EU leaders yesterday (21 July 2020) agreed on a €750bn coronavirus recovery fund after the longest summit meeting since 2000.
The deal was brokered by the 27 heads of state, excluding Britain, in order to tackle one of the biggest economic shocks Europe has faced since the Great Depression.
Financial deals, especially deals that involve hundreds of billions of euros, designed to prevent another EU wide recession, are never expected to be easily worked out. However, this round of extensive negotiations by EU member state hit more than a few snags, going onto expose the deep divisions and the capitalist nature of the European Union.
Perhaps the most divisive issue in the deal is the €390 billion allocated for grants that would go to the EU member states most harshly affected by the pandemic, the main recipients likely being Italy and Spain. This sounds like a sensible idea of how to allocate resources however, the capitalist mindset does not work that way.
This led to the “Frugal Four”, consisting of Denmark, Sweden (so much for the generosity of Nordic social democracy), Austria and the Netherlands demanding originally that €375 Billion should be the limit of the grants. Meanwhile representatives from Spain and Italy originally demanded that grants should not go below €400 Billion.
These disagreements led to more than just raised voices, as French President Emmanuel Macron allegedly slammed his fist down on the table at one point and accused the “Frugal Four” of putting the European project in danger.
After the compromise was reached, Macron went on to say that “We showed collective responsibility and solidarity and we show also our belief in our common future”. However, solidarity seems to be in short supply when you consider that the “Frugal Four” were allegedly only persuaded to accept the deal if they received a rebate on their payments into the EU fund.
In fact, it shows the opposite of solidarity, it shows the prioritisation of markets and profit over the needs of working people. It demonstrates what has already been shown in the past, that despite the double speak of “European cooperation”, the EU only exists as a trading bloc designed to support monopolies and major financial institutions at the expense of working people.
The YCL’s International Secretary Robin Talbot commented that, “this so called recovery deal comes too little and too late for the peoples of Europe. It should be noted that the bureaucratic structures of the EU took virtually no action to combat the COVID-19 pandemic and abandoned the people of Italy in particular to grapple with the pandemic alone.”
“More than a decade of austerity and privatisation encouraged and enforced by the unelected European Commission left many countries dangerously under prepared to face the crisis both in terms of healthcare and social services. We can fully expect any EU brokered loans or grants to be dependant on further cuts and privatisation,” he added.
The YCL International Secretary concluded, “here in Britain we have to intensify the struggle to leave the EU on the terms most favourably to working people, in particular those which allow for state aid and investment in the productive economy, an independent foreign policy and a break with the racist and xenophobic policies of ‘Fortress Europe’.”