The financial meltdown is rooted in a deep contraction of world capitalist production and trade.
Thus far the capitalist rulers of Europe and beyond have pumped massive loans to postpone the impending bankruptcy of the Greek government and the consequences this would have for the European Union, as well as world capitalist finance.
But the underlying problem of slowing production and trade remains unaffected, barring any way out of further financial and economic crises.
Under these conditions, increasingly divergent interests within the EU are brought to the fore. The disintegration of this utopian union among competing bourgeois nations becomes increasingly inevitable. The forms and time frame remain unpredictable. But what will be left is what was there before and during the EU’s existence: separate and sovereign capitalist governments.
The EU was put together in the 1990s by Berlin, with the support of Paris, as a counterweight to the common market between the U.S., Canada and Mexico established in 1994 by Washington. What worked well at first only built up contradictions of a union between countries with sharply different levels of productivity and development.
These differentials appeared to be mitigated as the less developed economies such as Ireland, Portugal, Greece and Spain benefited from massive low-interest loans—promoted by Berlin and Paris in order to expand markets for their goods and capital.
A decade later the former are massively indebted, their economies contracting and left without the option of devaluing their currency. The latter are holding bad debt and facing shrinking markets.
Bourgeois politicians in Europe, the U.S. and other imperialist countries are debating ways of slowing down Greece from leaving the euro, in fear that a disorderly “grexit” could trigger bank runs, financial panics, political instability and social unrest.
This is the overall meaning behind so-called growth proposals promoted by newly elected French President François Hollande, Italian Prime Minister Mario Monti and others, with the support of President Barack Obama.
The “growth” track is ostensibly counterposed to “austerity”— the slashing of social services and government jobs, along with tax raises. This approach has accelerated the economic contraction of several countries, while sparking social unrest among working people and others.
But the actual content of so-called growth policies amounts to no more than what the Financial Times calls “some magical mix of stimulus and austerity that restores both budgetary balance and growth.” This translates to more loans, some currency devaluation (inflation), tax breaks to businesses and other “stimulus” measures, while continuing to try to crank up labor “productivity,” press down wages and slash government expenses.
What Greek workers faceMeanwhile, in Greece the economic and financial crisis has precipitated a political crisis.
In the recent May 6 elections, New Democracy and the Socialist Party (PASOK), the two incumbents, were soundly defeated. With none of the main parties having enough votes to form a majority or coalition government, new elections have been set for June 17.
New Democracy and PASOK are campaigning on warnings of devastating consequences if the country leaves the eurozone—which they say is unavoidable without further austerity.
According to recent polls, the Coalition of the Radical Left, or Syriza, is projected to get more than 20 percent of the vote, bringing it neck and neck with New Democracy. While supporting Greece’s EU membership, Syriza campaigns for a three-year suspension of loan payments; nationalizations of banks; and the reversal of wage cuts, public workers’ layoffs and the voiding of collective bargaining agreements.
The Communist Party of Greece (KKE) is campaigning for abstract slogans and reforms within the framework of capitalist rule. It demands Greece’s withdrawal from the EU, the cancellation of its debt, “socialization of the wealth” and “workers’ and people’s control from the bottom up.” The KKE got 8.5 percent of the vote in the May 6 election.
In the midst of a crisis that devastates the lives of millions of workers and middle class layers, the fascist-minded Golden Dawn got 7 percent of the vote in the May election with its anti-foreign bank demagogy and anti-immigrant thuggish violence. But contrary to what some liberal pundits say, fascism is not at the gate.
Fascism is a mass movement of desperate middle-class layers, demoralized workers and lumpen elements, mobilized in the streets to smash working-class organizations. Before this could happen, workers will have their own opportunity to take power.
What Golden Dawn is doing is exploiting the crisis to garner cadres for such a reactionary movement.
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