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Michael Hudson says that the nationalist parties will not challenge austerity in Europe despite widespread discontent with economic policy

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ANTON WORONCZUK, TRNN PRODUCER: Welcome to The Real News Network. I’m Anton Woronczuk in Baltimore. And welcome to another edition of The Michael Hudson Report.

Now joining us is Michael Hudson. Michael Hudson is a distinguished research professor of economics at the University of Missouri-Kansas City. His two newest books are The Bubble and Beyond and Finance Capitalism and Its Discontents.

Thanks for joining us, Michael.


WORONCZUK: So, Michael, let’s talk about the E.U. parliamentary election results. What were the main political issues surrounding the elections? And how did the different parties fare?

HUDSON: Well, the main political issue is that unemployment is over 10.5 percent in Europe. And the European Parliament has no power at all over the domestic policy that’s in the hands of the bankers that are imposing austerity and unemployment, and it has no power over foreign policy. That’s in the hands of NATO.

So the so-called nationalist parties in France and England and others are saying, wait a minute, we want a real government that can use a central bank to restore employment by running a budget deficit. The European Lisbon Treaty won’t let us do that. We want a government that’s going to not just contribute to NATO to go to war in Afghanistan and Libya and Iraq, and now maybe Ukraine; we want to spend this money at home because we’re in a depression.

And essentially there is–they’ve lost faith especially in the left. The newspapers all say it’s a victory of the right, but the right only really got 25 percent. What is really striking is the fact that throughout Europe and in every country there’s been a rejection of the traditional socialist parties–or I should say the parties that call themselves socialist, because the socialist parties, ever since Tony Blair in England sort of made a right ring run around Thatcher and out Thatcherized Thatcher, you’ve had the socialists taking the lead in urging austerity and urging anti-labor parties. And it’s as if there’s no memory at all of what socialism was a century ago, when it was increase government spending on industry, subsidy, and basically promotion of higher living standards. So you had the socialist parties all being co-opted by the right-wing, and there really isn’t any party that’s having an alternative to the current austerity that’s just tearing Europe apart. So the real increase in voting was nonvoters: people voted with their backsides, saying, we’re not going to vote for the socialists or any conservatives and we’re not going to really vote for the so-called right-wing parties either, because they don’t have an alternative to the austerity neoliberal neocon economic model that is being operated out of Brussels.

WORONCZUK: Well, you said earlier that–you said that the E.U. Parliament doesn’t really have any influence over some major national policies. I think, like, some of it is, like, banking policy and foreign policy. What powers does it have?

HUDSON: Very little. It has the power to say yes; yes, please; and yes, thank you to the bankers and the neoliberals when they insist on more unemployment, when they say, we’ve got to tighten money against inflation, we’ve got to basically squeeze labor, and we’ve got to bail out the banks so that the banks can pay the bondholders. They don’t really have the power to say no to any of this, because it’s not really the kind of a parliament that you’d have in a nation state. A real nation state is defined as controlling the money supply, which the European Parliament doesn’t do, the power to declare war, which the European Parliament has relinquished to NATO, and the power to set taxes. There is no real eurozone tax system. The taxes that are being supported are taxes that fall only on labor–the value added tax and the income tax, and they’re charging labor for the Social Security and the health taxes.

So the fact that the parliament has so little power is what is leading the so-called nationalist parties to say, wait a minute, if Europe isn’t going to have these powers, if only nation states have the power to say this, then let’s withdraw from the eurozone and let’s create a nation state that can do what governments are supposed to do–pull us out of the depression, subsidize industry, and make us grow again like we did before the eurozone and the euro came in to being.

WORONCZUK: Well, talk about this co-option of the political left by the right-wing parties. How did this happen?

HUDSON: There have been–many people, especially in Italy say, well, the Americans have a National Endowment for Democracy, meaning [incompr.] oligarchy [incompr.] came in. And the Americans have been subsidizing the most right-wing people within the socialist parties. So in England you had Tony Blair saying, wait a minute, the way to get votes for the Labour Party is to move to the center and to out-Thatcher Thatcher, to actually become an anti-labor party. I guess you could say what has happened by definition is a lack of economic theory to counterpose to the neoliberal theory that imposes austerity and the theory that give money to the banks and it’ll all trickle down. The socialists became trickle-down theorists. And when a few socialists have raised their hands and said, wait a minute, maybe we ought to have a referendum on this, they’ve been very quickly removed–for instance, in Greece, when the socialist Papandreou–and when he said, let’s have a referendum on whether to repay all of Greece’s creditors, he was immediately removed, within a week. Even in Italy, when Berlusconi said, let’s have an Italian referendum on the euro, he was very quickly removed. So there’s a feeling that the eurozone bureaucracy has turned into basically an oligarchy and it’s not democratic it all. So you could say that the people who are called and anti-democrats and extremists in reality–but they’re saying, no, is that they want to protect the democracy from the oligarchic takeover that’s occurred out of Brussels.

WORONCZUK: Do you think the SYRIZA gains in Greece are going to offer a challenge to this, the neoliberal governance, throughout the E.U.?

HUDSON: Yes. To me, that’s the very best result of all of this. In practice, in the European Parliament, the fact that the opponents of neoliberalism are only 25 percent means that they’re going to be ignored. The election will have zero effect on what the European Parliament actually does, because they can say, hey, we’re in the majority, we don’t have to give you anything at all. That’s what happened in the Baltics, when the Baltics have opponents of neoliberals. So all the SYRIZA victory means is that they can show the people, look, we’ve done it here, we can win; now we need a national election, and if you elect us as a national election, we will then stop paying the foreign debts and we’ll try to make the Greek economy grow again so that you don’t have to emigrate in order to find work.

WORONCZUK: So, much of the press coverage of the election results have focused on what’s happened in the U.K. and what’s happened in France, Germany, and Greece. Is there–what about the Baltic states? As anything interesting happening in there?

HUDSON: Well, the U.S. coup in Ukraine frightened the Baltic voters. So one of the politicians from Latvia vote yesterday saying that most Latvians just didn’t vote, because they weren’t going to vote for austerity. But somehow the newspapers in Latvia all said, Russia is about to invade the Baltics, you’ve got to vote for the neoliberal parties that are supporting the bankers, or else the other parties is a pro-Russian party, and they’re going to invite the Russians in. So you had the usual saber-rattling about Russia as a means of supporting the right wing. In other words, they’re calling everybody who opposes the unemployment and the neoliberalism and the austerity, they’re calling them communists or, in this case, just pro-Russians. And so they were panicked into supporting the right wing, what is there the right-wing parties, which, of course, call themselves socialist and social democrat.

WORONCZUK: Okay. Michael Hudson, thank you so much for the report on the E.U. parliamentary elections.

HUDSON: Good to be here.

WORONCZUK: And thank you for joining us on The Real News Network.


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