason the EU-powers-that-be have decreed that 3% is the limit and no more.

The economics isn’t that difficult. If everyone spends what they earn, that includes all profits, and exports are equal to imports, in the same economy in which it is earned in then everything clears. If 3% (GDP) of those earnings is (net) spent on imports then that shortfall has to be made up by government running a deficit for everything to clear.

Similarly if 5% of GDP is saved then government needs to borrow that from the savers and spend it back in to the economy too. Both the trade balance and the level of savings are outside of government control, especially for a country within the EU using the Euro.

So, 3% + 5%  (These are the figures which are much closer to reality for an economy like France) = 8%. This is the minimum deficit the government needs to run to stop the economy spiralling into depression.

So for the rulers of the  EU, or the Troika, to impose a 3% GDP limit on government deficits within the EU is criminally insane.  They understand all this very well! They understand that France cannot impose trade restrictions. They understand the French government can’t stop the population saving and they understand that’s what people do when the economic future looks bleak.

The EU powers-that-be have been smart enough, in many European countries, to seduce the centre-left into thinking that the EU is both progressive and democratic. That joining in the EU wholeheartedly is an easier option than taking on reactionary forces directly in their home countries.

Well it isn’t.  The EU reactionaries are just as bad, if not worse. It’s not just me saying that. It is the 25% + figures for unemployment in Spain and Greece, and high unemployment figures everywhere in the Eurozone  which is the real evidence for the truth of that. No amount of social legislation on conditions at work can compensate for not having a decent well paying job.