Home > News from Abroad, Terrible Tories > The real Lisbon Treaty: Tsipras, May and Eurogeddon realpolitik

The real Lisbon Treaty: Tsipras, May and Eurogeddon realpolitik

A short while ago, I mentioned the possibility of a Greek ‘fix’ involving artificial devaluation via (temporary) import duties and export subsidies, and noted:

Of course there is a reluctance even to think about tinkering with the fundamentals of the Single Market in this way, but as ‘eurogeddon’ approaches for both Greece and the rest of Europe, a temporary fix like this may start to seem an awful lot more attractive.

I was, as expected, pilloried for such left-field (borrowed) thinking , especially in the comments on the Liberal Conspiracy Sunny horror-edit, which failed to notice that I’d already acknowledged the issue, e.g.:

Providing subsidies for exports to the EU would be clearly illegal also as there’s no realistic prospect of it being approved by the EU Commission under the State Aid rules.

This is of course, true.  Up to a point…….

Article 30 of the Lisbon Treaty does indeed say:

Customs duties on imports and exports and charges having equivalent effect shall be prohibited between Member States. This prohibition shall also apply to customs duties of a fiscal nature.

But then Article 32 goes on to say:

In carrying out the tasks entrusted to it under this Chapter the Commission shall be guided by………(d) the need to avoid serious disturbances in the economies of Member States and to ensure rational development of production and an expansion of consumption within the Union.

This might easily enough be interpreted, if the political will is there, as meaning the Commission doesn’t have to enforce Article 30 if it’s going to create havoc, which then opens the door to precisely what I/Duncan have in mind.

 We’ll see.  It is only one option. 

In any event, the SYRZIA leader seems to be adopting a strategy of brinkmanship on pretty well exactly the same lines as I was supporting in that piece – refusing externally imposed austerity while at the same time refusing the option of leaving the Euro,  in the knowledge that both side have the ‘nuclear option’, and that it’s Merkel who will most likely blink first; that’s why IMF boss Lagarde has been sent in to play tough cop; SYRZIA will, I hope, see that as a demonstration of increasing desperation rather than one of bargaining strength. 

Cleverly, Alexis Tsipras also refers to the “structural reforms” that a SYRZIA-led government would undertake.  This might include some kind of unilateral export subsidy (import duties will of course be much harder to implement effectively, and a holidaymaker-focused sales tax may be another partial route). I suspect ‘structural reform’ is more code for reforming the tax system so that taxes from the wealthy are a) increased; b) actually collected.  The code may be about dampening capital flight for the time being.

Alongside this,  it’s interesting to see the Tories now in the UK making plans to restrict intra-EU immigration.  This is, like duties/subvention, apparently outside the spirit of the Single Market, as set out in Article 21 of the Lisbon Treaty, but open to exception:

Every citizen of the Union shall have the right to move and reside freely within the territory of the Member States, subject to the limitations and conditions laid down in the Treaties and by the measures adopted to give them effect.

It will be interesting to see, if Sunny decides to hack this article up and post random excerpts of it at Liberal Conspiracy, whether those accusing me of crass stupidity in understanding the fundamentals of the Single Market also think Theresa May’s plans are beyond the pale.

For myself, I suspect Alexis Tsipiras and his comrades understand the real politik of the European crisis rather better than Theresa May, though I may be wrong – May might be on to an incredibly cunning way for the UK to leave the EU without the bother of a referendum, thus outflanking Labour from so far to the right that even Ed’s brilliant Euro-team won’t see it coming.

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