If Europe ’s voters think
“austerity” is bad for their health, it’s nothing compared to what some of the
advocates of “growth” have in mind as the next stage of the crisis unfolds.
People like Mario Draghi, president of the European Central
Bank, know all too well that providing trillions of euros in cheap loans to
banks has not led to increased lending.
The eurozone is firmly in recession so plan B is on the
agenda. As far as Draghi is concerned, the aim is “structural reforms” like
“labour-market flexibility” and increased competitiveness through speed up and
lower wages.
In other words, living standards have to be driven down
faster and further for there to be any chance of the eurozone coming out of
recession.
What Draghi’s plan confirms is that the crisis has entered a
new, more dangerous phase - economically and politically. The deadlock is
absolutely clear in Greece .
The rejection of the draconian EU-IMF bail-out terms in the
Greek election cannot be satisfied by any political deals amongst the minority
left parties. Demands by Alexis Tsipras, leader of the Syriza party to tear up
the deal cannot be met because the global capitalist economy is imploding.
Some like to say that “austerity isn’t working” and should
be abandoned in favour of growth. The
Guardian’s Seamus Milne remarks: “Cutting jobs and pay while increasing
taxes isn't reducing borrowing and debt, let alone leading to economic
recovery. It's deepening recession, increasing debt and destroying jobs and
squeezing living standards across the eurozone – in countries such as Spain and Greece ,
catastrophically – as well as in Britain .”
This is stating the blindingly obvious but ignores a salient
fact. Forced to contract by its own logic, capitalism is beyond the control of
any political initiative that leaves the system intact.
The reality is “going for growth” just means moving to the
next stage of a brutal contraction that will see workers sacked, factories
closed, shutting down unprofitable production, driving up rates of
exploitation.
New measures by the Con Dem coalition in the Queen’s speech
like reducing public sector pensions and making it easier to sack workers, are part of this process.
The scale of what has to come if the current system is to
survive is too terrible to contemplate. Attention must now turn to the means by
which a new system can be created.
The interdependence of politics and economics rules out talk
of a new direction for the economic system without a new political arrangement
that removes the power of global corporations to dictate to governments.
Seismic shifts in electoral results in Europe follow
on from mass movements in North Africa and the Middle East
which have toppled regimes that ruled throughout the latter part of the
twentieth century.
With unemployment soaring, anger cannot be contained and
will explode on the streets throughout Europe in the coming months.
Replacing a bankrupt for-profit system with new forms of
common ownership can only be carried out by new political formations, not
co-existing with the world of capitalist corporations and global financial
institutions, but challenging and replacing them.
People’s assemblies, where everyone participates in the
decision-making, can take the place of a five-yearly cycle of voting for
representatives who immediately become subjects of capital.
A global network of people’s assemblies can establish
democratic control over the financial and productive resources of the world,
protecting them against the threat of destruction, turning them to the
satisfaction of need.
We should not ignore the other message from Greece , where
an openly fascist party won 20 seats in parliament. People’s assemblies have to
become the future shape of democracy because the old political order is
crumbling but does not intend to go quietly.
Gerry Gold
Economics editor
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