French protesters are furious with EU champion Emmanuel Macron while Rome battles Brussels over its budget. Amid all this, Andrew Spannaus discusses why organized labor isn’t seizing the moment.
Yellow Vests, Italian Budget
Battles & Silent Labor Unions
By Andrew Spannaus
Special to Consortium News
From the European Union’s standpoint, the historic levels of social unrest confronting French President Emmanuel Macron, one of its leading champions, came at a delicate moment in its dealings with Italy.
Since mid-September, the European Commission, the EU’s executive body, has been battling with Italy over its budget. The populist government in Rome—led by the Five-Star Movement, orM5S, and the League—have decided to stimulate the economy by giving money to the poor, lowering taxes and increasing public investment.
With an assist from financial markets that are penalizing Italian government bonds, the Commission has been threatening an “excessive deficit procedure” if Italy doesn’t reduce spending and resume measures to balance its budget. In theory this austerity policy will make the country more stable and efficient. But the last 10 years have demonstrated that cutting the budget and raising taxes have depressed economic activity, with the effect of making people poorer. Italy’s new political leaders are determined to show they can break through the resistance to public stimulus of the economy.
The French Yellow Vest protests came just in time to alleviate some of the pressure on the Italians, allowing the M5S and League leaders to point out the hypocrisy of letting France run a budget deficit of over 3 percent while pushing Italy to go below 1.5 percent. “If the deficit/GDP rules apply to Italy, I expect they should apply to Macron as well,” Italian Deputy Prime Minister Luigi Di Maio said on Dec. 11, Reuters reports.
The response from pro-austerity factions within Italy and the European Commission is that Italy has a larger public debt and benefits from less market confidence.
EU Tries to Hold Line
Nonetheless, the European Commission showed…