Labour’s European dilemma

Labour should make common cause with its sister parties and oppose EU austerity.

2011 was dominated by the eurozone debt crisis and the bad news is the same will be true in 2012, well, at least for the first six months of it. The debt crisis is, for wildly different reasons, a major headache for the three major UK parties.

The Conservatives are still hugging themselves with delight at David Cameron's 'obstinate child' act at the EU summit. They were particularly pleased when ministers and Treasury officials traded insults with the French counterparts about the state of the other's economy - for a Tory there is no higher calling than picking a diplomatic fight with the French. The Tories also enjoyed a decent poll bounce following the summit.

But their pleasure will be short-lived. Those who are happiest with Cameron's non-veto are the ones who see it as the first step towards a referendum on Britain's EU membership. Meanwhile, by seeing the summit solely as an opportunity to shore up back-bench support and protect Tory donors in the City, Cameron has shut himself out of the negotiations to resolve the eurozone crisis on which the stability of the UK economy depends. In the meantime, it is almost certain that, one way or another, he will increase Britain's IMF contributions to help foot the bill.

The Lib Dems once again demonstrated their unique capacity in government to pick the least popular position. Their support for the Angela Merkel inspired 'fiscal compact' treaty and fury with Cameron for isolating Britain within the EU follows the precedent of supporting massive spending cuts and the tripling of tuition fees. It is a remarkable change for a party famous in opposition for jumping on ever populist band-waggon that moved.

But Labour, too, has a big strategic decision. Amid the triumphal mood of the House of Commons debate following the summit, Ed Miliband actually had Cameron on the run until cornered by the question: 'what would you have done'. Unfortunately, Miliband had no answer.

The truth is that David Cameron was right to oppose the fiscal treaty. Indeed, most media coverage of the December summit overlooked the fact that the proposed 'fiscal compact' treaty is actually very bad news indeed. While the left should not be opposed to the concept of putting a national debt ceiling into law the automatic sanctions, involving fines of up to 0.2 per cent of GDP, are excessive and pro-cyclical. Fining a country in economic difficulty billions of euros is akin to cutting off a one-legged man's working limb. But it is the limit of 0.5 per cent on structural deficits that is truly daft. Most EU countries can't hope to meet this target within the coming years, only the likes of Germany, Finland and Netherlands, who have a large current account surplus, will be able to consistently meet it. To put the 0.5 per cent figure in context, Britain's structural deficit is currently around 6.5 per cent. Even with George Osborne's spending cuts the OBR's optimistic forecast is that this will only fall to 4 per cent by 2015.

More importantly, this treaty will make it virtually impossible for EU countries to pursue Keynesian-style expansion in the future. If it ever comes into force, Europe will be locked into a decade of austerity and economic stagnation. At a time when most economists are projecting a tough decade of recession and low growth, the treaty is plain daft. Had Ed Miliband been at the summit there is no question that he should have opposed it.

With the Coalition bickering between the Conservatives and the rest of the EU, and the Lib Dems with their Tory colleagues, Labour has a difficult path to tread. Should it join the Tories in some facile, but populist, Brussels-bashing?

For those who think Labour is unwaveringly pro-EU, it's worth remembering that euroscepticism has existed in Labour far longer than the Conservatives. Labour's infamous 1983 election manifesto included a pledge to withdraw from the EEC. Only in the late 1980s under Kinnock's leadership did party policy became pro-European as, crucially, did the trade unions, realising that the EU could be an effectively means to enshrine social and employment protection in European law.

But although there are prominent eurosceptics on the Labour backbenches and in the shadow cabinet, Miliband should realise that there is no electoral advantage to Labour by adopting a Tory-style euroscepticism. This sentiment has been built into the Tory party's DNA ever since the Maastricht Treaty and Labour couldn't credibly outflank them. Besides, while the British public may be sceptical about the EU, they have never elected a party whose platform was to estrange Britain from the rest of Europe.

Instead, Labour should make common cause with its sister-parties, particularly those in France and Germany who face critically important general elections this year. Both Francois Hollande and Peer Steinbruck have opposed the new treaty, rightly arguing that it enshrines austerity economics in a recession and, consequently, won't work.

Indeed, although Labour's relationship with its continental partners has often been marred by mutual suspicion, the reality is that they are all, by and large, singing from the same policy hymn sheet. Rigorous financial regulation, which Britons want but the Tories refuse to countenance, is being adopted at EU level. Laws on short-selling, hedge funds, and bank bonuses have all been adopted at European level with Labour's support but in the teeth of Tory opposition.

Now, more than before, socialist parties need each other. In the past two years left-wing parties with a strong history in government have been soundly beaten in the UK, Spain, Sweden, Portugal and the Netherlands to name but four, with Helle Thorning-Schmidt's victory in Denmark the only ray of light. Defeat for Hollande and Steinbruck this year would point ominously towards a Labour defeat at the next election.

Labour needs to sketch out a credible alternative on Europe if they are to effectively attack Cameron's isolationism. Both the Tories and Lib Dems will lose what influence they once had in Brussels. Rather than join them in carping from the sidelines and wielding vetos and threats that do not mean or stop anything, Labour should fill the policy vacuum as the only party with any meaningful answers on Europe.

Ben Fox is chairman of GMB Brussels and political adviser to the Socialist vice-president of economic and monetary affairs.

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“If not evolution then revolution”: temperature rises in Catalonia as independence vote looms

Clashes between Barcelona and Madrid over the disputed referendum lead to protests and arrests.

Summer may finish today according to astronomers, but the heat in Barcelona has been steadily rising over the past few weeks. Things reached boiling point yesterday when the Spanish police arrested 14 Catalan officials responsible for organising a referendum on independence for the region. They also seized about 9.8 million ballots intended for this vote, which the Catalan government wants to hold on 1 October.

The Spanish central government, the conservative People’s Party (PP), is completely opposed to the referendum and has so far refused even to discuss it with the Catalan administration. This prompted the pro-independence Catalan parties in power to start planning it unilaterally.

On 6 September, the Catalan parliament passed the Self-Determination Referendum Act, which established how the vote will be organised and held. The question would be: “Do you want Catalonia to become an independent state with the form of a republic?” And since the electoral register can only be accessed by the Spanish authorities, whoever is allowed to vote in the Catalan regional elections can have their say.

Legal experts are divided over whether this kind of independence referendum is allowed by the Spanish constitution, which was approved in 1978. This was just three years after the death of fascist dictator Francisco Franco, and one year after the first democratic elections since the 1936-39 Spanish Civil War.

According to the constitution, sovereignty resides with the Spanish people. Opponents of Catalan independence claim it is therefore up to the whole of Spain to decide such a matter – and that in any case, it would have to be approved by the Spanish government.

But those in favour of the Catalan process argue that, given the complete lack of political will in Madrid regarding the referendum, the unilateral way is legitimate even if it may be declared illegal according to Spanish law.

As expected, two weeks ago the constitutional court suspended the Catalan Self-Determination Referendum Act, and yesterday’s police operation followed. Shortly after the raid began, during a government control session in the Spanish parliament in Madrid, prime minister Mariano Rajoy said “the rule of law has worked and it’ll continue doing so”. He insisted that the government was just “doing its duty”.

In this charged atmosphere, while Rajoy was still speaking, the MPs of the Catalan parties supporting the referendum walked out of the room, while those of the ruling PP chanted: “Leave here your salaries!”

Later in Barcelona, the Catalan regional prime minister, Carles Puigdemont, said Spain had “de facto suspended self-government in Catalonia and de facto applied the state of emergency”. Surrounding him during his speech, several other high officials looked funereal.

Applying further heat to the situation, the head of the Spanish tax agency signed an order on Tuesday that gave control of the Catalan public finances to the Spanish state. From then on, and at least until the end of the year, the Catalan administration isn’t allowed to allocate any money that hasn’t been sanctioned by Madrid.

However, the Spanish central government could still go even further and, using Article 155 of the constitution, suspend self-government in Catalonia – not de facto but officially. This extreme measure, never used in modern Spain, would in theory make possible what Catalans often joke about: tanks from the Spanish army would drive down the avenues of Barcelona.

Catalonia is the richest Spanish region, last year contributing 19 per cent of the country's GDP, while its population represents about 18 per cent of the total. It has long considered itself historically and culturally different from the rest of Spain, and yet just a decade ago an independence referendum would have been inconceivable.

In 2006, just 15 per cent of Catalans wanted “an independent state”. But that year the ruling PP referred the Catalan statute to the constitutional court, which declared part of it illegal. Then, after the PP won the general elections in 2011, the Spanish government started refusing to engage with Catalonia on the issue. 

Support for Catalonia becoming an independent state remains at around 41 per cent in favour and just under 50 per cent against. However, when Catalans were asked if they would vote in a referendum not sanctioned by Madrid, 67.5 per cent said yes, and of those, 62.4 per cent would vote “Yes”.

As of today ballot boxes are still being kept in a secret location, and Puigdemont and other Catalan officials insist the referendum will be held one way or another. In the past, the Catalan PM has said that if “Yes” wins, Catalonia will declare its independence within 48 hours.

For now the atmosphere is tense. On Tuesday, thousands of people took to the streets of Barcelona to protest against the police operation, in front of several offices of the regional government that were being searched.

The biggest demonstration was next to the Catalan finance ministry, which was being searched by the Guardia Civil, the Spanish paramilitary police. Many protesters were carrying the estelada, the unofficial flag of the independence movement – some worn it as a cape, others waved it in the air.

“We are protesting against this unjust situation”, said 47-year-old sales rep Ferran Batalla. “[The referendum] is not an aggression, it’s an option to have justice, an option to ask the people what they think."

The protesters chanted in Catalan, “We will vote!”, and in Spanish, “We want to vote!” Some were distributing flyers that read in Catalan, “We vote to be free”, and graffiti on a telephone booth said in Catalan, “Voting is not a crime.”

In English a giant banner on top of the building that hosts the Catalan finance ministry read: “Welcome to the Catalan Republic”. At one point, police coming out of the building were met with deafening whistles before the crowd started chanting in Catalan: “Out with the occupying forces!”

“I don’t want to fight anybody in Spain, but we’ve reached a point in which we can’t understand each other any more”, said Batalla, who complained about the fact that the central government has always sternly refused to talk about planning a referendum. “When the state doesn’t want to negotiate, and doesn’t want you to leave, and doesn’t want to hear from you, and mistreats you… They think we are stupid, and we are fed up and this is over, because they are making us feel as if we are the bad ones."

In nearby Plaça de Catalunya just a month ago, barely a flag could be seen among the huge vigil following the terror attack on Barcelona. And if that proved to be a show of social and political unity between Madrid and Barcelona, today the Spanish government on the one side, and the Catalan authorities and many of their people on the other, couldn’t be more polarised.

Many Catalans mention the Scottish independence referendum in 2014, and the agreement with Westminster that preceded it, as an example of how things could and should happen. But the two situations are actually very different.

Catalonia makes up a far larger chunk of Spain's population and economic output than Scotland does of the UK. Meanwhile, Spain has a constitution that the government considers untouchable, while there is nothing similar in the British legal framework.

Late Tuesday, Rajoy made an official statement urging the Catalan government to get back to  law and to democracy, and stop at last this “escalation of extremism”.

"This referendum can’t be held, it has never been legal nor legitimate,” he said, before adding: “And every illegal act and every infringement will get its response, which will be determined, proportional and rigorous”.

The PM’s intervention was followed by a huge cacerolada in Barcelona and many other Catalan cities – meaning people started banging pans in their windows in protest. In the streets, demonstrations went on through the night as people tried to prevent the Guardia Civil from leaving the Catalan finance ministry. The protest was mostly peaceful, but police cars parked outside were destroyed while people chanted a rhyme in Spanish: “¡Esta noche os vais sin coche!”, or “Tonight you will leave without a car!”

Finally, at around 4am the first Guardia Civil agents started leaving the building. There were moments of tension between the protesters and the Mossos d’Esquadra, the Catalan regional police, who opened the way for the Guardia Civil.

Wednesday began calmer, as both sides considered their next steps. The Spanish government remains focused on preventing the vote from happening, but has said it will be open to dialogue afterwards. “On 2 (October) we will talk and this new dynamic will take us to look for solutions because the coexistence of all Spaniards must continue in Spain... We’ll have to sit together and talk, and that we will do”, Íñigo Méndez de Vigo, the spokesperson for the government, told Spanish Radio. 

By the afternoon, there hadn’t been word of response from the Catalan authorities, but having invested so much in the referendum and seeing the atmosphere in the streets, it’s not clear how they could backtrack.

In a bar in the Eixample area of Barcelona, right outside the city centre, people discuss the situation over their mid-morning coffee. “What happened yesterday was shocking, independently of whether one supports independence or not,” says 37-year-old Italian IT consultant Paolo Mosca, who has lived Barcelona since 2013.

“I understand that within the Spanish legal frame the referendum isn’t legal, I know this, but within the Catalan legal frame it is legal because it was approved in the Catalan parliament”, says Sergi Pedraza, a developer and who was born in Catalonia as the son of Andalusian parents.

“The only possible solution, because the situation has become unsustainable, is a referendum, but one well planned and agreed with the state”, says Álex Castaño, 28, also a developer, originally from Seville and who has lived in Barcelona since 2015.

All three would be eligible to vote and Sergi says he’d vote “Yes” while Álex says he wouldn’t vote. Paolo says he’d vote “Yes” because he understands and supports the will of those who want independence. But he and Álex say they’d probably leave if Catalonia becomes independent, because of the uncertainty of what may happen to today’s cosmopolitan Barcelona.

By noon the street demonstrations had resumed, this time in front of the Catalan High Court, where hundreds of people, many of them again carrying and wearing esteladas, were protesting against yesterday’s arrests. Loud Catalan music could be heard.

“The government in Madrid is insulting the intelligence of the Catalan people,” says retired businessman Enric T Coromina, who adds that he studied law and is “politically from the right”. He is wearing a barretina, a Catalan traditional red wool hat, and a T-shirt saying in English: “Make no mistake, I’m Catalan, not Spanish”. He’s sitting on a folding chair; has brought food, water and a blanket, and says he’s ready to spend the night here. He’s sure the vote will happen – he will back “Yes”– and will be legitimate even if not legal under Spanish law.

"If evolution is not possible from within the system, then there’s only one other way left and that’s revolution, civil disobedience,” he concludes, as more and more people join the protest.