22.11.2012
November 14 strikes: Europe unites to resist austerity
As the EU slips into recession, November 14 gave us a taste of what is possible, argues Eddie Ford
On November 14 millions of workers responded to the European Confederation of Trade Unions call for a “day of action and solidarity”. There were a whole series of demonstrations, strikes, protests, etc against the austerity blitzkrieg launched by individual European Union states and the Eurocrats, who are intent on offloading the economic crisis onto the backs of the working class.
In city after city along the continent’s debt-encrusted Mediterranean rim and beyond, militant workers marched and waved banners declaring, ‘Austerity kills’. More than 25 million Europeans are unemployed and about one in every eight people in the euro zone is jobless. Meanwhile youth unemployment in Greece and Spain respectively stands at 55% and 53%. In the words of Bernadette Ségol, ECTU secretary general, “There is a social emergency in the south.”
For the first time in its history, an ETUC action included simultaneous strikes in four countries - most notably general strikes in Spain and Portugal, both of which find themselves on the austerity frontline, along with Greece. Some 40 trade union organisations from 23 countries were involved in the event, a celebration of resistance. The Italian CGIL union led a four-hour national strike against labour ‘reforms’ introduced by the Mario Monti government making it easier for the bosses to hire and fire at will - as well as against rising unemployment, austerity-driven spending cuts and tax hikes which are hitting ordinary families so hard.
France’s five main unions organised around 100 protests across the country against the ‘shock treatment’ meted out to workers. Encouragingly, Germany’s DGB union federation organised several thousand protestors across the country to demonstrate their solidarity with strikers in southern Europe - a token but it does cut against the chauvinist grain. London saw a symbolic protest too.
Various demonstrations were also held in Poland, the Czech Republic, Slovenia and Romania. Naturally, there were protests in Greece too - which has already had innumerable national/general strikes, of course. Greek workers, who on average have seen their purchasing power decrease by 35%, are demanding that pay and pension cuts be revoked and that collective work agreements be reinstated. They are also voicing bitter opposition to the sacking of 150,000 civil servants by 2015 - a central condition of the €13.5 billion austerity package passed by last week by parliament - with the first tranche due to be laid off before the end of the year. Furthermore, the labour movement is also demanding that all unpaid pensions and wages (sometimes going back months) be paid and that the programme of mass privatisations be immediately dropped.
As for the ETUC itself, it is demanding a “social compact” (or contract) “aimed at putting growth, employment and social justice at the top of the European agenda”. This should consist of the following elements: “collective bargaining and social dialogue”; “economic governance for sustainable growth and employment”; and “economic and social justice”. Keynesian vagueness, yes, but an indication that the bureaucracy is being driven to act by the intensity of the assault, combined with the pressure from below.
Recession
The CPGB, of course, emphasises the total bankruptcy of the capitalist system as a whole and the necessity of mass working class political resistance - which inevitably would bring it into sharp confrontation with Europe’s ruling class.
We need a European-wide political strategy and vision to show that there is a working class alternative to ‘fiscal consolidation’ and ‘book balancing’. But the very fact that there was some sort of continent-wide coordination and resistance was a highly positive development which should be welcomed and encouraged - a powerful symbol of the potential power of the working class. It was also a living rebuttal to the Morning Star-type nonsense about ‘pulling out’ of Europe, etc. Why on earth separate yourself from your proletarian brothers and sisters? Albanianisation is not the answer. In fact, it is a plainly suicidal approach - just when more attacks are on its way, especially in view of the latest economic statistics.
On November 15 the Eurostat agency declared that the euro zone was officially in recession. So, if the European Commission-International Monetary Fund-European Central Bank medicine is working so well, why not continue with the same treatment? Euro area GDP fell by 0.1% in the third quarter of 2012, as austerity economics and the weakening global economy hit demand. This contraction followed a 0.2% drop in gross domestic product in the second quarter. For the whole of the European Union, the economy grew by 0.2% in the quarter after having contracted 0.2% in the previous three months. The UK economy, for example, grew by just 1% in the third quarter of the year - almost entirely due to one-off factors such as the Olympic Games and the golden jubilee ‘bounce-back’.
Now there seems little doubt that the European economy is in a drawn-out period of stagnation. Germany and France, the two biggest economies in the euro zone, posted extremely modest ‘growth’ of 0.2% in the third quarter, but this was more than offset by the sharp decline - economic catastrophe - engulfing Greece, Spain and Portugal. Ominously, Germany’s growth rate has slowed since the start of 2012, when it was expanding at a quarterly rate of 0.5%. But most economists expect Germany to contract in the fourth quarter for the first time since the end of 2011, given that its growth is mainly driven by foreign demand. And where Germany goes France is likely to follow.
But perhaps the biggest shock was the sharp 1.1% quarterly fall in triple-A rated Netherlands, which was more than five times as large as the expected 0.2% drop. It is not difficult to discern the reasons though. Like the stinging Dutch austerity programme, with the new coalition government recently announcing €16 billion of new measures on top of already significant cuts. The rise in VAT from 19% to 21% is particularly punishing household budgets already stretched to their limit. Wages fell 1% in real terms last year, while unemployment has been rising since the middle of last year and is at a 15-year high. Austria as well posted a 0.1% decline in output.
Taken as a whole then, the most generous thing you can say about the European economy is that it is bottom-lining - ditto for the UK, with the mighty United States not doing that much better (its economy grew by 0.5% in the third quarter). Or, to put it another way, the crisis in the southern ‘periphery’ is - quite inevitably - creeping into the northern ‘core’.
Alarmed, Mario Draghi, head of the ECB, has warned (not the first time, it has to be said) that time is running out for the crisis is to be resolved. He might not be wrong. Financial analysts expect to see a decline of about 0.7% in the fourth quarter and maybe 2.5% for 2013 as a whole, as Germany and France start to go backwards - or at the very least come to a shuddering halt. Greece has just signed up to another batch of economy-destroying spending cuts, the Spanish economy is in free-fall, with Portugal not far behind, Germany will continue to struggle while world trade remains weak, and the UK is facing a triple-dip recession, despite the fiscal genius of George Osborne. European banks remain in a parlous state and would go under without life support from the ECB and national governments. Short of divine intervention, 2013 looks set to be grim indeed. Just imagine the situation if the US falls off the ‘fiscal cliff’ in January.
Of course, the continuing Greek drama over the next batch of EU bailout money is feeding into the wider sense of crisis. Late on November 21, euro zone finance ministers admitted they had failed to reach a deal - with the chairman of the Euro group, Jean-Claude Juncker, saying they will meet again on November 26. “Technical verifications” and “financial calculations” have still to be made, he said slightly cryptically. However, the main areas of disagreement are fairly clear. Euro zone ministers favour giving Greece an extra two years, until 2022, to bring its debt down to 120% of GDP, but the IMF is hostile to such an extension - the original deadline, and target, must be kept. Which can only mean, of course, that euro zone governments and institutions must take losses - just as the private creditors did. Angela Merkel, however, has ruled out the possibility that European governments would accept ‘haircuts’ on their holdings of Greek bonds. Stalemate.
A 15-page document circulated at the meeting of EU finance ministers spelt things out in stark terms. Without any “corrective measures”, the document stated, the Greek debt at the very best would be 144% of GDP in 2020. The spectre of Greek exit and euro collapse remains.
Budget battle
Making matters even more fraught, we have the looming battle over the budget at the November 22 EU summit. This has intensified the row between, on the one side, those (ie, Germany) who want to freeze or limit the EU’s budget to one percent of member-states’ GDP - meaning that the EC’s proposed budget would have to be slashed by as much as €130 billion. And, on the other side, those such as the ‘net receiver’ countries in eastern Europe, which want to increase it by 5% or more. If no compromise is reached, there will be an automatic 2% increase each year for inflation. Europe’s very own ‘fiscal cliff’ perhaps.
This budgetary tussle in Brussels has had a direct impact on British politics. David Cameron, of course, is under intense pressure to negotiate a tough-looking deal on the EU budget after Labour opportunistically teamed up on October 31 with 53 Conservative Eurosceptic MPs to defeat the government: an unholy alliance if ever there was one. The successful amendment demanded that the next EU budget should be reduced in “real terms”. If not, then Cameron - or whoever happens to be the British prime minister - should exercise a veto. Previously, whether Jesuitically or not, Cameron argued that any freeze is effectively a reduction. Not enough, it need hardly be said, to silence the barking dogs that have tasted blood and now want more - like, for instance, an in-out referendum on the EU.
Mark Reckless, who led the Eurosceptic revolt of Tory MPs, has predicted - not without reason - an even bigger rebellion if Cameron returns from Brussels without having negotiated a real-terms cut in EU spending or wielded his veto. He added that if Labour stood firm then Cameron would be defeated - “He is between a rock and a hard place”. Hard to disagree. Labour has yet to say whether it will repeat its pro-cuts stance if European lawmakers vote to increase the budget.
Yet the reality is that a veto would be an essentially meaningless gesture, merely angering European leaders and further isolating Britain. Indeed, even if Cameron wins a freeze in overall Brussels spending - which seems unlikely - Britain “accepts it will end up paying more”, as The Guardian provocatively comments (November 21). Firstly, Tony Blair agreed in 2005 that the rebate should be reduced over time to compensate for the arrival of the relatively poor new EU members from eastern Europe. Without any reform, contributions to the rebate from the likes of Poland would have made Britain one of the largest net beneficiaries. Secondly, Britain’s net contributions to the EU have been increasing over the last 10 years because agricultural subsidies have declined in relative terms. Under these circumstances, how exactly is Cameron going to ‘battle for Britain’ and ‘defend the taxpayer’?
All this against the backdrop of the latest Opinium/Observer poll which finds, to no-one’s great astonishment, that 56% would ‘probably’ or ‘definitely’ vote for the UK to go it alone, if they were offered the choice in a referendum. About 68% of Conservative voters want to leave the EU, against 24% who want to remain; 44% of Labour voters would probably choose to get out, against 39% who would back staying in - while some 39% of Liberal Democrats would probably or definitely vote to get out, compared with 47% who would prefer to remain in the EU. Hang on, aren’t they supposed to be ardent ‘pro-Europeans’? Someone call Nick Clegg right now.
These findings should make sobering reading for the mainstream parties, which are in danger of losing further support to the UK Independence Party - now not far behind the Liberal Democrats (Ukip is on 8%, as against 13% for the Lib Dems, according to the latest Guardian/ICM poll). Overall just 28% of likely voters think the EU is a “good thing”, while 45% think it is a “bad thing”. Interestingly, the 18-34 age group is the only one in which there is a clear majority backing the EU - with 44% approving of membership, as opposed to 25% against.
Adding to the heat in the kitchen, the Daily Express screamed on November 21 about the “secret EU plot to stitch up Britain”, while London mayor Boris Johnson ranted in The Daily Telegraph that there should not be “a single penny more for the EU’s begging bowl” (November 19). Rather, he explained, Cameron should “put on that pineapple-coloured wig and powder-blue suit, whirl his handbag round his head and bring it crashing to the table with the words ‘no, non, nein, neen, nee, ne, ei and ochi’, until they get the message”. Obviously a man with an eye on replacing Cameron as Tory leader.