David Cameron has suggested to German chancellor Angela Merkel that he would support a quick change in European treaties, to increase economic integration and help tackle the eurozone crisis, if only he gets a payback with the scrapping of European Union labour laws.
Especially mentioned is the European Working Time Directive, which imposes limits on working hours. The Tories would surely also like to scrap the Agency Workers’ Directive.
Merkel has agreed to discuss the deal “constructively”. There are a dozen large obstacles in the way of treaty change, but the labour movement should take note of the warning.
On Wednesday 23 November the European Commission [the EU’s “civil service”] will publish a report favouring the introduction of “eurobonds”, i.e. a system where each eurozone government’s IOUs would be guaranteed by the whole eurozone. Debt crises like those hitting Greece, Ireland, Portugal, Italy, and maybe tomorrow France, would be ruled out short of a cataclysmic collapse of the whole eurozone, and weaker EU governments would no longer have to pay over the odds to borrow.
Those “eurobonds” would certainly help. The snag is that they would require a sizeable change in EU treaties (though there is frantic discussion of devious tactics to get round that), and that the eurozone leaders, if they decide in desperation to go for eurobonds, would certainly couple the introduction with a search for guarantees of severe cuts in weaker economies and maybe with measures like Cameron’s proposal of scrapping labour laws.
Also under discussion is a “financial transactions”, or “Tobin”, or “Robin Hood” tax. European Commission President Jose Manuel Barroso is pushing the idea; many European governments agree; the British government opposes it vehemently.
Cameron’s opposition is because far more financial transactions happen in London than in any European centre. And there is reason to welcome any move in the direction of taxing the rich.
However, the appearance that a “Tobin” tax could raise vast revenues without any of the conflict which direct taxes on high income or large wealth would require is illusory. Some analysts, including left-wingers, have even suggested that it could backfire.
Socialists should stick with the general programme of taxing the rich, and not see the “Tobin” tax as a cure-all.