Paul Murphy (Dublin South West, Solidarity) | Oireachtas source

I want to speak about what is happening with the Italian budget and the response of the European Commission to it because we are in uncharted territory. The Commission is refusing to accept a budget decided by an elected Italian Government. Although it is an Italian Government with which I disagree and which contains some horrifically right-wing forces in the form of the Northern League it is nonetheless an elected Italian Government. Here we have an illustration of precisely what we warned against at the time of the so-called fiscal treaty, which was in reality an austerity treaty. We warned that the crisis would be used to embed a system of authoritarian neoliberalism within the European Union. At the time, the Taoiseach, Deputy Varadkar, who has just left, called on the Socialist Party not to "lie" about the treaty and what it was about. He told us that if we did not accept the austerity treaty there was a risk that austerity might have to be faster, quicker and deeper. The then Tánaiste, Eamon Gilmore, informed us that this was an opportunity to vote for "economic stability and economic recovery", but what we have seen in the last week or so in terms of the relations between the Commission and the Italian Government on the question of the budget has been an absolute confirmation that what took place with the fiscal treaty was an enshrining and hardening of that system of authoritarian neoliberalism.

Explicit use was made of the Commission's power to say no to a budget put forward by an elected government, to refuse to accept it and to say, in this case, that the Government had three weeks to come back and present a different budget in line with the kind of mechanisms the Commission wants. If the Government does not do so, the Commission has the ability to fine it. Those fines will escalate. In the case of Italy they could reach up to €3.5 billion. The Commission has the right to take the Government's votes at the European Council away from it. Up until this point the European Commission has not used those powers. Instead it has relied on the softer powers of the European semester, putting pressure on governments to toe the line and so on. Now, however, authoritarian neoliberalism has bared its teeth within the European Union in a very blatant way to which everybody should pay attention because today it affects the Italian Government and some of the horrific characters involved in it, but tomorrow it could well affect a left-wing government trying to implement left-wing policies.

To be clear, I hold no candle for the Italian Government whatsoever. It is a fundamentally right-wing government. The Northern League and Matteo Salvini are guilty of horrifically racist rhetoric, but also of implementing anti-immigrant and racist policies since the party came to power. It is also fundamentally committed to a neoliberal model of capitalism and the maintenance of its rule. That is reflected in the fact that in the past clash with the European Commission it conceded on the question of the finance minister and ended up appointing a right-wing technocratic finance minister in order to attempt to please the European Commission.

This is a question of fundamental democratic rights. The Italian Government, under pressure from below, has delivered a budget which contains measures for which ordinary people have pressed, for example a minimum income for the unemployed, a reduction of the retirement age and a refusal to increase VAT from 22% to 25%, as requested by the European Commission. Under pressure from below on some level, it has not implemented the kind of harsh budget involving austerity across the board which the European Commission would request.

The response of the European Commission to that has been absolutely vicious. It has refused to accept the budget. Pierre Moscovici, the European Commissioner for Economic and Financial Affairs, has said the "budget represents a clear and intentional deviation from the commitments made by Italy last July" and that Italy's compliance with the debt reduction benchmark agreed by all member states is in question. This requires, as outlined in the fiscal treaty, a steady reduction of the debt level towards the 60% threshold referred to in the EU treaties. This is about locking Italy into literally decades of austerity to pay down this debt. Commissioner Valdis Dombrovskis said "The Italian Government is openly and consciously going against the commitments made" and that it is tempting to cure debt with more debt but that at some point debt weights too heavily. The Commission's recipe is to attempt to cure conditions that are partly the effects of the crisis of austerity by heaping on yet more austerity. It is a recipe for a downward spiral.

I saw someone mentioning that bond yields are being checked in Italy like it was 2011. We are back again to that point at which markets are being used as a threat against the Italian Government and any government that would threaten to vary outside the extremely limited strictures of the kind of neoliberal and austerity policies promoted by the European Commission. Sebastian Kurz, the Chancellor of Austria, which currently holds the Presidency of the Council of the European Union, said that Austria is not prepared to stand behind the debts of other states while those states are actively contributing to market uncertainty. That is the same sort of rhetoric we saw six or seven years ago in attempts to make governments comply with the diktats of the market, as represented by the demands of the European Commission.

This is a right-wing Italian Government which has no redeeming features whatsoever. The left in Italy is absolutely correct to oppose this Government and to attempt to bring it down through struggle. These fiscal rules, however, are an impediment to resolving the crises that face ordinary working-class people. That is a fact. It is also a fact in this country when it comes to the question of housing. The rules function in such a way as not to allow us to use the massive resources that exist in this country in NAMA or the Ireland Strategic Investment Fund to invest in resolving the housing crisis because doing so would mean investing at a rate higher than our growth rates. The fiscal rules are a barrier to resolving crises that affect ordinary people. The effect of the fiscal treaty was to hammer those fiscal rules, which started their life in the Maastricht treaty, absolutely into law and to give significant power to the unelected European Commission to ensure that governments do not come under pressure from below and that austerity policies are implemented.

It is a very unfortunate reality that it is a right-wing Italian Government which is coming into a clash with the European Commission on this question. The betrayal of Syriza was very unfortunate. It did not carry through a confrontation with the European Commission which now unfortunately allows the right to be painted as those who are willing to stand up the European Commission when, in reality, it has already bowed down in terms of the finance minister and is likely to seek some sort of compromise on this issue. It is important for the left to be absolutely clear here. These fiscal rules are an absolute disaster from the point of view of ordinary people. The model of the European Union, which has become increasingly authoritarian and which has neoliberalism at its core, is no model for any social progress or any democratic vision of Europe. It has nothing to do with any idea of internationalism whatsoever. Left-wing governments which do not bend the knee to austerity policies and the European Commission, as happened with Syriza, will be elected again and those left governments are going to face these rules.

A choice will have to be made to say clearly that we refuse to accept the fiscal straitjacket and refuse to be bound by the fiscal rules. It is a choice between abiding by its rules and not facing its sanctions and not implementing austerity and policies that are disastrous for ordinary people. If we break with austerity and neoliberal policies, we will clash with the European Commission, safe in the knowledge that in doing so we will be standing up for the interests of millions of people across Europe who similarly reject those sort of policies and the very authoritarian model of the European Union that we have now. It will be part of a struggle for a very different type of Europe, a Europe that is built democratically from below and which has social and socialist policies at its core, including pro-worker and pro-environmental policies. It will have policies of global solidarity and social justice as opposed to the imperialistic austerity driven capitalist policies which are at the core of the European Union.

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