European Consolidation Board for Foreign Industry (ECBFI)


Brexit and The European Consolidation

Posted on June 25, 2016 at 6:15 PM

The exit of Britain could contribute not to disintegration but a consolidation of authoritarian governance in the European Union.


Anti-democratic rules

The recent launch of a progressive organization in favour of EU membership should come as welcome development. This complements the 15 June conference in Greenwich (open to the public), “The Progressive Case for Staying in the European Union”, when MP Keir Starmer and the general secretary of the Fire Brigades Union, Matt Wrack, will speak.


As part of the launch of Another Europe is Possible, Yanis Varoufakis wrote, “Brexit...would hasten the disintegration of the EU”. Whatever the likelihood of this outcome, another sinister consequence should capture our attention. The exit of Britain could contribute not to disintegration but a consolidation of authoritarian governance in the European Union. By “authoritarian” I mean regulations and rules that remove political, social and economic decisions from the electoral process at the national and EU levels.


The current anti-democratic tendencies in the European Union represent political developments over several decades. The global financial crisis accelerated these tendencies through the draconian “bailout packages” designed in Brussels. Ad hoc and non-legislative measures facilitated their implementation, most notoriously in Greece, but also with less negative media in Ireland, Italy, Portugal and Spain.


The Maastricht “convergence criteria” and its lineal descendents, culminating in the so-called Fiscal Pact (Treaty for Stability, Coordination and Governance), present the most obvious authoritarian vehicles. As I have shown elsewhere, these putative fiscal rules mandate bad policy and more importantly legally restrict national governments’ ability to set policies on taxation and expenditure. The limitations on taxation and spending imply broader policy limitations, such for social protection.


All but two governments (Britain and the Czech Republic) endorsed the anti-democratic Fiscal Pact through a democratic process. Not satisfied with legislation that might be repealed through simple majority voting in national parliaments, the ratification process specified that governments write the pact into their constitutions, much most governments have done. The Fiscal Pact with its embedding in constitutions does more than constrain policy.


It severely limits public sector deficits contrary to rational economic policy and makes these budgets subject to review by Brussels. As a result the embedded Fiscal Pact reinforces the reactionary forces in each country that oppose social protection programmes and effective functioning of the public sector.



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