European Workers Have Nothing But Chains To Lose

The EU is struggling with great difficulty to convince the 16 voting countries to establish a monetary fund sufficient to absorb the EU-wide bank losses and the  financial crisis that will result from a disorderly Greek default.


As usual, Paul Krugman aptly summarizes the latest failure in Europe to abandon austerity economics and politics.  The default of the Greek government’s on its  debt now seems inevitable to most economists.

“On one side, Europe’s situation is really, really scary: with countries that account for a third of the euro area’s economy now under speculative attack, the single currency’s very existence is being threatened — and a euro collapse could inflict vast damage on the world. On the other side, European policy makers seem don’t seem at all ready to acknowledge a crucial fact — namely, that without more expansionary fiscal and monetary policies in Europe’s stronger economies, all of their rescue attempts will fail.”


The EU is struggling with great difficulty to convince the 16 voting countries to establish a monetary fund sufficient to absorb the EU-wide bank losses and the  financial crisis that will result from a disorderly Greek default. Yet already economists are saying the $600 billion proposed fund is less than a third of what is needed to prevent runs on EU banks. And staving off bank failures is only half the problem. The draconian austerity cutbacks in workers’ incomes, retirement, health and security demanded by banks of debt-plagued EU members in return for access to cash are unprecedented and unsustainable under democratic government. Without the kind of fiscal stimulus that only central governments, not central banks, can provide --- unemployment insurance, direct spending to create jobs, etc ---- political instability, the return of military rule, and worse,  threatens any and all efforts to stabilize the banking system.

Witness the massive demonstrations in Greece against the visit of EU “Inspectors” who are there to determine if Greece is sufficiently savaging it’s peoples’ welfare. From the EU nations’ perspective, perhaps the “inspection” makes sense. But the socialist party trying to negotiate with the EU is down to less than 12% popular support. What “inspector” would reasonably believe any assurance they try to give? The “inspectors”  could not even meet the Greek Finance minister in the Finance building because it is being occupied by ITS OWN EMPLOYEES in protest!

Its not pretty, and we begin to see the wisdom of Lord Keynes observation that “we are all dead in the long run” as the fitting response to those who fear stimulus and investment in the face of depression, and counsel faith that markets will “correct them selves in the long run”. Europe in particular need only recall the impact of austerity on Germany after the onerous and “austerity” peace enforced on it after WWI to measure the catastrophe that can arise from faith in some ideal “long run” market model!


 We see here in the US the extraordinary difficulties pushing a “more expansionary fiscal and monetary policy” upstream against a fierce Republican opposition since the 2010 Congressional elections. And we already solved the biggest problems of having 50 separate states and  many races and nationalities. The truth is that only solid steps toward an updated kind-of “United States of Europe” can implement a “more expansionary fiscal and monetary” policy needed for recovery -- AND to avoid a breakup of the EU. The latter calamity will certainly throw the US into another depression on top of the one we are still in.

The loss of sovereignty required for each EU member to embrace a Europe-wide governing entity is a powerful countervailing force for many nations: Germany fears inflation most; partly because of the runaway inflation in the 30’s leading to the Nazi catastrophe; each country -- including Greece -- has its own version of “anti-imperialist” politics that draws on these fears. But shying away from political union now means the collapse of the Euro, the common market, and the growth and economies of scale it promises. “Vast damage”,  Krugman’s words, may be an understatement -- especially when the political ramifications are taken into account.


The fears associated with a loss of sovereignty are understandable, especially for weaker countries contemplating unity with stronger ones, but also for stronger ones fearing competition from lower wage, less productive, nations. The only comfort, and solace, however is not nationalism, but internationalism. The unity of European working people, like the unity of the many races and peoples of the “American working people”, is the path forward. And the slogan of internationalism is peace and prosperity -- not war and austerity!

Post your comment

Comments are moderated. See guidelines here.

Comments

  • This analysis is regrettably free of working class bias. It doesn't address key issues of how a more integrated capitalist EU will impact working people under capitalism. For example, does it mean French workers lose their guaranteed vacation and other "entitlements"? What about health care benefits.

    Integration under NATO and the World Bank, meaning capitalist integration, doesn't help workers, it helps maintain the power of capitalists.

    I would suggest that it is time for workers to think of systemic change, not change to protect the current system in crisis. It is true that European workers have nothing to lose but their chains -- when they throw off the oppression of capitalist exploitation, not when they bind closer together in support of the current capitalist economic and social structures.

    For me, the "only comfort, and solace" in the European context is not capitalist "internationalism" to protect the current status quo but the workers and allies saying they won't pay for the capitalist crisis, and in particular the Communists and workers parties. The Greek communists and PAME labor activists, along with the World Federation of Trade Unions, has injected class struggle political clarity and thereby strengthened the European fight against the austerity measures and putting the cost for capitalist crisis on the backs of workers.

    As we see the protests on Wall Street that are so inspiring, we also see a lack of class clarity in the demands and the lack of experience in the evolving level of organization, similar to what we saw in Egypt. A consistent Marxist/Leninist outlook coupled with concrete organizing experience and a press would be a positive contribution to these workers and allies congregating and demanding, like the Egyptians, the Greeks, and so many others, that capitalists pay for their own crisis. The next step is to get rid of the capitalists all-together. Socialize the wealth.

    Finally, the "more expansionary fiscal and monetary policy" mentioned is a half step that would not adequately respond to the crisis of unemployment facing workers in the US just as the "health care reform" didn't address the crisis of health care. We need to get beyond current bills to looking at objective need. We can support bills that don't meet the need, but don't imply that half-steps that are band-aides for capitalists trying to protect a dying system are the solution for workers in Europe or the United States.

    We can and must throw off the shackles of capitalism and transform our society to socialism.

    In unity and struggle,
    Eric

    Posted by Eric Brooks, 10/01/2011 12:16pm (6 years ago)

RSS feed for comments on this page | RSS feed for all comments