Archive for November, 2012

The Labour Party was congratulating itself yesterday on having joined with Tory rebels to defeat the Tory-led government by voting to cut the EU budget. In truth, this was sheer opportunism. While the two Eds (Miliband and Balls) may believe that supporting belt-tightening in Europe is good populist politics, in truth, Labour has shot itself in the foot.

Why? Because the vote was not about whether the British hate Europe—doubtless many do and will continue to rally round the Daily Mail. Rather, it’s a vote about the principle of adopting further deflationary policies.

By voting to cut the EU budget, Labour is aligning itself with budget cutters throughout the EU—in the main, centre-right parties. With euro-zone unemployment now above 11% (in some member-states above 25%!) and Europe headed for even deeper recession, any sensible progressive politician should be shouting out for co-ordinated fiscal expansion. What’s needed is the opposite of budget cutting—a far larger EU budget which could be used to reflate the economy and transfer resources towards the neediest regions.

Granted, under current arrangements, the EU budget is nearly useless as a vehicle for driving reflation. Bright economics-trained shadow ministers like Rachel Reeves and Chuka Umunna—even the Pro-EU Shadow Minister for Europe Emma Reynolds—understand this and know what needs to be done, but sadly are forced to toe the party line.

But whether it’s about Britain or about Europe as a whole, it’s time to repeat the message loud and clear—balls to deflationary policies in the midst of recession!