Why EU membership is important to the fight against austerity

The reason that Jeremy Corbyn has resonated so powerfully with young people today is that he has stood up and unequivocally spoken out against the economic policies that have let them down. These young people want social justice, and also voted to remain in the EU. The left of the Party must listen and put these two desires together.

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The defining economic paradigm of our times can be summarised in one word: “austerity”, cutting government expenditure at all costs, in the hope that reducing public debts leads to growth. The operational assumption is that any government involvement in markets is necessarily wrong and misguided, and that the private sector always knows best. In fact, these ideas are merely a cover for oligarchs and tycoons who lobby for the legislation they want and buy up public assets at knockdown prices. Since these misguided and unfortunate ideas (known as neo-liberalism) came to prominence under Thatcher and Regan, they have produced social inequalities, a sense of alienation, and a collapse of social mobility and inclusion, and eventually the 2008 financial crisis.

Sadly, neo-liberal thinking has been taken up by the economic elites in many countries in Europe, including the UK, and has prevented a recovery from the crisis. Rather than bring down debt, cutting spending has increased it, while hurting the most vulnerable. To keep the British economy from crashing after the referendum vote, the Bank of England printed half a trillion pounds (!) of new money to hold up the system, making a complete mockery of the Tory line that cuts happen because “we must live within our means”.

It was important for me to support Jeremy’s leadership from the moment he was nominated in 2015 precisely because he was the only candidate to clearly oppose austerity, and this is why I have chosen to continue to support him in the current contest.

However, I have felt there has been an element missing from our debate on how to challenge austerity. Brexit, if it does indeed happen, will be a momentous event with a profound impact on our politics, our society and wider global economics. From my position as a committed European and as a Member of the European Parliament, I can see how important the EU is as a political platform for shaping globalisation, particularly in respect of advancing workers rights and human rights more widely.  

It saddens me that some of the left in the Labour Party look at the EU solely as a capitalist club, without recognising all that it has done to advance left-wing causes, and without seeing its larger role in the world.

If we could have our way in the UK, and Jeremy Corbyn was elected Prime Minister in an early election tomorrow, a Labour government would be able to reverse Tory austerity relatively easily: instead of cutting public spending, we would invest, stimulate sustainable and inclusive growth and quality jobs in communities that have been abandoned, and rebuild our public services.

Although it is absolutely crucial that this happens at some point, it is not enough. As we have seen with proposed trade deals like TTIP and TPP (the US-Pacific trade deal), or the behaviour of international institutions like the IMF, or with the tax avoidance infrastructure revealed by the Panama Papers or the recent EU Commission decision on Apple, the neo-liberal logic is wired deep into the global economic system, and we desperately need a global effort in order to fix the problem.

Contrary to what some might think, the European Commission doesn’t have the power to “impose” austerity, but only to make recommendations that national governments must democratically adopt. The Commission does however have the power to promote an economic orthodoxy which is prevalent among Europe’s right-wing governments.

For all the criticism that EU institutions receive, we have seen a clear democratic response in Brussels to grass-roots campaigning. TTIP negotiations have ground to a halt after grassroots pressure pushed the European Parliament to take a stance to keep social and environmental standards high, and to block corporate arbitration courts, while the Commission has refused to soften its lines to American demands. In the meantime, years of campaigning for tax justice are beginning to bear fruit, with the recent Commission decision for Apple to pay 11 billion pounds in tax to Ireland. The Commission now has Amazon and Google in its sights.

These are positive changes, which show that fundamental transformation can happen. In order to truly tackle the austerity logic, we need to change minds not just in London, but also in Berlin and Frankfurt, and later on in Washington and Beijing. Otherwise, everything that another a Labour government might achieve could be reversed by a Tory return, and so long as there is no Labour government, the Tories are free to destroy the EU-based social and labour protections we cherish. A change of paradigm at the EU level would be cemented across the continent for the long-run, and would have the weight and power to re-shape the international scene.

As Theresa May prepares for Brexit negotiations, Labour’s left-wing must begin to speak of the bigger picture, and make sure we either stay as close to Europe as we can, or democratically reverse the result of the miserable and thoroughly flawed referendum altogether.