Crisis and resistance intensify in Europe

October 16, 2012

Spain has become a new focal point in the struggle against austerity and neoliberalism in Europe. Jonah Birch and Alan Maass look at the backdrop to the struggle.

THE ECONOMIC crisis wracking Europe--particularly the countries concentrated in the south that have borne the brunt of a catastrophic debt crisis--is producing dramatic new confrontations between governments and financial officials intent on imposing further austerity and masses of working people.

The growing tensions are shaking the foundations of the Eurozone--the 17 countries that use the euro as their currency--and the European Union, with implications that will be felt around the world.

The international media's spotlight has fallen recently on the Spanish state, where a wave of anti-austerity protests have been met with harsh repression by riot police, leading to street battles in Madrid, Barcelona and other cities. The latest demonstrations come in the wake of strike action and militant protests by miners from the Asturias region against threatened job cuts, which likewise ended in battles with police.

On October 7, tens of thousands of workers flooded the center of Madrid for the largest of more than 50 union-backed demonstrations in cities across the country. The main union federations are threatening a general strike if the government doesn't retreat from its latest plan for an additional 13 billion euros in cuts.

Spanish riot police attacking a protester in Madrid outside the parliament building
Spanish riot police attacking a protester in Madrid outside the parliament building

The conservative government of Prime Minister Mariano Rajoy claims to speak for a "silent majority" of people in Spain who favor his policies, but opinion polls show the opposite: One recent survey published in El Pais reported that 77 percent of people back the anti-austerity demonstrations against the government and 90 percent expect them to grow in the future.

The other media focal point has been Greece, the epicenter of the European crisis. At the end of September, the two main union federations, representing public- and private-sector workers, organized another general strike that brought the country to a standstill. This was the latest in a series of general strikes over the past two years--but the first to take place since a new government came to power, led by the center-right New Democracy after elections last spring.

Subsequently, protesters in Athens mobilized for demonstrations against visits by representatives of the so-called "troika"--the alliance of the International Monetary Fund (IMF), European Central Bank and European Union (EU)--who were meeting with government officials to check on the progress in implementing 11.5 billion euros worth of new cuts in exchange for access to new funds to bail out the Greece's financial system.

A few days later, demonstrators gave the same treatment to German Chancellor Angela Merkel, who came to Athens to express her support for the coalition government led by New Democracy's Antonis Samaras.

Meanwhile, in Portugal, the government was forced to rescind an unpopular plan for a 7 percent hike in taxes to pay for the country's social security system. This proposal was likewise designed to meet the terms of a 78 billion euro bailout from the EU and IMF. Facing widespread opposition, government officials announced they would alter course, though without dropping their plan to sharply reduce the country's debt.

Though with less fanfare than Spain and Greece, opposition to Portugal's push for extensive spending cuts and other austerity measures has escalated sharply. In late September tens of thousands poured into Lisbon's Praca do Comercio in response to calls by union leaders to protest the government. In the days afterward, transportation workers launched a series of job actions that caused major disruptions throughout the country.

SIGNS OF upheaval have been common for many months in the countries that are suffering the most because of the debt crisis--the so-called PIIGS, Portugal, Italy, Ireland, Greece and Spain.

But protest against austerity is spreading across the region. In France--which, under former President Nicolas Sarkozy, was the chief collaborator with Germany's Merkel in demanding harsh neoliberal measures in the indebted countries--some 80,000 people marched in Paris after the government publicized its plan to balance the budget by 2017.

The government was only elected a few short months ago, when the Socialist Party rode enormous popular anger at Sarkozy to a crushing victory in both presidential and parliamentary elections. But President François Hollande and Jean-Marc Ayrault of the Socialists have been plagued by the country's growing economic difficulties, which include a rash of layoffs and reports that the French economy is stagnating.

Hollande and Ayrault also had to quash a potential legislative revolt by lawmakers allied with the Socialist-led coalition government. The dissenters have been objecting to the terms of a new constitutional treaty for Europe, agreed to by representatives of the continent's ruling classes earlier this year, which stiffens penalties for governments that allow their annual fiscal deficits to rise above 3 percent of gross domestic product (GDP) or their total debt to creep past 60 percent of GDP.

With Sarkozy drummed out of the presidency, Merkel now stands alone as the chief symbol of the agenda that Europe's ruling class is driving through amid a continuing economic crisis--driving down working-class living standards with cuts and regressive taxes in order to assure the profits of the bankers and business executives.

Germany is the dominant power in Europe, and Merkel's center-right coalition government has therefore gotten its way in requiring Eurozone member states that need financial bailouts as a result of the crisis to impose austerity--not only drastic cuts in government spending to reduce deficits and debt, but far-reaching neoliberal "structural reforms," ranging from privatization to laws curbing labor rights.

In other words, the German state under Merkel has been able to blackmail indebted governments in Europe's southern tier into pushing through plans for deregulation and the extensive privatization of extensive state-owned assets, along with rolling back social welfare protections. Capitalists throughout Europe have been the beneficiaries--but since German capital has had a dominant role since the creation of the Eurozone, it benefits most of all.

Therefore, Merkel's stance hasn't been unique among the various quarters of Germany's political establishment. Her views on how to respond to the Europe-wide crisis differ only minimally from those of leading figures in Germany's main opposition party, the center-left Social Democratic Party (SPD). In fact, to run against Merkel for chancellor in elections next year, the SPD recently selected a prominent advocate of pro-business policies, Peer Steinbrück--who served as Merkel's finance minister until 2009, as the austerity drive was getting underway.

THIS CONSENSUS reflects the position of the German ruling class in the debate among European elites over how to save the euro in the face of the debt crisis.

Since its introduction in 1999, the euro has been immensely beneficial to European capital. This in large part because of the neoliberal and anti-democratic character of the Eurozone---something it shares with other institutions that compose the foundations of European unity, such as the EU--which has ensured that the interests of capitalists are favored over those of workers.

For instance, the Stability and Growth Pact, agreed to by EU members states as monetary union was being established, required governments to carry out spending cuts and neoliberal reforms in order to join the Eurozone--this gave neoliberal political leaders as useful weapon to bludgeon their opponents in national governments across the region.

Likewise, the European Central Bank (ECB) was set up in a manner that guaranteed control over monetary policy for unelected elites committed to preventing any increase in inflation--which would hurt the interest of global investors--no matter what the costs in terms of jobs and wage stagnation.

The euro has therefore played an important role in weakening the bargaining position of labor, reinforcing the trend toward greater inequality and facilitating neoliberal restructuring across the continent.

Even so, the Eurozone could still be torn apart if a country like Greece defaults, despite--or, in many ways, because of--the savage austerity measures imposed with the supposed justification that they will fix the financial crisis. The great fear is that the failure by one state, say Greece, to pay back its creditors would lead to a cascading wave of bankruptcies in the financial sector, which would put further pressures on other countries suffering from indebtedness--leading, perhaps, to a default by Italy, the third-largest economy in the Eurozone, and to a catastrophic financial crisis.

The response of European officials, led by the Germans, has been to put together a series of stopgap measures to head off default--while demanding harsh cuts and neoliberal "reforms" in return.

Over the summer, some officials--like Mario Draghi, head of the ECB--seemed to suggest they would be open to easing the austerity drive to save the euro. But there has been little action to back up the rhetoric. Instead, the last few months have seen only continued maneuvering over the terms of a proposal for a common banking union and endless debates about whether the ECB should buy up bonds issued by governments in Europe's weakest economies--which theoretically would have the effect of reducing borrowing costs and, thus, the need for more bailouts.

Generally, German officials have been more conservative in their attitude toward these disputes than their counterparts in France and elsewhere--again, reflecting the interests of their national ruling class. But the differences among European leaders shouldn't overshadow the fact that capitalist classes across the region have been unified in their commitment to a Europe that is anti-democratic and anti-working-class to the core.

That's why there hasn't been any real dissent within the EU or ECB about the need for austerity, despite the utter failure of this approach to stem the crisis.

On the contrary, the latest evidence makes it clear that austerity is only worsening Europe's economic disaster. Official statistics show that unemployment in the 17 countries of the Eurozone now stands at 11.4 percent, the highest level since the common currency was introduced in 1999. And this figure surely underestimates the real level of joblessness--millions of workers, for example, have given up looking for a job out of despair at ever finding one.

In Greece and Spain, about one in four people actively searching for work are without a job. Young people have been bit the hardest by the deteriorating labor market conditions: Across Europe, youth unemployment stands at around 22 percent according to official figures; in Greece and Spain, the jobless rate for youth has shot past 50 percent.

Meanwhile, reports during the past several months make it clear that many of Europe's most important economies are falling deeper into recession. Overall GDP statistics for the region have been negative for the past year, meaning that economic output has actually declined.

The economies of the weaker Eurozone members will contract even further for at least the next year, according to newly published findings by government and independent economists. And even in the stronger economies, there is pessimism about economic growth through the end of the year and beyond--in France, official estimates for GDP were lowered to a meager 0.2 percent increase.

AMONG THE countries that have suffered the worst from the Eurozone crisis, the Spanish state has today moved to center stage. That is because of both the aggressive drive of the right-wing Popular Party (PP) government of Mariano Rajoy to implement even deeper austerity measures and also the growing opposition to him.

Rajoy aims to cut around 65 billion euros from the budget over the next two-and-a-half years. At the end of September, government officials announced the latest round of austerity proposals, which include cuts in pensions and a continuing freeze on public-sector wages (which already have not increased in several years). Rajoy's government has also promised further "reforms" in labor law and social welfare programs, along with liberalization of the energy and telecommunications sectors, and more.

Yet even as the cuts get deeper, the Spanish state's economy continues to deteriorate. New data show that employers are shedding workers at a frightening rate--service sector employment was particularly hard hit during the last year. In late September, the findings of a "stress test" on the country's banks were released--and showed that they would need a total of 59.3 billion euros to recapitalize.

Though Rajoy has been coy about it, the likelihood of Spain heading down the road that Greece has traveled--of successive bailouts by the troika, conditioned on successive rounds of austerity--is greater than ever.

But the austerity drive has also fueled growing battles between the government and those hit the hardest by its measures.

Last year, the movement of the "indignados" (literally meaning "the indignants") swept across the country with mainly youth-led occupations of plazas and central squares to protest the lack of democracy in the country's governing institutions and the absence of opportunities caused by the economic crisis. The indignados helped to inspire a similar "movement of the squares" in Greece--and, later, Occupy Wall Street.

The mobilizations against the government in recent weeks exhibit the same spirit. The government has reacted with increasing levels of violence and repression. Protest marches are regularly met with tear gas and mass arrests--activists have been detained for nothing more than parading around with signs calling on the public to surround the parliament building.

Another factor here is how the austerity drive has fed escalating tensions between the central Spanish state and regional governments--notably the government of Catalonia, which by itself has an economy larger than Portugal's. Catalonia has a long history of nationalist sentiment, which was strengthened by the policies of the Franco dictatorship that ruled Spain from the end of the Spanish Civil War in the 1930s until the mid-1970s. Under Franco, the use of Catalan national symbols and even the Catalan language was banned.

The combination of austerity and cuts in central government funds for regional governments has spurred calls for greater Catalan self-determination, even with a center-right government in power there. Attendance at a September 11 demonstration in favor of self-determination in Barcelona was estimated 1 million people or more. The regional parliament passed a measure calling for a referendum on self-determination, but the central government insists this is invalid.

The Spanish state's refusal to acknowledge the legitimacy of a Catalan referendum is particularly disgusting given the long history of repression suffered under Franco. Indeed, the same type of individuals and forces that suppressed Catalan self-determination under the dictatorship are leading the charge today.

In September, Col. Francisco Alaman compared the crisis to 1936 and vowed to crush Catalan nationalists. "Independence for Catalonia?" Alaman said. "Over my dead body. Spain is not Yugoslavia or Belgium. Even if the lion is sleeping, don't provoke the lion, because he will show the ferocity proven over centuries."

THE DIRECTION in Europe is clear: toward a deepening crisis and continuing austerity measures--and a mass resistance, growing in size, activity and militancy.

In countries like Greece and Spain, popular fury has reached such a crescendo that it has partially overcome the fears whipped up by the political and media establishment that rejecting austerity will lead automatically to bankruptcy and being kicked out of the Eurozone, with economic instability and isolation from global markets the result.

In Greece, the Radical Coalition of the Left, or SYRIZA, presented an alternative vision in the country's two elections last spring--of a united government of the left that renounces the agreements with the troika and rolls back the laws imposed at their command--and it came within a few percentage points of winning each time.

On the other hand, the troika's blackmail can still be effective. In the Netherlands, the left-wing Socialist Party was leading in opinion polls before September parliamentary elections on a program of rejecting social welfare cuts and other pro-business reforms, but it ended up finishing behind the more pliant center-left Labor Party.

Turning the widespread anger at austerity and authoritarianism into effective political action will require larger forces among the left and the labor movement to break with their traditional subservience to parties of the center-left that have become integrated into the project of neoliberalism. All too often, unions and other organizations representing the working class and the poor continue to provide electoral support to such parties.

But in country after country, social-democratic parties have helped lead the way toward market liberalization. As a consequence, they are even more discredited than their center-right counterparts in some countries--like Spain, where the Spanish Socialist Workers Party, which ran the government until late last year, has even lower approval ratings than Rajoy's PP.

There is another challenge looming for the left in Europe--the rise of a far right that feeds off the bitterness and despair felt by millions as they face relentless crisis and austerity.

The threat of the fascist right is particularly acute in Greece, where the Nazi Golden Dawn party entered parliament with 18 representatives after elections last June--and which would come in third place, ahead of the main center-left party PASOK, if new elections were held now.

Golden Dawn has fed on the circumstances of crisis and austerity that are tearing apart Greek society. The fascists oppose the troika's austerity measures as a "foreign" imposition, and they have stepped into the vacuum caused by the collapsing Greek state to provide basic services and aid for those in need--but only if they can prove their national identity as Greeks.

This exposes the real aim of Golden Dawn--to scapegoat Greece's large immigrant population as the source of the crisis. Groups of Golden Dawn members patrol the streets in the name of "stopping crime"--and carry out attacks on anyone who can't prove they are Greek citizens. These Nazis have supporters among the police in Greece, who have been known to encourage people reporting crimes to take their problems to Golden Dawn.

Golden Dawn is clearly more than a parliamentary force. Like Hitler and the Nazis in Germany, their leaders and members are more concerned with the battle to dominate the streets, as this report in Britain's Guardian makes clear:

"We feel disgusted in the parliament," said Nikos Mihaloliakos in a speech to his followers on August 25. "If they want us to, we can abandon it at any given moment and take to the streets. There, they shall see what the Golden Dawn is really about, they will see what battle means, they will see what struggle means, they will see what bayonets sharpened every night mean."

Holding torches, they shouted "Blood, honor, Golden Dawn"--a direct translation from the German "Blut und Ehre," the motto once carried by the Nazi SA. "It's you who are our Storm Detachments (Sturmabteilung). Let them come after you!" he continued, in his usual Nazi-inspired terms. Singing their official hymn "Raise the flags high"--again, a direct translation of the Nazi storm troopers' hymn "Die fachne hoch"--young men and women call for open, violent conflict both with the state and with any opponents on the ground.

The far right has been able to grow in other countries, too--a frightening reminder of the fact of history that economic and social crises provide opportunities for the right to grow, as well as the left.

But the Greece where Golden Dawn is spreading its influence is also the Greece of general strikes, massive protests, occupations of the squares and the radical organization SYRIZA. The Spain where Col. Alaman threatens to crush Catalan nationalists is also the Spain of a growing left-wing upheaval that is uniting miners and other workers with a radicalizing youth movement.

The challenge for the left in Europe is to present an alternative to crisis and austerity--not only in the day-to-day struggles against cutbacks and anti-worker attacks, but with a vision for a different kind of society, based on justice and democracy.

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