Europe is now the centre of the global crisis. It is a crisis of the system, sweeping across Europe and is not limited to just one country. The crisis erupted four years ago under governments of both the traditional left and right as they all pursued similar neo-liberal policies.
The ruling élites claim that Europe has a sovereign debt crisis due to lack of fiscal discipline. They ignore that the public debt would not have increased at the current rates if it were not for the unprecedented bank rescue packages, the loss in tax revenues, and the increased social spending because of rising poverty and unemployment. Their solution to the crisis is austerity: ever deepening attacks on the working class and welfare states across Europe.
We need a European-wide mass movement of resistance against this concerted attack around four key demands: i) opposition to austerity policies and all cuts, ii) increasing taxes on the income and wealth of the rich, corporations and financial transactions, as well as controlling the movement of capital; iii) bringing the banks into public ownership under democratic control; iv) auditing the debt and cancelling the parts which are illegitimate.
There is a growing consensus within the left across Europe around these issues. But we also need to build a bridge from an emergency programme to beat the crisis to an alternative internationalist Europe of the people, rather than one which works in the interests of capital though the current institutions of the European Union.
The resistance in Greece, Spain, Portugal and elsewhere across Europe is focussing against the austerity like we are in Britain. They are opposing deep cuts in public services, wages and pensions, and are calling instead for the banks, corporations and the rich to pay for the crisis which they created. If these movements succeed, they would push for renouncing the neo-liberal treaties of the European Union such as the one of Maastricht, and cancelling the illegitimate debts. This would encourage and spread resistance across Europe. Withdrawal from the European Union or exit from the Eurozone is not a pre-condition in our fight against austerity and for radical change.
If one country in Europe denounced the austerity plans and refused to pay the debt, this could lead to a massive domino effect of mobilization across Europe. Protectionist alternatives on a country-by-country basis, such as withdrawal from the EU or exit from the Euro, do not have the same power to spread the resistance. They will also lead to devaluation, which would have disastrous consequences for ordinary people, especially in countries in the periphery of the EU such as Greece, as the costs of imports rise and the prices of domestic goods using these imported inputs soar and the purchasing power of wages and pensions collapse. Moreover the exit of one country is likely to lead to the exit of others, which would start a currency war via a series of devaluations across countries.
The way to unite the power of people across Europe is to build on the common interests that we have across borders. The austerity packages in every country, driven by the interests of banks and corporations across Europe and co-ordinated through institutions such as the IMF and European Central Bank, are creating mass unemployment and driving down the living conditions of the working class to pay for the crisis. In Greece, pensions and wages have been cut several times, while the rich ship owners continue to avoid and evade tax by placing their wealth in accounts in Switzerland and other tax havens. Successive rounds of austerity packages will lead this country into a prolonged recession, and turn the problem of debt into one of insolvency. The working class in a rich country such as Germany has not been spared. At the turn of the 21st century, wages, unemployment benefits and pensions were attacked to make German companies more profitable. Reversing the pro-capital austerity programmes in Germany as well as in Greece is crucial to solve the crisis in Europe. The losses of the German workers and the increased competitiveness of German firms is part of the causes of the large trade deficits in Greece.
The austerity policies to deal with debt are intended to bail out the banks. But these policies bring countries in the periphery such as Greece, Ireland, and Portugal to the edge of insolvency by means of a deepening recession. This has consequences for the tax-payers in core countries such as Germany, France, or Britain, who will again be pressurized to bail out their banks that have driven these countries into an ever increasing level of debt which cannot be reimbursed.
The cancellation of the major parts of the debt and the nationalization of banks under democratic control, in both the richer countries such as Britain and Germany as well as in poorer ones such as Greece and Ireland, is the only way to end the vicious circle of austerity and bail-outs.
The questions we must ask are not only “why should we pay for the crisis?” and “can we pay the debt?” but also “why should we continue paying for the increasing debt caused by the ever deepening crisis?” The recognition of the need to cancel the debt is also important given the ecological limits to growth, which poses a constraint to the traditional Keynesian policies of growing our way out of debt.
An international mobilization against austerity must lead to a radical change in economic priorities in Europe, a challenge to the dictatorship of the EU, IMF and the banks, and a new and democratic way of organising society. Fiscal, monetary, and industrial policy should aim at full employment, ecological sustainability, and equality. Minimum wages, social benefits and public services across Europe should be financed by a European budget funded by increased progressive taxation of corporations, banks, and the rich. Fiscal transfers within Europe are also consistent with the interests of the working people in the core countries: a low wage periphery as an alternative location for transnational corporations is a threat to the workers in the core as well. The European Central Bank should be replaced by a real Central Bank – a Peoples’ Bank of Europe – responsible for the supply of funds necessary for green investments and to meet the needs of people and not private financial profits. Monetary policy should accommodate the priorities agreed by a Peoples’ Assembly of Europe and not those of the unelected European Council.
Across Europe we have to reject the austerity programmes and the logic of the capitalist system by proposing another way of redistributing wealth and challenging the private ownership of finance and industry. It is within this framework that we should work towards the convergence of the struggles across borders and collaborate with different anti-capitalist movements across Europe. The resources of the continent could be used to meet the needs of people and the planet, tackling poverty, inequality, and climate change. But this cannot be done within the existing framework of the European Union which was set up to create a free market for capital. Resistance against austerity is starting at a national level, but the scale of the crisis is such that radical solutions are required at the level of Europe and should be carried by a movement of resistance uniting workers and the people of the continent.