A new phase of the financial and economic crisis threatens to drag Spain and other so-called “peripheral” countries in the eurozone into a 1930s-style depression and trigger a renewed global crash.
Spain’s failure to raise all the foreign loans it requires has sent markets tumbling and renewed pressure on the ailing euro. The European Central Bank’s decision to rein back on cheap loans to cash-starved commercial banks also adds to the sense of crisis.
Astute observers like economist and academic Nouriel Roubini believe that the pressure on countries like Spain and Portugal to slash spending coming from the European Union, the ECB and the IMF, could trigger major events.
“Japan had a Great Recession, and a Great Stagnation, but it never had a Great Depression,” he says. “But recession in some eurozone countries could become a depression, just like the 1930s.”
Earlier this week, treasury minister Cristóbal Montoro, presented the Spanish parliament with the harshest budget since the death of dictator General Francisco Franco. Prime Minster Mariano Rajoy described the situation as “extreme, at the limit and exceptional”.
This was the day after news came that youth unemployment in Spain's rose to 50.5% in January compared with an average eurozone youth unemployment rate of 21.6%. Total unemployment is up by 10% in a year to stand at 4.75 million.
The Spanish government agreed the details of a savage budget, brushing aside a 24 hour general strike which saw more than 1 million people take to the streets on March 29 against laws making it easier to sack workers.
Spending cuts averaging 17% and a further freeze on public sector workers’ wages will be imposed along with sharp rises in gas and electricity bills. Business taxes are being reduced. These measures can only accelerate the contraction of the economy already predicted to be 1.7% smaller this year.
But it wasn’t enough to satisfy the profit-hungry investors. Despite the severity of the budget measures, Spain’s debt was still forecast to rise to record levels, soaring to 80% of annual income.
In the latest auction of its bonds intended to raise the funds needed to keep the economy breathing, and the acid test of the market’s reaction, investors showed that they were losing confidence in the Spanish government’s ability even to make the interest payments. They forced up interest rates and only bought two-thirds of what was offered.
In Spain, as in other countries, the people have reached the limits of their endurance and a new kind of response is maturing. The Assembly of the Neighbourhood Los Austrias in Madrid played its part in mobilising for the general strike.
As Global Voices correspondent Lidia Ucher put it, the movement that sprung up on May 15 “has been a turning point in terms of supporting the calls of a part of civil society, organised in collectives, neighbourhood assemblies, and local or individually-led associations. In this general strike, the citizen movement has taken different forms in the streets, neighbourhoods, social organisations, and digital social networks.”
This new movement is seeking creative ways for all affected to join the action. Among the proposals from the neighbourhood assemblies was for those without jobs to support the withdrawal of labour, with a consumption strike, taking to the streets without paying to consume food for 24 hours. Another was to involve women in a “care and gender strike”.
Together with the Arab Spring, and the revolutions in North Africa, the 15M movement has been the inspiration for the worldwide Occupy movement. As the global capitalist crisis continues to seek its victims, the new movement for democracy should seek to go beyond more inventive protest which the state can cope with.
We need a strategy for mobilising millions of people to actually defeat the present political and economic system, which M15 rightly identified as the problem not the solution. Our aim has to be the creation of a not-for-profit society of ecologically sustainable production satisfying the needs of the 99%. That’s the only alternative to a capitalism heading for a new Great Depression.
Gerry Gold
Economics editor
For revolutionary solutions to create a sustainable, not-for-profit economy in place of global capital alongside a real democracy based on People’s Assemblies. Visit our web site at www.aworldtowin.net
Showing posts with label occupy factories. Show all posts
Showing posts with label occupy factories. Show all posts
Thursday, April 05, 2012
Friday, February 20, 2009
A global protection racket
Global car maker General Motors is demanding an additional $18 billion in addition to the $13.4 billion in loans already received from the US Treasury to keep it afloat whilst it slashes jobs and production. Its Chief Executive Officer Rick Wagoner says “We have to structure the business so we can be viable at dramatically lower volumes. The industry sales volume is running 40 percent lower than in 2007.”
They plan to shut 14 manufacturing plants around the world and throw 47,000 workers on to the streets, adding to 600,00o workers losing their jobs every month in the US. There, the number drawing unemployment aid has jumped to a record high of nearly 5 million as the slump deepens. Steven Wieting, an economist at Citigroup in New York, said the data was "consistent with a very quick sharp rise in the unemployment rate and that's going to continue for the next few months because production data are correcting very sharply."
GM is also issuing threats to the Swedish government, demanding that unless Sweden pumps money into the loss-making Saab which GM has owned for 20 years, it will abandon the company to its fate. Saab directly employs 4,100 workers in Sweden, with another 10,000 employed through sub-contractors, out of a total population of just 9 million. Unemployment in Sweden is also rising at an alarming pace. It jumped from 6.4pc to 7.3pc in January alone.
This is a new, doubly inverted type of protection racket. In the past the threat would be ‘pay us not to destroy your business ’. Now it is ‘pay us to destroy our business.’
Government advisers like to use phrases like ‘a managed contraction.’
They are trying to avoid the sudden shocks like the one delivered in the UK to BMW’s 850 contractors in Cowley, earlier this week, sacked with one hour’s notice, unleashing fury against the union leaders who’d known it was coming. The best they could offer to the angry workers was to say ‘it’s the times we’re living in’, and ‘the way it has been done is a disgrace after we’d negotiated three weeks notice.’ Thanks very much.
Derek Simpson and Tony Woodley, the joint leaders of Unite, Britain’s biggest union are on the side of the racketeers, warning that without “urgent assistance, UK manufacturing will not recover after the recession”.
They held what they termed “crisis talks” with Alistair Darling on Thursday to lobby the chancellor for a “strategic support package” for the car industry. Unite argued that billions of pounds more were needed, including state subsidies for jobs. The union said it called the meeting because of “fears that a plant closure in the car industry is imminent”, saying this would “have a devastating effect on UK manufacturing”.
As in the US, any state support will be used to finance ‘restructuring’, protecting profitability not saving jobs. Just like the trillions poured into the banks the sole motivation is to try and preserve something for when the mythical recovery starts.
The logic of the capitalist crash demands a destruction of productive capacity on a scale never before seen. No defensive programme or policy for jobs can withstand the devastation that must come before the economic basket-case hits bottom.
The only policy for jobs is for workers to a make a pre-emptive strike – occupying all factories, plant, refineries, offices and land to prevent their closure, before they are sent home, the gates locked and the sites cleared. These valuable resources must be secured against destruction and plans prepared for a new kind of economy – producing the things we need rather than profits for shareholders.
Gerry Gold
Economics Editor
They plan to shut 14 manufacturing plants around the world and throw 47,000 workers on to the streets, adding to 600,00o workers losing their jobs every month in the US. There, the number drawing unemployment aid has jumped to a record high of nearly 5 million as the slump deepens. Steven Wieting, an economist at Citigroup in New York, said the data was "consistent with a very quick sharp rise in the unemployment rate and that's going to continue for the next few months because production data are correcting very sharply."
GM is also issuing threats to the Swedish government, demanding that unless Sweden pumps money into the loss-making Saab which GM has owned for 20 years, it will abandon the company to its fate. Saab directly employs 4,100 workers in Sweden, with another 10,000 employed through sub-contractors, out of a total population of just 9 million. Unemployment in Sweden is also rising at an alarming pace. It jumped from 6.4pc to 7.3pc in January alone.
This is a new, doubly inverted type of protection racket. In the past the threat would be ‘pay us not to destroy your business ’. Now it is ‘pay us to destroy our business.’
Government advisers like to use phrases like ‘a managed contraction.’
They are trying to avoid the sudden shocks like the one delivered in the UK to BMW’s 850 contractors in Cowley, earlier this week, sacked with one hour’s notice, unleashing fury against the union leaders who’d known it was coming. The best they could offer to the angry workers was to say ‘it’s the times we’re living in’, and ‘the way it has been done is a disgrace after we’d negotiated three weeks notice.’ Thanks very much.
Derek Simpson and Tony Woodley, the joint leaders of Unite, Britain’s biggest union are on the side of the racketeers, warning that without “urgent assistance, UK manufacturing will not recover after the recession”.
They held what they termed “crisis talks” with Alistair Darling on Thursday to lobby the chancellor for a “strategic support package” for the car industry. Unite argued that billions of pounds more were needed, including state subsidies for jobs. The union said it called the meeting because of “fears that a plant closure in the car industry is imminent”, saying this would “have a devastating effect on UK manufacturing”.
As in the US, any state support will be used to finance ‘restructuring’, protecting profitability not saving jobs. Just like the trillions poured into the banks the sole motivation is to try and preserve something for when the mythical recovery starts.
The logic of the capitalist crash demands a destruction of productive capacity on a scale never before seen. No defensive programme or policy for jobs can withstand the devastation that must come before the economic basket-case hits bottom.
The only policy for jobs is for workers to a make a pre-emptive strike – occupying all factories, plant, refineries, offices and land to prevent their closure, before they are sent home, the gates locked and the sites cleared. These valuable resources must be secured against destruction and plans prepared for a new kind of economy – producing the things we need rather than profits for shareholders.
Gerry Gold
Economics Editor
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