Coalition Chancellor Osborne says that economic “recovery”
is taking longer than expected, but this is a deliberate deception because all
the indications are that recession in the UK is part of an international trend.
This is accentuated rather than slowed by government
austerity programmes under the cosh of the financial markets, the IMF and the
European Central Bank.
If conditions in Europe are
anything to go by – and they most certainly are – the world economy is in an
uncontrollable downward spiral.
The Office for National Statistics says Britain 's
annual output (GDP) fell 0.2% in the first quarter of 2012 after contracting by
0.3% at the end of 2011, putting the economy back into recession. Since these
are provisional figures, it may well be a lot worse
On Monday, a Bank of Spain report showed gross domestic
product in that country falling 0.4% in the first three months of 2012, adding
to a 0.3 % contraction in the previous
quarter. Unemployment is 23% and growing. A continuing fall in property prices
is choking the supply of bank credit as lenders are forced to make provision
for increasing quantities of bad loans.
The Bank of Greece forecasts the Greek economy will shrink
by about 5% this year – the fifth consecutive year of contraction. This year’s
contraction comes after a 6.9% drop in 2011 and a cumulative shrinkage of more
than 13% since 2008. Unemployment is to set to put one in five Greeks out of
work this year.
Many private sector workers are facing wages delays as 300,000
companies do not pay salaries on time because of a drop in sales and scarce
funds. Their pay is also plummeting by over 15%. Greece had one million companies in
2009, but 250,000 have since closed.
In Germany, which has carried the burden of the eurozone
debt crisis, manufacturing output is shrinking at the fastest pace since 2009
while further spending cuts are on the agenda in France and Italy.
In the UK ,
public sector workers whose salaries have been frozen whilst inflation surges
are the sharp end. A million young people are without work, condemned to
becoming a lost generation.
With the ConDem regime staggering from one political crisis
to another and becoming increasingly unstable, it is not surprising that only
24% now believe the current system of coalition government is working,
according to the Hansard Society’s latest survey.
Dr Ruth Fox, director of the Hansard Society's parliament
and government programme, said: "2011 was one of the most turbulent and
momentous years in recent history, but it appears that the economic crisis, the
summer riots and phone hacking did not lead to any greater interest in or
knowledge of politics.” She added: "The public seem to be disgruntled,
disillusioned and disengaged.” The
survey showed:
* 42% of people said they were interested in politics - down
16% on 2010 and the lowest figure since the audit was first carried out
* 48% of people said they would definitely vote if a general
election was called tomorrow - down 10% from last year and again, the lowest
figure in the audit's history
* 30% said they were unlikely or absolutely certain not to
vote - up 10% from 2010
The collapse of the Dutch government and the rejection of
the major parties by voters in France
are European-wide indications that, as one leading economics commentator put
it, “the street might overwhelm the establishment”.
So, the economy is broken and people have lost faith in the
political system. Now is clearly the time for a sustainable, not-for-profit
economy that is freed from the need to “grow” directed by a new system of
democracy based on a global network of Peoples Assemblies.
Gerry Gold
Economics editor
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