From Volume 2, Issue Number 32 of Electronic Intelligence Weekly, Published Aug. 12, 2003

The Tremonti Plan:
'Euro New Deal': A Fight for Survival
by Andrew Spannaus

MILAN, Aug. 5 (EIRNS)—The battle for a policy centered on infrastructure-building and investments in the productive economy continues to dominate debate in Europe, as the Italian Plan known as the Euro-New Deal has begun to provoke open challenges to the free-trade policies of the past decade. The Italian Plan, which has been endorsed by most European governments, calls for massive investment in large-scale infrastructure projects such as high-speed rail, highways, and port systems, and proposes a financial mechanism which would exempt spending for such projects from the monetarist constraints of the "Stability Pact." That Pact requires each country to limit spending so as not to run a deficit of over 3% of the national budget, and also imposes limits on national debt and inflation rates.

The proposal to use the European Development Bank to finance projects which would provoke growth in the productive economy, is intended as a direct attack on the free-trade policies which have led to the current global economic crisis. In an interview with the daily Corriere della Sera at the end of July, Italian Finance Minister Giulio Tremonti took direct aim at these free-trade policies. He blamed the rules of the World Trade Organization (WTO) for the industrial crisis in Italy, and decried "the too violent opening of the markets.... Trade is either with rules or it is not trade.... In the long run, trade will surely make everyone richer, but in the meantime, we must avoid dying." Tremonti said that the concept of "free trade" must be replaced with the formula "trade based on rules," and again called for a protecting industry against the labor-gouging policies of globalization.

He explicitly supported the abandonment of the monetarist policies imposed by the Stability Pact, in favor of the Growth Plan which Italy has proposed to the European Union. This plan, he said, "is the first form of economic policy after the [introduction of the] euro," and it serves to resolve a situation of paralysis, wherein European governments have lost their power to intervene in the economy.

At present, the free-market faction which originally imposed the Stability Pact on Europe, is doing its best to continue enforcing the policies of the past decade, by demanding nations cut key sectors of the economy in order to balance the budget. A recent report from the bureaucracy of the European Union, for example, criticized an Italian economic planning document, saying that it failed to make the "structural reforms" necessary to eliminate the deficit and reduce the public debt. The report demanded that Italy enact serious cuts in the public pension system in order to get into line. This line of "structural reforms" is currently the battle cry of all the free-market institutions, and is being used to denounce any attempt to return to state intervention in the economy. - Return of 'Survivors' Club'? -

Along with the explosion of the debate provoked by the Euro New Deal plan, there are signs of a resurrection of the proposal for a "Strategic Energy Partnership" between Russia and the European Union which was originally discussed in October 2000. Then, the possibility was raised that long-term agreements could be signed which would guarantee European capital investment for the Russian productive economy, in exchange for a steady and cheap supply of energy resources from Russia.

At that time, Lyndon LaRouche spoke of the emergence of a "Survivors' Club": a group of nations that are not willing to commit suicide simply in order to avoid clashing with the dominant financial oligarchy in the United States and Europe. These countries—including, principally, the strategic triangle of India, China, and Russia—began working to establish economic cooperation which could provide long-term benefits for their populations, while dismissing the Western demands for globalization and free trade.

Today, the growth potential for such a grouping is enormous, given the undeniable collapse of the physical economies of Europe and the United States over the past three years. At the same time though, the oligarchs behind such free-trade policies have now launched a desperate attempt to beat the world into submission, through the neo-imperial adventures of Dick Cheney and his Synarchist cronies, who are manipulating the Presidency of George W. Bush.

On two recent occasions—during the summits in St. Petersburg and Athens—leaders of the European Union have once again begun to concentrate on the "energy partnership" with Russia. Discussion has gone forward on the infrastructure corridors necessary for improving pipeline connections with Russia, and a team of experts is to be formed in order to manage the EU-Russia contracts. Finally, there is also a move to use the euro for all such transactions, as opposed to the dollar. Apparently, some in Europe intend to join the Survivors' Club.

Reprinted from the Aug. 11 New Federalist.

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