Never Ending Nightmare by Pierre Dardot & Christian Laval

Author:Pierre Dardot & Christian Laval
Language: eng
Format: epub
Publisher: Verso Books

Budget and Currency as Disciplinary Tools

The power of law is increasingly explicitly aligned with the absolute, unchecked legitimacy of capital accumulation and generalized competition. If we follow examinations of the internal balance within European institutions, we find the ‘economic’ core of governance has been considerably strengthened since the introduction of the euro and, even more so, since the ‘crisis of the euro’ in 2008–09. This core combines central bankers, members of the economic and financial directorate of the European Commission, finance ministers (particularly those of the eurozone) and senior civil servants at national finance and economics ministries. Educated at the same universities, these people, who have often worked in US investment banks, the OECD or the World Bank, form an ‘integrated transnational ruling group under American domination’, in the words of Frédéric Lebaron. Relying on constitutionalized economic rules, this group strives to ‘supervise’ national policies not only in the fiscal domain, but across the whole spectrum of government.28 Hence the numerical rules fixed at Maastricht. They are easy to mock: as a proportion of GDP, the 3 per cent budget deficit or 60 per cent government debt refer to no macro-economic reality and have no historical precedent. In Europe, however, a figure is no mere statistical fabrication, but immediately valid as a norm, an absolute limit, a disciplinary tool. Once prescribed, the rule must be observed whatever the cost, even when it clashes with the best macroeconomic analysis and its effects are disastrous.

It was in the emergency context of 2010–12 that normative constraints were made harsher still, under the rubric of the ‘new European economic governance’.29 We have seen that the ‘subprime’ mortgage crisis triggered a sovereign debt crisis from late 2009. The financial crisis led to an increase in government debt in numerous member-states and to speculation on debt securities. This created a marked divergence in long-term interest rates between eurozone countries. Political and institutional responses to the crisis exposed growing tensions between groups of countries. Mutual distrust necessitated the strengthening of controls over national statistics, the creation of supreme budgetary bodies independent of political institutions, and, above all, the establishment of a whole series of controls and locks in the 2012 Treaty on Stability, Coordination and Governance (TSCG) and the subsequent directives and regulations that complemented it. European leaders thought they could gradually resolve the problem of government debt over twenty years by constitutionalizing a fiscal ‘golden rule’. The idea behind these innovations was a priori monitoring of any national policy that might impact upon the budget, debt, employment or growth. Before national parliaments pronounce, economic and social orientations are subject to ex ante validation by the Commission, so that the monitoring system has become steering of a technocratic kind.30 The slightest deviation from the norms is subject to warnings, involving the revision of plans and the threat of financial penalties.

The significance of the adoption of the Bundesbank model when creating the independent European Central Bank, on the basis of the 1989 Delors Report, cannot be exaggerated. Central

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