At Every Step, a Neo-Liberal Mortgage

Translated Wednesday 19 May 2010, by Henry Crapo and reviewed by Isabelle Metral

The policies of liberalization and deregulation have been confirmed and deepened in each of the European treaties, leading up to the present impasse.

A mercantile preoccupation is, to say the least, coded in the DNA of the European construction. Already in 1957, the Treaty of Rome, which transformed the European Community of Coal and Steel (CECA) into the European Economic Community, set up a common market and fixed objectives for the member states to establish “a regime assuring that competition is unfettered [1]“. The freedom of circulation of people, of merchandise, of services and of capital was already erected as a founding “principle”. These principles were not fully fleshed out until the 1980s, with the neo-conservative revolution and the neo-liberal reorientations that it imposed. In 1985 the European commissioner Francis Arthur Cockfield, ex-secretary of State for the Treasury, then of Commerce, under Margaret Thatcher, presented, under the supervision of Jacques Delors, then president of the Commission in Brussels, a “White Book on the Completion of the Internal Market”. This document, which compiles more than 300 measures aimed at liberalizing commerce, was directly inspired by the proposals of a powerful European industrial lobby, the ERT (European Round Table of Industrialists).. This liberal bible prefigured the Single European Act, which was signed on 17 February 1986. It projected, for a horizon of 1992, the establishment of a single market and a program set up to remove all “obstacles” to the free circulation of persons, of services, of capital and merchandise. The dismantling of customs barriers was completed by the “abolition” of “physical, technical, and fiscal” barriers to free trade. “The free circulation of capital will play a powerful role in the convergence and integration of economies, via a better allocation of resources”, rejoiced Jacques Delors at the time. On an institutional level, the Single European Act sanctified the existence of a Council of Europe, at the same time as it reinforced the executive powers of the Commission.

“The entire content of the new treaty had for more than twenty years been inscribed in golden letters on our industrial strategy”

But, already, the next stage was becoming visible: the creation of a single currency, overtly presented as a factor of acceleration of “the liberation of capital”. In June 1988, the chiefs of state and of governments fixed for themselves the objective of building an economic and monetary union. One year later, the Delors report defined the steps and the “convergence criteria” that should preside at the creation of the single currency. The Treaty of Maastricht fixed these conditions. It instituted a strict budgetary discipline, which was later codified as the Pact of Stability. It organized the transfer of powers over monetary policy to a Central European Bank, entirely independent of any democratic control. “The single currency will mean fewer unemployed, and more prosperity”, promised Michel Rocard. “The entire content of the new treaty had for more than twenty years been inscribed in golden letters on our industrial strategy,” savors Antoine Riboud, president of Danone. “The Maastricht Treaty acts like an insurance policy against the return of the hard and fast socialist experience”, celebrates Alain Madelin.

In France, where the ratification of the text was submitted to referendum, the “yes” finally won with a slim majority (51%) on 20 September 1992. On the 1st of January, 1999, eleven states adopted the euro, which was put into circulation, in fiduciary form, the 1st of January 2002.

Public enterprises and services opened up to competition, social and fiscal dumping, pressures on salaries, massive unemployment, … for the people, the promised prosperity was not at the rendezvous.

The growing defiance of the people did not, however, manage to dam the liberal advance. Then came the elaboration, in 2004, of a project for a European Constitution, which makes “free and unfettered competition”, full powers of the Central European Bank, liberalization of world commerce and the deregulation of the financial sector the golden rules of the European project. Rejected, in the Spring of 2005, by the French and Dutch voters, the European Constitutional Treaty was finally recycled, in its essentials, as the Treaty of Lisbon, which came into force on the 1st of December, 2009. As its predecessors, this treaty codifies those economic and monetary policies, the shipwreck of which is now confirmed by the global crisis.

[1] in literal translation “not falsified”