Elections in the EU have delivered a resounding rejection of the austerity programme being imposed on the various countries that are seeking their way out of the economic crisis.
Austerity – a failed policy
These austerity measures are designed to cut government budget deficits by reducing government spending, but they cannot avoid at the same time cutting economic activity and thereby reducing government income – clearly a self-defeating endeavour. Even the US government, while implementing plenty of austerity measures of its own at home, is not ashamed to inveigh against such measures when taken by the Europeans, while bourgeois economic commentators, many of whom were not so long ago its enthusiastic supporters, are increasingly noting that austerity is disastrous for capitalism, both economically and politically.
The following comment in the Financial Times is fairly typical of this trend:
“What would constitute an economically rational choice for Greece, given the economic and political situation? I see four options, each of which is fraught with uncertainty.
“The first would be the status quo: more austerity and economic reforms as outlined by the International Monetary Fund and the EU. One risk is that this would keep Greece in an eternal depression and a debt trap, where economic output fell faster than growth …
“Of the four, the worst option is actually number one. By following the EU-IMF programme, Greece will end up with 10 years of depression, an inevitable euro exit and a possible breakdown of democracy.” (‘Default now or default later?’ by Wolfgang Munchau, 14 May 2012)
And with regard to Spain, the Financial Times notes that in spite of the swingeing austerity measures carried out over the last two or three years, “S&P … expects the Spanish economy to contract by 1.5 percent in real terms during 2012 and by 0.5 percent in 2013 after previously forecasting it would expand 0.3 percent this year and grow 1 percent the following year.” (‘S&P downgrades Spain to triple B plus’ by Michael Mackenzie, Vivianne Rodrigues and Victor Mallet, 27April 2012)
Landon Thomas Jnr, of the New York Times, for his part adds:
“Since the beginning of the debt crisis in Europe more than two years ago, defenders of the euro currency union have stuck to a basic argument: if the eurozone’s weaker economies would only keep pursuing policies of austerity, even as growth collapsed and job losses mounted, they would be rewarded by investors more willing to buy their bonds.
“Yes, the social cost would be high, but over the long term economies would benefit from the lower interest rates that can come with the seal of approval from global bond investors. Or so goes the argument.
“That approach, though, has failed in Greece, Ireland and Portugal. And now it is being severely tested in Spain, where the more the government promises to cut its budget deficit, the more foreigners are unloading their Spanish bond holdings.” (‘Spain is still awaiting the payoff from austerity’, 27 April 2012)
It is obviously the vote of the Greek people against the austerity imposed on them that is most disturbing the sleep of the defenders of capitalism at the present time.
Greece’s austerity programme, largely implemented by the previous social-democratic Pasok government, has massively increased unemployment while slashing wages and pensions by some 25 percent, has led to long queues at soup kitchens and to the spontaneous informal introduction of barter arrangements for the exchange of the products of labour that even have their own ‘currency’ in the form of TEMS vouchers. However, TEMS cannot pay rent or mortgages, utility bills and most of the other basic necessities of existence.
Yet the Greek people were seriously being asked at their last election to vote for parties committed to extending these austerity measures! Nobody was actually surprised when they voted overwhelmingly for parties, of the right and of the left, who were, at least on the face of things, against austerity.
In the Greek election, the first round of which was held on Sunday 6 May, Greece’s two major political parties, who had previously had the support between them of 77 percent of the electorate, were reduced to 32 percent between them. The incumbent Pasok was beaten into third place by the anti-cuts left-wing coalition, Syriza.
The winner, with 19 percent of the vote to Syriza’s 17 percent, was the New Democratic Party (a conservative party). The Greek Communist Party (KKE) took an increased 8.5 percent of the vote, and the far right Golden Dawn (which is into Hitlerite salutes and the like) 7 percent.
Since it proved impossible for any majority coalition to be formed, the election is going to be re-run on 17 June, and, for the moment, it seems that Syriza is strongly building up its electoral support, notwithstanding the threats being issued to the Greek electorate that the return of an anti-austerity government would mean expulsion from the eurozone and a far worse austerity brought about by Greece thenceforth being boycotted by Europe’s kindly loan sharks and being left to the mercy of the deadly ones of international finance capital.
However, it is not only the Greeks who are baulking against austerity and who have used, or are threatening to use, the ballot box for the purposes of both expressing their opposition to that austerity, and, they hope, of returning governments who will reverse all the measures that are so severely undermining the standard of living of the working class and petty bourgeoisie throughout Europe.
The French elections too registered a (somewhat more muted) protest against austerity. There was no party equivalent to the KKE offered to the French electorate, but there was an anti-austerity coalition. This coalition, the Front De Gauche (FDG), included the French Communist Party, but this firmly revisionist party lacks the Greek KKE’s revolutionary outlook.
Roughly equivalent in outlook to Syriza, the FDG’s presidential candidate, Jean-Luc Mélenchon, took only 11 percent of the votes (as compared to Syriza plus KKE’s 25.5 percent), while Ms Le Pen, the candidate of the French far-right Front National took 18 percent compared to Golden Dawn’s 7 percent.
The anti-austerity vote was hijacked by François Hollande of the Socialist Party, which of course supports both capitalism and the EU (as, indeed, does Syriza), but which promised to increase the taxes on the rich, slightly raise the minimum wage, and to attempt to renegotiate the European Fiscal Treaty, while continuing however to implement austerity in some unspecified milder form.
Hollande took 28.6 percent of the vote on the first round, compared to Sarkozy’s 27.1 percent, and 51.63 percent of the vote on the second round to Sarkozy’s 48.37 percent. The continued illusions in official social democracy in France can perhaps be explained by the fact that the French have not had the recent experience that Greece has had of a social-democratic government implementing austerity on behalf of the exploiting class.
In Greece, as the KKE rightly says, the traditional social-democratic party, Pasok, has been so thoroughly exposed in the eyes of the masses by its readiness to implement the severest of austerity programmes dictated by European finance capital that the bourgeoisie needs to find a replacement social-democratic party with which to continue diverting the Greek people away from communism – and it would seem that Syriza has all the right qualifications for the post.
Italian opinion polls show that the proportion of the electorate who would vote for any of the parties that have ruled since the early 1990s is down to less than 10 percent, while even in Germany, whose electorate are alleged to be insistent on the most rigid austerity in the European periphery, Angela Merkel is being caned in regional elections in North Rhine-Westphalia by those who oppose austerity measures being implemented in Germany: the vote for her centre-right Christian Democratic Union fell to 26 percent, its worst result in the state in the post-war period.
Because of conflict over austerity proposals, the governments have fallen in Holland (where, however, the irreconcilable differences in the governing coalition, and with outside parties, is not whether to cut, but what to cut) and in Slovakia, while in the Czech Republic the ruling coalition has splintered over a proposal for vicious fiscal tightening that has brought tens of thousands of people out into the streets in protest over the last month.
The way forward
In considering the solution to the problems confronting the working-class and petty-bourgeois masses of Europe, including Britain, it has to be faced that whatever way forward is taken will involve a severe decline in living standards.
There are bourgeois economists who hold out the illusion that it is possible for bourgeois governments to embrace growth instead of austerity, and by this simple act relieve the oppressed and exploited of all their pain.
Generally, however, when you look at the small print, what is actually being advocated is ‘growth’ policies for other countries, so that those suffering austerity in their own countries can be ‘rewarded’ by the knowledge that the greater competitivity that they have helped bestow on their ‘own’ bourgeoisie is bringing in the orders from the ‘growth’ countries, and thus securing their underpaid jobs (for the moment).
The only problem is that no bourgeois government is prepared to promote the so-called growth policies in their own country for fear of finding itself indebted beyond endurance, and, in fact, in the same state as those countries for whose sake they are asked to promote ‘growth’.
The reality is that Greece will face extreme austerity whether it returns a pro-austerity government or not, whether it renegotiates a less harsh deal with the EU or not, whether it leaves or is expelled from the eurozone or not. Whatever policy its bourgeois political leaders adopt, Greece cannot avoid defaulting on its debts, whether the default is negotiated or whether it happens in a ‘disorderly’ way.
Countries that have lent to Greece (Spain is particularly at risk here) will be dragged into the morass of sovereign debt default, followed by countries that lent to countries that lent to Greece; and the working class and petty bourgeoisie of all these countries will be expected to pay the price.
Since the economic crisis that is giving rise to all these demands for austerity is a crisis of overproduction, in which the bourgeois capacity to produce far outstrips the capacity of the market to absorb these products, it is ultimately only solved, within the confines of the capitalist system, by the wholesale destruction of productive forces, with all the suffering that presupposes for the employees of the capitalists whose businesses are lost.
The experience of the two world wars of the last century suggests that there is no return to real capitalist ‘growth’ without the wholesale destruction brought about by world war, and that even then the period of ‘growth’ is limited. The worst aspect of saving capitalism in this way is not so much the austerity, or even the lives lost in the ravages of war, as the fact that the problem is not, despite all the massive personal sacrifices, resolved but is going to recur again and again.
It follows that real solutions can only be found by breaking asunder the carapace of capital.
The European masses are not yet ready to take that step, even in Greece. If elections are a gauge of the maturity of the working class, the KKE is quite correct in pointing out that in their country, the masses are still harbouring illusions in a quick and easy fix to be provided by the bourgeoisie, whether European or purely Greek, and are not ready for the upheavals of proletarian revolution. They are, nevertheless, learning fast and it’s no foregone conclusion that the Greek people will be beguiled by the mirages put before them by the bourgeoisie.
In Greece it is the KKE and the KKE alone who are putting the real socialist alternative before the people, calling for a “people’s movement that will struggle, counterattack and have the prospect of the conquest of the workers’ and people’s power and economy, for the disengagement from the EU and the unilateral cancellation of the debt, the socialisation of the means of production, the productive cooperatives of the people, the nationwide planning for the utilisation of the development potential of the country with workers’ and people’s control from the bottom up”.
Until such time as the Greek masses realise that this is indeed the only productive way forward, the KKE’s leaders feel that it would only confuse the masses if their party were to participate in any bourgeois coalition government and delay the masses coming together in such a people’s movement.
The Greek masses for the moment are certainly way ahead of the masses of the rest of Europe. We wish them well in their onward journey and we wish well to the KKE in steering their course. We all of us face a hard road ahead – let us not falter in our steps.
> Eurogeddon – December 2011