Eurobonds: one more mechanism of elite control

On the surface of things, Euro-bonds may look like a rather progressive solution to the current European crisis.
If you’re not sure what they are, imagine that the European Union was a single country.  That is, after all, the basic goal of those who are manipulating this crisis, seeing it as an ideal opportunity to complete the project begun in the mid-1980s with the Single European Act, and continued at Maastricht and then, after several smaller steps, carried much nearer to fruition with the Lisbon Treaty.
If the EU was a single nation-state, it would, in common with other countries, borrow money against promises of future payment with interest.  Empowering the EU to do this would be to give it one of the major attributes of a nation state. Indeed, all it would then lack would be an army, but they are of course working on that.
Whether despite this or because of it, the idea is popular across a range of opinion. The Europhiliac right, led by the Prime Minister of Luxemburg and president of the Eurozone, Jean-Claude Juncker, loves the idea, but so do most European social democratic parties, Greens and  other supposedly ‘progressive’ elements. Even the usually eminently sensible Susan George, one of the founders of ATTAC, which describes itself as “an international movement working towards social, environmental and democratic alternatives in the globalisation process”< http://www.spectrezine.org/we-need-eurobonds-and-new-charter-europe>, sees Eurobonds as a means of establishing control over the financial markets and escaping from their tyranny. So how would they work, and why should socialists and democrats oppose them?
Eurobonds would be issued by the Eurozone as a whole, rather than by individual member states. The advantage would be that a troubled country such as Greece would be able to borrow money at the same rates of interest as one which is seen as ‘sound’, such as Germany or the Netherlands.  The problem is that this ability would be bought at a very high price indeed, one to which a monetary value cannot be ascribed.
Far from enabling states to get out from under the oppression of the ‘markets’, they would provide a mechanism whereby coercion by big capital could be reinforced. You can be sure, first of all, that Eurobonds would not replace national bonds, but complement them. Most of a country’s loans would continue to be backed by their own bonds, at rates of interest higher than those carried by Eurobonds. Neither the powerful member states – for which read, in the current circumstances, Germany – nor the ‘markets’ would allow any country to borrow significant sums of money against a common Eurobond interest rate unless it could be seen to be making strenuous efforts to clear its debts.  In doing so, it would be obliged to follow detailed instructions from the powerful.
Greece, for example, could be making inroads into its debts right now, without doing the least damage to its population, if it were to cut or eliminate its insanely high spending on armaments.  As, however, the arms in question are imported from countries such as France and the USA, with powerful voices in the Eurozone and/or the IMF, you can be sure that this option would not be considered.
Instead, we would see more of the same – attacks on the welfare state and on public provision, theft of the people’s property in the form of privatisation and handing everything and anything over to the ‘market’.
Eurobonds would not so much bring centralised EU control of national budgets closer, as establish it without need of statute or fanfare. Member states might retain nominal independence, but as far as economic policy is concerned, this would no longer mean a thing.
Juncker and those who think like him celebrate all this as a step towards greater European integration.  Knowing full well that hardly anyone – at least outside Luxemburg – would vote for greater integration, they are busily devising mechanisms to circumvent this inconvenient democratic fact.
When the European single currency was first mooted, it was clear to many of us that its purpose was to make a federal Europe unavoidable. The more intelligent Europhiliacs understood that no significant section of Europe’s population would ever vote in favour of a federal Europe, so they dreamed up a scheme to bring it about regardless.
We are now told that a single European market with a single European currency will not function without a single European economic and financial policy, and likely a single European fiscal policy as well.
This is a rare example of Europhiliacs telling the truth. It is a truth which critics of the single currency proposal were telling anyone who would listen fully two decades ago, when all we were hearing from the pro-monetary union lobby were fairy stories about ‘peace in our time’, and how advantageous it would be not to have to change your money when travelling abroad.
There are two possible conclusions to de drawn from this truth, however. One is that we do indeed need a federal Europe, starting with Eurobonds. The other is that we need to find some way out of the chaos which has followed the Euro as sure as night follows day, one which is respectful of national sovereignty and of what Europe’s peoples actually want, as expressed through their ballot boxes.
Eurobonds would simply add one more mechanism by which the powerful could control the weak, the big countries the small, and the ‘markets’ the lot of us.

Steve McGiffen is Spectrezine’s editor.  The cartoon is by Dario Levi. The taller figure is saying “I understand – we’ll be like the Titanic – and the First Class”; the shorter is replying “And the second have already drowned”.