Workers Solidarity Movement

The heads of government from around Europe are meeting today to agree a further program of attacks on the wages and conditions of workers across Europe in order to pay for the international capitalist crisis. In a process driven by the core economies of France and Germany under the title of a 'Competitiveness Pact' wages are to be 'restrained' and pension ages are to be raised across Europe.

The pact will also limit public service spending, thus reducing access to health and education services, will limit government borrowing and will move away from income based taxation towards consumption-based taxation on goods and services which are know to disproportionally effect the poor and low paid. This fits within the long term pattern of using the EU to impose a neo liberal restructuring of economies across Europe, a pattern which the crisis has escalated despite the crisis itself being triggered by the failure of the neo liberal banking model.

Also up for discussion is the €440 billion European Financial Stability Mechanism (EFSF) which is the source of the ECB bail out funds. As the crisis threatens to collapse the banks in more economies unless there is intervention there are worries this fund is not big enough or that it needs to be made more flexible to expand its effective lending capacity currently estimated at 250 billion. Expectations are that final agreement will not be reached today, that will probably wait till a summit at the end of this month.

Pressure will be put on the Portuguese government to accept an ECB/IMF takeover of economic and social policy on similar grounds to the one Ireland and Greece have been forced to accept. Enda Kenny, the new head of the Irish government, is expected to plead for a reduction in the interest rates charged under the bail out, rates that almost certainly make it impossible for Ireland to repay the loans without suffering an even more extreme economic crash. Portugal managed to sell €1bn in government bonds this week but the interest on its debt is at record levels suggesting it is following the Greek and Irish paths. The austerity plans are disasters for those living in these countries but even if Portugal is included their economies are very peripheral to Europe, between them Ireland, Portugal and Greece account for less that 5% the EU's €12 trillion gross domestic product.

Here in Ireland Enda Kenny is making a big deal of defending the ultra low corporate tax rate that it past of the reason Ireland gets a much higher investment per capita from US corporations like Google or Facebook then any other European country. In leading the race to the bottom Ireland takes almost no tax from these companies and enables them to avoid paying tax in other countries. In this way not only are workers in Ireland robbed of the funds needed for healthcare, education and other services but so are workers in other countries. In return for a change in interest rates Germany is demanding that Ireland back a common eurozone corporate tax base and that Greece imposes a mass privatisation drive with the Greek government already looking at selling off rail and even some of the country's archipelago of small islands.

Enda Kenny is tough talking on the corporate tax rate for the Irish media but unnamed EU diplomats are saying it looks like he has already cracked and that there will probably be "some reference in a very limited way to co-ordinated tax base, saying something along the lines of 'It is something that will be looked at."

The richest 1% of Irish society however not only do well out of the low corporate tax deal through getting rent and other contracts with these corporations but also make use themselves of similar tax avoidance schemes elsewhere. Most of them do no even live in Ireland for tax purposes! Their opposition to any attempt by the EU to close some tax loopholes and harmonize corporate tax rates is to be expected. For workers in Ireland however it makes more sense to consider how we best win workers in Germany, France and the other core countries to support the demand for a default on the debt and the ending of ECB/IMF control. This requires building a real workers movement at the European and not just national level.

WORDS: Andrew Flood