An update on this blog

So sorry for the lack of posts of late. I've not been that active as I’d have liked. Been quite busy thinking and considering the world we now live in. Since the general election things have as predicted got harder for people including myself. Tory government intent on ripping away our rights and our freedoms in lots of ways. While the labour party my former home has a new left wing leader catching many including myself by surprise. Not least my former party the socialist party of England and Wales who still can’t understand how labour can have elected a left wing leader a proper one this time. We were told for years the Labour party is just another capitalist party just like the democrats in the US. But the election of Jeremy Corbyn by a stonking majority has forced many on the left including myself to look again. I have not been shocked at the levels of crap thrown at Jeremy Corbyn. Any glimpse of a turn to the left or anything vaguely mentioning the working class or even socialism has to be squashed and ridiculed before it gains any foot hold. I have had lots of thoughts over the last few months just not got around to putting them down on a blogpost. I've come across many people from different walks of life and continue to be astonished how much people are prepared to put up with. But we can all only take so much and people will not lie down without a fight. I'm proud to say my disabled comrades at Disabled people against Cuts continue to do fantastic work and will always have my full support. The anti cuts movement is in a bit of a mess with no real direction but small local campaigns has found victories here and there. I am still thinking along a libertarian anarchist lines with a form focus on non hierarchical organisations. I still look back at my political past of labourism and Trotskyism with levels of cringe. But I thank them for showing me what not to go for in a movement it’s a process I’m and many of us are on we learn and develop our ideas day by day. The fight against the brutal austerity continues all over the globe but in Britain we have not given up. Anarchists, including AFed and Solidarity federation, threw themselves into the struggle against cuts after the election of the Tory/LibDem coalition in 2010. We joined literally millions of others on strikes, protests, occupations, and direct actions, but after 2012 it all got a bit... quieter, and the cuts continued. That's changing this year though, but how can we make sure this new wave of anti-cuts action is more successful? What can we learn from the past five years? What contributions can Anarchists make to the struggle (and what contributions SHOULD we make)? I was close to closing this blog down but something inside me nagged at me telling me. Don’t be ashamed of your past cringe worthy ideas heck we all have to start somewhere don’t we....

Why I’m scared for our future

You may say what future and you may have a point… Today we saw another government take office this time a fully Tory Tory one and lets be honest not many expected them to gain a outright majority how they managed it is open for debate but they have done and we must face facts. The labour party shouldn’t go without comment in their disgraceful backing of tory austerity they have been a hammered in the polls and rightly rejected yet we are left with the proper tories at least we know what this lot stand for and that is outright destruction of the working class if they get their way. As a disabled person I have been worrying all day what will happen to us come the next 5 years. Chills of dread have flooded me and the horrors of the last 5 years tell me with Tories on their own they can get away with so much more not that the Lib Dems stopped them with any of their brutal cuts but this time it feels we are facing the abyss in terms of our welfare state, our NHS and our public sector services. A total of 12 billion pounds is to be slashed from the welfare bill and this will I tell you now directly will hit the poorest the most vunrable in our society I fear for many of us I really do. A leak last week suggested the following cuts have already been drawn up by the Tories The proposed cuts included: • Limiting support to 2 children in child benefit and child tax credit, so cutting up to £3,500 from a family with three children. • Removing the higher rate child benefit from the first child, an average cut of over £360 for every family with children. • Means testing child benefit – cutting £1,750 for a two child middle income family • Removing child benefit from 16 to 19 year olds – a cut of over £1,000 for parents of a single child. The Conservatives have been under sustained pressure to detail how they will cut £12bn from the welfare budget by 2017-2018, and the Institute for Fiscal Studies think-tank confirmed this week the Tories have so far disclosed only 10% of these cut in the form of a two-year freeze in working age benefits. With further cuts to benefits surely on its way the DWP have wasted no time in outlining plans to slash the access to work scheme a benefit which is close to my heart and helps me every time I go to work. The attacks on this particular benefit already destroy the lie that the Tories are there to help the disabled in to work and in work they just do not care and are taking the axe to this next benefit. How it will affect me long term we will have to see but be sure I will not let any attacks on me working go unheard. In a piece in the independent tonight it is said. http://fw.to/EMNy4cK The DWP has moved further to examine cutting a scheme that helps disabled people into work – just hours after the Conservatives won the election. The fund helps people and employers cover costs of disabilities that might be a barrier to work. The biggest single users of the fund are people who have difficulty seeing and people who have difficulty hearing. A policy document originally quietly announced in March suggests capping the £108m Access to Work fund. An impact assessment of the policy was released on the day the general election results. “[Spending] has risen significantly over the past five years … One of the significant strategic questions we face is how to establish the right balance between the need to support as many disabled people as possible and what it is reasonable to offer individual users,” the assessment says. The first option outlined by civil servants in the document is “to set a cap on the maximum value of support per user”. The party's manifesto boats that "last year alone, 140,000 disabled people found work" but says that "the jobless rate for this group remains too high. "As part of our objective to achieve full employment, we will aim to halve the disability employment gap: we will transform policy, practice and public attitudes, so that hundreds of thousands more disabled people who can and want to be in work find employment," it pledges. The overall spend on Access to Work in 2013/14 was £108m, covering 35,540 people. • An earlier version of this story indicated that the policy had been announced in the hours after the general election result. In fact the impact assessment for the policy was issued in the hours after the general election result, while the policy itself was issued in the run up to the general election in March This is just a glimpse of the tories aims in this next 5 years. Be under no illusion they are coming for you and they will not give a stuff about who you voted for or anything. Its time to organise ourselvesin our communities find common allies and fightback in whichever way we can using any means at our desposable. We may never see the welfare state ever a gain if we do not fightback now. The last 5 years was justa warm up for what is coming next …..

Greece, Syriza’s predicted climbdown

As many of us who have been around for a while and were not swept up in all the excitement of a so called leftparty gaining power in Greece will have thought this recent news of a Syriza sell out comes as no surprise to us. We take no joy in this and in fact will only serve to boost the right who will play on this. “We won the battle, not the war,” declared Alexis Tsipras on February 21 after the euro group decided to extend the bailout deal for another four months. This was conditional upon the Syriza-led government submitting economic and other ‘reforms’ deemed acceptable to its creditors (especially Germany). Neither part of the Greek prime minister’s statement is true, of course. Athens blinked first, as was always going to be the case, and decisively lost the battle. And you can confidently predict that the isolated Syriza government will lose the war as well: the enemy is too big. Yes, the new deal may have averted immediate bankruptcy and a potentially catastrophic ‘Grexit’, but the country remains locked into austerity. Still at the tender mercies of the despised European Commission-European Central Bank-International Monetary Fund troika (even if they are now officially called the “institutions”). Now that the deal has been signed, with the troika (sorry, institutions) due to deliver a more detailed verdict by the end of April before the last tranche of €7.2 billion can be paid out, only the most deluded can fail to see that the agreement constitutes a headlong retreat from the Thessaloniki programme first presented last September - which itself represented a significant watering down of Syriza’s original radical goals (eg, nationalisation of the banks was dumped). The manifesto or “national reconstruction plan” was based on four central pillars: “confronting” the humanitarian crisis; “restarting” the economy and promoting tax justice; a “national plan” to regain employment; and “transforming” the political system to “deepen democracy”.1 At the wider, European, level, the programme demanded a European “New Deal” of large-scale public investment by the European Investment Bank, extending quantitative easing by the ECB and a conference for the reduction of Greek and southern European debt modelled on the London Debt Agreement of 1953. Rather unfortunately, Tsipras stated at the time that the programme is “not negotiable” - when in reality it has been negotiated out of existence. Relatively minor concessions aside, such as a possible reduction in the primary budget surplus2 and some theoretical leeway to propose his own fiscal/economic policies (which can be rejected at any time), the Syriza government has agreed to conform to the bailout, not buck it - let alone reverse or overthrow it. If that is a victory, then one dreads to think what a defeat would look like. Pie in the sky Thus the six-page letter signed by finance minister Yanis Varoufakis rowed back on virtually all the campaign pledges - he may be erratic, but he is definitely not Marxist. What Syriza originally wanted (there is no reason to doubt their sincerity) was the complete overhaul-cum-cancellation of the bailout and its onerous austerity terms; no more ‘supervision’ from the hated troika; reduction in the debt owed to the rest of the euro zone and a profits transfer from the ECB’s sovereign bond purchase programme; substantial easing of the requirement for Athens to indefinitely run large budget surpluses; an increase in the statutory minimum wage from €530 a month to €751; and, of course, an end to all privatisation programmes. What Syriza actually consented to, however, was an extension of existing bailout terms and conditions; some minimal reforms to supposedly address the humanitarian crisis (like food stamps), so long as they have no “negative fiscal effects”; a commitment to work in “close agreement” with its creditors (ie, the troika/institutions); maintaining current privatisations and “improving” the terms of privatisations that are not yet launched; the reduction/rationalisation of benefits, whilst keeping the public-sector wage bill to its current level; no debt repudiation or write-off, but a conditional promise of future transfer of central bank bond purchase profits to Athens; reduction in the required 2015 budget surplus from 4.5% to 1.5% (still harsh in a depressed economy); and the reintroduction over time of some form of collective bargaining, and no “unilateral” or “one-sided” changes to economic policies and fiscal targets - meaning minimum wage and other spending pledges are up in the air. Syriza also agreed to abandon plans to use some €11 billion in leftover European bank support funds to help “restart” the Greek economy. Then, of course, we have the vague and maybe unfulfillable promise to ‘crack down’ on the oligarchs and criminals - drawing up a €7.3 billion ‘hit list’. In this manner, we are told, the Greek government hopes to gather €2.5 billion in tax receipts from the fortunes of powerful Greek tycoons - and a similar amount, apparently, would be drawn from back taxes owed to the state by various individuals and businesses. A clampdown on illegal smuggling of petrol and cigarettes would yield another €2.3 billion for government coffers, we discover. Frankly, this is wildly optimistic. Obviously, such measures - assuming they ever happen - would not generate anywhere near the revenue expected or hoped: the oligarchs’ money has long left the country, relocated to London or New York. The only option, if you were serious about getting the money, would be to confiscate their assets - but clearly that would be to violate EU law and therefore will not happen. The Tsipras leadership would not risk getting kicked out of the EU. What we now have is austerity in the colours of Syriza, which was inevitable, once Tsipras et al agreed to form a government (unless they wanted to ‘do an Albania’, of course). Germany and its close allies were never going to consent to any form of debt relief or repudiation, as that would set a dangerous precedent - sparking rebellion across Europe. Expressing this worry, one of Schäuble’s senior officials told the Financial Times: “If we go deeper into the debt discount debate, there will be no more reforms in Europe. There will be joyful celebrations in the French presidential palace and probably in Rome, too, if we go down this path.” In other words, what Germany is really worried about - quite understandably from its own point of view - is that the austerity regimes imposed on Ireland, Portugal, Spain and Italy could unravel. The latter country, it goes without saying, is too big to fail - if it did, that would be the end of the euro zone. Now, you might have dreamed that Tsipras and Varoufakis were playing a highly sophisticated and devious game - master chess players. Knowing full well that they could not scrap or reverse the bailout deal, they actually had another secret plan up their sleeve: Grexit. They would revert back to the drachma, erect stringent capital controls and nationalise almost everything, whilst developing trade links with Russia, China, Venezuela, the Brics and Mint economies4, etc. After all, only a few weeks ago, Panos Kammenos, defence minister and leader of the Independent Greeks - coalition partners to Syriza - openly mused about a “plan B” to get “funding from other countries”: eg, Russian and China.5 True, in order to do this the Syriza government would have to effectively seal off Greek society - dig deep trenches, plant endless anti-tank mines, build millions of bunkers, massively expand the secret police and construct an enormous East German-like wall around the country to stop people fleeing: about two million have already left, after all. So just imagine how many more would want to leave after drachmaisation, which would see a considerable plunge in living standards: a ‘middle class’ exodus of doctors, lecturers, lawyers, etc. Tough, sure, but at least it would have been an act of resistance. Pure fantasy, of course. Those grouped around Syriza’s leadership never had a plan B, or even much of a plan A - apart from getting what crumbs they could from ‘renegotiating’ the bailout and doing whatever they had to do to remain within the euro/EU. But the Socialist Worker headline correctly sums up the situation: ‘New Greek deal turns the screws on Syriza’ (February 24). Unhappily, Syriza’s problems are only just beginning. Whilst the EC was quick to support the Greek formula, both the ECB and IMF are a lot more ambiguous about the bailout extension. Christine Lagarde, head of the IMF, and Mario Draghi, ECB president, have expressed strong reservations to Dijsselbloem. Lagarde thinks the Greek proposals are not sufficiently concrete, singling out “critical” undertakings such as VAT, pension and labour market reforms and privatisation - in these and other areas, the Greek letter is “not conveying clear assurances”. For his part, Draghi complained that the pledges outlined by the Tsipras government “differ from existing programme commitments”, meaning that the ECB will have to assess whether any possible new measures or policies are of “equal or better quality” - ie, are sufficiently committed to austerity and neoliberal reforms. The troika might come back later for yet more flesh. In his own way, Schäuble hit the nail on the head when he said that Syriza “certainly will have a difficult time to explain the deal to their voters”. He reminded radio listeners that the Greek government had told the people “something completely different in the campaign and afterwards” - hence the question now is “whether one can believe the Greek government’s assurances or not”. Many within Syriza are far from happy. Manolis Glezos, MEP and anti-Nazi resistance veteran - who famously in May 1941 climbed on top of the Acropolis and tore down the swastika - was one of the first to slam the deal. In a withering statement he wrote: “Renaming the ‘troika’ as the ‘institutions’, their ‘memorandum of understanding’ as an ‘agreement’ and the ‘lenders’ into ‘partners’ doesn’t change the situation.” He has called for urgent opposition inside the party on the grounds that there can be “no compromise between oppressor and oppressed”. Sofia Sakorafa, another MEP - the first MP to quit Pasok over its support for austerity - and leading Syriza economist John Milios quickly endorsed Glezos’s statement. Similarly, Costas Lapavitsas, Syriza MP, professor of economics at the School of Oriental and African Studies - and a prominent member of the Left Platform tendency - wrote a scathing open letter on his blog, outlining how “difficult” it is see how the Thessaloniki programme (which includes writing off the biggest part of the debt and scrapping the memorandum) “can be implemented through this agreement”. He went on to say that it is necessary to “give substantial answers immediately to these questions” in order to “retain the large support and the dynamism given to us by the Greek people”.6 Perhaps even more damning was the reaction from Stathis Kouvelakis, member of the Syriza central committee. He bluntly stated that “going on this way can only mean defeat”, as under the deal the Syriza government will have “no choice other than to administer the memorandum framework”.7 In turn, this will “disappoint the hopes and expectations” of those who voted for the party. He warned that Syriza could “disintegrate” and that there could be a “reconfiguration” of the current political alliances, as there is no longer any reason why pro-memorandum forces “should go on refusing to collaborate” with Alexis Tsipras. It is far from impossible, he contended, that To Potami, Pasok and even a wing of New Democracy could end up getting into bed with Tsipras - and it was “precisely” the latter that Syriza was “giving a nod and a wink to” when it chose to support Prokopis Pavlopoulos, a leading figure from ND’s centrist wing, for president (with 233 votes in favour). This is all turning very sour very quickly for Syriza and a left revival in Europe looks badly miss judged. We all know that any government who looks to manage the system better ends up beign managed themselves by the system itself. This is no more clear than Syriza itself who is bending its programme to fit the narrative being dictated to it by te EU. As for Golden Dawn and other far-right formations, their attitude is totally predictable - Tsipras is a national traitor like all Marxists and communists: look at how they have betrayed the country. Greece will continue to be polarised between the far right (maybe including sections of the Independent Greeks) and the far left: the centre cannot possibly hold. Under such crisis conditions, it is not entirely inconceivable that the EU will sponsor some sort of coup - whether militarily or constitutionally. Perhaps attempt to get a technocratic government installed, as in Italy. All this demonstrates the folly of tying yourself to the Syriza flag, as Left Unity stupidly did - making it a sister party and so on. Even worse, forces within Left Unity in the UK are now talking about an “anti-austerity alliance”, using Syriza as their model. Complete madness, when you consider that the Syriza government is now committed to implementing its version of austerity - lite or otherwise. Talk about shooting yourself in the foot. http://weeklyworker.co.uk/worker/1047/austerity-in-the-colours-of-syriza/ with thanks to quotes from the weekly worker at http://weeklyworker.co.uk/worker/1047/austerity-in-the-colours-of-syriza/

The Real agenda of PCS union suspending elections for a year

SO the PCS union has alarmed many who care about union democracy and decency in the union movement w by suspending elections for a year all in the idea of "saving money". In a excellent article detailing the hows and why's PCS your voice a publication of the independent left in PCS who i believe have no party line as such wrote the following piece today i find it interesting reading given when i was a member of the socialist party it was talked for years there would be a situation like this happening. "The PCS National Executive Committee has taken the decision to suspend elections to the NEC and to Group Executive Committees for the coming year. Your Voice condemns this decision as a mistake and wholly unnecessary. The NEC made this and several other decisions at an emergency meeting on Thursday 18 December. The meeting also decided on staffing reductions and budget cuts, whilst confirming the sell off of the HQ building in Clapham. The rationale given for this was the scale of government attacks on PCS. A number of government departments are currently in the process of removing check-off, the facility to pay union subscriptions through payroll. This has left union reps rushing to sign members up to Direct Debit, with more and more other activity put on hold as the year has progressed, to combat a potentially massive loss of funds for the union. This threat, and in particular the fact that elections would take resources away from the Direct Debit campaign, has been used as justification for the suspension. The costs of elections were also brought up in favour of the decision. Whilst recognising dire threat that the removal of check off presents, alongside other measures such as union busting in HMRC, we nonetheless feel that suspending democracy was the wrong decision to take. On a practical level, we know that there is under-engagement in elections just as there is a shortfall of take up for Direct Debit. Could both issues not have been addressed together? An election campaign would surely present an ideal time to engage with members and promote the need to defend the union, while more simply Direct Debit forms and literature could have been included in the mail shots. In terms of cost cutting, there are no doubt any number of measures which could have made the ballots cheaper without doing away with them altogether. The savings may not have been as stark as the £600,000 quoted for this decision, but the loss wouldn’t be as great either. Democracy is not simply a cost to be reduced, but a necessary part of organising as workers. Your Voice believes in a union run by its members at a rank-and-file level, and that requires more democracy rather than less. This should be a fundamental tenet of what defines us, not a niceity to be discarded when inconvenient. There is much more that could be said on this issue. We are sure more will be in the run up to AGMs and Conference. In the meantime, we urge all those who oppose this decision to argue for their branch to adopt that same position and write to the NEC urging that they reverse it at their next meeting in January. Facing off the attacks on our union from this government mean not only standing our ground but advancing forward. If we take a single step backwards, in terms of democracy or organisation, then that is a concession too many to our foes. Further to this is the awkward situation or not so awkward if you are in favour of a lash up for the PCS with the unite union which for me has been the socialist partys aim for a long time to wrestle control of the biggest union in the country out of labours grasp. All this to aid in their dream of a new workers party i.e a labour party mark 2 but with the SP as its radical leadership of course. The independent left in PCS have wrote some good things on this issue and expose the sham for what it is. They continue. "The Independent Left believes that the NEC’s suspension of elections is related to the efforts of the central leadership to steer PCS into Unite (whatever NEC members were actually told regarding the suspension of elections – most of the 13 who voted for suspending democracy are voting sheep). The core leadership (the shepherds if you wish) need to submerge into Unite because: • Senior officers’ huge salaries and associated pensions would be protected. • They would be inside a financially secure trade union having handed over the proceeds from the sale of PCS HQ to Unite. • The ruling regime could look forward to running the Unite Public Sector Group and without having to ever accept its responsibility for the shockingly incompetent manner in which has led PCS (they would not willingly give up the leadership of an independent trade union to play second fiddle in Unite). • They would in fact preside over a wider and more securely based public sector membership. • The Socialist Party would have high hopes of dominating Unite’s own “left wing” grouping through the much bigger PCS Left Unity membership and indeed of linking up with those with an apparent desire to disaffiliate Unite from the Labour Party. • By effectively moving PCS elections to later in 2015 or indeed to 2016 (they are reserving the right not hold a vote for up to 12 months) the NEC move PCS more in line with the constitutional structures of Unite. • The suspension of elections and talk of bankruptcy might bring an otherwise recalcitrant PCS Conference into line on Unite merger and even if it doesn’t the self-elected NEC would be beyond Conference’s control if it steers PCS into Unite. The core leadership, Mark Serwotka and the Socialist Party, cannot risk an election as they might lose seats and so not be as dominant as presently they are, or worse still they might even lose the NEC. Rather than run that risk and therefore the chance to ‘save’ the union by destroying it by a lash up with Unite, they self-elect themselves into continuing power. If you can suspend elections you certainly ignore any conference decision regarding a (sub) merger with Unite. The core leadership is now going for broke; they are desperate to join up with that union. As their actions show they are sufficiently ruthless as to deny ordinary members a say in who runs the union; do you think they will allow delegates a greater say? Let members have a vote!! Further reasoning as to why the SP think this way and why they would set to benifit hugely from a potential PCS/Unite merger. Because they think they can take it over and break it from the Labour Party! Their analysis is that organised left grouping within Unite, the United Left is weak and they can take it over. As that grouping controls most of the Unite NEC they think they will take over the NEC. Once they have the NEC then they will break Unite from the Labour Party. Of course this is the sort of machine politics that the SP has successfully practiced in PCS (take over Left Unity, LU takes over the union etc). Therefore they believe that Unite will be just PCS writ large. Also they are pinning their hopes on all the public sector workers in Unite (council workers, NHS and former PCS) being put into one group. Such a hope is mentioned in a PCS bulletin and by their speakers. Of course they would hope to dominate this public sector group (PCS would be the biggest component of such a set up) and so be bigger fish in a bigger pond than at present in PCS. This group would be their power base within Unite and no doubt a source of full time officer jobs for their comrades. Of course all the above is mechanical (everything just follows from one thing to another; take over the United left, then the NEC etc.) and does not involve winning the members over but SP would believe that if you win the superstructure of the union and the organised left, then the members will follow – or at least they will not get in the way. We have a different conception of politics to the SP. Ours involves winning members and activists to ideas, creating a rank and file movement that really does control the leadership; not as a means to winning places on committees. Also as said the SP conception is mechanical. For example if they did succeed in winning the United Left in Unite they seem to think they could just take it over intact. But it is highly likely that the UL would split and a new ‘left’ would be created. Certainly the Labour Party and full time officials would not stand idly by and let SP operate unchallenged. So what would the members get out of all this? Well no doubt a SP comrade would argue that Unite under their control or if they had a significant voice within it, would be a radical union in the same way as PCS; that breaking from the Labour Party is a vital necessity for the working class. We have our doubts as to the former. Whilst PCS does take strike action it does not- as you would assume a radical union would- openly challenge other unions, appeal direct over the heads of other union leaders to the members in those unions, argue a radical change in the political system (the union’s demand for PR maybe part of such a change but in itself is not that radical change) and for a radical democratisation of the economy (saying that austerity should end is not the same thing as saying who should own what). The SP have made no substantive real case as to why a transfer to Unite would be better for members but, as we argue above, the proposed link up with Unite is not really for the members." This is not me having a swipe at my old party although i have many issues with them this should be something which concerns many union members who hold democracy close to their hearts of doing things. with thanks and solidarity to those over at your voice PCS and the independent left grouping in the PCS union their blog can be read at http://pcsindependentleft.com/2014/05/25/pcs-why-does-the-socialist-party-want-a-transfer-to-unite/?relatedposts_hit=1&relatedposts_origin=1342&relatedposts_position=1

2015 and the bumpy road ahead for the UK

As we draw closer and closer towards the general election in 2015 there is much to be concerned and worried about going forward. Not least that whoever gains power next year be it a coalition or a majority government of any sort we will be in for a lot worse cuts and tax rises to come of that we can be in no doubt. “The Conservative-led coalition faces an election next May and its main pledge when it came into office in May 2010 was to ‘balance the budget’ and reduce government debt. After the huge bank bailout and the impact of the Great Recession of 2008-9 on tax revenues and welfare spending, the government deficit stood at over 10% of GDP and gross government debt had rocketed to over 75% of GDP. The government blamed this on the profligacy of the previous Labour government. This was nonsense, of course. Labour had run relatively small deficits, has reduced government spending as a share of GDP and debt was low until the global banking crash.” “And the Conservatives would have done exactly the same as Labour in bailing out the City of London with more borrowing. The Conservatives are obsessed with the government deficit and debt – getting them down has been their measure of ‘prosperity’. But even on this measure, they have failed. Osborne made much of the reduction in the deficit ‘by half’ by April 2015. But back in 2010, he forecast that he would balance the budget by April 2016. He has now announced that this target will not be achieved until April 2019.” With an estimated figure of about 40% of cuts seen so far we are still yet to feel the worst of austerity to be honest. Huge chunks of the public sector could be privatised parts of local government could cease to function as they should and a hell of a lot more out sourcing is on its way to a country which already leads the way in out sourcing. The coalitions plan of eliminating the deficit by 2015 looks incredibly woeful now going into the next 5 years we can expect a very bumpy ride if any plan to eliminate any deficit is to be achieved “And to meet this target, even assuming that Britain continues to grow at 2-3% over the next four years, the government will have to impose a massive round of public spending cuts on welfare benefits and services. It will also have to raise taxes, although it claims that it can cut income tax again during the life of the next government (although that promise is pushed back to 2019). And the deficit is one thing. Government debt is still rising in real terms. Debt is over £160 billion more than forecast back in 2010 and is now well over 90% of GDP on a gross basis and is not expected to peak on the best forecasts until 2019. The government has failed because the UK economy has not grown in income anywhere near as much as the government forecast back 2010. Osborne forecast real GDP growth would average about 2.7% a year; instead it has averaged up to this year only 1.3%, half the rate. At the same time, although unemployment has come down, most of the new jobs have been part-time, low-paid and self employment ( This has meant that real incomes (i.e. after inflation) have fallen by the largest amount since the Great Depression of the 1930s.” We have to be clear young people who have been hit the hardest in real terms by austerity and have seen their pay fall the furthest have very little cause for optimism I’d suggest their future looks very bleak indeed. With little in the way of meaningful jobs and even more so of those which pay a decent wage to the fact many will never see a pension or even afford to buy their own home let alone affording a rent the future for young people growing up today is a very dark one indeed. “The government stood back from imposing too severe a reduction in the budget deficit after 2012, for fear that the economy would drop back into a new slump – and it nearly did. But that just means, in its obsession with the deficit, that if the Conservatives win the election in May, they will launch a new round of austerity measures. Maybe a new round of austerity won’t happen because the Conservatives won’t win next May. But all three major parties are committed to more spending cuts in bowing to the God of ‘fiscal probity’. “All parties support balancing the current budget in the next Parliament. Deficit spending is clearly still deemed to be politically untenable in the UK.” Gavin Davies, FT. Compared to the Chancellor’s plan, Labour would permit extra borrowing to finance investment (1.5% of GDP) and would allow them longer to attain balance for the current budget. But they would still impose austerity to the tune of half the amount of the conservatives. Behind the obsession with deficits and debt lies the real agenda. It is two-fold: to reduce the size of the public sector and destroy any vestiges of the ‘welfare state’, opening up public goods and services to deliver profits to the capitalist sector. The other aim is lower the burden of tax on and increase the subsidies to the capitalist sector over the long term to boost profitability. This hidden agenda is sometimes exposed. Only this week, a Conservative MP called for huge cuts. “The Chancellor could make a £20 billion start by culling Whitehall’s sprawling bureaucracy, enforcing public sector pay settlements, freezing benefits, reducing the welfare cap, scaling back middle-class welfare and looking again at the state pension.” Dominic Raab, Conservative MP for Esher and Walton. Note the attack on the state pension. This has been sacrosanct up to now. But the Conservatives are now preparing to dismantle it, using the argument that the young should not have to pay for the old and that’s unfair. The right-wing Economist magazine took up this call: “Britain’s fiscal problems are partly the result of over-generous spending on the old. They should pay off some of the debts instead of passing them all on to the young.” But apparently it is not unfair for the poor to pay for the rich. In the UK the bottom 10% of income earners pay more in all taxes as a percentage of their income than the top 10%. The government could switch its priorities on spending from defence, subsidies to industry, lowering corporation tax, more tax cuts for the rich to boosting public investment, services and welfare. Despite its headline noise on a few infrastructure projects (rail, flood protection etc), it is doing no such thing. Faster growth would soon deal with any deficit anyway. In terms of real annual GDP growth, the OBR estimates that a 0.1% point increase would do as much over the four years from 2015-16 for the deficit as roughly £3 billion of spending cuts. The trouble is that the UK economy may be growing at 3% a year currently, but nobody expects that to last. The Office for Budget Responsibility has actually revised down its forecasts for growth after this year for every year up to 2019. Even Osborne admitted that the "warning lights" are flashing over the health of the global economy, and Britain "cannot be immune". Yes, any new downturn in the world economy would soon push the UK economy back into recession too. Osborne raises only that risk to a booming UK economy (the fastest in the G7 this year). But there are serious domestic risks too. Most of the contribution to the ‘boom’ of 2014 is coming from the unproductive sectors of the economy (housing – prices rising at 12% a year; and financial services as the City of London ploughs on). Manufacturing output is still struggling and despite a huge devaluation of the pound back in 2010, UK exports have failed to get anywhere near the government’s expectations.” “That’s mainly because the business sector is unwilling to invest in new technology or skilled labour at good rates of pay. Investment to GDP in most major capitalist economies has been falling. But it is particularly low in the UK. And that is because profitability in the corporate sector, although improving a little after all the austerity measures so far, is still below levels seen in the late 1990s or even 2005. After six years, the UK economy has only just got back to where it was before the Great Recession.” It’s certainly going to get a lot lot worse before we even see a glimmer of improvement for most people. With thanks to the excellent Michael Roberts for quotes and extract, you can read his full post and blog over at http://www.applevis.com/forum

Why as an English socialist I’m supporting Scottish independence

It may sound odd and not my right to have a view on this and I accept those who will say it’s nothing to do with me but... I couldn’t help commenting and giving my opinion on the huge debate that is nearing its conclusion and the day of reckoning arrives for the actual vote if Scotland is to stay as part of the UK or will it choose independence. I look at the question as a socialist through the eyes of whose interest will benefit from independence if any. Of course there is not socialism or anything near it on the ballot paper come Thursday but you are not voting on if you like the SNP or Alex sallmond either. I think there is a big argument to be made that Scotland does not control its own destiny and has little in the way of powers to control its own direction and economic policies they are mostly decided and voted on in London at Westminster. I am a strong believer in the right to self determination as a socialist I believe it is down to the Scottish people and them alone to decide how they run their society. Indeed it’s even excited me living down south the debate up in Scotland of how can we run society better what could we do differently and make things fairer. All this has ignited a burning desire for change in many who believe in a hope over fear campaign is what will win out come Thursday. The negative campaign of the official NO campaign and its scaremongering tactics has backfired hugely on them as only recently a poll showed for the first time the Yes campaign was slightly in the lead. Now I’m not saying that independence will or won’t happen simply stating why I would support independence if I had a vote. If anything it could spark thought down here in England to begin to think how we can change things for the better. "After Thursday, Britain will never be the same again," the Observer newspaper accurately declared four days before the Scottish referendum. The referendum is on a knife edge, but whichever side wins, Britain's ruling elite will have suffered a battering which will leave it permanently damaged. If the Yes campaign wins it will be an enormous blow to the power and prestige of British capitalism. But regardless of the outcome, the independence campaign demonstrates graphically the power of working class people - the majority - to win victories even when the whole of the establishment is straining every nerve to try and inflict a defeat on you. In the week before the referendum - from the moment it became clear that the Yes vote had a chance of winning - 'Project Fear' has become 'Project Terror'. An avalanche of threats from major banks and corporations has rained down on the people of Scotland, promising hell-fire and damnation if they vote for independence. Virtually the whole of the capitalist media and establishment have been united in their desperate attempts to prevent a Yes vote. At the same time, for millions of Scots the referendum has become a means to express their anger at austerity and the capitalist politicians. Growing numbers of workers in England and Wales have also begun to urge the Scots on to vote Yes. They hear Cameron saying it would "break his heart" and grasp what a blow it would be to the same capitalist politicians who are implementing savage austerity in England and Wales. Now I’m no nationalist and neither are my family who my dad’s mum’s brothers family who were always solid labour voters are now backing independence with the SNP. These sorts of changes you simply can’t ignore. The Scottish referendum answers decisively the myth that working class people and young people are 'apathetic' and not interested in politics. Wit the vote being granted to 16 year olds the young have been as much of this debate as anyone else and why not its their futures too which are being discussed. I don’t expect to wake up on Friday morning if Scotland has voted for independence for socialism to be declared it can only be one step towards that idea but to dish out a blow to the British state which has gone through wars invasions and all sorts of awful things in its history then I am all for that. To see David Cameron’s face if Scotland leaves the union on his watch will be a picture to behold. 97 % of people who are entitled to vote in Scotland have registered with the turnout on Thursday set to be in the 80s of % there is a groundswell of feeling of change is on its way. The hatred of the capitalist politicians has reached new highs in Scotland. The most recent YouGov polls show that Cameron's trust rating is minus 46% in Scotland. So hated are the Tories in Scotland (with only one MP) that the leader of the Scottish Tories publicly pleaded with Scottish voters to vote No - by promising that it is safe to do because the Tories won't win the general election! Cameron came close to do the same thing, saying that his government "would not be around for ever". Prime Minister David Cameron survives the fall-out from a defeat on the referendum. The loss of prestige for a British Imperialism – who once held one quarter of the globe – would be disastrous. From the US to Europe – and in particular in Catalonia – the outcome of a Yes majority would introduce a new period of instability and challenge to capitalist elite There has been huge anger, including among journalists and employees, at the BBC’s scandalous partisan role in acting as an uncritical mouthpiece for Project Fear. Any pretence at impartiality and balance has gone as the corporation has acted in the interests of British capitalism in its time of need. Both the Scotsman newspaper as well as the FT has formally come out for a No vote this week. Only one paper, the Sunday edition of the Herald, is backing yes, thus far. Even former ‘lefts’ like George Galloway have become advocates of Project Terror. Galloway, incredibly, claimed on the BBC’s Question Time that Britain had now “escaped from austerity”. He’s certainly not living on the same planet as working class people including in his own constituency of Bradford West, who face savage attacks on their wages and benefits by the Con-Dems – which Labour have promised to continue. The “economic Armageddon”, “flight of capital” and “corporate exodus” line of attack – as opposed to the pleas from the discredited Cameron and Miliband – has shown some signs of having an effect. There may have been some movement in the polls away from Yes in the last couple of days. The blackmail, intimidation and scaremongering can, if it goes unanswered, raise doubts in the minds of some who have been thinking about voting yes. Indeed, polls regularly show that most people think that an independent Scotland will be worse off economically. For example, the YouGov poll on Thursday reported that 48% thought that Scotland would be worse off compared to 37% who believed it would be better off under independence. When asked if they personally would be better or worse off, 42% said worse off and only 21% better off. This reflects the impact of Project Fear on the one hand, and the lack of belief that the SNP’s policy of continuing with pro-business policies, and the austerity that goes with it, can offer any way out for the working class. Only Scotland can decide the outcome on Thursday no matter what the media down south try and whip up I wish Scotland luck and solidarity and hope they make the right choice for themselves at the end of the day. I will be watching with interest from down south.

solidarity with striking J10 workers, their fight is our fight

Adapted from a Workers Liberty leaflet: Up to two million workers will strike on 10 July. Members of unions in local government will strike to oppose a 1% pay offer, and are demanding an increase of at least £1 per hour or to the "Living Wage", £7.65, or £8.80 in London. Other unions involved in the action have their own pay demands. According to the Joseph Rowntree Foundation, the cost of maintaining a decent standard of living in the UK has risen by 46% since 2008, while wages have increased by just 9%. It's the harshest squeeze on real wages in the UK since records began. According to TUC figures, around five million workers in Britain (20% of the total workforce) are paid less than the living wage. The 10 July strike can be the start of a working class counter-offensive challenging the capitalist logic that demands workers pay for the financial crisis. We need a plan, not a day at a time One-off strike days, each followed by a long wait until union leaders report back or call further action, aren't nough. The remedy is not just to convert one-day protest strikes into two-day protest strikes, but to plan continuing action, discussed and decided in advance by union members. This could include limited, selective action as well as all-out strikes and be directed by local strike committees. Local strike committees should continue meeting after 10 July, and the executives of all the striking unions should meet together. After 10th July? Unison's leaders have already talked about further strikes on 9 and 10 September. Unions should liaise with each other in order to pin down the most effective date, and other actions should be planned between now and then - even small, local events like lunchtime rallies, demos and street stalls. NHS workers should be brought into the dispute. Unison should act on its 2014 Health sector conference decision to ballot for strikes over pay. Strike funds should be levied at both local and national level to ensure the lowest-paid workers are supported in taking sustained and escalating action. On strike days every workplace should be picketed, with pickets approaching non-striking workers and attempting to persuade them not to cross. In 2011 some activists held members' meetings with discussion and voting - not just set-piece rallies.' We should organise such meetings this time, as well.

Learning the lessons from the last 4 years of austerity

We simply can’t go on doing the same thing and hoping the results will be different. There is a sort of year 0 approach going on on the left right now in regards to the upcoming public sector strikes on July 10th over pay. A black spot on the left is it it rarely looks back over its own history and analysis’s its own role in the situation and where it went wrong. So as we head into another big strike day in the UK the same bold statements are coming out from various left groups and sources. We must all get out for this day build for July 10th etc etc yet no lessons appear to have been considered since the public sector pensions dispute back in 2011 which saw up to 2 million people take strike action on November 30th. So we not remember the role played by the union tops in the selling out of this dispute the heads of agreement that was made behind member’s backs? Well I do and I did not even take part in the strike action myself. We must warn workers when taking strike action this time around to be aware of their leaders looking for a quick deal and to get away from escalating action as quickly as possible. The last thing a union wants is a dispute it cannot control. The last big dispute was organised top down in a much regimented fashion The way a strike is built is very key when it springs from the bottom up much like the sparks dispute back in 2011 the union finds it far harder to control and a lot more militant action can be built. I do think we are lacking a good rank and file movement to hold union leaders to account and to even go beyond them if need be. Workers should be in control and own their own battles and not leave it up to unelected full time officials of various unions. Failing to learn these lessons and following the same actions and ideas of various left’s is a recipe for further defeats and demoralisation I’m afraid. Lastly I’d like to offerm y full solidarity and support to those taking action on july 10th but this cant be a one off day out on strike furter action must follow and soon.

The bedroom tax is a year old today, shame on Britain

Today see's a year pass since the hated and much talked about bedroom tax came into force. It is 12 months since the government removed its spare room subsidy, dubbed the "bedroom tax" by critics. It is designed to save money and free up under-occupied homes, so what effect has it had? The fact it still exists is a disgrace to be honest lot of hot air as per usual has come from the left from the labour party and even more to the left than them yet the tax still exists this must not continue. "Scrapping the spare room subsidy, which applies to working-age tenants in social housing who are claiming housing benefit, is supposed to ensure that people are not living in bigger homes than they need at the taxpayer's expense - at a time the government is looking for savings from the welfare budget. People deemed to be doing so have a choice: they can move to a smaller home or pay more rent. Polls show the government's welfare policies are popular with the public. The problem is that finding a smaller home in the social housing sector is not easy - there is a lack of availability - so most people affected have had to find more money. Benefit cuts In May 2013, a month after the "bedroom tax" was introduced, the Department for Work and Pensions (DWP) estimated that 660,000 people would face a reduction in their housing benefit because they had at least one spare room. By November, the deparrtment produced new figures showing that 498,000 were affected by the changes. This is a fall of 50,000 from the initial estimate, which the DWP attributes to people taking action, such as moving to a smaller home, finding work, increasing their earnings, and/or discontinuing their claim for housing benefit. Channel 4 News asked the DWP what had happened to all social housing tenants living in homes with excess bedrooms. Were they paying more rent? How many had moved? The DWP said it did not have any published data which could answer these questions. 'Little research' An impact assessment drawn up by the DWP in 2012, before the policy was implemented, said "there is little research that provides an indication about the possible behavioural impacts on claimants in the social rented sector following the introduction of the size criteria". But it added: "DWP estimates that the impact of claimants moving to smaller accommodation, (as opposed to remaining in their current accommodation), is likely to be broadly neutral in terms of the impact on benefit savings." This suggests that although the government could not be sure how people would react when the spare room subsidy was removed, it expected to make most of its savings from people staying put and paying more rent rather than moving to smaller, cheaper accommodation. The government's rationale is that before the reforms, a million spare bedrooms were being paid for by the taxpayer, despite the fact that there are a quarter of a million households in England living in overcrowded social housing and another 1.7 million on waiting lists. Then there is the small matter of austerity, with ministers expecting to save £1bn over the next two years. People caught out who decide to stay put, or cannot find a smaller home, face a 14 per cent reduction in their housing benefit if they have a spare room, or 25 per cent if they have two or more spare rooms. So what has happened since April 2013? The National Housing Federation (NHF), which represents two thirds of housing association homes in England, published a survey in February which showed that two thirds of households hit by the changes were in rent arrears, with one in seven at risk of eviction. The Ipsos MORI survey of 183 housing associations found that more than a third of those in arrears were in this position because they could not afford to pay the "bedroom tax". 'Misery and hardship' According to David Orr, chief executive of the NHF, removal of the spare room subsidy is "heaping misery and hardship on already struggling families". Although the government argues that people affected can move, "we know there aren't enough smaller homes in England for these families to move into". The DWP is aware of these shortages. Its 2012 impact assessment said there was a surplus of three-bedroom homes and a lack of one-bedroom properties, which "could mean that there are insufficient properties to enable tenants to move to accommodation of an appropriate size even if tenants wished to move and landlords were able to facilitate this movement". The Local Government Association (LGA), which represents councils in England and Wales, says the "limited opportunities" for tenants to downsize is driving up local authorities' costs. The government is helping people affected by its welfare reforms with its discretionary housing payments fund, which allocates money to councils, and the LGA says the end of the spare room subsidy is "the biggest cause of financial hardship among those applying for help". It also argues that demand for help "is significantly outstripping the money the government has made available to councils to mitigate the changes in some areas". In August, a study commissioned by the LGA estimated that benefit cuts, combined with a shortage of jobs and affordable homes, would mean that "four out of every five of those households are likely to need some form of assistance from their council to help them cope with the reduction in welfare". with extracts from Channel 4.com http://www.channel4.com/news/bedroom-tax-year-spare-room-subsidy-social-housing

Is the Green party a left wing party and should the left support them?

Is the Green party a left wing party and should the left support them? I like the Green party know a fair few of their members and all seem genuine to me. A fair few are what I’d even describe as socialist and left wing. But are the greens a party that the left could rally behind and more to the point are they even left wing at all? All very interesting questions. I would say personally from my experience they’re on the left without a doubt where you place them after that becomes a big debate. I’d almost compare their politics today as almost old labour style politics of public ownership and higher tax’s on the rich as a basis to go forward. I see the greens as an interesting party with lots of variety and some very forward thinking individuals including their on single MP in Caroline Lucas who I like a lot and have heard speak on a number of occasions. I think she is independent and speaks out on things she believes in and is not tied to a party line like many MP’s are. Whether you are in favour of parliamentary politics or not you cannot fail to notice the green party of late having taken control all be it in a minority fashion in Bright and Hove. Yes the ruling group fronted by the greens have passed on cuts and no amount of hand ringing can get away from this fact for me. Having been a socialist party member and previously stood for TUSC this did not go down well in the anti cuts movement when the green lead council in Brighton passed on the cuts and look to again this year too. But do we therefore right off the greens as a party and a wider movement all because of Brighton city council? Maybe if you are a dogmatic sort I suppose. I tend to look at things a bit more rationally these days in a sense. Those of us outside the party often point to the record of the Greens in Germany, where the party joined a neo-liberal coalition and voted for the Afghanistan war, and in Ireland, where they joined a right wing government and cut healthcare and benefits while saying it was OK because they were creating new cycling schemes. Against this we are told that the Green Party of England and Wales is different – the most left wing Green Party in Europe, even. Does this all stand up ? Well the Brighton council thing does not want to go away it seems and the greens will be judged on this their claims to the contrary. Of course that is not the whole story of the Green council in Brighton. As you might expect, it has been pursuing many sustainability initiatives. More significantly, it has just declared that no Brighton council tenants will be evicted if they cannot afford their rent because of the bedroom tax. And councilors have been active in supporting all sorts of other local campaigns. But when it comes to the key issue of fighting austerity, there is scarcely even a cigarette paper between the Greens’ “fairer” cuts and Labour’s. The bogeyman of Eric Pickles’ administrators coming in and making the cuts is used to justify… making the cuts. Spotting the pattern After the first Brighton budget, the Greens held a vote at their conference on whether it was the right to make the cuts. It wasn’t even close – two thirds backed the Brighton councilors. It was at this point that Joseph Healy, one of the founders of internal left wing grouping Green Left, quit the party on principle. As he noted “A few days later at the party’s national conference, despite vigorous objections from Green Left, the party voted to support the Brighton decision. Pragmatism had defeated principle, realpolitik triumphed over radicalism. While the Green Party has many good socialist members, and some radical policies, it is not a party of the left – deliberately so. It has always included different wings of the green movement. Quite a large element of the membership are devoted to an agenda of ‘cycling and recycling’, with a narrow focus simply on environmental issues. While there are many who see themselves as part of the left, they are happy to work alongside those who use the phrase “neither left nor right” with a straight face. Open expressions of leftism are widely seen as a turn-off to voters, and class is generally not thought relevant. The party just voted to put a commitment to “social justice” in its constitution, but that’s as far as it is willing to go. The consequences of this are that Green politicians’ positions can be all over the map. I l have a lot of time for the greens but are they ultimately the answer. I am not sure. I do think they have much to offer and have some very good genuine members but I’m just not sure managing the left side of capitalism is a goal worth fighting for. . Of course we’ll all work with Greens in the battles we face against austerity – and with the many people in Labour, too, who want to oppose the Tories’ destruction of everything we’ve worked for. There is too much at stake not to. But the Green Party offers no solution to the problem of working class representation, or a left alternative to the mainstream consensus. After all, if the Greens are the answer, then why are so many crying out for something new?

The long term implications of last week’s budget

Many people have described last week’s budget as against the young and for the pensioners I think this miss's the glaring point that it was for me probably the most class based pro elite budget George Osborne has come to the house of commons with to date. The long term implications for this budget and what it could do to the economy could be wide and quite stark. I do think the grounds are being laid now for the next economic crisis around the globe and the UK will not be able to avoid this so much this time. China which has a huge shadow banking system worth an estimated 50% of GDP is very unstable and that isn’t starting to mention the USA with its huge debt overhang and the euro crisis which on the face of it seems like it has gone away although things are still not right across the single currency. We have seen austerity budget after austerity budget since 20011 from the coalition government and even on George Osborne’s own omission he has failed to eliminate the deficit this parliament which he promised to do. The reason why our loyal opposition is not making more of this you ask? Well they too are wedded to the same financial path of austerity as the Tories and the lib dems. They are all quite literally in this case all in it together. Some may think the recent "recovery" if you can call it that is cause for optimism but I’d be far more cautious personally. "The scars of 2008 remain and the UK economy is in big trouble with austerity and declining living standards here to stay. Below are five things about this year’s budget; a document which outlines a ‘recovery’ based on presumptions that, quite simply, aren’t going to happen 1. Low interest rates are setting the stage for another bubble just like the one that preceded the crisis of 2008. Yesterday Mark Carney, the governor of the Bank of England, criticised the BoE and his predecessor, Mervyn King, when he said that its almost exclusive focus on low inflation meant it had failed to also keep an eye on financial stability. In other words the BoE had no problem stoking bubbles with low interest rates if that meant it also kept a lid on inflation. Interestingly enough Carney also pointed out that “It doesn’t take a genius to see that similar risks exist today”. He noted how risks were brewing because of the current period of of ultra-low interest rates – historically without precedent – saying that this could breed “potential complacency and excessive risk-taking” in financial markets. Sound familiar? Near 0% interest rates are necessary for any growth at all in the UK at the moment but they are also creating similar conditions which led to the last financial crisis. 2. The OBR is plucking numbers from the air on projected productivity gains (again). The economy can grow for a while yet, especially if unemployment falls to 5-6%. Alongside big numbers entering work (and workfare) is however the unresolved (and often ignored) problem of falling productivity. If and when unemployment does fall as low as 5-6% productivity *will have* to increase for growth to continue. The Bank of England expects productivity (output per hour worked) to go up in the next quarter as does the Office for Budget Responsibility. Indeed the OBR is today saying that they anticipate 1.2% productivity growth in 2014 and 2.2% growth the following year. The only problem is that this’ is completely at odds with all the data since 2008 and all of the BoE’s predictions over the same period. Where do those numbers come from? My guess is that it’s a case of the OBR and the Bank of England collectively sitting on their hands and saying ‘productivity has to go up sooner or later, right?’ For more on why productivity matters for any prospective economic ‘growth’ check out the recent video we did for #NovaraTV 3. Its also making ridiculous claims on future wage growth. Sooner or later the Bank of England is going to have to increase interest rates. That will probably happen later this year and if wages are still not keeping up with inflation by then (as has been the case for the last six years), consumer demand - and growth – is likely to take a hit. If wages don’t grow this year and rates go up, even by half a percent, that has huge consequences for the economy. As I recently wrote on the LRB blog: “Late last year the bank reported that average outstanding mortgage debt remains high, at £87,000, and that any rate rise not accompanied by an increase in real wages would cause serious problems. The number of households ‘most at risk of financial distress’ would double to nearly one in six if their mortgage rates went up by 2.5 per cent and their incomes did not improve.” Wages have been in decline for six years. If it stays that way and interest rates begin to inch back towards their historical average (even that of the recent past) the government has big problems. Wage growth is now crucial and without it any increase in interest rates might prove politically difficult. Furthermore the projected increases in household consumption - around 2.5% between 2014-18 – make little sense if interest rates are going to go up even a few percent. 4. … and on exports. The OBR expects export growth of 2.6% in 2014, rising to 4.7% in 2015 and 5.0% in 2016. In 2012 exports of goods and services increased by 1.1% (with imports increasing by 3.1%), while in 2013 that figure was 0.8%. That was in the context of reasonable global growth with the US and the BRIC economies seeing more demand than they probably will after 2015. In spite of that the OBR is projecting increases in UK exports not seen in the last several decades. That is all within a context where one of the UK’s biggest exports - oil – is seeing falling output. The projected numbers on UK exports - averaging around 5% over the period 2014-18 – is utter nonsense and without precedent. Seen alongside falling North Sea output I would argue it is impossible. While industry surveys have been pointing to increased export orders for a while, Samuel Tombs, an economist at Capital Economics, claimed these have been “misleadingly upbeat . . . we would not place too much weight on them”. The OBR is making claims for the next half a decade on the back of confidence surveys and figures for very short period – it’s a bit like when your mate shows you a video of a 12 year old wonder-kid on YouTube saying they are going to be better than Cristiano Ronaldo. 5. …and yeah, on fixed investment. Business investment is still 26% lower than it was in 2008 and while there was a dramatic increase in business investment in the final quarter of 2013 – 8.5% – that was the outlier in the data, not the norm. The OBR is now confidently predicting that kind of growth in business investment not just for the next three months, or even the next year, but all the way through to 2018. Compare that to 0.7% growth in business investment in 2012 or, worse still, the 0.5% contraction in 2013. It’s a bit like saying that your best striker scored a hat-trick in the last match of the season and is therefore going to score 150 goals next year. Clutching at straws doesn’t do it justice. The UK, in spite of a massive currency devaluation in 2008, still has a major trade deficit and if there is any truth in this year’s budget it is the realisation that the UK is not going to become a net exporter any time soon. Alongside that massive trade deficit – and exports of goods fell in the three months to November last year – is a budget deficit of over £100 billion. The Treasury is now saying that that deficit will be eliminated by 2019 with a small surplus being run that year – a ‘return to normal’. This is of course complete nonsense: the UK has only run five budget surpluses since 1980 and that was with the bonanza of North Sea oil and the cash garnered from privatisation of, well, pretty much everything. It doesn’t take a genius to work out that budget surpluses - without outlandish projections of growth, investment and productivity gains – are impossible. Final point. This data states that by 2020 households will be as indebted as they were when the economy tanked it in 2007/08. Less ‘march of the makers’ more march of the mickey-takers." 5 things about this year’s budget came from the excellent Aaron Bastani Over at novara media on residence Fm every Friday afternoons. Always a top listen http://wire.novaramedia.com/2014/03/front-bubble-and-bluff-5-things-about-budget2014/

Bashing those on benefits

So the new year of 2014 has started in much the same way 2013 ended with much of the media and politicians scape goating people on benefits. In George Osborne’s Keynote speech the other day where he announced we will see a further 25 billion cuts in the next parliament this will mostly be taken from the welfare budget we are told. Further hammering of the poor the working and non working poor is the order of the day for George Osborne and his Tory mates it would seem. This is no surprise to me but I would just like to reiterate that people on benefits are simply not the problem and were not the cause of the economic crisis. While Tories and labour alike look to search for people to blame rather than focus on the real cause of the crisis we will be forever divided and ruled over if we end up blaming immigrants or those on benefits who are a consequence of the crisis not its cause as such. But it is clear with programmes on TV last night on channel 4 called benefit street trying to paint all on benefits as scroungers on the take and living the high life with LCD TV’s and all sorts of accessories. These people are the exception not the norm. Most people who receive benefits or social security as it should be called are actually in work of some sort. The strivers vs skivers false idea is an all wrong as we well know as you can be in work and benefits at the same time due to such low pay. Housing benefit too for example is no benefit at all in a way it is a landlord subsidy and those in receipt of housing benefit barely see it most of it if not all goes straight into the landlords pocket so the idea it is a great life and you can go on holiday after holiday and spend spend spend is just nonsense. I should not have to do this blog post again but I do as the media are relentless with their propaganda against the poor and those unfortunate to have to receive benefits to get by. We should look at the facts of the situation where those who have frauded the tax payer (another false idea as we all pay tax even if it’s VAT (by 1 billion. When you put in to context which the media never do that the estimated tax evasion by rich multi nationals is thought to be around 120 billion a year you can see why the media are trying to cover for their rich private business mates laughing all the way to the bank. It’s time we exposed the media for what they are apologists for capitalist exploitation and enemies of the poorest in society. We need our own voice. Not necessarily a new party as some on the left shout for all the time as labour mark 2 would not be any better but a voice within an alternative media starting from the bottom up holding all those who claim to speak for us to account if they don’t we should out them as soon as possible. Lastly I wish to extend solidarity to those under attack in words and actions I’ve had my benefits cut this year with my working tax credits its harder for me to get by this year than it was last. Many are suffering in silence. Let’s not allow this.

Outsourced Britain

As austerity continues to bites one of the big features before and now very much more so after the great recession is the idea of outsourcing and it is really happening on a huge scale lets be frank. Outsourcing is a good way for capitalist to drive down labour costs during times of austerity. Take N Power this week. "Npower is to cut 1,400 UK jobs. PA Npower is to close offices and outsource work to India in a move that will see 1,400 UK staff lose their jobs at the energy supplier. The announcement is expected to intensify public anger around the activities of the Big Six power companies and raise the political heat in Westminster where energy has risen to the top of the political agenda. Trade unions accused npower of serving up a "Christmas nightmare" by planning to offshore 1,400 jobs to India and transfer a further 570 to another British firm, probably Capita. It is understood that frontline call-centre operations will be outsourced to a third party in the UK, with back-office work moved to India. Union leaders warned the moves would backfire and further tarnish the reputation of npower which came bottom for customer service in a recent survey and which told a parliamentary committee earlier this year that it had paid almost no corporation tax for three years. Npower, the energy supplier of Germany's RWE, hit gas and electricity customers with a 10.4% rise in fuel bills earlier this month and its central London offices were the target of fuel poverty demonstrations earlier this week. The company declined to comment on the planned office and staff cuts but well-informed sources told the Guardian that npower staff would be informed of the changes at 9am on Thursday. Npower said in a statement: "As we announced a couple of months ago, npower has been undertaking a major review of sites, operations and people across the UK. "We've been doing this to improve our customer service and keep our costs down, at a time of external pressures on customers' bills. As we've always said, we'll tell our people first and then inform the media," it added. Npower and the other big six firms such as SSE and Centrica insist that they have to raise domestic bills and trim their costs in a bid to counter the impact of rising wholesale prices and green levies for home insulation. Npower's parent RWE said earlier this month that 6,750 jobs would need to be cut across Europe as it tries to reduce a debt mountain of over £28bn, partly caused by the Berlin government's decision to phase out nuclear power stations." The key bit that jumps out at me in that piece in the Guardian was the cutting costs line. This is clearly not to cut costs for the customers and those who use Npower but to keep costs down for the business and to maintain profits and raise profit levels if possible. With Britain being the second biggest nation for outsourcing we will see in time if its allowed to happen a huge wave of outsourcing to other cheaper nations and to areas where the labour costs are cheaper. In an excellent piece on Open democracy Stuart Weir writes "The government has put a huge FOR SALE sign over the country’s public assets and services. According to the sharedserviceslink.com website, the bulletin board for “leaders in finance shared services”, the United Kingdom is the world’s largest out-sourcing market after the United States. The number of contracts in the UK has increased sharply by 47 per cent to 148 contracts a year since 2010. The annual contract value for this country jumped 16 per cent in 2012 to $3.75 billion! All this before the major sale drive about to take place in the NHS. The International Services Group (ISG) states that the UK accounted for 80 per cent of all contracting out across Europe, the Middle East and Africa, making our government alone among the major European economies in using out-sourcing as a key element in its response to austerity. Richard Vize, of Outsourcer Eye, says that the application of cuts is dominated by “short-term thinking”. The effects of all this activity on quality or cost is unclear and there is no reliable information on the impact of cuts or out-sourcing – though these effects are visible, for example, in local government, the NHS and government agencies such as the Inland Revenue. The government’s “short-term” thinking is of course, as Polly Toynbee warned recently, part of a determined and reckless long-term drive to reduce the public sector to a mere rump. Social security is gradually being outsourced to charities and food banks, while services and assets are increasingly handed out to private firms to operate at often extortionate prices (like the trains), described by George Monbiot as the 'toll booth economy'. The effects on ordinary citizens will be far-reaching and devastating, the more so for the vulnerable people whom the state has long acknowledged a responsibility to protect. The state is being fundamentally transformed before our eyes. This is a phase or a form of capitalism which is turning public service’s into money making enterprises and this will stop at nothing. From our energy sector to our schools and hospitals nothing is sacred when it comes to capital's drive for greater and grater profits. With thanks to open democracy link to article at http://www.opendemocracy.net/ourkingdom/stuart-weir/uk-becomes-worlds-second-largest-outsourcing-market

Angela Merkel wins 3rd term in Germany where does Europe go now?

After a 3rd successive win for Angela Merkel In the German elections over the weekend much of Europe will be waking up with different feelings. Certainly the Northern European states will be much relieved although this result was never really in any doubt in all honesty. Yet for Southern Europe this election win may be greeted with fear and worry as to what Germany and Europe as a block does next. It was clear that many of the big economic decisions have been put off until after this big election so we will see in the coming months and years where Germany sea’s things going and how it reacts to really dire situations in the likes of Portugal, Spain, Italy and most pressing no doubt will be Greece. Angela Merkel who won her 3rd general election on Sunday received popular backing due to Germany's prosperity of late and ever since the great recession anyway have stormed ahead in the global race in terms of capitalist development. Her conservatives took about 42% of the vote, the polls said. TV projections said that might almost be enough for a historic absolute majority. Otherwise Mrs Merkel might have to seek a grand coalition with the Social Democrats - estimated to have won 26%. Her preferred liberal partners appear not to have made it into parliament. This is an amazing result for Angela Merkel, currently Germany's - and Europe's - pre-eminent politician. It was clear that she would win this election, but no-one really predicted that she could get so close to an absolute majority. The final results are not yet in, but it may still be that she needs a coalition partner. The obvious solution is a grand coalition with the centre-left Social Democrats. The party improved its share of the vote in second place, but still did not do as well as it wanted. But there are divisions within the SPD about going into coalition again as a junior partner. In 2009 they were punished by the electorate for doing that in 2005. Now the same thing has happened to the liberal Free Democrats, who have been in coalition with Mrs Merkel for the last four years, but appear to have been kicked out of parliament altogether. Exit polls for ARD public television put the liberal Free Democrats (FDP) on 4.7%, which if confirmed would be a disaster for the junior coalition partner, leaving it with no national representation in parliament. Party chairman Philip Roesler called it "the bitterest, saddest hour of the Free Democratic Party". The FDP was beaten by the Green Party (8%) and the former communist Left Party (8.5%), and even, according to exit polls, the new Alternative fuer Deutschland, which advocates withdrawal from the euro currency and took 4.9%, just short of the parliamentary threshold. There was some speculation on German television that Mrs Merkel's Christian Democrats (CDU) and their Bavarian sister CSU might even win enough seats for an absolute majority - the first in half a century - if both the FDP and AfD fail to make it into parliament. The ARD channel's projection had her group winning 297 seats against 301 for the other three parties, while ZDF had her dead even with the other three. The turnout in this election is interesting Turnout, projected at about 72%, was higher than at the last federal election - which had the worst on record. So clearly the Christian democrat’s wre catching on to a wave of support out there for now. How long this will last all depends on the economy in my view. Quoting Marxist economist Michael Roberts from his blog at http://wp.me/pLequ-2mg "Germany is the largest and most important capitalist economy in Europe, if not yet the most important European imperialist power (there it vies with the UK and France). It is the main creditor and funder of the Eurozone member states. So what does this election campaign and result tell us about the future of German capitalism and the strategy being adopted by its political leaders? On the surface, all looks good for the economic health of Germany as there appears to be very little difference on policy between the CDU and the SPD. You would find it hard to push a sheet of paper between them on major policy issues for Germany. So it seems likely that a Grand Coalition between the CDU-CSU and SPD will be formed with two-thirds of the seats in parliament and German capitalism looks set fair for the status quo for another four years. However that is too simple a calculation. There are new economic and political pressures for German capitalism that will make it more unstable than before. The first thing is that there has been a long-term trend in German (and other Euro) politics: namely, the fragmentation of electoral votes from two or three parties into several. That’s a recipe for instability and paralysis, as we have seen in Greece, Italy, Belgium, and the Netherlands etc. This election has slightly reversed that trend with the two main parties polling about 56% compared to 50% last time, but that is no better than in 2005. Some 16% of votes will not be represented in parliament due to the 5% hurdle -- more than ever before. The turnout may be slightly better than in the recession year 2009 at 73%, but it's well down from the 1990s. http://www.google.com/url?q=http%3A%2F%2Fthenextrecession.files.wordpress.com%2F2013%2F09%2Fgerman-turnout.png&sa=D&sntz=1&usg=AFQjCNF41yoervmoJG4NpkLHvT9WvnBImg And then there is the joker in the pack: the eurosceptic Alternative fur Deutschland party (AfD), a party made up of academics and other petty-bourgeois elements, strongly opposed to ‘handouts’ to the 'free-spending' peripheral Euro states and demanding a return to the D-mark. The AfD polled 4.9%, just not quite enough to gain representation. But by polling close to the 5% threshold, that will stir up new currents beneath the surface of serenity in German politics, especially leading up to the Euro elections next May. Despite the Euro debt crisis and the 'contingent' costs to the pockets of the German taxpayers from the bailout payments to the distressed Eurozone states, the German ruling class is still convinced that the euro is worth having over the D-mark. That is because German capitalism has gained most from the trade and capital integration of the single currency. The best indicator of that is to look at what has happened to German capital's rate of profit. The European Commission AMECO database provides a measure of the net return on capital invested for many countries including Germany. There are several technical issues with this measure, but I think it gives a relatively good guide to trends (partly because it is supported by alternative data from the Extended Penn World Tables that I have used before to measure country rates of profit). The AMECO measure shows that Germany's rate of profit fell consistently from the early 1960s to the early 1980s slump (down 30%) - much like the rest of the major capitalist economies in that period. Then there was a recovery (some 33% up - using Penn measures) with a short fall during the recession of the early 1990s and then stagnation during the 1990s as West Germany digested the integration of East Germany into its capitalist economy. The real take-off in German profitability began with the formation of the Eurozone in 1999, generating two-thirds of the entire rise from the early 1980s to 2007. http://www.google.com/url?q=http%3A%2F%2Fthenextrecession.files.wordpress.com%2F2013%2F09%2Fgerman-net-return-on-capital.png&sa=D&sntz=1&usg=AFQjCNFr1RYT5b1fFsbk9DjyM4nw0ektBg German capitalism benefited hugely from expanding into the Eurozone with goods exports and capital investment until the Great Recession hit in 2008, while other Euro partners lost ground. http://www.google.com/url?q=http%3A%2F%2Fthenextrecession.files.wordpress.com%2F2013%2F09%2Fchange-in-rate-of-profit-under-emu.png&sa=D&sntz=1&usg=AFQjCNEi79xb4yKwJAHaMooXHtdv4Knd_A Once the east was integrated, Germany's manufacturing export base grew just as much as the new force in world manufacturing, China, did. http://www.google.com/url?q=http%3A%2F%2Fthenextrecession.files.wordpress.com%2F2013%2F09%2Fgerman-exports.gif&sa=D&sntz=1&usg=AFQjCNGAvNAoRfD_k0eH_TtrCblJ_qivOQ But the fall in profitability during the Great Recession was considerable and AMECO forecasts do not suggest a significant recovery in profitability since. Indeed profitability will be below the level of 2005 from now on. So things may be more difficult from hereon. It is interesting to consider the reason for the rise in the German rate of profit using Marxist categories. The rise in the rate of profit from the early 1980s to 2007 can be broken down into a rise in the rate of surplus value of 38%, but only a small rise of 5% in the organic composition of capital. This is consistent with Marx's law of profitability in that the rate of profit rises when the increase in the rate of surplus value outstrips the increase in the organic composition of capital. It seems that the ability to extract more surplus value out of the German working class while keeping the cost of constant capital from rising much was the story of German capitalism. In other words, constant capital did not rise due to innovations and investment in new technology while surplus value did, due to the expansion of the workforce using imported labour from Turkey and elsewhere at first - and then expansion directly into Europe later. The real jump in the rate of profit began with the start of the Eurozone. In this period, the organic composition of capital was flat while the rate of surplus value rose 17%. German capital was able to exploit cheap labour within EMU but also in Eastern Europe to keep costs down. The export of plant and capital to Spain, Poland, Italy, and Greece, Hungary etc (without obstacle and in one currency) allowed German industry to dominate Europe and even parts of the rest of the world. Most important, the fear of the export of jobs to other parts of Europe enabled German capitalists to impose significant curbs on the ability of German labour to raise their wages and conditions. The large rise in the German rate of profit was accompanied by a sharp increase in the rate of surplus value or exploitation, particularly from 2003 onwards. http://www.google.com/url?q=http%3A%2F%2Fthenextrecession.files.wordpress.com%2F2013%2F09%2Fgerman-rosv-rop.png&sa=D&sntz=1&usg=AFQjCNGU4KUz6jCJ9U2ZVKbQ20LUCZ3JRg What happened from 2003 to enable German capitalism to exploit its workers so much more? In 2003-2005 the SPD-led government implemented a number of wide-ranging labour market 'reforms', the so-called Hartz reforms. The first three parts of the reform package, Hartz I-III, were mainly concerned with creating new types of employment opportunities (Hartz I), introducing additional wage subsidies (Hartz II), and restructuring the Federal Employment Agency (Hartz III). The final part, Hartz IV, was implemented in 2005 and resulted in a significant cut in the unemployment benefits for the long-term unemployed. Between 2005 and 2008 the unemployment rate fell from almost 11% to 7.5%, barely increased during the Great Recession and then continued its downward trend reaching 5.5% at the end of 2012, although it is still higher than in the golden age of expansion in the 1960s. German unemployment rate (%) http://www.google.com/url?q=http%3A%2F%2Fthenextrecession.files.wordpress.com%2F2013%2F09%2Fgerman-unemployment-rate.png&sa=D&sntz=1&usg=AFQjCNEzSZ2AGskTJV1lGgToukvTSEclCA A wonderful success then? Not for labour. About one quarter of the German workforce now receive a “low income” wage, using a common definition of one that is less than two-thirds of the median, which is a higher proportion than all 17 European countries, except Lithuania. A recent Institute for Employment Research (IAB) study found wage inequality in Germany has increased since the 1990s, particularly at the bottom end of the income spectrum. The number of temporary workers in Germany has almost trebled over the past 10 years to about 822,000, according to the Federal Employment Agency. This is something we have seen across Europe - the dual labour system in Spain being the prime example. http://www.google.com/url?q=http%3A%2F%2Fthenextrecession.files.wordpress.com%2F2013%2F09%2Fgerman-employment.gif&sa=D&sntz=1&usg=AFQjCNEKIaU2Vl7a73hveITTmsI8dpuOBQ So the reduced share of unemployed in the German workforce was achieved at the expense of the real incomes of those in work. Fear of low benefits if you became unemployed, along with the threat of moving businesses abroad into the rest of the Eurozone or Eastern Europe, combined to force German workers to accept very low wage increases while German capitalists reaped big profit expansion. German real wages fell during the Eurozone era and are now below the level of 1999, while German real GDP per capita has risen nearly 30%. http://www.google.com/url?q=http%3A%2F%2Fthenextrecession.files.wordpress.com%2F2013%2F09%2Fgerman-real-wages.png&sa=D&sntz=1&usg=AFQjCNEuj6PZ5zLg8Qai43vI23Pt9lKwrQ No wonder German capitalism has been so 'competitive' in European and world markets. The Hartz reforms may be regarded as a success by German capital and mainstream economists. But they have always been very unpopular among the German public. In this election, no major party has dared to run on a platform that openly endorses the Hartz reforms. Indeed, several parties tried to win votes by promising to roll back the Hartz reforms, including the SPD which initiated the reforms in 2003-2005 under Chancellor Gerhard Schroeder. Of course, this is not to deny that the German working class is better off than its peers in the rest of the Eurozone and this explains why German voters, who have voted, did so, by and large, for parties that wishes to preserve the status quo. http://www.google.com/url?q=http%3A%2F%2Fthenextrecession.files.wordpress.com%2F2013%2F09%2Fgerman-household-income.png&sa=D&sntz=1&usg=AFQjCNGraKVZK-v3oaAV2UWeMV23CR-Y8A The German ruling class and the leadership of the two main parties are generally agreed that the Eurozone must be kept intact as it is, despite the cost of the debt crises in the peripheral EMU states. After all, German capitalism has gained hugely from the Eurozone, as I have shown. Greece should not probably have been allowed in, as Merkel and others have said on several occasions, but now it is in, it is too risky to kick Greece out as it sets a dangerous precedent. And the cost of yet another Greek bailout in the next year is small. But there are are some differences between the CDU and the SPD over the Eurozone. The CDU does not want any integration of debt and debt payments within the Eurozone through things like a euro redemption fund or Eurozone bonds, while the SPD does. The CDU does not want German capital taking on any contingent liability of the future or existing debt of the likes of Italy or Spain; even if it never happens that they cannot service it. Even so, a Grand Coalition will agree eventually to ease the terms of repayment of the bailout recipients - indeed it will probably put repayment back for likes of Greece to the indefinite future. Remember that the US allowed the UK to repay what they owed the US after the Second World War for ages - it was only fully paid off in 2005! However, the Grand Coalition will be set with difficulties from its beginning. It will be under the pressure from the right, the eurosceptics and the small business FDP to refuse any further bailouts and apply severe austerity to the peripheral EMU states and France. The SPD will be under pressure from the left to break with the coalition to reverse the Hartz reforms, spend more and avoid nuclear energy or leave the coalition. German capitalism may have been a 'success story' over the last 25 years since the integration of East Germany. But its long-term prospects do not look so good from here. It has a declining and ageing workforce (this will be the last election in which the majority of voters were under the age of 55) and less areas for exploitation of new labour outside Germany, while competition from the likes of China and Asia will mount. And the costs of maintaining the Eurozone will grow. All these are issues for the strategists of German capital now that there will be a new coalition in power. http://www.google.com/url?q=http%3A%2F%2Fthenextrecession.files.wordpress.com%2F2013%2F09%2Fgerman-demographics.gif&sa=D&sntz=1&usg=AFQjCNEmoxSciJdR3jOOFQD3wYAd46iHeQ The German electorate may have voted for the status quo again in this election, but the relatively low turnout and the low share of the vote for the main parties show that there is growing disillusionment with the 'success' of German capitalism that has given just a few crumbs for the working class off the table of bounty for German capital income. And the burden on the working class in paying for the further ambitions of German capitalism is set to rise. "

Euro Crisis is the end in sight ?

A lot more bullish feeling is coming out of the economic power houses of Americ and Europe of late. Is this to be founded or is this just more wishful thinking. Economic figures due out shortly are set to show a ending or at least softening of the recession in the Euro zone and America growing slowly yet there is tentitive fear that this is a false start and a real recovery is still not appearing . On Bloomberg one of my favourite capitalist news outlets and superb for figures and long term trend analysis anyway has a good summary by Jeff Black By Jeff Black - Aug 12, 2013 2:13 PM GMT+0100 Q The euro-area economy probably edged back to growth last quarter for the first time since 2011, ending the longest recession since the single currency union started 14 years ago. Gross domestic product in the 17-nation region expanded 0.2 percent in the three months through June after shrinking for the previous six quarters, according to the median of 41 forecasts in a Bloomberg News survey. The European Union’s statistics office in Luxembourg will release the data on Aug. 14. Germany probably grew about 0.75 percent, according to a government estimate, exceeding the 0.6 percent economists predict. year of relative calm on financial markets, budget cuts from Spain to Italy and accelerating growth in the U.S., the world’s biggest economy, have helped the euro area start to recover. While the overall outlook has improved, the recession has left the region with a youth unemployment rate of 24 percent, and parts of southern Europe remain mired in a slump. “The external environment is really getting better, led by signs that U.S. demand is picking up,” said Nick Kounis, head of macro research at ABN Amro Bank NV in Amsterdam. “The second quarter should mark the end of the recession in the euro area, but the recovery will be excruciatingly slow. We’re not getting the champagne out yet.” say the capitalists. I always like to look at the bourgeois press and fianncial news in particular i think its good to know your enemy so to speak and read how they see the long term trends and slumps. Its clear anyway to me that any sort of recovery if we can call it that is a two speed one anyhow with southern Europe still very much in a slump ropean Central Bank President Mario Draghi has described progress as “tentative.” Against that backdrop, the ECB has cut interest rates to their lowest-ever level and Draghi has pledged they’ll stay there or lower for an “extended period.” Spain’s economy shrank just 0.1 percent in the second quarter from the prior three months. Still, the country’s youth unemployment is 56 percent. In Italy, where Prime Minister Enrico Letta is easing last year’s budget austerity, GDP fell a less-than-forecast 0.2 percent. Economic confidence in the euro area increased for a third month in July. Manufacturing expanded for the first time in two years, according to a purchasing-managers survey by London-based Markit Economics. Adecco SA (ADEN), the world’s largest provider of temporary workers, reported increased profit for the second-quarter, and the Glattbrugg, Switzerland-based company said it sees more positive signs for business as Europe’s labor markets stabilize. An expanding manufacturing figure is a sign of a weak attempt to try and claw back some edge in the market to start to slowly restart production towards a better level. Greece is still very much the sick man of the Euro zone though. It all looks a bit better than we thought,” said Evelyn Herrmann, an economist at BNP Paribas SA in London. “Our central case is a very modest recovery, and we’re still not overly bullish for the second half of the year.” Greece’s economy contracted for a 20th quarter, extending an economic slump that has left more than six in 10 young Greeks out of work, the Athens-based Hellenic Statistical Authority said today. Gross domestic product shrank 4.6 percent in the three months through June from the same period last year after dropping 5.6 percent in the previous quarter. That’s better than the median estimate of a 4.9 percent contraction in a Bloomberg News survey of six economist. Greece doesn’t publish seasonally adjusted or quarter-on-quarter GDP data. area of stress remains corporate access to credit. Lending to companies and households across the region fell the most on record in June. A review of banks’ balance sheets to be conducted by the ECB has probably been delayed until the first quarter of 2014 as the central bank says it can’t start preparing until EU lawmakers vote on the legislation, which won’t be before September. The review is part of a plan to strengthen the region’s financial system by building a banking union comprising ECB oversight, a single resolution mechanism for winding up failing lenders, and common rules for deposit guarantees. In the meantime, economic performance remains patchy. An unexpected 1.4 percent drop in French industrial production in June underlined the government’s struggle to revive growth in the region’s second largest economy. France is also due to release data for second-quarter GDP on Aug. 14. “Talk of an economic recovery, to say nothing about a sustainable one, when domestic demand is still contracting, government debt levels continue to surge and the economic and institutional reform agenda is unraveling, is wide of the mark,” said Nicholas Spiro, managing director of Spiro Sovereign Strategy in London. “Germany may be pulling ahead, but the bloc’s other main economies, including France, remain in dire straits.” Improving Indicators The euro area’s path out of recession will also be determined by conditions in major export markets such as the U.K., the U.S. and China. There, indications are improving. In China, July industrial output rose more than expected after a larger-than-forecast rebound in exports eased concern that a credit squeeze in the world’s second-biggest economy would curb growth. The U.S. economy grew at a 1.7 percent annualized rate from April through June after a 1.1 percent pace in the first quarter. For the whole of 2013, the ECB forecasts a contraction for the euro-area economy of 0.6 percent, before an expansion of 1.1 percent in 2014. “There’s still some fiscal adjustment going on and that’s weighing on consumption, as well as banks in the south not being in a position to support the economy,” said Laurence Boone, chief European economist at Bank of America Merrill Lynch in London. “The consensus is for slight growth and we wouldn’t expect anything much more buoyant than that.” so all in all very mixed but signs of a possible upswing or anything like a boom period are well far wide of the mark. Any recovery will be very slow and drawn out. Painful for the working class's of Europe and beyond no doubt.