[D66] EU summit prepares new attacks on the working class

[Antid Oto]

EU summit prepares new attacks on the working class
9 December 2011

Once again great expectations have been placed in the latest European summit,
which began on Thursday evening in Brussels. According to the German paper Die
Zeit, the meeting constitutes a “European day of destiny.” At issue is nothing
less than “the future of Europe,” the weekly writes.

The summit takes place at the end of a year in which every measure undertaken to
stabilise the euro has been met with a new attack from the financial markets.
Even large countries such as Spain and Italy are now barely able to refinance
their debts. This week the Standard & Poor's rating agency intensified pressure
on summit participants by threatening to downgrade the credit ratings of all
members of the Eurozone. Many economists and politicians no longer exclude a
collapse of the euro, with catastrophic economic and political consequences.

Chancellor Angela Merkel and President Nicolas Sarkozy have vowed to adopt
measures at this summit to satisfy the financial markets. A spokesman for Merkel
said markets’ high expectations should not be dashed by “rotten compromises” or
“typical Brussels trickery” at the summit.

French Finance Minister Francois Baroin declared that neither Merkel nor Sarkozy
would “leave the negotiating table at the summit without a powerful result.” If
necessary the talks would continue on Saturday and Sunday, or a further summit
would be convened before Christmas.

Merkel and Sarkozy want to force through a change in the European treaties
compelling all members of the euro zone to undertake deep austerity measures.
They are to be contractually obliged to include a balanced budget amendment
similar to the German model, which sets a strict borrowing limit. In addition,
those countries that exceed the deficit limit of three percent of gross domestic
product are to be automatically punished. The task of ensuring compliance with
these rules is to be handed over to the European Court of Justice.

There are fierce conflicts over this Franco-German proposal, which could easily
lead to the failure of the summit. The British Prime Minister David Cameron has
made clear that he will refuse to agree to any change of the European treaties
that affects the interests of the UK financial industry. "In all of these
debates my job is to defend and protect the British national interest," he told
The Times.

Some smaller countries, together with Council President Herman Van Rompuy and
Commission President Jose Manuel Barroso, warned against changing the European
treaties, because these changes could be rejected by national parliaments or
referendums. They favour changes to individual clauses and regulations—a
proposal that the German government turned down with the words: “We have the
impression that some participants have still not understood the seriousness of
the situation.”

There are also sharp differences over the role of the European Central Bank.
While most countries are demanding that the ECB support ailing countries with
loans, Germany has consistently opposed such an option.

Despite these conflicts, all the summit participants are agreed there is no
alternative to the imposition of strict austerity measures. In response to the
criticism that its rigid stance on the question of debt was endangering
international economic growth the German government, responded by saying that
sound public finances were not a “German obsession,” but rather a prerequisite
for overcoming the credibility problems of the Eurozone.

At the beginning of this week, Italian Prime Minister Mario Monti, who supports
the Franco-German proposals, put forward a draconian austerity package, which
will condemns millions of elderly people to poverty.

Even the American, British and some southern European governments, which insist
that the European Central Bank must flood the markets with new money, combine
this demand with the need for budget cuts. Thus, the British Prime Minister
Cameron demanded in his Times article that “as Germany has argued, there needs
to be much tighter fiscal discipline.”

The situation in Europe is increasingly reminiscent of that of Germany in the
1930s. At that time, Reich Chancellor Heinrich Brüning introduced austerity
measures which set in motion a spiral of recession, cost millions of jobs,
incomes and savings and helped bring Hitler to power. Once again today, European
governments have nothing to offer except more austerity, recession and decline.

Three years ago, after the bankruptcy of the US bank Lehman Brothers, which
brought the international financial system to the brink of collapse, American
and European financial experts and politicians claimed they had learned the
lessons from the 1930s. On this basis they tried to justify their transfer of
trillions of public funds into the vaults of the banks! Now, in a situation
where the same banks are speculating against the very countries which ran up
huge debts to save them, they are pursuing similar policies to those of Brüning.

This policy is motivated by class interests. A super-rich financial oligarchy
has accumulated vast wealth in recent decades and will not rest until all the
social gains won by the European labour movement after the Second World War are
wiped out. In their eyes public expenditure on education, health, pensions,
public services and infrastructure are unacceptable restraints on their pursuit
of wealth—just like decent wages and labor rights.

The proposals of Merkel and Sarkozy aim to destroy these achievements. Balanced
budget amendments and automatic sanctions rob governments of any fiscal leeway
to respond to social protests. They are left completely at the mercy of the
diktats of the financial markets that they unflinchingly support.

The arguments they use to justify their austerity policies are both hypocritical
and false. No country can live beyond its means, they declare. Nobody, including
a sovereign state, can spend more than it earns.

If anyone is living beyond their means, however it is not the workers and
pensioners of Greece, Ireland, Italy or Germany, but rather the members of the
financial oligarchy. The total assets of all European millionaires (there are
now about 3 million of them) are growing faster than the sum of all European
national debt. The private wealth of millionaires has doubled in the last 13
years, while public debt has doubled in 15 years. The total assets of Europe's
millionaires, estimated at around $10 trillion, are sufficient to pay the debts
of almost all European countries at a stroke.

In Germany alone, 830,000 millionaires have financial assets of €2.2
trillion—more than the total debt of all federal, state and local authorities.
The principle cause for this growth in private assets is the tax cuts introduced
for businesses and top earners. As a result, the ratio of government consumption
to GDP has fallen by 5 percent in ten years. If those tax cuts were reversed the
state treasury would benefit by around €100 billion.

For European governments, however, the funds of the financial oligarchy are
strictly off limits. Not a single government—be it social democratic, liberal or
conservative—dares to touch this wealth, for fear of infuriating the financial
markets. As was the case in the 1930s, Europe stands before enormous class
struggles.

These class struggles must be prepared. The old reformist organisations—Social
Democrats, ex-Stalinists and trade unions—have placed themselves entirely at the
services of the financial oligarchy and faithfully implemented their austerity
measures. They are immune to pressure from the population and can rely on the
support of a host of pseudo-left organisations which do everything they can to
prevent a break with the old, discredited bureaucracies.

The most urgent task now is to build a new party to unite the working class of
all countries on the basis of a socialist program. This is the perspective
advocated by the Socialist Equality Parties across the globe and the
International Committee of the Fourth International.

Peter Schwarz

http://wsws.org/articles/2011/dec2011/pers-d09.shtml