Italy - The economic crisis becomes a political and institutional crisis

www.socialistworld.net, 11/05/2013 website of the committee for a workers' international, CWI The latest events that have happened in Italian politics mark a new phase of development in the crisis in the third European industrial power. With extracts from Marco Veruggio, ControCorrente (CWI Italy) The economic storm that has wreaked havoc on the economy first transformed itself into a social crisis and now into a veritable institutional crisis. Youth unemployment has gone over 30%; more than 450,000 workers risk finding themselves from one day to the next without any income due to the funds running out for the lay-off pay paid by the regional governments; in 2012 more than a thousand firms a day closed. The phenomenon of suicides is growing; on 14 April, in one day alone, a small fruit seller and two unemployed people took their lives. Against this tragic background, the extreme fragmentation of the Italian capitalist class and the absence of a political representation of the workers is producing an analogous fragmentation and loss of control of the so-called ’political class’. Workers and vast sectors of the middle class accuse the politicians of continuing to demand sacrifices from them and at the same time remaining in possession of their own privileges. While the Italian bourgeoisie on the one hand calls on the parties to carry on with their anti-people measures without listening to what is going on in the streets, on the other they criticise them for not having enough of a consensus to guarantee governability and demand ’class unity’ to carry out the reforms ’Necessary for the country’, that is for them, against the workers and the middle class. The escalation of suicides, just as the extreme gesture of one unemployed man from the South who, during the swearing in of the ministers, opened fire on three policemen of the parliamentary guard, declaring afterwards that his real target was the politicians, indicate the climate of exasperation. But at the same time they show how exasperation, without a political and social outlet, is destined to tranlsate into such gestures - desperate at the same time as merely symbolic. Berlusconi resuscitated by the Democratic Party The Democratic Party, at the end of 2011, with Berlusconi reduced to historic lows of credibility, was afraid of saying no to being the agent in Italy on behalf of the European Central Bank and of going to elections and succeeded from then until today in doing everything that was within their power to restore Berlusconi’s lost credibility and risk their own. They voted together with him for the raising of the pension age, the cancellation of Article 18 (of the labour statutes), the IMU - an odious tax on first homes and, after having governed a year and a half with the Centre-right, carried out an election campaign on the slogan ’No agreement with Berlusconi’. And while the leader of the PD, Bersani, was giving interviews explaining in a confused way what his party would do once it had won the elections, Berlusconi was taking over the talk shows promising the abolition of IMU. Beppe Grillo was filling the squares demanding the abolition of politicians’ privileges, but also the establishment of a citizen’s wage, the nationalisation of the banks and big companies like Monte dei Paschi and Telecom and the cutting of military spending, cancelling Italy’s commitments in Afghanistan and Mali. The result of the election followed the laws of marketing technique: in a market full of products substantially the same and ’costly’, a quarter of the consumers chose not to buy anything; one quarter chose a new brand, original and low cost (the Five Star Movement of Grillo); the rest of the demand was divided equally between the other products, preferring the traditional ones (PD and Berlusconi’s PDL) to ones that were just as costly but with no history (Monti). After the election, Bersani, secretary of the PD, the second force after the M5Star in number of votes, but first by number of parliamentary representatives, employed all his own tactical skills to commit suicide. He asked for the job of forming a government without having the numbers and got it. He continued to repeat that never and once more never would the PD make an agreement with Berlusconi (while he had declared himself ready for a pact with Bersani ’for the good of the country’). He wrote an eight point programme, the fruits of a compromise between the half of the PD that wanted to go with Berlusconi and the half that was against and trusted Grillo to support a PD government to get some points implemented. The first of those points was, ’to reconcile the discipline of the budget with productive public investments and to obtain maximum flexibility in the medium term targets for the public finances’. This was a proposal so ridiculous that even a comic would not have been able to accept it, and Grillo rejected it. It provoked the indignation of the centre-left and the press - ’irresponsible: he’s playing Berlusconi’s game’ - and even the criticism of the leader of the ailing Rifondazione Comunista - Ferrero - who, in his position, would have accepted the eight points without even reading them. Meanwhile, the other delicate institutional game was approaching and that was the election of the new President of the republic. Berlusconi declared that he was ready to vote for a candidate of the PD, provided such a candidate was ’not hostile’ (meaning disposed to guaranteeing the impunity and survival of himself and his businesses). Grillo at this point puts forward an intellectual, with no past and with no high ambition*, from within the PD - Stefano Rodotà, as a candidate, well regarded even in the ranks of the radical chic left as well as the PD electorate. But Bersani meets Berlusconi and together they agree a common candidate - Marini, former Christian Democrat general secretary of the trade union federation CISL and amongst the founders of the PD. A choice that everyone justifiably interprets as the prelude to a ’broad agreement’ government. If Bersani had accepted Rodotà, he would have become president of the Republic with the votes of Grillo and the centre-left, would have given the task of forming a government to certain representatives of the centre-left unacceptable to Berlusconi and at this point it would have become very difficult for Grillo not to support such a government. However, everyone understood, including the PD voters, that the earlier agreement, the choice of Bersani, is due to an objective reality: the PD has more interests in common with the PDL than with M5S and on the other hand for 20 years every time the PD had the possibility of wiping out Berlusconi, it pulled back. The revolt broke out. The PD had to meet and withdraw the candidature of Marini and put forward Prodi, not welcome for Berlusconi, wailed about betrayal. The candidature of Prodi was agreed unanimously, on the same day that 100 PD parliamentarians voted in secret urns for other candidates. The last resort before complete institutional chaos, is the reappointment of Napolitano, also ex PD and extremely acceptable to Berlusconi who was the first to propose his reconfirmation. Bersani accepts and announces, finally, in the end, his own resignation as secretary. Members of the PD occupied several party offices. Dozens burnt their membership cards in the squares. Napolitano and ’national responsibility’ Paraphrasing the title of a film by the Cohen brothers, some students, after the re-election of the President of the Republic, went onto the streets with placards saying: ’ This is no country for young people’. Napolitano, old post-soviet archeological remains, who defined the Soviet Union’s intervention in Hungary as the only to ’prevent it from falling into chaos and counter-revolution’ and ’to safeguard world peace’, then leader of the right wing of the Communist Party of Italy (financed by Berlusconi), friend of the corrupt Craxi and his Socialist Party and friend of America and the first Italian ’communist’ invited to the United States, became the real dominant figure in Italian political life in the last few years. He has been the truest representative in Rome of the interests of Brussels and Frankfurt and the most fervent backer of Mario Monti. Napolitano was acclaimed in Berlusconi’s era as a shining defender of morality. In fact, in 2004, when he was a Europarliamentarian, he was surprised by a German journalist trying to claim EUR800 for a flight from Brussels to Rome that cost EUR88 and reacted by having the journalist identified and taken in by the police. Recently he tried to interfere in the court case of the Palermo magistrates over the state-mafia dealings in the ’90s and managed to get tapes destroyed that had recordings of his phone calls with Nicola Mancino, interior minister at the time and between the main people on trial. After the recent Monte dei Paschi banking scandal broke, Napolitano asked the press ’not to make too much noise’. A few hours after the news of his being re-nominated, thousands of people including many youth, besieged the parliament shouting ’Rodota! Rodota!’ and ’Napolitano, we don’t want you!’. After the vote, the PD and PDL MPs had to be escorted out of the parliament by police. Coins were thrown at the leader of the ’left PD’. The ex-deputy secretary, Franceschini, was besieged by hundreds of people in a Rome restaurant. An episode which is related only to the superstructure, like the election of the head of state, has become for thousands of people, worn down by the economic crisis and disgusted with politics, symbolic of a political class that preaches change but practices conservation, the spark that sets off the fire. Some old woman, interviewed in front of the parliament, said: ‘One month ago I was in Saint Peter’s Square to celebrate the new pope Francis I. The Catholic Church gives us an impression of trying to implement some change. The Italian state is not able to do the same’. Grillo described the re-election of Napolitano as a ’mini coup’ and the same evening invited Italians to besiege parliament, announcing that he would arrive in the late evening. ’We must be in our millions’, he said. But a few hours after, he cancelled the demonstration, suggesting ’the violent ones should be isolated’ and gave the time for meeting in a square on the following afternoon. But the day after he appeared for just a few minutes. The Grillini MPs, the only ones who can walk the streets of Rome without an escort, responded to people calling for a march on the President’s residence - the Quirinale - by saying ’it’s not worth it’. ’In parliament we are many, and we can do ’cool’ things!’. A left with a minimum of credibility would have been able to move into this vacuum and played a political role. Instead, the self-styled leaders of the far left limited themselves to criticising Grillo for not having done what they should have done. National responsibility Napolitano, who is 88 and once again ready to do battle to avoid the country ’falling into chaos’, has given the responsibility of government to Enrico Letta, ’young’ ex-Christian Democrat leader of the PD, liberal, nephew of Gianni Letta - trusted right hand man of Berlusconi and skilful operator in the most difficult negotiations between ’The Cavalier’ (Berlusconi), the centre-left and Italian and international capitalism (sitting on the advisory board of Goldman Sachs from 2007). Letta Jnr has put together a techno-politico government, confirming various ministers of Monti’s (but not Monti), among them the one for European relations - a reassuring signal for Brussels. On the political slopes, while various big names from the PDL are entering the government, in key rolestaking care even of the personal interests of Berlusconi, most of the leaders of the PD - with D’Alema and Bersani at their head, remain outside. There are only Letta and Franceschini, from a Christian Democratic background, some minor ex-PCI leaders and many unknown personalities, women and young people (among them a black woman doctor of Congolese origin and a one-time woman canoe champion from Germany), who owe eternal gratitude to Letta for having got through the casting for the reality show ’New faces at Chigi Palace (home of the government)’. But the ministries that count remain firmly in the hands of seasoned politicians and experienced functionaries of the state, amongst them, at the economy, the ex director-general of the Bank of Italy. Anyway, this is not about a Summer-time government but meant to last long enough for a restructuring of the political system to avoid coming out of elections once more without a governing majority. The social version of the government of ’national responsibility’ is the Pact between producers proposed in Turin by the bosses’ organisation, Confindustria to the union federations - CGIL, CISL and UIL - ’to save the factories and the country’ because ’we’re all in the same boat’ and promptly accepted by the unions. Some weeks later, the unions in Bologna invited Confindustria representatives to speak on the platform at the May Day demonstration in front of no more than 300, many of them trade union bureaucrats and pensioners. Landini, the general secretary of the metalmechanics’ union (FIOM), responded to Confindustria that ’like on the Titanic we are all in the same boat, but those who were in the engine room were the first to drown’, provoking criticism from the CGIL general secretary, Camusso. FIOM has made a call for a national demonstration on 18 May of engineers, of students and the social movements for the right to work, the right to education, to health, and social justice and democracy. It could be the first opportunity to test how much the latest political developments have changed the mood on the streets. But FIOM, without a political focus, risks being crushed in a pincer: Landini has been playing a ‘half political role’, due to the vacuum on the left, creating high expectations, more political than trade union, more amongst activists than metal-mechanics. On the other had, he has to manage a retreat on the trade union front due to sudden defeats, to political and social isolation and even a certain disorientation of the leading group in FIOM, without a clear trade union strategy and politically suspended between certain illusions in relation to the centre-left and the absence of a credible alternative on the left. The left without a plan The PD comes out of these events with its bones broken. Starting out with a centre-right in a coma and victory in its pocket they have succeeded in an enterprise which is something incredible, bringing Berlusconi back to power once more, making a deal with him in front of his electorate, without restraint. It’s like a firefighter who sets fire to his own car in full daylight on the pavement in front of his house, to get money from the insurance. Now a congress is being prepared in which Fabrizio Barca, ex minister of Monti, should be representing the ’internal left’. In the meantime critical voices are being raised in the ruling group and realignments taking place, voting their confidence in Letta. But the real incurable fracture, which indicates the end of the PD, is that with its own social base and its own electorate. A fracturing which will be heavily reflected inside a CGIL which is marching towards the congress in a devastating political, trade union and financial crisis. If the PD has broken bones, Rifondazione and the left parties are by now in a phase of decomposition. Nichi Vendola, of the SEL (Left Ecology Liberty), after an embarrassing electoral result, has been forced to break with the PD and to support Rodotà as President of the Republic. He has announced that he will create a ’constructive and responsible’ opposition to Letta and planned to launch on 8 May a new ’workshop’ of the left, seeking to gather the right of the RC and certain renegades from the PD. To the left of the RC, Cremaschi, former number two of FIOM now retired has launched a new appeal for an ’anti-capitalist and libertarian movement’, with half the forces that belonged to ’No debito’. (ControCorrente did not belong to it, only maintaining discussions with them.) ALBA (’Alliance of work, public assets and the environment’) continues to propose a ’new political force’, but is run by a handful of intellectuals, deprived of any social base, of an organised force and of a clear political programme. The secretary of Rifondazione, Ferrero, resigning after the disastrous election, but in charge until the next congress (fixed with great calm for the end of the year), leads an already virtual party by means of his own Facebook page, commentating on the on the initiatives of others and often giving advice to Grillo on the tactics to use against the PD, which Grillo wisely does not follow. Inside the RC, without his own independent political project, Ferrero follows ALBA with interest, one part of his people have joined Cremaschi’s appeal, while the right tries to have a dialogue with Vendola. The Communist Party of Workers, the only list with the Hammer and Sickle - a symbol which always has a certain appeal for us - at the elections reached an historic low. Critical Left - the Italian section of the United Secretariat of the Fourth International, is living through the nth split in the name of the movements. Falce Martello - the section of the International Marxist Tendency, is enthusiastically preparing for a congress in which Ferrero’s centre and the right will be fighting over the mortal remains of the RC. For the Italian left a real ’trek across the desert’ is starting. The absence of a generalised social response to the offensive of big capital renders the current proposals ’to rebuild the left’ pathetic attempts to put together bits of the political and trade union bureaucracy without a clear political idea and incapable of exercising an attraction for workers and young people, all to the advantage of Grillo. These leaders, always ready to quote Gramsci (usually incorrectly), instead of putting themselves on the terrain of a ’struggle for hegemony’ over ordinary sectors of their electorate, run after him, one day exalting them and the next accusing them of being fascist. On the other side, in a country that has had the biggest Communist Party in western Europe and a lively extra-parliamentary left, against the background of a stagnation of the class struggle and of the crisis of the trade unions, a generation of activists over 40 are living with the feeling of being orphans of the past and don’t manage to be a point of reference for the youngest. With the result that the best part of the activists tend to distribute themselves in a casual way amongst the various discussion tables on the left or limiting themselves to waiting for something to happen. Only an unfreezing, at least partial, of class conflict can unblock the situation, bring into politics new forces and restore enthusiasm to the old militants. The shock represented in the nth compromise between the centre -right and the centre-left by the definitive loss of credibility of the PD and in bourgeois democracy itself, the new wave of anti-people policies that await us could make millions of people understand that nothing remains but to struggle, relying only on our own forces. It would be necessary to try and rebuild with our own hands what the leaders of the left have destroyed: a party capable of giving a voice, programme and organisation to workers and ordinary people in society. * ‘senza infamia e senza lode’ means’: he’s not responsible for big mistakes nor for big victories in the past. He’ s not worth of big criticism nor of big praises.

Is Italy’s 5 star movement something we could or should follow n the UK ?

With the emergence of a new formation based on the characture of Italian comedian Bepe Grillo gaining a very respectable vote in the recent Italian elections made many on the left in the UK sit up and take notice. In the CWI we’d known about this rising movement for a year or so now with our comrades in our Italian section explaining what he and his followers wereall about at last years CWI euopean school in Belgium. I don’t hink any othr left grouping has anything like the CWI does on a international scale at present. The CWI currently has operations and comrades in over 40 countries on every continent in the world. Not only are we trying to build our sections there but it also gives us invaluable insight in to the goings on in those countries and various movements there detailed on our fantastic website www.socialistworld.net Comedian Beppe Grillo and the Five Star Movement have taken centre stage following Italy’s general election in February. It is the latest, dramatic manifestation of the widespread rejection of establishment politics. CHRISTINE THOMAS of our England and Wales section writes on this new political phenomenon. The shock result in the recent Italian elections reverberated around the world, leading to market instability and fears about the possible economic fallout. The Five Star Movement (M5S – Movimento 5 Stelle), launched by the comedian Beppe Grillo just four years earlier, emerged as the biggest single party, with more than 25% of the vote. “We channelled all the anger in society”, said Grillo, summing up this election ‘victory’ in an interview with the international press (he refuses to speak to the Italian media). While workers and youth in Greece, Spain and Portugal have been waging general strikes and taking to the streets in their millions in opposition to a never-ending austerity onslaught, in Italy there has been relative quiescence. This is in spite of the devastating economic impact on ordinary people, with living standards falling to the level of 27 years ago. But, on 24/25 February, all the accumulated anger and dissatisfaction poured into the ballot boxes, with the M5S becoming the main beneficiary. In packed electoral rallies in piazzas all over the country, Grillo’s cry of “tutti a casa” (send them all packing) had a particular resonance with a population sick to the stomach of the corrupt, moneygrubbing, self-seeking politicians of the establishment parties, and of the industrialists and bankers involved in scandals. With just 2% having faith or trust in political parties, more than eight million voters turned to the M5S which pledged to ‘clean up’ and ‘shake up’ the political system. Consistent with its election pledges, the M5S is refusing at this stage to form an alliance with the PD (Partito Democratico) electoral coalition, or with the coalition of the PDL (Popolo della Libertà), the party of Silvio Berlusconi, both of which got around 29% of the vote. The ‘grillini’, as they are often called, effectively hold the balance of power. While the immediate perspectives are unclear, if any government emerges from these elections it will be weak, unstable and short-lived. New elections are likely, possibly within months. In that situation, the M5S could even increase its support – it has already gone up three points in opinion polls to 29%. A ‘movement’ not a party Clearly, the Five Star Movement is a key player in the Italian political arena. But what is its character, what does it stand for and how is it likely to develop in the future? In reality, the confused, ambiguous and fluid nature of the movement makes it difficult to define. Grillo describes himself as its ‘megaphone’, because the M5S, which developed in opposition to the traditional parties, is a ‘movement’ rejecting the structures of a party and which, therefore, cannot have a ‘leader’. In actual fact, Grillo, who co-founded the M5S with Robert Casaleggio, a wealthy marketing and web businessman, has an enormous personal influence over the movement. He owns the M5S ‘franchise’ and can personally decide who can and cannot use its symbol in elections. Grillo describes the M5S as “neither right nor left”, a “movement of ideas not ideologies”, and this is reflected in its membership, programme and electorate. The movement is mainly one of young, educated middle-class professionals. Of its MPs and senators, 24% are self-employed or small-business owners, 35% are professional/white collar workers and 15% students, pensioners or unemployed, 78% have a university degree. The M5S votes were geographically evenly spread and came from all political parties, both ‘left’ and ‘right’. Around 25% of its electorate had previously abstained. Which parties its votes mainly came from varied from region to region. In Turin, an industrial city in the north, for example, 37% of the M5S votes came from the PD (which includes part of the ex-Communist Party), and 20% from the ‘radical’ left. In Padua, 46% came from the right-wing populist Northern League (Lega Nord). In Reggio Calabria in the south, 49% came from Berlusconi’s PDL. The movement has a programme, voted for online by its members, but the pronouncements of Grillo in the piazzas and, in particular, posts on his blog, the most widely read in Italy, hold considerable weight. He also has a million followers on Twitter. The use of the internet and social media is central to the way in which the movement is organised, with ‘horizontal’ democracy seeking to replace the normal ‘vertical’ forms of democratic structures of elected committees, delegate conferences, etc. The 163 grillini MPs were selected online, with 20,000 people participating. Grillo launched his blog with Casaleggio in 2005, and the first ‘friends of Beppe Grillo’ began to discuss online and organise local ‘meet-ups’ (they use the English word). Things really started to take off in September 2007 when Grillo organised his ‘V.Day’ (V standing for an Italian expletive), when tens of thousands of people queued for hours in piazzas around the country to sign a petition calling for politicians with a criminal record to be banned from holding office. The movement spread via internet and social media, and the first Five Star councillors (30) were elected in local elections in 2008. In autumn 2009, the Movimento 5 Stelle was officially launched, going on to get more councillors elected and its first mayor of an important city (Parma, in Emilia Romagna). In anticipation of what was to happen later in the national elections, M5S became the biggest party in elections in Sicily in November 2012. Awash with corruption The corrupt political ‘caste’ and political system are the main targets of the movement. Grillo’s comedy routines have always had a political edge to them. In the 1980s, he railed against corrupt politicians. In 1986, he was banned from public TV after a joke about the then prime minister, Bettino Craxi, who eventually fled the country to avoid charges during the Tangentopoli scandal. Tangentopoli lifted the lid on a sewer of kickbacks and corruption spanning the political spectrum, leading to the collapse and disintegration of most of the main bourgeois parties. It was against this background of political crisis that Berlusconi was ushered to power, and the Northern League began to grow, both claiming to be ‘new’, ‘fresh’ untainted forces. Now, once again, Italy is awash with corruption scandals, undermining virtually every institution from football to the Vatican. In an international corruption league table, Italy is ranked 72nd, below Botswana, Chad and Rwanda. At national and local level, politicians of all the establishment parties, including the Northern League, and in particular Berlusconi’s PDL, but also the PD, have been found guilty of, or are under investigation for, taking bribes to give favours to friends and family members, creaming off millions of euros of public funds to finance lavish lifestyles, and a myriad of other charges. The idea, already extremely widespread in society, that they have all got their snouts in the trough, that they are all thieves, has been reinforced by these latest scandals. This partly explains the success of the grillini. Grillo uses revolutionary sounding phraseology about sweeping away the current MPs, parties and political system. This strikes a chord, especially with young people who hold the traditional parties in contempt and see no credible, mass left/anti-capitalist alternative among the existing parties and political formations. Fifty per cent of under 25s voted for the M5S (67% in Sicily), and 60% of students. In reality, however, the movement is proposing not revolution but democratic reform of the existing political system. This would include cuts to parliamentary salaries and expenses – the grillini representatives will only take half of their salaries, possibly less. In Sicily, the remainder of their salaries has gone to help local micro-businesses. The M5S calls for a change in the electoral law, halving the number of MPs, and abolishing the state funding of political parties, etc. The money saved, it claims, would go towards financing the rest of the M5S programme. The remainder would be financed from scrapping military spending on wars in Afghanistan and elsewhere. Voicing deep discontent Before the economic crisis, Grillo only really ever touched on two main issues: the political caste and the environment. The problems faced by workers in the workplace, cuts in health, education and public services were barely if ever mentioned. Even now these economic and social issues take second place to political reform. But the impact of the economic crisis has been severe both on working and middle-class people. Nearly 40% of youth are unemployed and tens of thousands of workers are on ‘cassa integrazione’ (short-time working or at home with part of their salary paid). The overwhelming majority of Italian companies are small, often family-run businesses struggling to obtain credit from the banks. A company closes down every minute. In his ‘tsunami’ election tour of 77 piazzas, Grillo began to give voice to the deep discontent at economic crisis and austerity. ‘Borrowing’ demands from the anti-capitalist left, he called for the nationalisation of the banks, a shorter working week and a ‘citizen’s income’. He spoke about restructuring the debt and called for a referendum on the euro. The M5S programme opposes cuts in education and supports a totally free health system. It is against the privatisation of water and is for the renationalisation of telecoms. In a context where the parties of the ‘radical left’, like the PRC (Rifondazione Comunista), have become invisible both in struggles and in elections, the fact that these issues are being raised and discussed is a positive development. The PRC stood in the elections as part of a heterogeneous electoral alliance (Rivoluzione Civile) dominated by magistrates which got a mere 2% of the vote. However, while the M5S’s reformist agenda has reflected and channelled the anger in society, it is entirely inadequate as a response to the crisis. Even if the political reforms were enacted and military spending cut, it is estimated that this would provide barely €2 billion, nowhere near sufficient to finance the proposed reforms in the M5S programme. There are many on the left who say that the vote for the M5S is a reactionary vote. This is based primarily on comments that Grillo has made about the trade unions, public-sector workers and, in particular, CasaPound, a neo-fascist organisation. It is important that these comments and the vote for the M5S are put into context. A distinction has to be made between Grillo, the M5S and those who voted for the grillini. A breakdown of the vote for the M5S shows that some of its best results came in areas where there have been important local struggles. In Taranto, for instance, where thousands of workers face losing their jobs due to the closure of ILVA, the biggest steel factory in Europe, the M5S got the highest vote of any party. In Carbonia Sulcis, Sardinia, where miners occupied the last pit in Italy with dynamite strapped to their bodies to stop it from closing, the grillinis got 33.7%. In Bussoleno, Val di Susa, centre of the mass No TAV campaign against a high-speed rail link, the M5S obtained a massive 45%. Undoubtedly, in the Veneto region in the northeast, many of the grillini votes came from former Northern League voters, including small-business owners. But some of these would have voted for the left in the past and, as Grillo has shown, could be won over to a programme which included the nationalisation of the banks and low-interest credit for small businesses. An eclectic mix of policies If a credible anti-capitalist alternative had been on offer there is no doubt that many of the votes which went to the grillini could have been channelled in a leftward direction, as has been the experience in Greece with the rapid rise of Syriza. But this is not the case in Italy. The historic weakness and collapse of the left has created a vacuum which the M5S has filled rapidly and spectacularly. This is most definitely a complicating factor in the development of a new mass left workers’ party. But, in the absence of a viable alternative, the vote for the M5S marked an important break from the parties of austerity and a searching for radical change. The programme of the grillini is a confused, incoherent, eclectic mix of policies reflecting its middle-class make-up. Grillo’s comments are often ambiguous and open to different interpretations. They also express clumsily the genuine feelings of many middle- and working-class people. His comments on CasaPound were not an open endorsement of fascism but a recognition of the reality that some of CasaPound’s policies overlap with those of the M5S (and even with the anti-capitalist left), and that some youth attracted to fascism could be won over to the M5S. However, many on the left interpret Grillo’s comments as being sympathetic to fascism. The question of the character of fascism needs to be addressed – the grillini group leader in the lower house has also made comments revealing an ignorance of its real nature. So do some of the comments Grillo has made regarding immigrants: saying that Italy cannot take on all the world’s problems, and that the children born in Italy to immigrants should not be given the right to citizenship automatically. However, this needs to be done not by labelling the M5S as ‘fascists’ or in a moralistic way, but by putting forward a programme which explains how it is possible to fight for an extension of jobs, workers’ rights and quality public services for all, and how this entails challenging the economic base of society. When Grillo called for trade unions to be ‘eliminated’ because they are ‘old structures’ like the parties, some interpreted this as an attack on unions in general. Others, including many organised workers, saw it as a welcome attack on the union bureaucracy, especially as Grillo said that, if the unions were like the FIOM (the more militant union of engineering workers) or COBAS (union of the base), things would be different. In the same speech he went on to declare that companies should belong to those who work in them. This is consistent with the grillini support for ‘direct democracy’ over a democracy which requires intermediaries such as parties. The real issue here, however, and which has been expressed in Grillo’s praise of workers’ participation in Germany, is a denial of class conflict and the promotion of the idea that workers and bosses have a common interest in working together for the good of the economy, a position which flows from the M5S’s middle-class composition and outlook. Conflicting pressures In the very short term, the movement is likely to grow both in terms of members and electoral support. But very quickly the political and organisational contradictions are likely to intensify, leading to its decline and fragmentation, especially if it enters or forms a government at national level. Some reforms will be possible. In Sicily, the grillinis have blocked the building of a controversial US satellite ground station, and the same could happen with the TAV. But the weakness of the Italian economy and the ongoing crisis mean that these reforms will be very limited. The movement will come under conflicting pressures from the capitalist class, on the one hand, demanding austerity and labour market ‘reform’ and, on the other, from the working- and middle-class people who voted for it in the hope of real political and economic change. The limits of the M5S’s reformist policies and the methods of the movement can be seen in Parma, where the mayor, Federico Pizzarotti, is a grillino. As a legacy of the previous corrupt administration the mayor inherited a budget deficit of almost €1 billion. Already the administration has started to increase charges for local services and impose cuts ‘because the money isn’t there’. The grillini were elected in Parma partly in opposition to the building of a local incinerator which, they claimed, would go ahead ‘over their dead bodies’. The incinerator has now been activated and cannot be stopped, they say, because of the crippling compensation that would have to be paid. There is no concept of building a mass campaign among local people to demand more money for local services from central government or to stop the incinerator. While individual councillors have recently begun to go to factories faced with closure, and individual members are involved in local environmental struggles, like that of the No TAV in Val di Susa, the main M5S campaign initiatives have been limited to the question of democratic political reform. The absence of party structures in the M5S means a lack of accountability and democratic control over elected representatives, especially at a national level. The unrest among members in Emilia Romagna and the expulsion of two councillors, including the first ever elected M5S councillor, who criticised Grillo for undemocratic methods, is a foretaste of future rebellions against the political and organisational dominance of Grillo over the movement. Already, Grillo has threatened around ten to twelve senators with ‘consequences’ for the ‘betrayal’ of voting for the PD candidate (an anti-mafia magistrate) for president of the Senate, causing uproar among the movement’s members in blogland. As the political and organisational contradictions emerge this will open up space for discussion about the need for an anti-capitalist political party based on the workers’ movement and on struggle. The M5S represents a new and important factor in a situation of political, economic and social crisis. An analysis and understanding of the character and the weaknesses of this movement is necessary but is not, in itself, sufficient. Those on the left in Italy need to engage politically with the grillini and their ideas and, most importantly, with those radicalised workers’ and youth who voted for them as part of the process of building a real working-class alternative to the capitalist system.

Democratic deficit in Europe

Right across the Euro zone and beyond the crisis in capitalism is deepening by the day. When all seems calm and stable another shock is set off the latest in Cyprus where people’s personal bank accounts have been raided by 10% on their savings to bail the country out. Were people asked first? No they weren’t this is the democracy of the Euro in action. Or not. Since the onslaught of austerity was placed on the shoulders of working people and the poor across Europe people’s democratic rights as limited as they always are under capitalism are being slowly eroded under our very eyes. This crisis is not just a financial crisis it’s a series of crisis’s and one that myself and certainly the Committee for Workers International CWI including our own MEP Paul Murphy MEP have pointed out for a while now the democratic deficit we are seeing in Europe now. The ruling class is not afraid to take away democratic rights if their system or profits are under threat and wish to safe guard their interests. Although now Greece has a elected government back in power and Italy well who knows they are still trying to figure something out already we have seen the lengths the ruling class will go to safe guard their system by installing their own men in power. The imposition of the 'technocrats', in reality bankers, in both Italy and Greece, shows the seriousness of the crisis for the capitalist class nationally and across Europe. To try to save their system across Europe, the democratic rights of people to decide who will govern them have been trampled on. The markets, through the Troika of the IMF, EU and ECB, have usurped democracy and placed their own men in charge to ensure that the cost of this crisis is placed on the shoulders of the working class, unemployed and poor. The technocrats elevated to rulers in Greece and Italy, Lucas Papademos and Mario Monti, are the banking sector's choice of leader. Monti was an as advisor to Goldman Sachs until his appointment. Papademos was a former vice-president of the European Central Bank, and has publicly been opposed to the write down of Greek banking debt as it would hurt the banking sector. Goldman Sachs was described in a 2010 Rolling Stone article as: "The world's most powerful investment bank" and "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money." It can manipulate "whole economic sectors for years at a time, moving the dice game as this or that market collapses and all the time gorging itself on the unseen costs that are breaking families everywhere - high gas prices, rising consumer credit rates, half eaten pension funds, mass layoffs, future taxes to pay off bailouts." These 'technocrats' have been presented to the world as the experts who will be able to solve the financial crisis, as some sort of wise men who can rise above politics. It has been put out that these men will put the 'national interest' first. This is a lie. The 'dictatorship of the technocrats' is an attempt to divorce economics from politics. The technocrats will act, not in the interests of the mass of the people, but in the interest of the people they represent - the financial elites. The protest movements and strikes that have swept across Greece and Italy need to be intensified against this anti-democratic and anti-working class move by the national and European establishment. No matter how much they try to persuade us that the technocracy is above politics, a mass movement of workers, the unemployed and young people which builds its own party, can brush away this dictatorship of the markets and start to create a society that is democratically run in the interest of the mass of the people.

Italy could reignite Euro crisis

For many the Euro crisis never went away but for the markets there was a period of stability from Christmas till about now when we’ve seen the Italian elections deliver a stalemate and this as a result has thrown the markets into turmoil and panic. The “Tsunami tour” was the name comedian Beppe Grillo gave to his election meetings which filled piazzas throughout the country with tens of thousands of ‘spectators’. Now an electoral tsunami has well and truly rocked the Italian political system with Grillo’s 5 Star Movement, which did not exist at the last election, becoming the biggest single party in the lower house with more than 25% of the vote. Another 25% of the electorate stayed at home, the highest ever post-war abstention rate. The outcome of the election on 24 and 25 February is political gridlock. No party or list having an overall majority and the possibility of fresh elections quite soon. The opinion polls had predicted a victory for the Democratic Party (PD) in the lower house and most commentators expected an alliance of the PD in the senate with the electoral coalition of the outgoing (unelected) Prime Minister, Mario Monti. However, the polls vastly underestimated support for the 5 Star Movements and also for Berlusconi’s PDL, which, on the basis of populist programmes, tapped into deep and widespread anti-austerity and anti-political establishment feelings. Just 120,000 votes separated the PD camp from that of the PDL in the lower house (Camera). The Centre-Left got 29.5% to the Centre-Right 29.2% but the PD lost nearly 4 million votes compared with the last election and the PDL 6 million! Even though the PD as the ‘winning’ party will receive bonus seats to give it a majority in the Camera, it cannot reach a majority in both houses of parliament, even in alliance with Monti. Grillo has ruled out any alliances and a ‘grand coalition’ - embracing Bersani (PD leader) and Berlusconi - although not impossible, could be politically suicidal for the PD. The ‘technocratic government’ card has already been played with the Monti government, so the most likely perspective now seems to be a period of political crisis leading eventually to another election, possibly after a change in the electoral law, in which the support for the ‘Grillinis’ could grow even further. The “worst result possible” was how the Wall St Journal described the election outcome. The repercussions will reverberate far beyond Italy. The day after the election, falls on the Milan stock exchange were so great that trading was temporarily suspended. At the same time the spread (difference between interest rates on Italian and German bonds) began to increase, raising once again the prospect of market turmoil in Europe. The fate of the Euro could eventually be decided not in Greece but in Italy. ‘NO’ to austerity The election results were an overwhelming rejection of Monti’s austerity policies of public spending cuts, tax increases and attacks on workers’ rights. Monti had been dubbed the ‘saviour of Italy’ when he replaced Berlusconi in November 2011 and the markets began to stabilise after months of instability and crisis. In these elections he was the candidate of Brussels, of Merkel and of a section of the Italian capitalist class. They were fearful that a PD government with an overall majority would come under pressure from workers and unions to ditch or water down the austerity policies they had supported under Monti. A PD/Monti coalition was considered the safest option for continuing the ‘Monti agenda’. This strategy failed dismally with Monti’s alliance receiving just 10.5% in the Camera. Before the elections Monti’s personal ratings had been higher than all the party leaders but this was precisely because he was a ‘technocrat’ and not part of the despised political class. Once he became “one of them”, his days were numbered. Grillo and the 5 Star Movement were the real winners. His slogan “tutti a casa” (send them all packing) summed up the absolute disgust and contempt which ordinary Italians have for politicians, establishment parties and an entire rotten political system mired in corruption, scandals and self-enrichment while working people are called on to make more and more sacrifices. Scandals Reports of the huge cover up and fraud at Italy’s third biggest bank, Monti dei Paschi, exploded during the election campaign, tainting the PD, who have been historically closely linked with the management of the bank. It reinforced the deep-rooted feeling that the whole system stinks. Every day pages of the press were devoted to stories of politicians receiving kick backs for economic favours, of public funds being creamed off to fund lavish lifestyles and of company directors (including the director of one of Italy’s biggest and most prestigious companies, Finmeccanica) being arrested for fraud and corruption. The Grillo votes came from across the political spectrum – from the right, from the left and from those with no political affiliation. “I want to give them all a kick up the arse!” was how one voter explained her choice, summing up the mood of many of those who voted for the 5 Star Movement. In the piazzas, Grillo shouted populist slogans and sound-bites about curbing the power and privileges of the political ‘cast’, about a ‘citizen’s income’, a referendum on the Euro, a shorter working week, nationalising the banks, and about improving the environment, all of which struck a chord with those who have had enough of cuts and corruption. There are enormous illusions in the ability of the Grillinis to shake the system up. In reality, the Movement (Grillo refuses to call it a party) has no worked-out programme capable of solving the day-to-day problems of unemployment, low wages, and declining public services which most ordinary Italians are concerned with. It has no real roots in the workplaces or communities, organising principally via the Internet and social media. Grillo himself decides policies and tactics in an ad hoc, off-the-cuff way with no explanation or understanding of how those policies could actually be implemented in practice. His ‘rants’ are confused and inconsistent. Grillo has an ambiguous position with regards to the far-right and immigration. During the campaign he spoke of “eliminating” trade unions although he has also made a distinction between CGIL, CISL and UIL on the one hand and the more combatative FIOM and unions of the base. At a certain stage the limitations and contradictions of the Movement will become clear, ripping it apart. It is likely to disappear as quickly as it has arisen; but for the moment, in the absence of a left-wing, anti-capitalist alternative, it has become the main vehicle for expressing the anger, frustration and disaffection of millions of Italians and its support could grow even more. Economic crisis These elections took place against the background of the longest recession in Italy in the post war period. GDP has declined 7% since the economic crisis began. Unemployment has doubled and more than 37% of young people are now without work. Devastated by rising taxes and declining wages, the average family’s real income is at the same level as it was 27 years ago. Yet with working and middle class people desperate for an end to austerity, the PD was offering a continuation of the Monti agenda with just a few ‘modifications’. They pledged to respect the fiscal compact and balance the budget even though this would entail cuts of 45 billion euros every year. This is behind the massive fall of 11% in their ratings towards the end of the campaign. Berlusconi, on the other hand, was astute enough to understand how supporting Monti’s tax increases and cuts agenda was undermining his electoral base and so he pulled the plug on the Monti government, waging a populist anti-austerity, anti- Europe, pro-tax-cutting election campaign. This included sending a mock-up tax demand to every home pledging to reimburse every penny that people had paid out when Monti reintroduced the IMU household tax. On the basis of this campaign the ‘mummy’, as one French newspaper dubbed Berlusconi, rose like Lazarus from the dead; his PDL alliance clawed back 15 points in support and ended up neck and neck with the PD. What little remains of the Left was electorally crushed. Nichi Vendola’s SEL (Left Ecology Freedom) party, which was allied with the PD, got just 3.2%. Had the party stood alone it would have failed to cross the 4% threshold and would have had no seats in parliament. This was ultimately the fate of Rivoluzione Civile, the heterogeneous electoral list headed by the former magistrate, Antonio Ingroia. New force needed Instead of standing on a clear anti-capitalist/workers’ list, Rifondazione Comunista (PRC), once a semi-mass workers’ party, dissolved itself into Rivoluzione Civile on a vaguely reformist/liberal platform. This was an opportunist move, undemocratically imposed from above in a desperate attempt to get back into parliament. The PRC lost all of their MPs five years ago after entering into a coalition government with the pro-capitalist PD. After every electoral defeat, the PRC leadership, rather than looking to increase its support by involving itself in struggles in the workplaces and in local communities, has sought a new unprincipled electoral alliance, and every time its vote has plummeted. Rivoluzione Civile won just 2.2% of the vote meaning no seats at all.. The unprecedented support for Beppe Grillo can only be understood in the tragic context of the collapse of the Italian Left. But now an entirely new political landscape is emerging. The anger of working class people has exploded in the ballot box rather than on the streets and in the workplaces, but continuing crisis and instability will see the development of new mass struggles. At a certain stage the inadequacy of the 5 Star Movement will be exposed leaving millions looking for another alternative and opening up huge possibilities for the building of a new mass political force based not on confused populism but on the movements of workers and young people, offering a real solution to the problems of working people by challenging not only the politicians but the economic roots of the whole rotten capitalist system. With extracts taken from http://www.socialistworld.net/doc/6180

The markets rule

"Can there be any doubt but that we are witnessing a full frontal assault on democratic rights by European bondholders, bankers and speculators facilitated by the leadership of the European Union?"

Joe Higgins, TD (member of the Irish Parliament), Socialist Party (CWI Ireland)

As recently as a year ago when I and others on the Left wrote and spoke about ‘the dictatorship of the financial markets’ many people thought we were exaggerating. However after the events of the past few weeks, can there be any doubt but that we are witnessing a full frontal assault on democratic rights by European bondholders, bankers and speculators facilitated by the leadership of the European Union?

The political and financial establishment in the United States responded to the financial collapse caused by the insane, greed driven, speculation in the sub prime housing market and the toxic debt packages that were traded among the world’s most ‘prestigious’ banks, by allowing the very same authors of the disaster to write their own bailout terms and ram them down the throats of the American people.

Former and serving chiefs in the world’s biggest investment bank, Goldman Sachs, were centrally involved. Goldman Sachs made a fortune on the sub prime scene at its height and then, with consummate cynicism, made another fortune speculating on the inevitable crash of this gigantic pyramid scheme built on the exploitation of poor and middle income Americans.

The first thing you need to know about Goldman Sachs is that it is everywhere’, wrote Matt Taibi in Rolling Stone Magazine two years ago. Comparing it to a vampire squid sucking the economic lifeblood of humanity, he continues, ‘…the history of the recent financial crisis which . . .doubles as a history of . . . the suddenly swindled dry American empire, reads like a Who’s Who of Goldman Sachs graduates.’

After the dramatic events of the last few weeks, The Rolling Stone writer could now say much the same of the European Union response to the disaster in the Eurozone.

Silvio Berlusconi has just been peremptorily removed from office at the diktat of the speculators in the European financial markets, not because he was a despicable charlatan, but because they weren’t confident he had the authority to force through the drastic austerity on the Italian people which they see to be necessary to recovering their gambling debts. The replacement they have secured as the new Italian Prime Minister, Mario Monti, is a ‘graduate’ of Goldman Sachs, having been an international adviser to the bank.

The new President of the European Central Bank, Mario Draghi, is also a graduate, a very senior graduate in fact. He was a Vice Chairman and Managing Director of Goldman Sachs. This is the same bank which conspired with a right wing Greek government to falsify the national accounts so that Greece could join the Eurozone. The same Goldman Sachs also which specialises in speculating against the currencies and debt of weaker economies in order to make massive profits oblivious to the social dislocation and human suffering which this activity causes to working people and the poor in the affected countries.



Mario Draghi

In Greece former Prime Minister Papandreou has also been removed at the diktat of the markets and the leadership of the EU. The new Prime Minister Lucas Papademos was a major banker, Governor of the Bank of Greece in fact from 1994 to 2002. He is now tasked with bludgeoning the Greek people with a savage intensification of austerity and massive privatisations. Like Mario Monti in Italy, he is really a direct representative of the very sharks in the financial markets whose activities caused the current frightful crisis in the first place.

Monti and Papademos are both members of the Trilateral Commission a secretive organisation founded by US oligarch, David Rockefeller, to coordinate the strategies of US and European big business. In addition Monti is a member of the Bildergerg group an even more secretive and sinister strategising body for the world’s major capitalists.

Monti and Papademos have been foiseted on the Italian and Greek people respectively without ever having been elected. Monti is joined in the new Cabinet by an equally unelected conglomerate of representatives of big business and banking interests.

In all this we see the reality of what it takes to ‘satisfy the markets’, ‘give confidence to the markets’ and ‘reassaure the markets’, phrases faithfully repeated without questioning by just about every establishment commentator and journalist in Ireland and all over Europe. Shamefully the political establishment of this State, like their European counterparts,connive in this crushing of the democratic rights of millions of Europeans in the interest of the private profit of the private financial corporations which orchestrated these ‘coups d’etat’.

There is only one solution to the present crisis that is so destructive of society. The power of the financial markets must be challenged and broken by mass action of the ordinary people of Europe. The financial institutions must be brought into public ownership and democratic control and run for the benefit of the big majority.

Paul Murphy MEP writes on diminished democracy in the EU

democracy in the EU .
Thursday, 01 September 2011 14:02 Paul Murphy . .
The continued economic crisis gripping the eurozone has raised questions of the role of democracy in the European Union, writes Paul Murphy, MEP from the Irish Socialist party part of the CWI.

Euro crisis – democracy diminished to facilitate austerity

In scrambling to avoid a break-up of the eurozone, the approach of the elites in Europe has been characterised by two common themes – austerity programmes to make the working class pay, and a further diminishing of democracy to facilitate the implementation of that austerity.

The results of that austerity have been felt by millions of people across Europe, particularly those in the countries that have received ‘bailouts’ for the European bankers – Ireland, Greece and Portugal. The failure of this medicine of cutbacks and attacks to generate economic growth and enable economies to be redeveloped has also been documented.

Here, I want to focus on the sinister and persistent undermining of democratic checks and controls that have been driven by the establishment in Europe in the course of the crisis. In saying that, no one should presume that the EU was a bastion of democracy prior to the crisis. Even within the limited terms of capitalist democracy, the EU is an inherently undemocratic organisation.

Despite the repeated rhetoric to the contrary, the European Parliament, which is the only directly elected body, has relatively little power. It has no power to ‘initiate’ legislation and a large portion of its work simply consists of making recommendations or suggestions in so-called “Own-Initiative reports” that go to the European Commission. It is with this unelected European Commission (President: Jose Manuel Barrosso) and the European Council (made up of the heads of state of the EU countries) that real power lies.

The Commission in particular plays the role of a strategic thinker for the capitalist classes in Europe. Shielded from the pressure of mass movements and not having to face elections in the member states, it is able to baldly put forward a strategy for a neoliberal, militarised Europe like that set out in its “Europe 2020” strategy.

So even in advance of the economic crisis, the level of democracy within the EU structures has been extremely limited. Decision making consciously takes place out of sight and mind and shrouded in technocratic language to make it very removed from public scrutiny and debate.

However, with the advent of the crisis and the consensus of the establishment around the need to impose austerity as a solution, democratic checks are being diminished even further. This attack on democratic rights fundamentally flows from the fact that if given a choice, the mass of people would not choose vicious austerity, cutbacks and mass unemployment! Therefore, to achieve the chosen ‘solution’ of the establishment, the people must not be given a choice. These attacks on democratic rights have taken a variety of forms.

Increased role of the European Central Bank


The European Central Bank is, in line with neoliberal economic logic, ‘independent’. Independent of whom, you might ask? Well, independent from any democratic check or oversight by representatives of ordinary people. It certainly isn’t independent from the interests of big business and the right-wing economics that serves their interests. One of the clear developments in this crisis has been an increase in the role of the European Central Bank, and its President, Jean-Claude Trichet.

The ECB is now an equal partner in the so-called ‘Troika’ of the European Commission, the ECB and the IMF. This means that the central bank for Europe is actively intervening with the governments of Europe to demand certain austerity policies. More than that, however, particularly in recent weeks, it has used its powers as a potential buyer of bonds on the bond markets, to blackmail countries into implementing very specific austerity policies.

It has emerged that Mr. Trichet wrote a secret letter to the Italian government in early August detailing a series of austerity measures to be implemented in exchange for the ECB agreeing to purchase Italian bonds. The letter called for privatisation of municipal assets, liberalisation of various sectors and gave detailed advice on how to relax Italian employment law!

The response was swift, with both the Italian and Spanish governments aceding to the requests, which are in line with the right-wing character of these governments in any case. Berlusconi announced a package which included extra austerity measures worth €45.5 billion. The Spanish government did likewise, and promised a constitutional cap on debt amongst other measures.


This incredible situation – whereby an ‘independent’ ECB dictates, not just the general thrust of policies (which would be bad enough), but also offers detailed austerity proposals – was not commented on widely. However, it is a very clear indication of the diminishing of democracy within the EU as part of the establishment’s response to the crisis.

So much so that Berlusconi (no friend of democracy or workers’ interests) was moved to exclaim: “They made us look like an occupied government.” Of course, it suits the likes of Berlusconi to blame the ECB for the austerity his right-wing government is carrying out. Clearly a genuine left government would refuse to be bullied by the ECB or the markets, by refusing to pay the debt to the international bondholders and instead raising necessary funds by taxing the super-rich and corporations as well as developing economic growth through a democratic plan based on the needs of ordinary people. However Berlusconi’s comment is indicative of the incredible power that this entirely unelected and unaccountable institution has gathered for itself.


Moves towards an “economic government"

Repeated calls have now been made by the establishment in Europe for the creation of some sort of ‘economic government’ or ‘economic council’, to be chaired, if the current wishes of Chancellor Merkel and President Sarkozy are to be met, by Hermann Van Rompuy (the currently unelected President of the European Council). This body would be a sort of economic leadership for the eurozone countries. In other words, its aim would be to ensure that sufficient austerity is applied with sufficient vigour across Europe.

After their recent summit, President Sarkozy announced the aim “to create a real economic government for the eurozone” and Chancellor Merkel announced “there has to be a stronger coordination of financial and economic policy". You can be sure that they are aware that this “stronger co-ordination” (read: common austerity) and economic government will not be welcomed by the mass of people.

Instead, to achieve this move towards fiscal unity, they know they have to diminish democracy further, hence the concentration of more powers and “economic direction” into the hands of an unaccountable “economic government”.

The most boldly-stated version of this proposal has come from the German Foreign Minister Guido Westerwelle who has called for a “stability council” of unelected supervisors for the economies in the eurozone, with the power to impose sanctions on countries that don’t implement sufficient austerity.

Economic governance and the eurozone plus pact


The apex of the current attacks on democracy within the EU are plans for “economic governance”. This series of proposals, which are currently still being fine tuned, amount to a further serious diminishing of democratic checks within the EU.

Budgets will now have to be presented to the European Commission and Council for approval (“surveillance”) in advance of any debate in national parliaments. The proposals also strengthen the “Growth and Stability Pact” which limits countries’ public debt to 60% of GDP and their annual deficits to 3% of GDP. Sanctions are to be introduced for countries that miss these targets, with states in breach having to pay 0.2% of their GDP into a non-interest bearing account, which will be lost as a fine if they do not follow the directions of the Commission. This fine can be increased up to 0.5% of GDP (around €700 million for Ireland). The final element is a procedure to prevent “macroeconomic imbalances”. The Commission will create a series of parameters (as yet unannounced) and a scoreboard of austerity will be used to measure a country’s progress. If a state fails to meet the targets, further massive fines can be imposed.

All of these moves are designed to facilitate the imposition of semi-permanent austerity in Europe. It is being prepared with the awareness that a major movement of opposition to cutbacks already exists in Greece, Portugal and Spain and can easily develop in Ireland and other countries. Conscious of the pressure that such movements can exert on governments that have to seek re-election, this is designed to move decision-making further away from working people and create a counter-pressure on national governments (through the threat of fines and the process of budgetary surveillance) to enable them to resist these movements.

How can the further diminishing of democracy be stopped?


The diminishing of democratic checks is entirely related to the content of the proposals that the undermining of democracy is designed to facilitate. Therefore, the battle against austerity of the Left and the trade union movement needs to take up the question of democracy within the European Union as well.

In Ireland, loud noise must be made to demand a referendum which it is the intention of the government to not grant us, on the amendments to the Lisbon Treaty to facilitate the establishment of the European Stability Mechanism. Fundamentally, the whole undemocratic EU project must be resisted and a struggle for an alternative, socialist Europe, based on the interests of working people across the continent and mass participative democracy, must be waged.

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Paul Murphy is the Socialist Party and United Left Alliance MEP for Dublin. He replaced Joe Higgins after his victory in the 2011 General Elections. More information can be found on his blog: http://www.paulmurphymep.eu/.

World economy, capitalists unable to stop the turmoil

this is a excellent article on the growing turmoil in the world of capitalism from this week's socialist. The newspaper from the Socialist party where you can find more excellent articles each week at
www.socialistparty.org.uk

As their system continues to slide further into its worst crisis since the 1930s, the frantic efforts of world capitalist leaders to reverse the process are farcical, contradictory and ineffective. "Financial markets at their wits' end", was the headline in the Financial Times.

In a matter of weeks, trillions of dollars have been wiped from equity market values worldwide. The rush out of equities (shares in companies, banks etc) to alleged 'safe havens' of gold is now greater than at the time of the collapse of Lehman Brothers in 2008. This indicates the depth of the present crisis which threatens to become a prolonged slump.

The credit-worthiness of the USA, the most powerful economy in the world, has been questioned. Eurozone leaders are stumbling from one summit to another without being able to solve the crisis.

On Friday 5 August, the credit rating agency Standard and Poor (S&P), downgraded US government bonds from AAA to AA+. This, they said, was due to the debacle between Democrats and Republicans over the debt ceiling for the US - now standing at $14 trillion, the highest in the world. These are the very same 'experts' who gave an AAA rating to the sub-prime lending spree in the first place which helped to lay the basis for the present crisis.

Big investors in US 'treasuries', including the Chinese government, are still not likely to move out significantly, but China's official People's Daily newspaper took the opportunity of the S&P assessment to chide the US government with its own interests in mind. It should not "become blind to the great risks that a weak greenback could pose to the world's fragile economic recovery by lifting dollar-denominated commodities prices", it wrote.

Double-dip recession
The S&P found the sums on which it based its assessment were wrong - by $2 trillion - but, pessimistic as they are about growth prospects, they still believed that lenders would have doubts about buying US government bonds. The latest figures for January to July show the US economy already crawling along at a rate of just 0.8%.

The US economy is now almost certainly facing a 'double dip' recession. There are legitimate fears, now widespread, that the austerity measures being imposed in the US and many other countries to tackle high levels of debt, will actually stifle their already weak economic recoveries and plunge them further into crisis.

This is behind the renewed expectations that the US Federal Reserve will announce a new round of 'quantitative easing' (QE - printing money) in response to forecasts of the US having a 50-50 chance of entering recession before the end of the year. But QE1 and QE2 have not solved the problems and it remains to be seen whether a new 'stimulus package' will be sufficient to stem the crisis.

Fears about the future of the world economy have been reflected in the price of gold and oil. Gold - not 'paper value' but a store of real value - is always a favourite 'investment' in uncertain times. Its price has jumped to new nominal records well over $1,720 an ounce and could, in some estimates, go as high as $2,500 by the end of the year.

Another 'safe haven' for investors - the Swiss Franc - has reached in the last month record highs against the euro and the dollar. The 'Swissie' has now moved into negative interest rate territory, which means investors paying the banks to hold their assets safe!

On the other hand, the price of oil has considerably declined. This is because of the grave concerns about downturns in growth leading to a fall in demand.

As the CWI has explained on many occasions, the very feeble recovery in most countries has not been accompanied by any sizeable growth in total output. Apart from some notable exceptions, it did not bring jobs for the tens of millions of unemployed, nor stem what seems like a war on the poor - massive cuts in public spending.

Further cutbacks and downturns in the prospects for young people lie behind the outbursts of anger recently seen on the streets of England. Seriously prepared strikes and general strikes are urgently needed in a series of countries now to stem the attacks on pension rights.

Without the trade union leaders giving a clear lead in the struggle against cuts across Europe and in other countries, clashes with police and attacks on property could erupt in the most deprived urban areas.

A programme of jobs and homes for all has to be accompanied by a struggle for the nationalisation, under democratic workers' control and management, of the banks and big monopolies. This can channel all the anger and frustration of youth and workers against the system.

Crisis measures
On 21 July a special meeting of Eurozone finance ministers agreed another bailout for the Greek government. But within days it was clear this would not solve Greece's underlying problems or prevent a default of its national debt. Before the 21 July agreement can even come into force, it has to be ratified by all of the Eurozone governments, mostly through their parliaments which are not in session during August.

Only two weeks after this, under pressure from the Eurozone leaders, especially Merkel and Sarkozy, the European Central Bank (ECB) was forced to announce new measures to try and prevent the stock markets going into a tail-spin after Friday's news from America! Its previous policy of not buying Italian and Spanish bonds on the open market was reversed.

This reduced, at least temporarily, the rates on these countries' borrowings. However, stock markets remain volatile, reflecting investors' doubts over effective EU measures to solve the eurozone sovereign debt crisis.

Other discussions have taken place about expanding the powers to intervene by using the €440 billion in the European Financial Stability Fund but they are hampered by the need for unanimity across the zone.

Italy and Spain's governments alone need to find an extra €840 billion over the coming 18 months - more than the total of bailouts already found for Greece, Ireland and Portugal.

The ECB measure will ease the situation in relation to the debts of Italy and Spain but the strings attached will bring them into head-on confrontation with their populations.

Italy's prime minister, Silvio Berlusconi, has tried to give the impression there is no major problem in Italy. But his country has one of the biggest debts as a percentage of GDP (nearly 120%) and an economy which has failed to grow more than a fraction of 1% for the past two decades.

He has now agreed, with his government, to bring forward the deadline by which budget cuts will balance the state books - from the original 2014 (well after the next general election) to 2013 (still after the next election is due!).

Extra austerity measures, nearly double those already announced, have been put through the cabinet by decree. Already, even in a summer period, opposition is mounting. Berlusconi has said he will not stand next time round, but he desperately needs a government in power that will not allow three major court cases against him to proceed.

Spain's prime minister, José Luis Rodríguez Zapatero, has also declared he will not stand in November's election, sensing the widespread dissatisfaction with his inability to get Spain's economy back into healthy growth.

He has nevertheless agreed to increase austerity measures as a condition of the new loans. The massive level of youth unemployment in Spain and a feeling of utter neglect by politicians have been behind the mass movement of the 'indignados' - young people disillusioned with political parties and looking for radical, even revolutionary solutions.

Richard Hunter, a broker from Hargreaves Lansdown, said: "The markets are looking for a concrete plan out of Europe and the US in terms of how they are going to deal with their deficits." But because of private ownership and the states' role in defending the national interests of their own capitalists, a clear plan is something that capitalism, by its very nature, can never provide.

Capitalist anarchy
Trying to control an anarchic and blind system, none of the measures they take seems to stem the downward spiral into the worst crisis since the 1930s.

The measures they take to try and rescue their system will mean yet more cuts and austerity, yet more suffering and anguish for the vast majority of the world's population. The accumulating crises - economic and political - of the last few weeks, have only served to underline the chaotic and wasteful way in which capitalism works or fails to work.

Only 58.1% of Americans of working age now have a real job. Tens of millions of people worldwide are on the scrapheap when they could be producing goods and providing services.

On the basis of public ownership and democratic planning, all the human and physical resources of society could be harnessed for the benefit of the vast majority instead of the increasingly rich minority.

The stranglehold of the banks and capitalist politicians over the lives of millions, in fact, billions, has to be broken. Mass movements, including general strikes, will show the power that the working class can wield in society.

Linked with the energy and anger of the youth, new mass workers' parties can be rapidly built. Confidence in the idea of a socialist alternative to capitalism can and must be renewed without delay.

Markets take a tumble as fear spreads about state of world economies, a socialist alternative is needed

Today saw one of the biggest falls on the global stock markets in 3 years with big dips in America and in Britain.

Wall Street had its worst day for almost three years as shares tumbled on fears about the eurozone debt crisis and the US economic recovery.

The Dow Jones index closed down more than 500 points, or 4.3%, and came after the leading European bourses fell more than 3%.

It was the biggest one-day fall for the Dow since 22 October 2008.

Earlier, European Commission President Jose Manuel Barroso warned that the sovereign debt crisis was spreading.

Also in New York, the S&P 500 index fell 4.8% and the tech-rich Nasdaq was more than 5% lower.

Meanwhile, Frankfurt's Dax and London's FTSE 100 indexes had their worst day this year, closing almost 3.5% lower as investors fretted that Italy and Spain might become engulfed in the debt crisis.

"People are throwing in the towel because they can't find relief on any front," said Milton Ezrati, market strategist at Lord Abbett.

Investors sought the relative safety of gold, sending the price of the metal to a new record high of $1,677 an ounce.

More weak jobs data from the US also raised concerns about the strength of the economic recovery there.

Wall Street's financial power houses were hit hard, with JP Morgan and Bank of America falling 5% and 7.4% respectively.

In Europe, Lloyds Banking Group fell 9.9% and Royal Bank of Scotland was down 7%. France's Societe Generale lost 6.9% and Germany's Commerzbank dropped 6.8% in Frankfurt.

Miners also suffered, with Vedanta Resources slumping 9.5% and Xstrata and Eurasian Natural Resources falling more than 8% in London.

The oil price also slumped on fears that a weaker global recovery would hit demand. Benchmark West Texas crude for September delivery fell $5.30, or 5.8%, to $86.63 a barrel. Brent crude fell 5.3% to $107.25.


This just highlights the fragileness of the global recovery if you can even call it one. There are fears over Italy and Spain who are borrowing at high interest rates which they are not thought to be able to sustain for too long.

There is increasing doubt over these economies and this doesnt even begin to mention Greece which surely will take anotehr tumble sadly. But all this means that global economists are urging for more cuts and less borrowing. I.e austerity which we are all starting to become very familiar with unfortunatly. If your nearing the edge pull back and cut is the message being sent to countries in trouble.

But this is no warmth to the working class who as a result of all this will feel their living standards cut even further and jobs lost, wages cut and gains we have made over decades taken away.

Unless we resist . There i a growing movement of reisstance but i feel this now has to be stepped up to a major scale. Bringing whole cities and towns to a stand still for prolonged time. The demand to write off the debt must be started to be made i feel too. If this message is spread early enough it can become ingrained in workers contiousness and spread.

The absence of a workers party in much of europe and the world is still very evident. The struggle for this must continue with building of things like TUSC - trade union and socialist coalition in order to give workers a voice on thepolitical stage and a alternative to the cuts and austerity.

Idealy this need for a party would not be nessesarily to win elections and replace labour as a careerist capitalist pro busienss party but to reject capitalism and offer a new way forward for workers to realise. NOt by just voting will things change it all has to be linked to the continuous need for socialism and democratic workers control of the planned economy.

Will Italy be next on the bailout list ?

Fears that Italy will be forced to seek a bailout sent Italian government bonds falling on Monday, as Europe's most senior finance ministers gathered to discuss the ongoing eurozone debt crisis.

The euro dropped sharply, as City traders and analysts warned that Italy could be close to becoming the fourth member of the eurozone to require financial help. The concern was shared in Europe's stock markets, with the FTSE 100 falling more than 70 points by lunchtime.

The yield, or interest rate, on an Italian 10-year government bond jumped to 5.4%, closer to the 7% level which is generally seen as unsustainable.

"What will really concentrate the mind of the finance ministers will be the recent upward trend in Italian government bond yields," said Gary Jenkins, head of fixed income research at Evolution Securities. "What would keep me awake at night if I was a European finance minister is that we are only about 2% away from a potential disaster scenario."

European Council president Herman Van Rompuy was scheduled to meet ECB president Jean-Claude Trichet, EU commission president José Manuel Barroso, EU commissioner Olli Rehn and Luxembourg's Jean-Claude Juncker, who chairs the group of eurozone finance ministers, at 11am BST to discuss the crisis.

Clouds have been gathering over Italy since Friday, when shares in several Italian banks fell sharply over concerns that they would fail the next round of EU stress tests. Economists have warned that the eurozone lacks the firepower to fund a bailout of Italy. German newspaper Die Welt reported on Monday that the European Central Bank is considering doubling its existing stabilisation mechanism to €1.5trn.

"We are seeing contagion spreading to Italy. The bailout facility as it stands would be nowhere near big enough to deal with Italy," Adam Cole, head of global currency strategy at Royal Bank of Canada Europe, told Bloomberg.

The Italian blue-chip index, the FTSE MIB index, fell by 3.25%, while the Spanish Ibex lost 2.8%. Traders in London said the eurozone crisis was dominating attention again, with the FTSE 100 down 1.25% or 65 points at 5924.

"The risk is that we may well have already seen the best of the stock market strength for the moment," said Yusuf Heusen, senior sales trader at IG Index.




The question is how will the EU survive this debt crisis with seemingly no end in sight for these vunrable nations with crippling debts spiraling out of control.

You can only bail out a country so many times before much like what will happen with Greece it still cannot afford its repayment on its finance on its debt. It will have to default. There is no other way.

TO bring bigger nations in on the deeper crisis hitting the weaker EU nations would spell catastrophy.

The next bank bailout could dwarf the last bank bailout in 2008 if austerity measures are carried out. There will be nothing left to bail these banks out this time leaving a partial or total collapse of the EU.

These news stories must be sending shockwaves through the capitalists minds and trembling them with fear. The question is to get themselves out of this crisis they will have to offload the debt on to the shoulders of the working class. But will they be able to push these measures through. I'm not so sure. The resistance in Greece already has shown the people will not take these cuts and privatisation lying down.

But for a big push back there needs to be a working class organisation on the political stage to lead the way.