A political blow to austerity in Europe

THE REJECTION of austerity by voters in Greece and France and the deepening turmoil of Spain's unraveling banks are two faces of Europe's political and economic crises--and they point to new potential for resistance.

The results of Greek elections on May 6 is a watershed in European politics, catapulting a radical left coalition SYRIZA to second place, just behind the conservative New Democracy party--while the main center-left party PASOK, which had imposed austerity program for the past three years, collapsed.

Because no party was able to form a governing coalition, a new election will be held June 17. SYRIZA--whose program stands for rejecting austerity, a huge increase in social spending and aggressive taxes on the rich--could well emerge as the leading party.

But at the same time, the Greek vote boosted the fortunes of an openly Nazi party, Golden Dawn, which made it into parliament for the first time. This polarization between left and right at the ballot box is the reflection of austerity policies that have only deepened the economic slump and driven millions of people into unemployment and poverty.

The same dynamics can be seen in other European countries. With establishment parties backing the austerity agenda, the far right has struck a populist pose, criticizing measures demanded by the bankers as a condition for maintaining the euro currency, while pushing an anti-immigrant, nationalist politics.

It was that formula that got Marine Le Pen of France's National Front 17.9 percent of the vote in the first round of the presidential elections in April. In the Netherlands, the anti-immigrant Freedom Party of Geert Wilders recently pulled out of a conservative-led government coalition in protest against austerity measures and could well emerge as the top vote-getter in upcoming elections.

NEVERTHELESS, THE elections in Greece and France show that the initiative is still with the left as a new economic slump takes hold in Europe. This will give new momentum to political movements against austerity. The challenge for the left and the union movement across Europe is to push the struggle forward from protest at the ballot box to the point of production and a direct confrontation with capital.

There is a window of opportunity to do so. The victory of the Socialist Party's François Hollande has derailed what had been a Franco-German demand for fiscal austerity to prop up the euro, the currency shared by 17 members of the European Union. Driven by ousted French President Nicolas Sarkozy and German Chancellor Angela Merkel, the program centers on cuts in social spending, higher taxes, mass layoffs and wage cuts in the eurozone's most indebted countries.

To be sure, Hollande is no radical, but rather a moderate center-leftist. He's a protégé of the Socialist Party leaders of the 1980s, when then-President François Mitterrand took office with a program promising reforms, only to execute a U-turn when faced with demands from big business.

Nevertheless, Hollande is under pressure from his own voting base as well as those who backed the left-wing campaign of Jean-Luc Mélenchon, who tallied 11.1 percent of the vote in the first round of the presidential elections as candidate of the Left Front.

But the really critical struggle for Europe's direction will take place in Greece, the center of the debt crisis that emerged following the economic crash of 2008.

As in many other European countries, the Greek government effectively took responsibility for the debts taken on by its private banks, even as it struggled to make payments on government bonds. The various bailouts organized by the "troika"--the European Central Bank (ECB), the European Union and International Monetary Fund--were designed not to provide relief to working people in Greece, but to shore up banks in Germany, France and other big European nations.

This austerity has only accelerated Greece's economic decline, causing the economy to shrink every year for the last four years. Analysts expect Greece's GDP to shrink by another 5 percent this year alone. No advanced European economy has seen such a crisis since the Great Depression of the 1930s.

Resistance to this agenda in Greece has been prolonged, with more than a dozen general strikes since the economy unraveled in 2009, and countless mobilizations and protests in addition.

Yet when the government of former Greek Prime Minister George Papandreou proposed a referendum on whether Greece should retain the euro as its currency--at the cost of massive austerity--he was pushed out of office under pressure from the troika and replaced with a former ECB official blessed by European Union bureaucrats in Brussels. Silvio Berlusconi, the right-wing former Italian prime minister, met a similar fate--forced to step down when Germany and France demanded deep government budget cuts and an attack on pro-worker labor laws.

This was a showdown between the European ruling class's demand for austerity and democracy--and austerity seemingly won.

That's why the Greek election results are so important. SYRIZA's rise denotes not just the popular opposition to austerity, but it is also a reflection of an intensifying class struggle over four years.

Implementing SYRIZA's program would require a still higher level of struggle to compel employers to pay taxes and stop capital flight. Although SYRIZA leader Alexis Tsipras says Greece wouldn't leave the euro under a SYRIZA-led government, the coalition has also vowed to stop making payments on debt unless the troika drops its demands for austerity as a condition for new loans.

That raises the possibility that Greece could be effectively expelled from the euro. In that case, workers will be have to prepared to stop Greek bosses from stealing even more of their wealth with the return of a new, devalued Greek currency.

THE HEIGHTENED possibility of a Greek exit from the euro has already sent new shock waves through the European economy.

As further evidence of the weakness of Spanish banks surfaced in May, that country has been forced to pay higher interest rates to cover its debts while it pursues its own scorched-earth austerity policies. But with the $306 billion bailout loans to Greece having already strained funds available for financial rescues, the looming banking crisis in recession-wracked Spain--the eurozone's fourth-largest economy--could overwhelm efforts to keep the eurozone intact.

As the New York Times observed: "In a season of nightmare projections for Europe, this one could be the scariest: Greece leaves the euro currency union at the same time Spain's banking system is collapsing." And following last year's indignados movement, popular resistance to Spain's new conservative government is on the rise, with protests and a national teachers strike on May 22.

Italy, the number three economy in the eurozone, could soon find itself in the same situation as the economy slumps. As in Greece, establishment parties in Italy are feeling the voters' wrath: in local elections in the city of Parma, a new anti-austerity party led by a comedian captured the local government.

Even in Germany, which has prospered in recent years, voters in the important state of North Rhine-Westphalia gave Merkel's ruling Christian Democrats their worst showing in a regional election since the 1950s. And Occupy-inspired protests in Frankfurt drew more than 30,000 to its main event, giving the lie to the idea that Germans support their government's efforts to squeeze Europe's smaller and weaker countries.

As the European economy deteriorates, this political volatility is likely to continue. While European capitalists may be prepared to make some concessions in the near term, their overall program will be to push the long-term costs of the economic crisis onto the working class. The only thing that will stop these attacks and turn the tide is working-class struggle and a revitalized left and labor movement.

The same is true in the U.S., where employers are even more ruthless than in Europe as they squeeze wages and cut social spending, even while continuing its imperial military spending. The Wisconsin labor uprising and the rapid spread of the Occupy movement last year showed the potential for renewed struggle against these attacks. But the resistance needs to become sustained over months and years to meet the challenge of stopping the austerity drive.

The lesson of Greece is that the struggle of workers and communities must go hand in hand with building left-wing political organizations that can help project an alternative to austerity and war.