Europe’s austerity zone

12 July 2012

Spanish Prime Minister Mariano Rajoy’s announcement of a further 65 billion euros in cuts and tax hikes confirms that no shift from austerity can be expected from either the European Union or any of its constituent governments.

Rajoy’s statement was a declaration of class war. He spoke in parliament as riot police, using rubber bullets and batons, attacked striking miners who are threatened with the loss of their jobs and other demonstrators.

The payback for the third such package in six months is to be an extra year to reach Spain’s deficit targets and a possible additional bailout of 100 billion euros. This too will have to be clawed back through cuts, alongside the 100 billion given directly to the banks.

All talk of a “growth strategy” in Europe means nothing other than a vast additional handout to the banks and speculators, for which workers will have to pay. Any agreement to allow more long-term debt repayment will only be made to avert default and will be accompanied by demands for more severe cuts, to be imposed at a faster pace.

Less than a month ago, governments were elected in France and Greece on the basis of supposed opposition to austerity. In France, Francois Hollande’s Socialist Party government promised an end to the policies of Nicolas Sarkozy.

In Greece, New Democracy and PASOK, the architects of the Memorandum signed with the troika—the EU, International Monetary Fund and European Central Bank—promised to renegotiate the terms of repayment. New Democracy and PASOK made these campaign promises in the face of mass opposition to austerity that found a distorted expression in the dramatic increase in support for SYRIZA, the Coalition of the Radical Left, which came in a close second in the polls.

In recent days, French Prime Minister Jean-Marc Ayrault has made clear that the government’s budgets will seek to tackle what he has called a “crushing” and “unprecedented” debt crisis by reducing the deficit by 43 billion euros this year and next. Major cuts in jobs and services are coming notwithstanding Hollande’s cynical anti-austerity rhetoric.

In Greece, the troika made short shrift of appeals for leniency and insisted on all targets being met. The coalition government, consisting of New Democracy, PASOK and the Democratic Left, duly obliged.

Greece is now in its fifth year of recession, with nearly one in four unemployed and over half of all youth jobless. The minimum wage has been slashed by 22 percent to just 600 euros a month, and for every new worker hired in the public sector at least five are slated to be sacked.

Prime Minister Antonis Samaras has pledged to implement all previously agreed measures, including the elimination of 150,000 public-sector jobs and sweeping privatizations. The economy will shrink by an additional 6.9 percent this year.

Greece has already cut its deficit from 15.7 percent of gross domestic product (GDP) in 2009 to 9.2 percent in 2011, even as the economy shrank by 11 percent. It must produce a budget surplus of 4.5 percent by 2014, meaning a cut of at least another 15 percent under conditions of continued recession.

The whole of Europe has been transformed into a giant austerity zone. And there is no end in sight to the pain that is to be inflicted. Europe operates as a de facto dictatorship of the banks, corporations and speculators, with every avenue for democratic change closed down under the edicts of the troika and governments that function as the mouthpieces of a global financial oligarchy.

However, the reduction of millions of workers and young people to a state of social misery is far more than the failure of a policy pursued by the troika. It is a devastating expression of the failure of capitalism itself.

That is why the same fate is befalling hundreds of millions, indeed billions, of working people in America, China, India and throughout the world. Only the replacement of capitalism with socialism, creating the conditions for the rational utilisation of the world’s abundant resources to meet essential social needs—jobs, homes, education, health care—offers a way forward.

The latest austerity measures are a devastating exposure of the petty-bourgeois pseudo-left tendencies, which play a critical role in preventing the mass opposition of workers and youth from taking the form of an independent revolutionary movement against capitalism. They share political responsibility for these attacks.

In France, for example, the New Anti-capitalist Party (NPA) in the first round of the presidential election lined up behind Left Front candidate and former Socialist Party minister Jean-Luc Mélenchon, who served as a political stalking horse for the Socialist Party’s Hollande. In the second round, the NPA called for support to Hollande without any conditions.

The most high-profile role has been played by SYRIZA in Greece, in which most of the pseudo-left groups have factions. SYRIZA and its leader Alexis Tsipras won massive support for their stated opposition to the Memorandum and the austerity programme agreed with the troika.

SYRIZA’s support has increased in the past four years from just four percent of the electorate to 27 percent, and it won the support of a majority of voters under the age of 50. SYRIZA obtained its highest percentage vote from workers in the private and public sector, the unemployed, students and residents of the poorest municipalities.

However, SYRIZA set out to divert the mass opposition of the working class and youth into the dead end of appeals to the EU for concessions. Tsipras gave constant reassurances to the ruling elite that he would repay Greece’s debts by ending tax evasion, asking for little more than an extension of the repayment schedule in return.

He criticises New Democracy and PASOK for striking a poor bargain, while categorically defending the bankers’ EU and upholding its institutions. Speaking not for the working class, but rather for disaffected sections of the Greek bourgeoisie, he rejects a struggle against the Greek and European ruling classes for socialism.

Since the election, SYRIZA has emerged as a loyal opposition to the government, chiding it for not doing enough to exploit the difficulties of the EU to secure the type of concessions won by Spain—modifications in the terms of repayment that would in reality benefit no one but the Greek bourgeoisie and the global bankers.

Organisations such as the NPA and SYRIZA, despite their socialist phrases, are parties of affluent sections of the upper middle class. Their orientation to the EU reflects their support for the capitalist system, within which they seek to carve out a bigger share of the wealth sweated out of the working class.

They function as a privileged stratum, standing above the working class and policing it politically and ideologically on behalf of the bourgeoisie. The defense of the working class against the capitalist onslaught is inseparably bound up with a political struggle to shatter the influence of these pseudo-left organizations.

Workers and youth throughout Europe must reject the chimera of EU reform and adopt an entirely new perspective—one that champions their real interests. New and genuinely socialist parties of the working class must be built to mobilise a counteroffensive against the parties, governments and institutions of big business, including the EU.

The formation of workers’ governments and a United Socialist States of Europe is the task set by history and fought for by the International Committee of the Fourth International.

Chris Marsden