Europe

Greece: Savage austerity policies passed despite mass protest

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Written by Stephan Kimmerle, CWI, Athens Wednesday, 06 July 2011 14:27

Tear gas and police brutality against general strikes and movement of the Enraged
 Deploying tear gas and threats, the Greek Pasok government passed new austerity policies during a protest 48 hour general strike and the movement of the ‘Enraged’. Tens of thousands went on to the streets of Athens on 28 June during trade union demonstrations to Syntagma Square, next to the parliament buildings. During the evening, around 50,000 attended a ‘rebellion’ concert. On Wednesday 29 June, tens of thousands came together in the centre of Athens to show their anger. The trade union confederations called for a 48 hour general strike. The support was solid. Public transport – except the metro, which was asked to transport people to the demonstrations – came to a halt and the public sector participation was overwhelming.

   

48hr General Stike in Greece

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Written by xekinima-greek sister party of the Socialist Party Tuesday, 28 June 2011 20:12

The Greek trade unions have started their first 48 hour general strike since 1992. The movement of the ‘enraged’ and the activists of the workers’ movement demanded this step, against the vote in the Greek parliament on the second memorandum - a new package of austerity imposed by the troika (EU, IMF and European Central Bank). This vote is planned to take place in various stages over the next days.

   

SNP landslide: but it will be a government of savage cuts

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Written by Philip Stott Monday, 16 May 2011 18:07

The Scottish National Party (SNP) has won the elections to the Scottish parliament by securing an unprecedented 69 MSPs, an increase of 23 on 2007, gaining an overall majority. This is the first time any party has been able to hold more than half the 129 seats in the Scottish parliament since its establishment in 1999.
The SNP’s share of the vote was 45.4% (+12.5%) in the constituencies and 44.1% (+13%) in the regional lists. This is the biggest vote ever for the nationalists and was achieved largely due to the collapse of the votes of the Con-Dem parties in Scotland. Between them the Tories (-3%) and LibDems (-8%) lost 11% of their constituency vote, almost all of this went to the SNP. The Lib Dems in particular were mauled, losing 11 MSPs and ending-up with just 5.
The swing to the SNP meant that although the Labour vote did not collapse, the SNP won scores of seats in former safe Labour areas. For the first time ever the SNP have won a majority of seats in Glasgow, Lanarkshire and across the central belt of Scotland. Every seat in north east Scotland, including those in Dundee and Aberdeen were won by the SNP. Five of the six Edinburgh seats as well. While in the past, the nationalists were restricted to wining first-past-the-post seats in the more rural parts of Scotland.  They now hold 53 of the 73 local constituencies - a huge gain of 32 seats from the 21 they won in 2007. They also picked up 16 seats on the PR based regional lists.
The SNP’s historic victory was a result of a number of factors. Alex Salmond’s minority government postponed the bulk of the spending cuts until after the election to try to avoid being fully exposed as a government of cuts. The £600 million cuts to the Scottish budget as a result of the June 2010 emergency Con-Dem were put-off and wrapped up in the £1.3 billion cuts for 2011-12 voted through by the SNP, the Lib Dems and the Tories in February. This meant that a majority of these cuts have still to be fully felt. The SNP will now, however, attempt to use their parliamentary majority to attempt to carry through the deepest and most savage spending cuts in decades. Their plan is to pass on the Con-Dem austerity and axe £3.3 billion from jobs and public services in Scotland over the next four years.
Ironically, with a Con-Dem government in power in Westminster, many people will have voted SNP as a protection from the cuts that are looming like a tsunami over the jobs, benefits and wages of millions of people in Scotland. In reality this new SNP government will arouse mass opposition if they attempt to implement the Tory cuts on the working class communities across Scotland.
The SNP re-built a significant electoral base in Scotland from the late 80’s on, as a radical nationalist party positioned to the left of Labour. While they moved to the right and in a more neo-liberal economic direction during the nineties and the noughties, they have still maintained the veneer of radicalism.
To an extent the support for the SNP in this election was based on the carrying through of some relatively progressive policies from 2007 - 2011, including the freezing of council tax, the ending of prescription charges, the abolition of the back-loaded tuition fees and the reversal of plans to close A and E services at hospitals. For a layer of people, the SNP are still seen as a more radical alternative to Labour. This reflects the potential for the development of a new mass workers party, especially as the SNP will now be exposed in a way that did not happen in their first 4 year term.

Labour’s catastrophe

If the election was a triumph for the SNP, it was a catastrophe for Labour. Bad enough was the overall loss of 7 seats, but worse, and more significant, was the loss of 20 first-past-the-post seats, leaving Labour with only 15 MSPs from a possible 73 available constituency seats. It was only the top-up section of the regional vote that allowed Labour to retain a total of 37 MSPs overall.
It’s an open question as to whether they can ever recover from their worst result in Scotland in 80 years. Added to a pitiful campaign, which began by stealing the SNP policies on the freezing of the council tax, opposition to any form of graduate tax or tuition fees and prescription charges, Labour were undermined again and again by the weakness of their leader, Iain Gray, compared to the populist oratory and debating skills of the SNP leader Alex Salmond. With virtually no policy differences, except on independence and a referendum, the outcome of the election came down for many between a choice between Gray and Salmond as First Minister. A contest that could have only one winner. This was reinforced by Labour’s incapability of exposing the SNP over their spinelessness over the cuts – because Labour support austerity and are making deep cuts as well. In the run-up to the 2010 Westminster elections Labour promised to make cuts even deeper than Thatcher’s.
Iain Gray has indicated he will resign as Labour leader after the summer. Who replaces him is unclear. Labour have also lost many of their “leading” MSPs. The new crop of Labour MSPs, are widely seen as the “third eleven” - totally inexperienced and devoid of any real connection with the trade unions and the working class. As such they will also reinforce Labour’s long term decline as a political force in Scotland.  The outcome of the election underlines the analysis of the Socialist Party Scotland and the CWI that Labour is no longer seen as a party of the working class by big sections, especially of younger people. Although it can still maintain an electoral base as a “lesser evil” as we saw in the Westminster elections in 2010.

SNP and big business  

Following the election Alex Salmond said, “We are now the national party of Scotland – acting in the interests of all of Scotland.” But in reality Salmond and the new SNP government will be a party acting in the interests of big business and carrying out savage cuts. It was no accident that a series of leading business figures backed and bankrolled their campaign. This included Brian Souter, head of Stagecoach who donated £500,000 to the SNPs election funds, Tom Farmer, millionaire founder of Kwik-Fit and a long-term donor, George Mathewson, former Chair of the Royal Bank of Scotland and many others. The SNP have proved again and again that they are prepared to defend the priorities of capitalism – which is to unload the costs of the economic crisis onto the backs of the working class. The widespread support for the SNP by the billionaire owned press, including Murdoch’s Sun, the News of the World as well as the Scotsman, the Herald and Express groups and others, are also a clear signpost to the political direction of the new SNP government.

Independence referendum

One of the most important consequences of the outcome of the election, is the inevitability of a referendum on independence. At this stage, the SNP have only said that the referendum will be held “at some time over the next 5 years.” Moreover, in the last parliament the SNP advocated a bill for a multi-option referendum, including a vote for more powers as well as full independence. They are likely to want to adopt a similar approach towards a new referendum bill.
It is also likely that in the first instance the SNP will use their election victory to wrestle concessions on the Scotland bill that is currently being debated at Westminster. This bill proposes extending, in a limited way, the powers available to the Scottish parliament. But this election outcome will apply extra pressure on the ruling class and the Con-Dem government to concede further powers, possibly over borrowing and even control over corporation tax.
The SNP have been very careful not to “antagonise” the interests of the majority of the capitalists who are opposed to independence at this stage. Opinion polls indicate a minority of people back full independence, with a big majority for stronger powers.  For the SNP a multi-option referendum would still be their preferable course of action – which, even if the independence option was defeated, would deliver extra economic levers to the Scottish government. As one of their MSPs, Kenny Gibson, commented, “more powers are an important staging post on the journey towards independence.”

Socialist and anti-cuts candidates

While no socialist/anti-cuts candidates were elected, the highest left vote on the regional lists was achieved by the George Galloway – Coalition Against Cuts list in Glasgow, which also involved Solidarity, Socialist Party Scotland and the Socialist Workers Party. This campaign, which stood on a platform of opposing all cuts, supporting the setting of needs budgets and standing shoulder-to-shoulder with trade unionists and communities fighting the cuts, polled a very respectable 6,972 (3.3%) of the vote. This was 5,600 votes short of seeing George Galloway elected, although it did defeat the Lib Dem’s list and came 5th out of 15 parties.
Alongside the Coalition Against Cuts, Solidarity also stood on its own in the other seven Scottish regions. As expected, Solidarity’s votes were very low and averaged around 0.2% - a total of 2,837 votes in the seven regions. The jailing of the Solidarity leader, Tommy Sheridan, earlier this year after being found “guilty” of perjury was a major factor. Many people, even those who supported Tommy, felt that it was a wasted vote to back Solidarity with Tommy in jail and unable to take part in the election. There is also no doubt that the public standing of Solidarity has been affected by the unrelenting campaign by the Murdoch press, the police and the legal establishment against Tommy Sheridan and other members of Solidarity. Also, without a presence in the parliament, the profile of Solidarity has dipped considerably since its high point in 2007. Nevertheless, the Solidarity vote added to the Coalition Against Cuts list in Glasgow (which also involved Solidarity) polled more than 9,000 votes for clear and principled anti-cuts platform.
The votes for the Scottish Socialist Party, who had six MSPs as recently as 2006, fell even further compared to their 2007 result when they lost 90% of their vote and all their MSPs. The SSP polled 0.4% of the national vote with 8,200 votes. Nevertheless, these votes also reflected support for a fighting anti-cuts platform. However, for the SSP leadership, who were instrumental in the state’s prosecution and jailing of Tommy Sheridan, and who believed they would gain electorally from having “told the truth,” this result was a damning public verdict on their criminal role and actions. An indication of their deluded belief that they would gain significantly in this election was the SSP’s boast that they would “push the Lib Dems into 6th place in Scotland.” In addition the Socialist Labour Party achieved a vote of 16,847 (0.8%).

Urgent task to build an alternative

The results for the socialist left were undeniably poor, with the exception of the George Galloway – Coalition Against Cuts list in Glasgow. The primary responsibility for having thrown away an important electoral position for socialists with parliamentary representation from 1999 until 2007 lies with the political mistakes and actions of the leadership of the SSP.  It is a vital task now to work to rebuild a viable socialist and anti-cuts movement in Scotland.
With the election of an SNP government prepared to make huge cuts to jobs and public spending this task is urgent. Alex Salmond and his new government are demanding public sector workers accept year-on-year wages freezes – pay cuts in reality - as well as attacks on their terms and conditions. Tens of thousands of jobs in the public sector will be lost if these cuts go through. Services that communities rely on will be butchered unless a struggle is built to oppose them. The trade unions must organise national and coordinated strike action and quickly against the cuts, rather than accept the cuts. Working class communities need to be organised in the local anti-cuts campaigns and through the Scottish Anti-Cuts Alliance to oppose all cuts and fight for the a return of the money stolen from us to pay for the bail-outs of the bankers and capitalism.
As part of this anti-cuts struggle, that can spread like wildfire in the months ahead, a political alternative to cuts and capitalism must be built. Socialist Party Scotland will be advocating that the anti-cuts movement, socialists, trade unionists and communities work to build a fighting coalition against cuts that will stand in the council elections next year. To elect councillors who will refuse to make cuts and will stand up to the Con-Dem government in London, the SNP in Edinburgh and the councils who are wielding the axe across Scotland. This can be an important platform to help build a powerful socialist alternative to the parties of cuts in the year ahead.
   

World & Europe: New period of instability and revolutions

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Written by CWI Tuesday, 19 April 2011 12:26

At the beginning of April, leading members of the CWI from Europe, as well as from Pakistan and Israel, met to discuss developments internationally, and in Europe in particular. The following thesis was discussed there and adjusted according to the discussion.

   

Build up the Movement for Palestinian Rights in Lebanon!

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Written by CWI Lebanon Monday, 28 June 2010 13:25

Say No to Racism and Sectarianism For Unity among Lebanese and Palestinian Workers!

“There shall be ... no settlement of non-Lebanese in Lebanon” was the amended Lebanese constitution of 21 September 1990 which provoked no opposition from any faction (Republic of Lebanon 1995: 12). This was mainly in reference to the second, third and fourth generation Palestinians in Lebanon, and however much this originates in the stand against the occupation of Palestine and for the Right to Return, in reality, this is depriving Palestinians their basic human rights!

While Lebanese activists are preparing their Freedom Boats to break the sanctions on Gaza, there are protests being called mainly by NGO;s and the Left, against the brutal oppression of Palestinians in the refugee camps in Lebanon.

Palestinians in Lebanon have for decades been facing mass poverty, unemployment, segregation, state repression, racism, and sectarian conflict and an increase in divisions in Lebanese society. Since 1948, the Lebanese and Palestinian peoples have had to deal a national conflict driven by political and economic interests of the big powers, with their big businesses and private companies being still today behind the misery of millions of workers and the poor on Lebanon, Palestine and the region.

The latest example of a war affecting Palestinians in Lebanon was the mass bombardment by the Lebanese army of Nahr El Bared refugee camp, in 2007. This was even backed with US Military aid following an "appeal" from the Lebanese government. Fatah al-Islam, the terrorist group which launched attacks on the Lebanese army from inside the camp, was using Palestinian residents as ‘human shields’. The Lebanese army left most of the camp in rubble, with 40,000 Palestinians displaced, and has since reinforced its positions around the camp, with checkpoints which at times do not even allow humanitarian organizations to enter the camp, which has still not been rebuilt, and which is still seeing thousands living in overcrowded pre-fabricated homes.

Exploitation of Palestinians
It is not a coincidence that Fath El Islam or any other Islamist group would find refuge in the Palestinian camps in Lebanon, as most Palestinians face the worst economic and social conditions despite being second, third and fourth generation Palestinians. They still have no basic social and economic rights, like the right to work or to hold property ownership, or the right to be organized in a trade union along with their Lebanese work colleagues. This is done in the interest of the Lebanese capitalists who zigzag between using the issue of the “right to return” on the national question on one hand, and whipping up racism towards the Palestinians on the economic front, on the other. As a result, Palestinians are forced to live in segregated and overcrowded camps, and are harassed by the Lebanese state forces who restrict their movement.

Build the Movement
Protesters demanding civil and economic rights for Palestinians need to call for the building of mass movement, which is the only force able to unite Lebanese and Palestinians workers against the exploitation of the profit driven companies in Lebanon, represented by the Lebanese and Palestinian mainstream parties. Racism and divisions make it easier to divide and rule in the drive to exploit Palestinian cheap labour in a time where unemployment among Lebanese works is on the increase.

What is clear is that the workers, the poor and the oppressed in Lebanon (Lebanese, Palestinians, Iraqis, Sudanese, etc.) need a new party of the masses which is willing to fight for civil and economic rights for all, which include standing up to capital and demanding huge investments into the public sector. This can be funded from the billions of US dollars of profits made by the banks and the big businesses if they are nationalised under workers democratic control and management. Committees would be formed representing all workers and new fighting inclusive trade unions would take the struggle to the next level. The so-called national unity governments in Lebanon and the one being called for in Palestine would only represent unity of the rich elite against the poor. Workers and the poor across the region have paid the highest price for the conflicts and economic crises. We need a united workers’ movement to to pull together working people of all nationalities, ethnicities and confessional backgrounds, under a banner calling for an end to capitalism, wars and poverty.

As socialists, we fight to overthrow the brutal racist Israeli capitalist regime, and demand an end to imperialist meddling in the region, and oppose the repression and oppression of Palestinians by the Lebanese regime, while struggling for unity and socialism.

   

The PIGS and the EU

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Written by Kevin McLoughlin Wednesday, 05 May 2010 15:34

The poorest of the rich

A volcanic eruption may have created a physical cloud of dust over Europe, however, it has been the events in Portugal, Spain but particularly in Greece, that are really haunting Europe and which make the talk of economic recovery sound decidedly hollow. Kevin McLoughlin looks at the prospects for the so-called poorest of the rich.

The crises in the three southern european countries have deepened due to huge debt and budgetary problems. In turn, all three, under the lead of their respective "social democratic" governments, are imposing unprecedented cuts and austerity programmes which have provoked angry, mass responses from the working class.

At this stage, it is the crisis that has engulfed Greece which constitutes the most clear and present challenge to the policies of the EU, the euro and EU integration itself. Far from resolving the problems, the €45 billion bail-out plan agreed between Greece and the EU at the end of March is also likely to go up in smoke.

Southern Ireland is the other country that makes up the now much used PIGS label (Portugal, Ireland, Greece and Spain). Sometimes Italy is included to make it PIIGS.

The fact that the bond markets refer to these countries as PIGS isn't just a comment on their credit "worthiness". It is a disgusting example of the contempt and complete disregard that those who caused the global crisis have for working people and the poor, their victims!

At the same time, being labeled as one of the PIGS is an incredible fall from the dizzy heights of the Celtic Tiger for the capitalist establishment in Ireland once the key part of the “Arc of Prosperity” stemming from Ireland to Norway and on to Iceland. Now Ireland is the start of an “arc of poverty” going the other way, ending in Greece via Portugal and Spain.

In truth, Ireland is just being reconnected with the poorer countries of southern Europe which it had been compared to in the 1970s and 1980s. While Southern Ireland joined the EU in 1973, in advance of the other so-called PIGS countries, fundamentally there has always been a similarity between the four, stemming from the traditional weakness of capitalism in these countries. Each of the four countries also has a very rich tradition of industrial militancy, with the southern countries also having a tradition of recent revolutionary struggle.

Militant revolutionary traditions
Portugal, Greece and Spain, under the impact of the first major postwar economic crisis, all emerged out of military dictatorships on the basis of revolutionary struggles of the workers and youth between 1973-75. Due to a lack of revolutionary leadership, these movements didn’t result in a defeat for capitalism but saw the rapid emergence or re-emergence of the mass social democratic parties in the form of the PS in Portugal, PSOE in Spain and Pasok in Greece.

With the historic election victories for PSOE in Spain (1982) and Pasok in Greece in 1981 on the basis of promising socialist policies and socialist change, all three countries had experienced social democratic governments.

However, betraying the movement that propelled them into office, none of these parties were prepared to break with the capitalist market or their respective capitalist classes and quickly, in the context of the economic crisis, imposed terrible attacks on the living standards of the masses.
That the PS, PSOE and Pasok are back in power is a reflection of the deep seated hatred amongst the working class for the parties of the right and the yearning for an alternative, in the context of profound economic crisis. However, there are no longer serious or deep illusions in social democracy. That they are back in power also shows that lack of real choice for the working class as a result of the lack of new mass socialist parties as an alternative to ex-social democracy.

The PIGS and the EU
Greece joined the EU in 1981, with Spain and Portugal both joining in 1986. All three are part of the sixteen state eurozone area. Like most countries, the establishment in Greece cooked the books in order to be able to meet the financial and economic criteria to join the EMU just before the start of the century.

The inability of countries to develop on the basis of capitalism and the inability of the EU to be a greenhouse for development are both exposed by the crisis which is engulfing the PIGS. EU membership was originally sold in these countries, and resold again and again when new treaties needed to be agreed, as a step to economic development and moderisation.

Yet twenty five and thirty five years after joining the EU as “the poorest of the rich”, these four countries are still the poorest and are facing austerity and insolvency. In truth, these countries have always tended to have the lowest wages in europe and the poorest public services. The booms in Ireland and in Spain may have temporarily obscured this economic reality but in Portugal and Greece, the weakness of capitalism has always been apparent for the working class.

The PIGS were by-passed by the postwar boom and never developed a strong industrial base through investment. Eighty percent of the Greek economy is accounted for by services. The booms in both Spain and Ireland were increasingly dominated by consumer spending, credit and property bubbles, as opposed to a qualitative development of investment and manufacturing industry. The lack of an industrial base is a factor in their debt crises but will be a key reason why these countries will not be able to escape from this black hole pulling them down.

The current crises and austerity
The current situation in the four countries is strikingly similar. All have budget deficits which are between 9% - 14% of their Gross Domestic Products. They have had to borrow increasing amounts on the international financial markets in order to be able to fund day-to-day state expenditure, as tax revenues have been hit by the recession and the cost of borrowing has risen. In the case of Greece, part of the problem is that the figures for the national finances were falsified over a whole period.
To appease their creditors and to convince them that the money will be repaid, all have embarked on huge austerity programmes, supposedly aimed at getting their budgets under control within two to three years.

In Spain, Prime Minister, Zapatero, has launched a programme of cuts worth €50 billion over the next two years. In Greece, the Pasok government, which only came to power in the second part of last year, has already announced draconian cuts of over €20 billion in a country of less than 12 million people.

In all instances, the public sector is the prime target. Public services are being butchered. Wages are been frozen or cut. Pensions are being cut and the age for entitlement to state pensions is being raised.

Workers – seeking to fight back
Like in Southern Ireland, in each country there has been instinctive opposition to these attacks from the working class and very angry scenes on mass mobilisations over the last two months in particular. Again, as here, in each case, even though the unions have been forced into action, their response has been weak in comparison to the nature of the attacks and hasn’t matched the desire to fight that exists amongst the working class.

In Portugal, the government says it wants to slash its budget deficit to just 3% by 2013. This austerity programme will have a devastating effect considering that already 20% of the population lives below the official poverty line. March saw 300,000 public sector workers hold a 24 hour national strike, with 80% participation.

Spain, with a population four times the 11 million of Portugal is one of the major countries in europe, with the fourth biggest economy. What happens there will have a profound economic and political effect on other countries and on the EU itself.

The main mood on the regional demonstrations in Spain against the attacks on pensions recently, was one of anger. The demand from the ranks, that the unions should organise a general strike, was a dominant feature of the protests. As well as the anger, there was also a certain lack of confidence and even a pessimism regarding the union leaders and whether the government would be defeated. However, since then, the government has actually been forced to a retreat on significant aspects of their pension reform because of the mobilisations.

The fragmentation of the euro and the EU
The crises in the PIGS are also a crisis for the whole EU and its institutions. It has exposed the true nature of the EU and demonstrated how fragile the euro and the EU is in a serious crisis, as the different capitalist classes act to represent first and foremost their own narrow nationalist capitalist interests.

The EU has become very unpopular in Greece because of its dictats and demands for austerity, coupled with the propaganda that the Greek working class are freeloaders and are living beyond their means.

Neo-liberal EU laws, built up through treaties like Lisbon, are being used to force austerity cuts and curtailments on public service provision. The rules of the Stability Pact, which were relaxed for some, are being used to try to force countries to quickly reduce their budget deficits. Papandreou has stated that Greece has lost national sovereignty. The terms for the bailout for Greece demanded from the EU are more severe than even the IMF had advocated.

The general monetary policies pursued by the EU and the Commission reflect the interests of the richer capitalist countries, particularly Germany, but are a vice grip squeezing the life out of the PIGS and other states in this crisis.

Weaker, less competitive capitalist economies suffer most when a currency is strong, as it tends to choke off the chance of gaining income from exports, as the high currency means exports are more expensive on the international markets. Maintaining a relatively strong euro has been a central plank of EU policy. By now, if they weren’t in the eurozone, many of these countries would have devalued their currencies to try to off set the crisis and the growth of mass unemployment.

It is also clear that the European Central Bank intends to raise interest rates over the next period and that will make investment more expensive and therefore less likely in the PIGS and will also increase the cost of their debt liabilities and thereby deepen the crisis they face. All these are undermining and chipping away at the EU.

Full economic integration and convergence of the EU has not been achieved and was never possible. While there has been an exceptional amount of co-operation and some integration both economically and politically, the EU has not supplanted the different nation states and the controversy around the Greek bail-out plan clearly showed that there are different capitalist classes, with conflicting national interests within the EU.

The modern EU, which evolved all the way from the Treaty of Rome in 1957, was a serious attempt by the capitalist classes of europe to build an economic, political and military bloc to rival that of the USA, so they could act collectively to safeguard their interests.

When the economy is going forward and markets are developing, different capitalist countries actually have a vested interest in co-operating with each other, to sustain development. However, when there is a crisis (and the current crisis is the worst in history, save the Great Depression) and markets disappear, co-operation tends to be replaced by competition and national tensions between the different countries.

While they have invested a lot into the project and there is a vast EU bureaucracy to push for its maintenance, the economic basis at the heart of the EU is being pulled apart and that inevitably will increase disintegration. The worse the crisis, the more the EU will fragment and even collapse.
The sixteen country eurozone is coming under irresistible pressure, with the likely prospect that some countries will be forced to leave the common currency sooner or later. That will be a huge blow to the position of the EU on the world stage. However, the EU and many of the countries will fight to try to hold it all together, but the omens from the controversy surrounding the Greek bail-out aren’t good.

Greek crisis threatens to explode the euro
The EU had to intervene, as the crisis in Greece threatened to undermine the whole eurozone. On the other hand, it was clear from the position of Angela Merkel, that the German capitalist class was only willing to give limited support. Of the bail-out deal that has been hatched, involving the availability of €45 billion, including a third to come from the IMF, Goldman Sachs said that for it to have any chance of working, a wage cut of 15% will be necessary in Greece. They weren’t optimistic about the prospects for the deal.

The international bond markets were making it very difficult for the Greek state to get the credit it needed to function. They did this in part by manipulating the credit rating agencies and then on the basis of a downgrading of Greece’s credit worthiness, the markets could squeeze a higher rate of interest for any new monies borrowed. Greece is being forced to pay 3.5% more in interest for its credit than Germany.

Without credit, Greece faced bankruptcy. Positive statements from the EU that it backs Greece etc cut no ice. That they weren’t prepared to guarantee Greece’s debt meant the markets continued to be free to speculate and profit from Greece’s crisis. That the EU establishment wouldn’t guarantee the debt also shows their lack of confidence in Greece and illustrates the real limitations in the integration of the EU.

On the other hand, at some point,§ the international markets may have refused to give more money to Greece. While that technically may not be a default, such a scenario would also have opened up the prospect of insolvency and profound economic, social and political collapse in Greece.
Economically, this would have been a disaster for the stability of the euro, which would have immediately impacted on all the euro countries. A default could have provoked new banking crises globally, Greece possibly acting, like in the Lehman’s collapse, as a catalyst for new turmoil. Politically, this scenario would have been a huge blow to the EU itself.

German capitalism puts its own interests above those of the EU
Given the seriousness of the situation, it says a lot about the current position of the German government that they delayed, played hardball, altered the plan and involved the IMF in the deal. The involvement of the IMF is a blow to the prestige of the EU and again that Germany pushed for such involvement, illustrates that in this instance their national capitalist interests were much more important for them than the integrity of the EU.

The Greek bail-out, as with the latest bail-out of the Irish banks, is unlikely to work because the economic crisis is likely to get worse, not least because of the effect of the draconian austerity programme itself. Greece is in a debt and budgetary nightmare, pointing towards insolvency and bankruptcy. The crisis in Greece and similarly Spain, Portugal, Ireland and potentially a number of other countries, brings potentially explosive weaknesses into the euro and the EU itself.

Economically weaker countries could leave the euro or even be removed by the more powerful countries, in a vain attempt to save the integrity of the euro or the EU. Clearly economically weak countries are strong candidates for this but for a weaker country to voluntarily leave the euro or the EU, would be a monumental decision. Yes, they could get benefits from devaluation but there is also the possibility that a new currency could collapse in an uncontrollable way. Devaluation could also see a country’s debt increase significantly. So there are pluses and minus and it’s not necessarily a black and white question as to who will break from the euro first.

It’s entirely possible a breach with the euro could also come from one of the more powerful countries, like Germany. The approach that the German government took regarding the Greek bail-out gives a glimpse of how in the future, for its own national capitalist interests, Germany or other states could decide to break-out with a view to re-establishing a strong currency or to try to insulate itself from further economic crisis.

Greece – preparing for revolutionary developments

Greece is centre stage at the moment and the crisis and the events that can develop there should not be underestimated.

The Greek capitalist class consciously didn’t attempt to impose these attacks through the last hated New Democracy government because they feared they would not be able to deal with the explosive response from the working class that would have provoked. They pushed New Democracy into early elections last year knowing that a Pasok victory was likely and that they would have a better chance to launch their offensive through the betrayal of the so-called workers’ party.

The level of the cuts is unprecedented and they have provoked a huge response - three general strikes in the last months - even though the full impact of the cuts has still to be felt. Not only will the cuts devastate people’s lives, they will further pull the economy into a downward spiral of chaotic economic decline. The basis is being laid for huge and more intense confrontations between the workers and the youth on one side and capitalist class and its state on the other.

The general strikes have the support of the working class, although the youth haven’t joined the movement or the actions in a decisive way. At the same time, workers aren’t confident that the government can be defeated or that the union leaders have the strategy necessary or the intention to defeat the government’s austerity.

Likewise, the leaders of the left parties, the KKE (Communist Party) and Syriza, are not galvanizing the movement around definite action to defeat the government. Recently on television, when pushed as to what the movement and workers should do now, the general secretary of the KKE blurted out that nothing could be done and abstractly talked about the need to change the social system!
The absence of a revolutionary leadership, with a clear idea of the struggle and for political action, is the single biggest factor in holding back the working class and the youth in Greece at the moment.
Some small terrorist groups have been established with a support and sympathy of a section of young people. That’s a dangerous consequence of the absence of real leadership and the pushing back of consciousness about politics and how to struggle. It also shows the level of anger amongst young people which could explode in the months and years ahead.

Xekinima, the Greek section of the CWI and sister organisation of the Socialist Party, is an important part of the left-wing of Syriza. Xekinima is pushing for the development of occupations throughout colleges and schools and for the establishment of mass action committees to unite and co-ordinate the struggle amongst the youth and between the youth and the workers.

Xekinima is demanding that the strike actions be co-ordinated. That starting with a 48 hour general strike, action should be escalated and repeated to force the government back. Xekinima is fighting for the establishment of a united front between Syriza and the KKE as the base for alternative workers’ and socialist government. Syriza and the KKE should build a mass movement around a programme of opposition to paying the national debt, nationalisation of the banks, ending the bosses’ tax avoidance and massive state investment in health, education, housing and infrastructure.

If a politically powerful and cohesive revolutionary movement, with a strong base existed now, the workers and youth movements could be brought together and strengthened and Greek society could be on the cusp of the early phase of a revolutionary period. Xekinima is urgently striving to build a revolutionary movement in Greece in preparation for the explosive events in the months and years ahead.

   

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