JP Morgan wants Europe to be rid of social rights, democracy, employee rights and the right to protest

This is an agenda for hard right, corporatist, centrist government. There’s another word for that, and it’s what the bankers seem to want.

By Richard Murphy, director of Tax Research UK

In late May J P Morgan issued a chilling review of what they saw as the state of progress on tackling the Eurozone crisis. As they put it:

“The narrative of crisis management in the Euro area has two dimensions: first, designing new institutions for the next steady state (EMU-2); and second, dealing with the national legacy problems, some of which were there at EMU’s launch and some of which arose during the first decade of the monetary union’s life.”

Their assessment of progress is:

• Sovereign deleveraging—about halfway there.

• Real exchange rate adjustment—almost there for a number of countries.

• Household deleveraging in Spain—about a quarter of the way there in stock terms, but almost there in flow terms.

• Bank deleveraging—hard to say due to heterogeneity across countries and banks, but large banks have made a lot of progress.

• Structural reform—hard to say but progress is being made.

• Political reform—hardly even begun.

I could comment on the first five issues, but it is the last that is most chilling. They argue of ‘the journey of national political reform’ as they see it:

At the start of the crisis, it was generally assumed that the national legacy problems were economic in nature. But, as the crisis has evolved, it has become apparent that there are deep seated political problems in the periphery, which, in our view, need to change if EMU is going to function properly in the long run. The political systems in the periphery were established in the aftermath of dictatorship, and were defined by that experience. Constitutions tend to show a strong socialist influence, reflecting the political strength that left wing parties gained after the defeat of fascism. Political systems around the periphery typically display several of the following features: weak executives; weak central states relative to regions; constitutional protection of labor rights; consensus building systems which foster political clientalism; and the right to protest if unwelcome changes are made to the political status quo. The shortcomings of this political legacy have been revealed by the crisis. Countries around the periphery have only been partially successful in producing fiscal and economic reform agendas, with governments constrained by constitutions (Portugal), powerful regions (Spain), and the rise of populist parties (Italy and Greece).

There is a growing recognition of the extent of this problem, both in the core and in the periphery. Change is beginning to take place. Spain took steps to address some of the contradictions of the post-Franco settlement with last year’s legislation enabling closer fiscal oversight of the regions. But, outside Spain little has happened thus far. The key test in the coming year will be in Italy, where the new government clearly has an opportunity to engage in meaningful political reform. But, in terms of the idea of a journey, the process of political reform has barely begun.

What J P Morgan is making clear is that ‘socialist’ inclinations must be removed from political structures; localism must be replaced with strong, central, authority; labour rights must be removed, consensus (call it democracy if you will) must cease to be of concern and the right to protest must be curtailed.

This is an agenda for hard right, corporatist, centrist government. There’s another word for that, and it’s what the bankers seem to want.

You have been warned. Amazingly, they had the nerve to issue the warning.

9 Responses to “JP Morgan wants Europe to be rid of social rights, democracy, employee rights and the right to protest”

  1. LB

    • Sovereign deleveraging—about halfway there.


    Yep, banks getting their money.

    Pensioners who are owed theirs? Who gives a hoot.


    So of that would be nice in the UK. Gay marriage? Not in the manifestos. How do people know what they are voting for, if they aren’t told? That’s dictatorship not demcracy.

    Remember that when a government imposes something on you that you disagree with. It’s democracy. You don’t have a say, MPs dictate.

    As for socialist inclinations.

    Are you going to confirm the 5,010 bn pension debt, and its 734 bn a year rise?

    That’s socialist pensions for you. You take the money, spend it on the choose, and screw other people with the debt.

  2. Harry Leslie Smith

    When a bank makes an advisory regarding the political structure of certain European Countries where there “Constitutions tend to show a strong socialist influence, reflecting the political strength that left wing parties gained after the defeat of fascism,” its safe to say that the banks are no friends of democracy, social justice, common decency, morality or compassion. Today the financial institutions can’t even be considered a necessary evil because their corruption is so malignant that the harm the banks committed in 2008, has the after life of nuclear fissionable material. Forget about gerrymandering the political structure of Europe, lets fix the real problem-the banking system.

  3. Bill Kruse

    It’s not at all amazing, they’ve got everything to gain by it and increasingly nothing to l ose either. Banking is fraud and it’s becoming easier and easier, thanks to the information revolution, to understand that even for the common and the uneducated. The information revolution is inevitably going to lead to another kind of revolution so the banksters are aware unless they act their time is runnning out. It’s do or die for the banksters, and they’re doing!

  4. Cole

    Actually most polls show a majority in favour of gay marriage, though it would have been better if the politicians had been more upfront about it. There certainly isn’t majority support for the ‘top down’ reorganisation of the NHS we were promised would not happen.

    Manifestoes are clearly marketing documents to get people to vote for a particular party. Nobody much reads them as they know they’re not worth the paper they’re written on. And the idiot politicians wonder why we are cynical about them.

    PS Does Tony Blair still work for JP Morgan?

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