CONCERNS ABOUT EMU

 

Sir, - You are to be congratulated on your recent attempts to foster some badly-needed public debate on our forthcoming accession to EMU (The Irish Times, March 2nd to 6th), arguably one of the most important moves we have made as an independent state. However, your series was noteworthy for its narrowness of approach, neglecting entirely the concerns of political scientists or sociologists.

As a social scientist, my work in the borderlands of International Political Economy and development theory alerts me to some major concerns about EMU which have received virtually no airing so far in the extremely muted Irish debate on the issue. These can be briefly summarised as follows. As Paul Gillespie noted in his World View (March 14th), EMU is essentially a neo-liberal project. As such it gives priority to issues of fiscal discipline, low inflation and debt reduction over issues of employment, poverty reduction or income distribution. Of course, the project is sold to electorates on the basis that it will improve European competitiveness and growth rates, thus having beneficial social consequences. Two major issues concern me about this scenario.

The first is that evidence from other parts of the world points to the fact that neo-liberal policies, though they often improve economic growth rates, exacerbate social tensions (for example, through institutionalising low pay and flexible work practices and through widening the gap between rich and poor). Recent evidence indicates some similar results in Ireland. The second major issue of concern is that that EMU will take key elements of fiscal and monetary management out of political contention, locking governments into a radically free-market conduct of fiscal, monetary and even economic policy. Essentially, therefore, it involves the victory of a neo-liberal Europe over a social democratic one, in which social regulation is designed to facilitate rather than control (transnational) market forces.

The further attenuation of democratic accountability and political power involved in EMU, coupled with the strengthening of transnational free-market approaches to resolving social issues, appears therefore a lethal political cocktail. At a time of severe disenchantment with politics and growing support for the extreme right (most recently seen in the Danish general election) throughout Europe, it seems that EMU involves us taking a very risky route indeed to establishing social and political cohesion. For those of us influenced by the ground-breaking work of Karl Polanyi (1886-1964), EMU appears to be altering in a fundamental way the balance between state and market, strengthening the latter as against the former. For Polanyi, making society subservient to the self-regulating market as happened for the first time in human history in the early 19th century, led to the catastrophes of the 20th century. Are we in danger of repeating the awful mistakes of history? - Yours, etc., Peadar Kirby

School of Communications, Dublin City University, Dublin, 9.