Confronting Neoliberalism in Europe

Sol Trumbo Vila is in the forefront of the intensifying struggle against neoliberalism in Europe. He works for the Transnational Institute in Amsterdam. We met round a corner from the TNI office, at a café beside a quiet canal. It was mid-summer, a few weeks after the European Parliamentary elections.

I asked Sol why he is so committed. It turned out that he first learned about political economy from his family and especially from his psychiatrist mother, a strong defender of public health services in Spain’s Valencia province. Sol’s family background prepared him for resisting the neoliberal indoctrination that he was subjected to when he started to study economics at Valencia University in 2000.

“From the age of 15 onwards I was familiar with other economic theories, including Marxism. At University I was expected to defend theories I didn’t believe in, for example, the concept of a perfect market - that doesn’t exist.”

Sol became convinced that, as an academic discipline in the hands of the neoliberals, economics has ceased to be a science and has become an ideology.

“There are no actual examples of what the neoliberals claim. Their theory does not allow for information and transaction costs or for the existence of monopolies and oligopolies. They set up mathematical models to prove their theory but reality isn’t like that. The interests served are only those of the rich, of the corporations.”

Sol’s six months stint in Ecuador in 2007 awoke his sense of what could be achieved through determined political action. Rafael Correa, an economist, had just been elected to the presidency, and one of his first actions had been to repudiate as illegitimate a large proportion of his country’s foreign debt.

One of the first directors of the TNI was another Latin American, Orlando Letelier, who had been one of Salvador Allende’s ministers. He was assassinated in 1976 by the Chilean secret police. By that time Pinochet’s Chile, prostrated by repression, was serving as a testing ground for the application of Milton Friedman’s neoliberal doctrines. From the early 1980s onwards this process was continued in Reagan’s America and Thatcher’s Britain. The 1992 Maastricht Treaty brought neoliberalism into the European mainstream.

The consequences have been dire. The banks that were responsible for the 2008-09 financial crash were bailed out but this triggered a sovereign debt crisis in the countries of southern Europe and in the Irish Republic. It is these populations that have paid the price as the infamous Troika (the European Commission, European Central Bank and the International Monetary Fund) has imposed austerity programmes and created recession. For the poorest people the impacts have been catastrophic. In Greece, for example, the programmes imposed by the Troika have shrunk the economy in recent years by 30%. Public debt so far from reducing has actually risen and unemployment has increased to 28%.

In 2011 Sol’s understanding of how social movements could challenge the grip of neoliberalism on the body politic was transformed by the springing into life in his native Spain of the 15-M movement, the indignados. He started to work for the TNI in 2012. The TNI covers a wide spectrum but Sol’s particular tasks have been to track the devastating impacts of neoliberal policies in Europe and to help coordinate the efforts of social movements to work with the most vulnerable groups.

It is not enough simply to understand. In October 2013 the TNI held an important meeting attended by members of social networks and groups from 13 European countries. The leitmotifs were the democratisation of Europe and the protection of the commons - the natural, material and cultural resources that never should be privatised. With the aim of developing a Europe-wide strategy the meeting decided upon an initial four projects.

Four projects

One of these projects was to monitor and publicise the latest moves by political and business elites to force their neoliberal agenda upon the European Union’s more than 500 million people. The TNI recently published on its website the results of its analysis, which it carried out with researchers from Ireland, Austria and Germany, reporting on a proposed European “Competiveness Pact” that is paralleled by another neoliberal proposal, currently being negotiated between the EU and the US for a “Transatlantic Trade and Investment Partnership” (TTIP).

The Competiveness Pact has been well described as a “Troika for all”, a planned extension to all of the Eurozone of what has been inflicted upon countries like Portugal and Ireland. The proposal, strongly backed by German Chancellor Angela Merkel and the business lobbies, is still mired in disagreements between different European governments. As the TNI points out, these disputes are opening up opportunities for citizen-based opposition to the Pact.

Work is not yet completed on another of the projects decided upon at last October’s strategy meeting. This was to create a data base for the thousands of initiatives throughout Europe that are trying to break with the dominant capitalist model, asserting the value of solidarity and actively constructing alternatives. Solidarity economics is a growing force, driven on by the exchange of ideas within peer groups, by the commitment to open source rather than to control and thereby limit the benefits of productivity. Just think of Wikipedia!

The third idea was to set up a “Troika Party”, the satirical notion being that the Troika in a sudden fit of frankness had set up its own political party to contest the European elections, telling the electorate what they really intended. In a world of double talk this ironic campaign was refreshing and revealing - and a lot of fun.

The tribunal

The fourth initiative, conducted jointly by the TNI and Corporate Observatory Europe, (CEO), was a tribunal hearing in Brussels on 15th/16th May 2014 as part of the “May of Solidarity”. The tribunal started on the same day as protesters tried to encircle the Egmont Palace where the elites were holding a “Business Summit Europe”. The police disrupted the attempted encirclement and arrested 281 demonstrators. Three of these were due to give testimony at the tribunal hearing.

This brutal prologue gave an edge to the tribunal, which had been organised so as to provide an opportunity to 18 witnesses and rapporteurs from different European countries to give a public account of the responsibilities for and consequences of the restructuring of labour markets and social policies “so as to favour the business community.”

One of the witnesses was Vicky Donnelly from Debt Justice Ireland. As she advised the tribunal, the budgetary cuts imposed by the Troika were the equivalent of 18% of the country’s GDP. As she later explained to me, the different testimonies told essentially the same story. All the testimonies were accounts - from the perspective of the victims - of the same kind of externally dictated austerity packages.

The judges’ verdict, determined by three senior and respected economists, was an indictment. To itemise:

• the economic crisis had been aggravated by the policies of the European Union resulting in the impoverishment of millions of people, social deprivation: and deteriorating quality of life;

• the policies were unnecessary, being driven by neoliberal prescriptions and particular economic interests;

• the implementation of these policies lacks democratic legitimacy;

• they violate international and European human rights obligations.

One of the three judges at the tribunal was Professor John Grahl of Middlesex University. He told me how impressed he was by what had been achieved by the TNI and CEO in bringing together social movements that operate at the local and national level, helping them to develop a Europe-wide perspective.

At the close of our meeting beside the quiet Amsterdam canal I asked Sol about the future. He sees light as well as dark in the Euro election results. What has been done in cooperation with the social movements will be evaluated before the next stage. And he is hopeful.