Intervention of Stavros Evagorou, member of the Political Bureau of the C.C. of AKEL

 

“THE EURO AND EUROPEAN MONETARY UNION – CONSTRAINTS AND DISRUPTIONS”

PCP INITIATIVE, LISBON PORTUGAL

 

On behalf of the C.C. OF AKEL, we would like to thank the Portuguese Communist Party for the invitation and its timely choice of the issue for the discussion of alternatives to the institutional and real situation in the Economic and Monetary Union. As AKEL, we know very well the struggles waged by the Portuguese Communist Party and the movement of the working people in Portugal. We highly appreciate not only the historical, but also your contemporary contribution to the struggles of the Portuguese people. Furthermore, AKEL appreciates the theoretical approach of your Party on the international situation, as well as in relation to the present-day problems of societies and more specifically, the problems of the working class inside the European Union and the Eurozone in particular.

The first issue I would like to elaborate on concerns the social and economic situation in Cyprus from the beginning of the capitalist crisis and the election of the government of the Right to power in Cyprus which accepted the Memorandum with the EU and IMF.

We are talking about the deepest economic crisis and catastrophe in the history of our homeland which is accompanied by the growing colonial dependence of Cyprus on its lenders.

The GDP of Cyprus from + 3.6% in 2008 has fallen to -2.3% in 2014. Over the last two years alone 5,000 companies that were employing up to 9 employees went bankrupt, while since the outbreak of the crisis 7,000 companies in total have closed down. People’s purchasing power based on the GDP has fallen to levels before the year 2000. The share of employees in the wealth produced in 2014 has fallen to levels lower than in 2006. While the percentage of wage earner’s share in the wealth produced even in the EU itself stands at 48%, in Cyprus it is even worse and is at just 37.1%, while in Portugal, which is also going through a social tragedy, it is at 44.6%. Approximately one in three Cypriots, that is to say 28% of the population, are at the official poverty level.

The Cyprus government has repeatedly stated that the Memorandum of Understanding it agreed and signed with the Troika constitutes is its own manifesto too. It is ideologically identified with the Agreement. In addition, it is committed to privatizing the profitable Semi-governmental organizations for electricity, telecommunications, and the ports. The Government has already agreed with the Troika on a framework of a Bill that in order to make the Banks sustainable will lead to foreclosures of even small family residences and professional premises.

It is the international and domestic monopolies, to whom the property of the Cypriot people will be handed over at humiliating prices, as well as the control of the Cyprus economy, that will be the ones to benefit from the privatizations and selling-off of the Semi-governmental organizations and properties.

AKEL and the wider peoples movement from the very beginning opposed both the Memorandum and its philosophy, as well as the broader policies of the government of the Right which are crushing the working people, middle strata, the SME’s and the very prospect of Cyprus’ economic recovery in general.

The second aspect that I will elaborate on concerns the institutional situation in the Eurozone today.

The ruling circles in the EU are using the capitalist crisis to legitimize through European legislation numerous measures permanent for the so-called single economic governance. The integration and deepening of the Eurozone is focused on the further centralization of decision-making procedures concerning Member-State’s economic policies to the Directorate of Brussels. With the Intergovernmental Treaty on Stability, Coordination and Governance it was agreed that member-states are obliged to perpetually have surplus budgets. A budget is considered surplus when the deficit is at 0.5% or less.

With the so-called “Six-Pack” of Regulations and Directive the preventative and corrective aspect of the Stability Pact is strengthened with regards those Member States violating either maximum budget deficit or public debt levels through the strict definition of a Medium Term Goal balancing the budget.

With the “Two-Pack” of Regulations and the European Semester the rules of the Eurozone’s monitoring and control system are made stricter. This on the one hand is transmuted both in common rules for national budgets that will be monitored institutionally by supposedly independent, third-party organizations – companies.

The pressure for the establishment of stricter rules for fiscal supervision is transmitted on the one hand into a second Regulation that provides for the enhanced surveillance on the Member-States of the Eurozone that are facing financial difficulties. Member States will be subject to a Wider Coverage Program. A country will be subordinated to this program so long as it does not repay 75% of its own debt. With the so-called Banking Association, headed by the European Central Bank, the philosophy and strength of the German monopolies is evident. Only the strong will survive, which is why the terms of restructuring – dissolution of the banks are set out.

For us, the conclusions to be drawn from these relatively recent reactionary reforms on a European level are obvious: These decisions were taken in order to intensify through the promotion of institutional and structural changes the political and economic onslaught of the monopolies at the expense of the state, SME’s and the working people. Cyprus is already suffered greatly and it is expected that the situation will deteriorate even further.

Furthermore, the integration of the EU (or single governance) also constitutes the conceding of popular sovereignty and competences at a European level and certainly within the context of capitalism. The second is that the fields and areas that are conceded concern that of public finances and affect the entire operation of a state.

The third issue I would like to elaborate on concerns some reflections on the exit from the structural dead-end of the problems in the Eurozone. AKEL had elaborated, prepared and submitted two years ago a detailed and comprehensive first proposal that was rejected by the Government and the other political parties.

Our proposal provided for an orderly exit from the Eurozone, along with other parallel measures, so as to create the preconditions for growth after the haircut of the bank deposits and the suffocating Memoranda framework. However AKEL, generating within Cypriot society a reflection on the EU and more specifically about the Eurozone in the conditions of Memoranda, submitted additional relief measures for the people and to prevent the worst. Among AKEL’s measures is the Bill submitted against the foreclosure and seizure of the primary family residence and small professional premises less than 350,000 Euros. We also tabled a Bill against the government decrees for the liberalization of shopping hours, as well as tabling legislation to reduce rents and other measures. Our struggle against the logic of the privatization of state enterprises and property is continuing. In this struggle we have gained the support of a broad platform of trade unions and social organizations.

We shall continue on this path of rupture with the logic of the Memoranda and the Eurozone. The fact that Cyprus and those countries that were subjugated to it are exiting the Memorandum is in our opinion one of the biggest delusions. All the Memoranda have an official expiration date. They last for a few years and subsequently there are monitoring mechanisms set up by the lenders because the loan will have to be repaid through the imposition and perpetuation of their policies.

Besides this there are in addition other EU decisions, such as those we have mentioned which all establish a suffocating framework that does not allow us to pursue different alternative policies. The option of creating the preconditions and the balance of forces, both internally and internationally, for a break and rupture with the philosophy of these policies is in the interest of the peoples of Europe. So long as the devastating consequences are damaging the needs of the popular needs, so must the preconditions for alternative options to the barbarity be created.

In conclusion, we need the international cooperation between the Communist and progressive forces. We agree with you on the necessity to forge and set up a broad front for the defense of labour and social rights, for the internationalization of our struggle, on the basis of common interests. The exchange of views and experiences from the struggle of the working people and our parties can add to the necessity of our cooperation and the effectiveness of our struggles