Spain's voters disenfranchised by markets

There can be only one winner in Sunday’s general election in Spain. And it won’t be the voters, many of whom are so disillusioned with the country’s political system that they seem set to stay at home in droves.

Even though the discredited Socialist Party (SP) looks likely to hand over the reins of state power to the right-wing People’s Party (PP), the financial markets are closing in. They know that the PP has no policies to tackle the country’s budget deficit or the growing debt crisis in the regions and is winning with anti-SP rhetoric.

So yesterday, the effective interest rate on Spanish government borrowing soared beyond 6% into what is considered the danger zone. Mariano Rajoy, the PP leader, will find himself in the firing line next Monday morning when Moody’s, Standard and Poor, Goldman Sachs and the other predatory operators in the financial markets move in.

In a mass sell-off of government bonds on Tuesday, investors’ fears spread beyond Italy and Spain to triple A-rated France, Austria, Finland and the Netherlands. Neil Williams, chief economist at UK fund manager Hermes, said “Markets are losing patience so they are going for the jugular, which is the core countries and not the periphery.”

In dealing with the crash of 2008 governments, central banks and global agencies added many trillions to the global accumulation of credit and debt, yet the growth the system needs to pay it off has not been forthcoming.

The “recovery” has now given way to a contraction. So the interest can never be paid, let alone the inflated capital, at least while forms of parliamentary democracy – however enfeebled – stand between the corporations, financial markets and living conditions of ordinary people. These must all be swept away in futile attempts to minimise the impact of the crash of 2011 on profits.

After a weekend of frenetic activity, two non-elected US trained economists have been appointed to spearhead the next round of assaults on the population of Europe. Mario Monti has been installed as replacement for the odious Berlusconi, and Lucas Papademos is the new prime minister of Greece, which includes anti-Semitic, far right LAOS – the Popular Orthodox Rally Party in its provisional government.

They’ll all be getting their instructions from the “Frankfurt group” which includes the International Monetary Fund, Germany’s Chancellor Angela Merkel, France’s President Nicolas Sarkozy, a bevy of European Union officials, with Barack Obama, USA and Hu Jintao, China’s President lurking threateningly in the background.

Every one of the now 7 billion occupants of the 200 or so states is directly and immediately affected by the unfolding of the interacting social, financial, economic, political and ecological crises of humanity and its planetary home. In Britain, youth unemployment has hit a record high of 1.016 million, as the overall jobless total rises to 2.62 million in the midst of a recession deepened by spending cuts.

The ruling classes everywhere fear any challenge to their rule, concerned that they might inspire others into revolt. Peaceful protests claiming the authority of the 99% find themselves confronting the forces of the state in its many forms. The brutal clearance of Zucotti Park won’t be the last to be seen of Occupy Wall Street. The Corporation of London has restarted legal proceedings against Occupy LSX, and its maturing programme of discussions on the economy, democracy and the state.

Amongst the most recent, but shortest-lived of the occupations, Cardiff, delivered one of the clearest objectives so far: “The monetary market system itself must be replaced with a resource-based economic model where everyone’s needs are provided for free.”

The collapse of the eurozone, the appearance of mass unemployment, the attacks on pensions, services and welfare, demands the alternative called for in Cardiff. On November 30, millions will strike in Britain against the government’s attack on public sector pension rights. To maintain the momentum, trade unionists should seize the initiative and create people’s assemblies in every community to carry the struggle forward towards a new political and economic democracy.

Gerry Gold

Economics editor