Click amount to donate direct to CounterPunch
  • $25
  • $50
  • $100
  • $500
  • $other
  • use PayPal
Keep CounterPunch ad free. Support our annual fund drive today!

Italian Union Leads Campaign Against EU Austerity Compact


Italy’s largest union has launched a referendum campaign against the EU fiscal compact, a draconian budgetary cap which is set to make austerity permanent across the 27-nation Eurozone.

The CGIL is calling for a repeal of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union that  was signed on 2 March 2012 by all member states of the European Union (EU), except the Czech Republic and the United Kingdom. In Italy this new turn in the EU austerity screw signifies 45 billion euros annual budget cuts for two decades.

One of the new budgetary rules means a country whose debt / GDP ratio exceeds 60% of GDP must reduce this ratio by a fixed amount each year. It is economically illiterate because countries like Italy – or Belgium – have had decades of public debt at 100% or more of GDP (Japan’s was even at 200%) without generating a crisis, because these debts are simply the result of high rates of household savings. Italy’s debt stands at a record 135% of GDP.

When the full force of the new budgetary rules start in 2017, they will force a massive amount of what pundits call ‘fiscal consolidation’, deep cuts in public spending and/or tax increases just as companies, up to their necks in debt, do the same. A recipe for economic strangulation. Or as the FT’s European commentator Wolfgang Münchau puts it, ‘a long period of slow growth, low inflation, and a constant threat of insolvency and political insurrection.’

For the CGIL, Italy’s economic and public finances problems have other causes and need new solutions: ‘The policies of indiscriminate cuts, a lack of investment in the future of businesses and young people, unsustainable increases in the tax burden, since 2007, have doubled unemployment, decreased the value of the national wealth, worsened public finances and closed three million businesses. With the policies of austerity, the crisis has worsened.’

‘The policy of so-called ‘expansionary’ austerity is a real failure,’ says Danilo Barbi, Confederal Secretary of the CGIL.

‘The idea on which it is based is that the compression of labour costs and the reduction of public expenditure. It was thought, mistakenly, that could increase foreign or domestic private investment, but in reality it was not so. On the contrary this policy has depressed consumption and also private investment. Instead of creating prosperity for all, it has left people fighting for a shrinking economic cake and introduced mechanisms of competition between peoples. ‘

The union has joined economists and lawyers in calling on Italians to sign up for the 4 separate referendum questions in a bid to reverse Europe’s current austerity policies and promote ‘development and employment’. The collection of signatures for the referendums in the Eurozone’s third largest economy begins July 3  and runs until 30 September.

The campaign comes just days after another mass protest against austerity in Rome and an apparent deal secured by Italian PM Matteo Renzi from Germany to allow for more ‘flexibility’ in interpreting EU’s mad budget rules. But critics have heard promises before from centre-left governments – notably in Italy and France –  that they had faced down German Chancellor Angela Merkel and Europe’s austerity hell only to find the treaties imposing a permanent downsizing of people’s living standards have remained in place.

Tom Gill edits Revolting Europe.

Tom Gill edits Revolting Europe.

More articles by:

2016 Fund Drive
Smart. Fierce. Uncompromised. Support CounterPunch Now!

  • cp-store
  • donate paypal

CounterPunch Magazine


Weekend Edition
October 21, 2016
Friday - Sunday
John Wight
Hillary Clinton and the Brutal Murder of Gaddafi
Diana Johnstone
Hillary Clinton’s Strategic Ambition in a Nutshell
Jeffrey St. Clair
Roaming Charges: Trump’s Naked and Hillary’s Dead
John W. Whitehead
American Psycho: Sex, Lies and Politics Add Up to a Terrifying Election Season
Stephen Cooper
Hell on Earth in Alabama: Inside Holman Prison
Patrick Cockburn
13 Years of War: Mosul’s Frightening and Uncertain Future
Rob Urie
Name the Dangerous Candidate
Pepe Escobar
The Aleppo / Mosul Riddle
David Rosen
The War on Drugs is a Racket
Sami Siegelbaum
Once More, the Value of the Humanities
Cathy Breen
“Today Is One of the Heaviest Days of My Life”
Neve Gordon
Israel’s Boycott Hypocrisy
Mark Hand
Of Pipelines and Protest Pens: When the Press Loses Its Shield
Victor Wallis
On the Stealing of U.S. Elections
Michael Hudson
The Return of the Repressed Critique of Rentiers: Veblen in the 21st century Rentier Capitalism
Brian Cloughley
Drumbeats of Anti-Russia Confrontation From Washington to London
Howard Lisnoff
Still Licking Our Wounds and Hoping for Change
Brian Gruber
Iraq: There Is No State
Peter Lee
Trump: We Wish the Problem Was Fascism
Stanley L. Cohen
Equality and Justice for All, It Seems, But Palestinians
Steve Early
In Bay Area Refinery Town: Berniecrats & Clintonites Clash Over Rent Control
Kristine Mattis
All Solutions are Inadequate: Why It Doesn’t Matter If Politicians Mention Climate Change
Peter Linebaugh
Ron Suny and the Marxist Commune: a Note
Andre Vltchek
Sudan, Africa and the Mosaic of Horrors
Keith Binkly
The Russians Have Been Hacking Us For Years, Why Is It a Crisis Now?
Jonathan Cook
Adam Curtis: Another Manager of Perceptions
Ted Dace
The Fall
Sheldon Richman
Come and See the Anarchy Inherent in the System
Susana Hurlich
Hurricane Matthew: an Overview of the Damages in Cuba
Dave Lindorff
Screwing With and Screwing the Elderly and Disabled
Chandra Muzaffar
Cuba: Rejecting Sanctions, Sending a Message
Dennis Kucinich
War or Peace?
Joseph Natoli
Seething Anger in the Post-2016 Election Season
Jack Rasmus
Behind The 3rd US Presidential Debate—What’s Coming in 2017
Ron Jacobs
A Theory of Despair?
Gilbert Mercier
Globalist Clinton: Clear and Present Danger to World Peace
James A Haught
Many Struggles Won Religious Freedom
Kollibri terre Sonnenblume
Dear Fellow Gen Xers: Let’s Step Aside for the Millennials
Tom Clifford
Duterte’s Gambit: the Philippines’s Pivot to China
Uri Avnery
The Peres Funeral Ruckus
Reyes Mata III
Scaling Camelot’s Walls: an Essay Regarding Donald Trump
Raouf Halaby
Away from the Fray: From Election Frenzy to an Interlude in Paradise
James McEnteer
Art of the Feel
David Yearsley
Trump and Hitchcock in the Age of Conspiracies
Charles R. Larson
Review: Sjón’s “Moonstone: the Boy Who Never Was”