VIEW: Old Europe, new crisis —Lal Khan - Sunday, February 27, 2011

Source :\02\27\story_27-2-2011_pg3_4

The main spark that lit the revolutionary inferno in Tunisia was the autumn revolt in Europe, especially in France that has long historical and economic links with its former colony. The raging Arab revolution is having deep social and psychological impacts on the workers in Europe

The mighty movement of the European youth and workers that had erupted in late autumn last year has been overshadowed by the stormy events of the raging Arab revolution. Such an upheaval has not been witnessed since the late 1960s and early 70s. In October 2010 there were 3.5 million people on the streets of France. The metal workers in Italy led massive protest demonstrations. In Britain the students exploded into the largest revolt since 1968, fighting against the draconian rise in university tuition fees. In Portugal, the biggest general strike took place since 1974. Greece went through eight general strikes in a short span of three months. There were huge movements in Hungary, the Czech Republic, the Netherlands, Belgium, and other countries. The movement’s first wave did not achieve a decisive victory, mainly due to the betrayal of the leadership and a certain sluggishness in the movement for the time being, but it is far from defeated and sporadic protests continue in several parts of Europe. But the relentless crisis of European capitalism continues to build.
The financial bailouts for Greece, Ireland, and Portugal are rather inadequate and will not be able to restore the economies of these countries. Spain, Italy, Hungary, and some other countries are threatened with similar defaults in the next period. The European Union (EU), its central bank and the German treasury simply do not have the massive amounts of cash needed to bail out the deficits of these countries. Expansion of credit in the last period has put the enormous weight of state deficits and corporate and personal debt on the economy, and makes it more and more difficult to recover. This burden will cut 1.1 percent off growth rates over the next 10 years. Every attempt to restore the economic equilibrium will end up in the break-up of the social and political equilibrium. All of the capitalist powers have to enhance their export competiveness and will have to increase the pressure on the working classes; they are resorting to massive cuts in wages, social spending, and other benefits. The social welfare state is being dismantled as the worsening crisis of capitalism shuns any possibility of serious reform. This is also true for the Scandinavian countries.
The Swedish model of a social democratic reformist haven is in tatters. The recovery from the 2008-2009 recession has been jobless and fragile. The growth rate in the euro area was less than 2 percent in 2010. It was only the German economy that had a growth of 4 percent. There is a lot of talk about German success in the media but these figures conceal some vital realities of the situation on the ground. In the last 10 years, the German capitalists have severely squeezed the working class. From 1997 to 2010, labour productivity has increased by 10 percent, but workers’ wages have been slashed by more than 10 percent. At the same time, per unit labour costs in the manufacturing industry in Germany have been reduced by more than 25 percent. The German workers are the highest paid, yet they are the most exploited in Europe. The working week had been cut with the result of the workers getting 70 percent of the wage. The bailout for Greece was to save the German banks that had heavily invested in the Greek economy. Greece would have to leave the EU if its debts were written off. But then what about Ireland, Portugal, and others? This raises the spectre of the break-up of the EU.
The German workers have already begun to resist the attacks. This was clear from the election result in Hamburg, in which Angela Merkel’s CDU faced the biggest defeat in 50 years. The euro is being undermined by the fragility of the state finances. States have to borrow money to pay previous debts with higher interest rates. France has accumulated debts of € 1,600 billion, which is equivalent to 83 percent of its GDP. Growth is about 2 percent while the yearly state debt is rising by 7 percent. In spite of cruel austerity measures, the French debt in 2010-2011 rose by € 150 billion. The main cause of the French revolution of 1789 was state bankruptcy. The rich refused to pay and the poor could not pay.
The Economist recently wrote, the ‘feel bad recovery in Britain’. The 2008-9 slump was the biggest since 1921 in Britain. Banking bailout in Britain cost £ 150 billion. The budget cuts start with £ 81 billion. Sir Mervin King, the Governor of the Bank of England, said in a recent speech that Britain will face the biggest fall in living standards since the 1920s. The policies of the present regime are an unprecedented cocktail of wage cuts, unemployment and slashing of public expenditure. Even the middle classes are up in arms against the present government that has gone as far as to privatise the forests in the country. The British economy is very weak, and even George Soros has warned of a double dip recession. There is 20 percent unemployment and 900,000 people have been on the dole for more than a year. A quarter of the public lavatories would be closed down due to these cuts, which will make Britain filthier and full of stench. This year Britain has had the lowest level of investment in 50 years, which speaks volumes about the confidence of the British capitalists.
The main spark that lit the revolutionary inferno in Tunisia was the autumn revolt in Europe, especially in France that has long historical and economic links with its former colony. The raging Arab revolution is having deep social and psychological impacts on the workers in Europe. This series of revolutionary uprisings of the proletariat and the oppressed masses is cutting across continents and frontiers, and are vindicating Marxist internationalism in a profound manner. A spectre of a social revolution haunts France and other countries of Europe. The European proletariat has great traditions of militant struggles and sacrifice. Perhaps sooner rather than later, the momentous revolutionary insurrection could ensure the victory of the European proletariat. It will pave the way for the oppressed billions across the planet to destroy this inhuman system of capitalism and make the emancipation of humankind a reality in this generation and the revolutionary epoch that has dawned.

The writer is the editor of Asian Marxist Review and International Secretary of Pakistan Trade Union Defence Campaign. He can be reached at

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