It has been a turbulent weekend, May 7 to 9, in Brussels and in the capitals of Berlin, Paris, Athens, Lisbon, Madrid, Rome etc. Since then, we have been told that our own fate has been “at stake”, “our currency”, the Euro. In order to “save its stability”, in other words, reflected by its exchange rate to the US dollar, a huge package of financial aid has been put in place, 60bn Euro of which are derived from a fund designated for catastrophes incurred by a member state “without its responsibility” – now applied to the event of speculation in order to bypass the restrictions contained in the EU treaty prohibiting member states to account for the debt of their neighbours….a fierce weapon launched by the strong and more productive imperialist countries against the economically weaker member states of the southern part of Europe, the Balkans and the Baltic’s in order to force them into a subordinated position, the smaller ones of them even into neocolonial dependence. Now, however, that speculation had evolved to a threatening level of dimension with capital markets soaring towards unprecedented super profits on the one hand and – inevitably, serious losses to state budgets by means of sharply rising interest rates for public debt, as well as to institutional investors having to sell downgraded government bonds and any bank not participating in speculation. The vicious circle was to be stopped, so says bourgeois propaganda, by an enormous “stability fund” of 500 bn Euro, thereof, apart from the aforementioned 60 bn, 440 bn Euro in bilateral aid and guarantees extended to member states where and if needed.
To top this up, the IMF has been engaged to extend further 250 bn Euro in terms of loans to member states in need. Not only German imperialism is hailing this involvement – it had been claimed by them for weeks, at first only in respect of the “Greek crisis”. Why?
Why is now the IMF involved in “saving good old Europe”?
When the Greek prime minister Papandreou, in March 2010, first demanded the IMF to be involved, he had in mind to put pressure on the EU, especially on German imperialism, to decide on an “aid package”. This latter immediately recognized the advantage of having the IMF “in”: it allowed further delays in finalizing the package, thus exerting all the more pressure on Greek government, and, more importantly, it allowed for an elegant solution to the issue of fierce control over Greece and a rigorous implementation of the austerity program. IMF’s loans, so-called “structural adjustment loans”, extended for decades to the depending countries of Africa, Asia and Latin America, are a terrible means of imperialist subjugation. The IMF’s “magic formula”: drastic reduction of public debt, currency stability as prime issue of restructuring, sharp rise in consumer taxes, strong downturn of wages and social welfare expenditures, privatization of the whole of public infrastructure, liberalization and deregulation of the domestic market in order to tear down any obstacles against foreign capital inflows, destruction of the domestic economy, especially of agricultural production by converting it to export oriented mono-cultures, etc. Where the IMF is involved the country will be devastated and pauperized. The implementation of the IMF’s “aid” results in the country’s deprivation of its sovereignty and its subjugation to neocolonial domination involving, of course, a dependent national bourgeoisie and their state with its police and army to defeat the working class’s resistance.
This is the reason why any depending country which was able to, tried, by any means, to get rid of the IMF’s involvement by repaying its loans: From 2002 to 2007 its loans decreased from a maximum in 2002 of 70,5 bn SDR (= 1 special drawing right, equal to appr. 1,14 Euro) to just 9,8 bn SDR in 2007. With the recent crisis evolving in 2008 arose the IMF’s chance to newly put their foot in the doorstep, and this time in Europe’s weaker member states prone to subjugation, Latvia, Hungary, Bulgaria to start with. Over recent months, their “austerity programs” have passed by, very much without mentioning in the imperialist media. And for good reason.
Any journalist, visiting Bulgaria in recent time, would not have been able to conceal the degree of mass unemployment and poverty, the disastrous state of public infrastructure, the devastation of agriculture and industries. Yet, in 2010, there is only 1 – one – country in all 27 EU member states complying with the imperialist “stability criteria” of the EU treaty of Maastricht which calls for a public debt not exceeding 60% of GDP and an annual increase not exceeding 3% of GDP. Guess which country this is? No joke, it is Bulgaria – waiting desperately. For what? ….for foreign capital. Unless the workers, in industry and services, jointly with their deprived agricultural mates take up the fight against the juggernaut wheel of capitalism.
Crisis “unplugged”: Fierce Austerity Programs against the working classes ahead!
It is high time to unmask the propaganda of “all of us sitting in one boat”. “All of us” having to desperately reduce state deficits, public debt. It has not been long that we saw, in 2008/09 huge amounts of money being injected into the banking and financial sector to account for their speculative losses; we have not forgotten the single amount of 109 bn Euro, i.e. one fifth of the overall “EU stability fund” now concluded, pumped by the German imperialist government into solely the bankrupt HRE (Hypo Real Estate Bank), and the total of 179 bn Euro in German public aid to banks only. Notwithstanding further, yet unidentified “requirements” by those banks and guarantees for the so-called “bad bank” concept for separation of foul papers. The very same applies to their mates in France, UK, Austria, Italy, Spain, etc. In total the EU16 mobilized in an extreme hurry more than 2.200 billion Euro in bank aid, yes, you are right, this is four times the EU rescue package!!
Yet, it is only now that government spokesmen and media are rivaling to invoke a dim scenario of inflation and recession, especially to the detriment of Germany, whose pole position in exports would further be ruined with hundreds of thousands losing their jobs. Let’s draw conclusions: Whenever the deepening of capitalist crisis requires loads of money to be directed from the state budget – by the way, primarily financed from wages and taxes robbed from workers and employees whilst exempting capitalists, financial institutions and speculators, this type of “aid” is one of the reasons for being of the bourgeois state! What a fool to blame them for their very job and demand more money for education, schools, public health systems and pensions! This, in fact, is the opposite front of the class struggle. There will be no one single Euro spent for the benefit of those deprived of any means of production except for their capacity to work which the working class will not have to fight for! This is the law of capitalist history, and even more so in its foul state of imperialism.
Of course, there is no such austerity program which will not spur resistance, this is for sure. Knowing this very threat to their rule, the bourgeois class incites their reformist and revisionist parties to derail the proletarian class struggle and mislead it into the dead end street of class reconciliation. And be aware of the various attempts to conceal this very essence! There is, like in France, the Sarkozy government’s open call to the working class to finally give up their protests and rows about delocalization, job destruction, theft of wage and allocation elements by the bosses, as they have been ongoing for more than 2 years now, and bow to the destruction of their pension schemes with the intended “harmonization” to the European standards of increased retirement age and decrease in pensions. It has been solely due to the obstinate class struggle of the French workers and employees that the bourgeoisie has to date not been able to destroy the public pension scheme to the extent it has been achieved in Germany or the UK. Of course, the imperialist bourgeoisie in those competing countries have had their relative advantage from this, especially the German bourgeoisie with their disastrous “Hartz IV” undermining social security and labor contract law, pushed through by the socialist and green coalition under Schröder and Fischer from 2000 onwards. Whilst the German working class finds themselves drowned by a wave of chauvinism mobilizing against the “global threat of inflation” and “sovereign bankruptcy” due to “outraging deficits” spent by the “PIGS” (Portugal, Italy, Greece, Spain) and it may even include others in due course, their French “partners” hit back against the German imperialist hypocrisy and launched a serious blow against any one-sided hostile take-over plans by German finance capital against Greece. In this respect, the EU summit conclusions of recent days was only achieved by France in the lead teaming up with the “PIGS” against German imposture. In fact, Ms Merkel had been wholly against any such EU rescue plan as has been concluded, she even encouraged igniting the German Constitutional Court against the project maintaining it would be against stipulations of the EU treaty prohibiting such extended bilateral aid.
EU: Joint action, increasing conflict – two sides of an imperialist alliance
And the row between German and French imperialism further sparked heavily in respect of the use and role of European “central” institutions, the Central Bank (ECB) and the Commission: ECB has been agreed to purchase government bonds of the weaker countries and ease their necessity to approach the capital markets. This was Mr. Sarkozy’s revenge against Ms Merkel’s strict refusal to allow the EU commission to extend bonds on their own guaranteed by EU governments. Now German media rival in discriminating against the ECB as having compromised its “independence”, German imperialism’s “holy cow” is being unfaithful! By the way, which “independence”? The working class is not so naïve as to believe in any class neutrality of this finance vehicle. Voilà, point is, there is enrolled contradiction between EU imperialists, in first place between Germany and France, in their attempt to impose themselves as ruling and dominating the “family”. And it will be interesting to see who will be more closely hugging with the IMF. Ms Merkel, do not to forget that French social democrat Dominique Strauss-Kahn, the IMF boss has been hove into his seat – as a bonus for a devil’s pact – by good old Nicolas Sarkozy! Yet, for the time being, Dominique does his job unequivocally well: down with budget deficits! Everywhere!
But we should not be misled by those rows, either. Mr Sarkozy, asked by journalists on Saturday May, 8, 2010 whether the outcome of summit negotiations did not reveal an outright defeat of Ms Merkel’s propositions, set up a serious mine and said: “In times like this it is about unity and nothing else”. Both bourgeois classes, like any other, are well aware of the fact, that, to date, their perspective of and interest in neocolonial subjugation of other, weaker countries can at best be achieved by joint action in the European Union.
They need the export markets where the more productive economies extract surplus value from the weaker ones by simple means of the price mechanism for (more expensive) exported against (cheaper) domestic goods. A “strong” Euro is their weapon and the Euro zone countries have been deprived of any adjustment means as it formerly was a depreciation of weaker currencies like the Greek Drachme of the Italian lira. In former years, when the balance of payments became too negative, imports soared and exports decreased in those countries, a depreciation of currency was at least a slight detention of problems: it made their own exports cheaper, helped reduce imports and supported tourism with cheaper costs. That has since become impossible, for Greece, for Portugal, for Spain, and others. And it hits extremely hard economies with so-called “structural problems”. And let us look at Greece in this respect as it is not at all by chance that the “Geek crisis” developed.
Why did Greece come into the focus of speculation?
Greece’s economy, one of the smaller EU countries with a population of 10 million, is even more prone to the negative effects of capitalist crisis than the larger and stronger economies are. This is due to the unequal development of certain branches of industry, to the delayed enrollment of capitalist production in agriculture which was late by several decades compared to Western Europe, by the highly negative balance of payments (2009: -8,8%; but still higher in 2007:-14,7% and in 2008: -13,8%, since introduction of the Euro, in Greece in 2001, in fact, it always exceeded -10%), and, last but not least, by a total dependence on foreign energy imports. All of those factors make a country’s economy strongly vulnerable. And, as regards Greece, this in first place is a historical legacy. Ever since capitalism has existed Greece has been a dependent and – in capitalist terms, less developed country, a victim of imperialist policies. Extended by various powers, apart from Germany, France, the UK and the US. And once again, German imperialism has started to blow the horn of subjugation. They intend to achieve this now by means of the IMF’s fierce control over the country which takes themselves out of the front line, a noble element of the EU row about how to prepare Greece for a hostile take over.
And this to note: it is not just the level of public debt which sparked speculation against Greece. If this was so why is there no speculation against Japan whose estimated public debt for 2010 stands at 197,6 % of GDP, far beyond any EU country’s? (EU limite: 60%; EU16 average: 84,0%; Gr: 124,9 % ; It: 116,7%; P: 84,6%; F: 82,5; D: 76,7%; Sp: 66,3%)
The reason is simple. Speculation, i.e. betting on the decrease of a countries rating (by the way, implemented exclusively by the 3 US rating agencies, Standard & Poor’s, Moody’s, and Fitch) is easy once the market for government bonds is very small. Any such attempt to do the same with Japan, let alone with the whole EU zone, would require an incredibly high amount of money. For Greece, the amount of gambling capital, so-called CDS, credit default swaps pretending to be an insurance against the rumor of imminent Greek bankruptcy, were contracted by hedge funds and investment banks, primarily US based, like JP Morgan, Goldman Sachs, Citibank, Bank of America, and the most important European investment banks alongside. CDS sales amounted to a total of 38 bn US dollars in early 2009, they rose to 85 bn (!) in early 2010, but fell again to 7 bn US dollars by the end of February 2010. Players had made their extra profits from rising interest rates for Greek debt and cashed them in. Yet, the greed of capital is insatiable. Let us look at the ugly job done by the US rating agents, who get paid from speculation, and their rating of Greece. As a means to spark the first wave of speculation until February 2010, the rating was firstly downgraded by one step from A1 to A2 on Dec, 22, 2009. The next attack with a downgrading to A3, i.e. below that of the Ukraine (!), followed on April 22, 2010. In this second wave of speculation, which reached its peak on April 27, 2010, interest rates for Greek 10 year government bonds rose to app. 9% pa. against 5,07% pa by the end of 2008. For a 3 year period interest is 1% pa for German or French debt. The 3 year EU aid package for Greece has imposed 5% pa, i.e. a 4% margin, a good treat for those saviors! You see, it is not the Greek people who live on the Germans! It is and has all the time been the imperialist finance bourgeoisie, the capitalist owners of production and their banks who live on the working classes, in Greece and elsewhere.
There is no reconciliation possible between those interests. There is no “common ground” in securing the “stability” of “our” currency. There is no interest on behalf of the working classes in defending any imperialist competitiveness. It will, everywhere and always, be to the detriment of the living conditions, of survival, and, more importantly, of the conditions of class struggle. That’s why those propaganda tools must be strongly and fiercely opposed! And the courage and resolution of the Greek working class and its people must be unequivocally supported! The best support is the unraveling of proper struggles in the other EU countries, especially in Germany and France.
Sticky glue of bourgeois ideology to conceal the cause of crisis
There is another obstacle of bourgeois ideology coming up, like in German opposition parties, the reformist social democrats and the “Linkspartei” who justified their abstentions in German parliament last week from voting in favor of the EU stabilization fund because, they said, it was “exempting the banks and the real originators of the crisis” whose very speculation had led to enormous profits whilst it was now the tax payer who should account for it. Nothing, they said, had obviously been learned from “the 2008 crisis”, nothing had been done by governments to put limits to the greed of speculators and regulate financial markets by prohibiting foul papers and fraudulent products to be spread around. The same arguments are brought forward by French socialist PS. But quite apart from the fact that all of those “opponents” have wholeheartedly consented to the huge amounts of aid to the banks in 2008/09, how on earth shall such speculation genuinely be prevented in capitalism when it is nothing but its ultimate aim? When there are enormous amounts of money searching for a profitable valuation, i.e. investment areas with high profits, they are increasingly restricted to the mere financial markets as in the productive sectors there is nothing but overproduction and over accumulation.
In the inextricable need of capitalist producers, each of them producing separately from the other with no plan behind, to increase, against all competitors, the degree and the amount of surplus value exploited from human labor, the organic composition of capital, i.e. modernized machines, buildings and other fixed assets account for an ever increasing part of total cost of production whilst the part of human labor decreases, thus bringing under pressure the profit rate, i.e. the surplus amount as against total capital employed. Since only human labor is able to create new value, no capital can grow unless it can get hold, directly or indirectly, of a chunk of this surplus value, and it is irrelevant where this latter may have been produced. If it is not here, it can be in Vietnam, and imperialist exports, like “highly sophisticated technology”, modern weapons or IT systems to Vietnam are the means to acquire part of this surplus value produced by the Vietnamese worker in the textile industry, for instance, where jeans are sold in return to the imperialist countries at a very low price, involving a high amount of human labor, with little impact of machinery, and those are sold in Berlin and Paris at 140 Euro each.
Imperialism means war, inevitably!
It is this very crisis of overproduction and over accumulation which is at the root of the dim events since mid 2008. It has been quite in vain that the media and EU governments cautiously but instantly nourished the rumors of a “recovery” from the depth of the “2008 crisis”. The speculation against Greece, the “Euro crisis”, it is nothing but the repercussions of the ongoing excess of capital which does not find any promising investments in productive areas. The EU still is involved in a massive economic crisis of capitalist overproduction. It’s industries, in particular the automotive sector, has not been but is to be massively “restructured”, i.e. re-dimensioned. World automotive production capacity is about 94 million vehicles, demand is at 55 million. How shall this be resolved? By massive destruction of capital, i.e. failure and liquidation of smaller competitors, hostile takeovers with destruction of whole brands, new, bigger, but fewer monopoly amalgamations. And, millions of job cuts!
For those automotive monopolies who survive it will be about a further brutal increase in productivity, in reducing labor costs and social contributions. Same applies to other important branches of industry in proportion to their relevant importance to the respective economy. For any “recovery”, governments of the monopolistic imperialist bourgeois states will accompany “their” capitalists by cutting back “deficit spending” for infrastructure, education, universities and schools and social security. But, even from the bourgeois standpoint of economic laws such austerity programs are not at all undisputed. And once again, we hear them shout, the agents of “Keynesianism”, reformist trade union leaders, social democrats, revisionists and “anti-capitalists”: Purchase power to the masses! That’s the way back to growth! Sorry, which growth, when there is all too much of merchandise and capital with no interest in production?
Contradictions will inevitably rise, amongst classes, as well as between competing imperialists and capitalists as the crisis lingers and its impact deepens. Chauvinism is being spread around like a cancerous cell, mobilizing “public opinion” against “the Others” who are to blame for “our dim fate” – you may choose what you like: PIGS, migrant workers, lazy-bones, social spongers, terrorists, anarchists, communists!
Since there is another means of “recovery”, which is War. There is no such massive destruction of capital as is the result of war.
Long before that, the weapons industry maybe an exit to other distressed capital, the only industry where productive capital and profits are not yet under pressure, has always been profiting from capitalist crisis. Imperialism is revealing its ugly face when we hear that the Greek “austerity plan” does by no means affect the massive arms purchases by the Greek bourgeois government from Germany and France.
A long reactionary tradition: Greek bourgeoisie selling out the country’s independence!
Imagine this: in 2009, 4,3% of Greek GDP accounted for expenses in military build up, twice as much compared to Germany. The “aid package” was insolently linked, by French and German imperialists, to the precondition of implementing important arms purchases previously contracted: i.e. tanks from German Krauss Maffei Wegmann, eurofighters from EADS, and German negotiators achieved an integration of a previously canceled delivery contract for submarines amounting to 2,9 bn Euro alone, including an annex to the contract for further two submarines. This maneuver, launched in January 2010 by the German Foreign Minister Westerwelle, took quite some time, it may have been yet another good reason for Ms Merkel’s tactics of delaying the German decision over the “aid package”. Imagine further this: extending something like 8 bn Euro in special guarantees for Greek debt if needed, but getting back half of this in cash out of the EU aid package for Greece for sales of military equipment, this is called “off-setting” in international arms industry. France is not less greedy: Sarkozy’s government officials insisted in reviving contracts for the delivery of 6 frigates (2,5 bn Euro) and several helicopters, contracts agreed with former Karamanlis government, then frozen when this bourgeois fraction was chased by the Greek workers’ and people’s struggles in 2008. What on earth does Greece need those weapons for? Against its own working class and people the Greek bourgeoisie who readily bows in front of imperialist powers like Germany and France, or the US, they do not need frigates, heavy battle tanks, submarines, eurofighters and the likes. Against the people’s revolt and workers class struggle for revolution they need different, less heavy military equipment. At any rate, light tanks and helicopters may be of use…..
Greece’s military build up over the past 20 years accounts for the enormous amount of 80 billion Euro, it is Germany’s second largest arms export market and, certainly, this may not be jeopardized by any austerity program!
Could this possibly be due to Greece’s delicate geographical position, close to the Dardanelles which are separating the Black Sea and the Mediterranean ? What about plans by NATO in case of any military “events” incurring sooner or later in the Eastern Mediterranean? On March 3, 2010 Papandreou paid a visit to Washington. He concluded an agreement with the US government to renounce all residual sovereign rights of Greece in the Eastern Aegis thereby placing Greece’s air and maritime sovereignty under exclusive NATO control. This part of the world has always been and, obviously, is once again prone to be exposed to belligerent competing imperialist powers and, obviously, like too often in the past, the Greek bourgeoisie is readily accepting an important role for themselves in this battle for hegemony. Imperialism means war, like Lenin said, and the deeper and longer the crisis, the more increases the danger of war. Is it necessary, though, to remind us all of the recent treaty between Russia and the Ukraine which provides for an extension of the disposal of the Krim military base to the Russian Black Sea fleet for another 25 years, not without causing a heavy punch-up in the Ukrainian parliament where the “pro EU” and anti-Russian fraction reminded of their “orange revolution” which was strongly supported by US imperialism.
Workers and masses of Europe: Unite!
Unless peoples of Europe understand that there is no such thing as reconciliation, with not a single imperialist interest, neither regarding the “foreign” policies, nor “at home”; in each EU country, there is fierce conflict between capitalists, their bourgeois state, their police, their army on the one side – and the workers, the employees and, to a larger or smaller extent, the peasants and small farmers who may be left after their majority have all been ruined already, on the other side. Unless this has become crystal clear, the sad song of “all of us in one boat” will linger around and suffocate class struggle and the unity of the working class.
Those who are taking up the historic banner of class struggle against exploitation and oppression, like now prominently the working class and people of Greece, deserve our hearts and minds and our strong support wherever we work and live in Europe! It is the voice of international solidarity and the spark igniting class struggle that need to be put forward and speak out loud against all the lies of the bourgeois media campaigning against them.
Down with the reactionary “austerity plan” against the Greek people!
EU imperialist block – hands off of Greece!
Down with the IMF! Down with NATO! Get out of Greece!
Long live the struggle of the working class against capitalism, imperialism and war!
Long live the struggle for the proletarian revolution!
Long live international solidarity of workers and oppressed peoples !
Proletarians of all countries and oppressed peoples, unite!