Syriza's first month

with thanks to libcom http://libcom.org/blog/syrizas-first-month-28022015A month since its election Syriza has moved far from its anti-austerity, anti-bailout rhetoric. It's been just over a month since Syriza won the Greek elections and formed a government. A month can be a long time in the Greek crisis and already the enthusiasm and hope that greeted the Leftist victory seems like something from the distant past. The new government's first few weeks saw a mix of action, inaction, retreat and surrender as it looked to find its feet both within the Greek state and in Europe. The news of Syriza's victory was greeted with joy from the Left across Europe. A Leftist anti-austerity party had actually won an election and was making grand promises of changing Europe. This enthusiasm was tempered somewhat by Syriza's formation of a coalition with right-wing Independent Greeks(AN.EL). This move was not surprising as the two parties have had an informal alliance for sometime as both are firmly anti-austerity. Whilst AN.EL took the valuable Defence Ministry they have so far kept themselves in the background. The formation of a coalition with AN.EL indicated that the main goal of the new government was to create an anti-austerity front to carry on negotiations with the Troika(IMF,EU,ECB). Syriza was elected on a promise to end the memorandums, the notorious bailout agreements through which the Greek state has been ruled for the last five years. Syriza's rhetoric started off by claiming an end to the bailouts and declaring the death of the Troika. From this rhetorical high ground Syriza gradually climbed down over the next few weeks. The claim that Greek debt would be written off was swiftly dropped. Charismatic Finance Minister Yanis Varoufakis stated that 70% of the bailout agreements was actually good and he only wanted to change the other 30%. Though Syriza demonstrated its willingness to quickly back down the talks with EU leaders dragged on. In part this was likely a deliberate move by the EU in order to push Syriza to further concessions and to punish the Leftist government in the manner of a teacher disciplining a back-talking pupil. In the end a slow bank run in Greece helped bring about a new agreement. The Troika was not dead after all but was just renamed. Syriza agreed to an extension of the previous bailout for four months, at which point a new arrangement will be made. Syriza won a few minor concessions such as a reduction in primary surplus targets and the ability to write some of their own reforms. The wording of the agreements has been changed, for instance no naming of the Troika, but other than that the extension is exactly the same as the previous government was prepared to implement. In just a few weeks Syriza has gone from ending the bailouts to extending them. The main substantial difference between Syriza and the previous governments in terms of the bailout agreements is that Syriza will be able to implement the deal from a position of popularity. The war of words the between the government and EU leaders during the negotiations stoked national pride in a country used to its politicians meekly submitting to Troika demands. Though there are doubts about the extension, Syriza is, for the moment, a popular government and was even able to call pro-government demonstrations-an almost unheard of event in Greece. Unrest is never far away though, there are already signs that the surrender to the Troika is causing disputes within Syriza and at the moment it is not clear if the deal will be put before parliament for a vote. One reason behind Syriza's popularity is their adept use of symbolism. The first days of the new government saw a number of symbolic gestures aimed at creating the impression of a new start. For the first time a Prime Minister was sworn in with a civil oath rather than a religious one. The fences which have surrounded the parliament building for the last years were removed. The police were restrained also. When an anti-fascist demonstration took place the riot police were told to sit back and watch while demonstrators were even allowed to paint and graffiti police buses (apparently the police were left 'confused and uncertain'), at the same event last year the police beat and chased people even onto the metro lines. The early symbolism was meant to demonstrate a break with the past but later moves pointed to a continuation of previous practices. Syriza proposed and elected Prokopis Pavlopoulos as president of the Republic. Pavlopoulos represents the old order of Greek politics, he was a high ranking member of conservative New Democracy and served as a government minister. Unforgivably he was Interior Minister during December 2008. His election represents a reconciliation rather than a break with the old order. Away from symbolism and the Troika negotiations another of Syriza's actions has had a more positive impact. After another suicide in the migrant detention camp of Amygdaleza, a Syriza minister visited the infamously poor camp and ordered the release of those held there. A number of people have already been released from the network of migrant detention camps across the Greek territories and it is hoped more will be freed. Other measures may also remove the worst abuses migrants are often subjected to by the Greek state. Other pre-election promises have so far been shelved or not acted upon. The fate of the controversial gold mine at Skouries is uncertain with Syriza seeming reluctant to act decisively against one of the only substantial recent foreign investments in the Greek state. As part of the bailout extension deal a number of privatisations are likely to go ahead rather than be frozen. The promised restoration of the minimum wage has to wait to 2016 at the earliest. Syriza now faces the same challenge as that has faced by previous Greek governments, how to implement the unpopular bailouts and the attached austerity. Their current popularity, bolstered by various symbolic gestures, will aid them in the process. But after having spent so long waiting for Syriza to end austerity, the Leftist's swift climb down will disappoint many. On Thursday night a few hundred protesters marched through Athens and clashed with police in the first small scale riot under Syriza. While insignificant in themselves, the clashes show that not everyone is following Syriza's path.

Green shoots of recovery or another false start

? There is certainly a growing mood of optimism in the business world that a recovery is under way. Is this something as socialists we should be pleased for or not ? We must always remember workers and boss's interests are not the same. Its a tricky one. It’s true, however, that employment is a lagging indicator – it looks backward to what has happened and not forward to what will happen. And the consensus is that faster growth is on its way, and along with it, a rise in real incomes and employment. This optimism is based on the significant rises in the Purchasing Managers Indexes (PMIs) around the globe in the last few months. The PMIs, are the best high-frequency measures of the level of activity in capitalist economies that we have. They are really measures of what company managers think about the state of their industries and markets. They are not measures of actual sales or production. Thus they show what might happen in the future. ). For the first time, in August, that indicator (data from the ISM) went close to what is considered boom territory So perhaps the US economy is finally on its way up? Similarly, across the globe, PMIs rose in August. But let’s be careful. This does not mean every region of capitalism is expanding. It means that each region is now doing better (or less worse than before), according to the PMI indicators. Also, the OECD announced its latest update for forecast real GDP growth in the advanced economies of the OECD, revising up their measures slightly. Many of the forecasts for capitalism are tentitively confident of the coming period. Even during longer term trends of a recessionary period or slow growth there can be smaller trends almost micro trends within a trend. The OECD reckoned that growth was “proceeding at encouraging rates in North America, Japan and the UK” and the Eurozone was “out of recession, although output remains weak in a number of economies”. But, although some advanced economies looked like growing faster in the rest of this year than previously thought, some larger emerging economies were slowing down: “the numbers for advanced economies are a tad higher, and for France and the UK more than a tad higher”, but the average rate of growth in emerging economies would be about 1% point a year lower than in the recent past. And remember what the OECD is talking about is growth of about 2% a year or less for the major economies , hardly a ringing endorsement of economic strength. It would seem contary to what was previously thought the more advanced economies appear to be returning to growth all be it on a small scale and the emerging economies are slowing down especially China and India now. The IMF has also begun to raise its forecasts a little for the advanced capitalist economies. But the IMF has dropped its rosy view of the emerging economies which it had considered were the ‘dynamic engine of the world economy’, instead noting that “momentum is projected to come mainly from advanced economies, where output is expected to accelerate”. It is now admitting that the faster growth in economies like Brazil, India, China etc was partly a product of a flow of cheap credit (fictitious capital as Marx called it) into the emerging economies. The huge expansion of credit generated by central banks printing money had not gone into new investment in the productive sectors of the advanced economies, but instead into buying financial assets (bonds and equities) The fact that optimism about UK recovery is based on its services sector is no accident. What has been recovering is the property market. Residential property prices are rising at over 10% a year in London and around 3-5% a year elsewhere. It is the same phenomenon in the US, where home prices are rising at over 12% a year. The boom in these economies is concentrated in the unproductive sectors of finance, property and the stock market, not in investment and employment in manufacturing, industry and exports. Indeed, UK industrial output was completely flat in July And exports to non-EU countries fell by over 16% in July, the largest monthly decline since January 2009. As much of the UK’s ‘better’ real GDP growth in the last quarter came from exports this does not suggest that this current quarter will deliver much faster growth. I get the sense that the slight boom we are seeing in the UK and teh US is a fictitious boom based on credit and the housing market will have to crash at somepoint it is simply unsustainable forever. There is not a permenant slump in capitalism it is a much more complex thing than that there is growth in some areas all be it slow and contractions elsewhere too. Recent optimistic noises from the capitalists and their industrial voices is unconvincing to me as a longer term thing as there still remains the case that the rate of profit has still not recovered to its pre 2007 levels. There is still a lot of capital in the system which is being a barrier to new capital and further investment. For me, the key indicators of sustained recovery in capitalism would be rising rates of profit, a sharp pick-up in business investment and substantial falls in unemployment. There are little signs of any of this. with extracts and sections from Michael Roberts at http://thenextrecession.wordpress.com/2013/09/07/autumn-pick-up/

Is the UK economy picking up?

We have heard in the last few weeks a set of upgrading by various monetary agencies including the IMF who have upgraded the UK’s growth figures for the coming period. Is this optimism to be believed or is this the markets reacting to a quieter time in the summer months as markets tend to slow during the summer months somewhat. It is a bit of a mixed picture on the global scale with China still rocketing ahead there is still this hard landing being talked of and how China can land as softly as possible without crashing the system. China is hugely in debt and is increasing that debt all the time. “The interesting development is that there has been a pick-up in the pace of expansion since April in the UK and Japan. This would seem to confirm that the fear of a ‘triple-dip’ or ‘double-dip’ recession in the UK was unfounded. Indeed, now all the economic forecasters are raising their guesses on UK expansion, including the IMF, from their dismal forecasts of a few months ago. But just as the forecasters overdid their view on the UK to the downside, they are probably now swinging to be over-optimistic on the upside. At best, UK GDP is going to grow by just 1% in real terms this year and even less per head of population. And the world economy as a whole is slowing down in its expansion. driven by slower growth in China and the other major emerging capitalist economies. Just as the very weak recovery in the advanced capitalist economies dragged down overall global growth between 2009-12, now it seems that the supposedly fast-growing emerging economies will dampen the impact of any relatively faster growth in the advanced economies. In particular, the Chinese economy slowed to 7.7% a year in Q1-2012 from 7.9% at the end of 2012. It is going to be even slower in the quarter just gone and through the rest of the year. Of course, a real growth rate of 7%-plus is huge compared to the rest of the world, but it is not enough to absorb the flow of new labour into Chinese industry and services. Elsewhere, Brazil, India and other major emerging economies are also slowing. But it is the US economy that remains key to the health of the world capitalist economy – it remains the largest, the biggest trader and the dominant financial force. And if we look at the US economy through the eyes of its combined manufacturing and services sector PMI, it remains stuck in a low-growth path, where it has been for almost the whole time since the end of the Great Recession. If anything, the trend is for even slower growth going forward.” So the UK is trapped in an up and down cycle depending on wider forces be it the Euro zone or the US economy which are all linked into the UK. The UK of course exports 50% roughly to the Euro zone so what happens in the Euro zone will be crucial to the UK’s so called recovery. It is true the UK has seen a little bit of growth but I do think the economists who have had gloomy news for a few years now are clinging onto any bit of positivity they can and as a result being far too optimistic now after months of pessimism. “Much has been made of the latest US jobs figures. Employment rose 195,000 in June and after upward revisions for previous months, it seems that average employment growth is now 200,000 a month, higher than the less than 150,000 in the first quarter of this year. But that increase has not made much of a dent in the unemployment rate because more Americans out of work have attempted to look for jobs after having given up for a while. Indeed, the measure of long-term unemployment rose in June, from 13.8% to 14.3%—the highest level since February. This suggests that new jobs are being snapped up by new claimants while those who lost their jobs in the Great Recession remain on the scrap heap, with their benefits being cut or expiring. Moreover, just as in the UK, most of these new vacancies are not full-time permanent jobs at good wages, but part-time, low grade work. The number of people working part-time rose by 322,000 to 8.2 million. These people aren’t working part-time because they want to—it’s because they can’t find full-time work. And of the jobs created in June, 60% were in low-paying positions: 75,000 jobs were created in the leisure and hospitality sector and 37,000 jobs were created in the retail sector. This will eventually translate into low or falling productivity in the US economy, just as it has done in the UK. US corporations are taking advantage of the huge reserve army of labour still out there to introduce part-time and temporary jobs to save labour costs – reduced benefits, no holiday or sick pay etc.” This is one of the tactics currently being used to try and keep the rate of profit up as best they can in the face of huge economic difficulties world over. It will not and cannot last. Capitalism is in a rut it is struggling to get out of. Only re organising society along democratic socialist lines with workers gaining power and owning the means of production and socialising production could we see an escape for the working class’s across the world. With extracts and references from http://thenextrecession.wordpress.com/2013/07/08/the-world-is-slowing/ “Marks indicate extracts for clarification

Democratic deficit in Europe

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

Solidarity with workers across Europe

As the crisis in capitalism grows deeper and deeper and the ruling classes look increasingly desperate for ordinary working people they haven’t seen this drop in living standards for a very very long time possibly ever.



In Britain, as in every country of Europe, millions of working people are following events in Greece with baited breath. In part this is because of fear of what the deepening economic crisis in the euro zone could mean for workers in Britain. But it is not the only reason. It is also because workers are inspired by the defiance of the Greek population.
Seventeen general strikes have shaken Greece in the course of the last two years as Greek workers have refused to accept the mass impoverishment demanded of them. And now the Greek working and middle classes have shouted their defiance in the elections - shattering the electoral base of the previous establishment parties - Pasok and New Democracy - and voting for those who opposed austerity.
Syriza (Coalition of the Radical Left) was the biggest beneficiary of the anti-austerity mood in the recent Greek general election, increasing its vote from 4.6% to 16.78%.
Since then Syriza's principled stand, refusing to join a coalition that accepted more austerity and instead demanding a left government, has led to increasing support in opinion polls - as high as 26% - mostly topping the polls. This also shows the potential for left, anti-cuts candidates to make breakthroughs outside of Greece, including the Trade Unionist and Socialist Coalition (TUSC) in Britain.
The right-wing and fascist Golden Dawn won 21 MPs in the 6 May elections but has since seen its support plummet in the polls. This gives an indication of how support for the far right can be undermined when a credible left alternative emerges. But it is also a warning of what could emerge if Syriza does not lead a battle against austerity.


All across Europe workers are being forced to accept austerity in Ireland next week people will go to the polls to vote on the European austerity treaty as socialists we call for a strong NO vote rejecting permanent austerity and being locked into a straight jacket in terms of Ireland’s options from this point on.

The capitalist classes of Europe are now cranking up the pressure on the Greek working class, trying to blackmail it into voting 'the right way' at the recall general election in June.
Typically Cameron has led the charge, crudely sending "a very clear message to the people of Greece: there is a choice - you can vote to stay in the euro, with all the commitments you made, or if you vote another way you're effectively voting to leave."
Cameron is attempting to turn the general election into a referendum on the euro. He is gambling on the fact that a majority of the Greek population still want to remain in the euro, fearing the prospect of being a small, isolated and impoverished country.
It was not the Greek people that made a "commitment" to endure endless misery. This was done by the previous government parties and, as a result, the Greek population punished them at the polls.
The policies demanded by the troika of the European Union, International Monetary Fund and European Central Bank, and implemented by Greek governments, have left sections of the Greek population destitute and the vast majority in terrible poverty.
The Greek economy has shrunk by 20% in four years, a catastrophe not seen in Europe since the 1930s. Public sector wages have fallen by 40%. The church is now feeding an average of 250,000 people each day as sections of the population literally face starvation.

As the pressure of the axe-men and women mounts on the Greek people to submit, the working class of Britain, along with workers across Europe, needs to send a resounding message to the Greek people: 'We stand 100% with your rejection of austerity. We support your struggle and will step up the battle to stop cuts and defend living conditions in our own countries, as the best means of assisting your struggle. If, as is overwhelmingly likely, the capitalist classes of Europe force you out of the euro zone, you will not be isolated - the workers of Europe stand in solidarity with you.'
What better support could workers in Britain give to workers in Greece than by bringing down the hated Con-Dem government?
It is not only in Greece but across Europe that the working class has rejected austerity on the streets and at the ballot box. The defeat of Sarkozy in France and of Merkel's party in Germany's most populous state, the huge vote against the Con-Dem's in Britain's local elections, plus the local election results in Italy; are all electoral indications of a growing tidal wave of opposition to austerity.
The battle against austerity must be linked to struggle against capitalism - a system in a profound crisis. It is not the supposed past profligacy of the peoples of Greece, Spain, Ireland or Britain that has led to the current catastrophe but the economic crisis of capitalism, and the past and current profligacy of the financiers and speculators who dominate the economy.
The euro zone has become an austerity zone, where all the problems of the capitalist crisis are intensified. We as Socialists always warned that the euro, a single currency for very different economies, would not work on a capitalist basis.
When the world economy was growing it could appear a success, but in a crisis it would become a terrible trap for the working classes of Europe.
The leaders of the euro zone, headed by German capitalism, are trying to overcome the crisis by driving the working class into the dirt.
Cameron is applying the same policy in Britain. But this is exacerbating the economic crisis and is creating a gigantic revolt. It is fear of a deepening of the economic crisis and, above all, of the revolt that is coming, that is forcing the leading representatives of capitalism, including Obama, to put pressure on German capitalism to move towards some measures to stimulate the euro zone’s economies.
The economic crisis is not caused by a lack of profits for big business. The capitalists have huge piles of cash. The Wall Street Journal estimates that in the US, the euro zone, the UK and Japan, some $7.75 trillion in cash, is sitting in the vaults of big business.
Because the capitalists refuse to invest this money, we call for an immediate 50% levy on it, in order for it to be used for a massive programme of investment in public work and job creation. However, there is no prospect of capitalist governments carrying out this kind of serious stimulus, which would create howls of outrage, and opposition, from their big business backers.

So let’s join together across Europe and look across borders and see we are all fighting the same enemy and that if we unite across borders workers can finally feel their huge strength they do hold. Once workers in Europe break out of their chains the tide will turn very quickly. In Britain we can do our bit by helping to bring down this weak rotten con-dem government which is intent on making the poor pay for a crisis they did not create. This October on the TUC demonstration we also need to have placards and banners with messages of solidarity with Greek, Spanish, Irish and Portuguese workers on this will scare the ruling class’s with the ideas and solidarity that is spreading like wild fire across Europe as we speak.

Its time to fight back, its time to unite but most of all stand together.

Europe and capitalism still on very shakey ground as financial crisis continues

So as the financial crisis inside the EU intensifies I thought I’d look at a recent socialism today article
By Lynn Walsh, Editor, Socialism Today, monthly magazine of the Socialist Party (CWI England & Wales)


The European economies are in the throes of an austerity-induced recession, which is likely to be protracted.
The Greek bailout 2.0 has averted a default, for the moment. The new fiscal pact is a straitjacket that will aggravate Europe’s austerity-induced recession. Ireland’s referendum threatens to shake the EU and the eurozone. There is growing discord among EU leaders. Far from over, workers’ struggles against capitalist austerity will erupt on an even bigger scale. LYNN WALSH reports.

AFTER SEVEN months of wrangling, the troika, the Greek government and private bondholders have agreed to a second bail-out package. As a condition for the package, the Greek coalition, led by the technocrat Lucas Papademos and supported by Pasok and New Democracy, has agreed to further savage austerity measures. Leaders of the troika – the European Central Bank, European Commission and International Monetary Fund – claim that this package will stabilise the eurozone. But the savage austerity measures they have imposed on Greece will actually increase the burden of debt and ensure another default further down the line.
Greece will save around €100 billion through a managed default that has been agreed or imposed on the private bondholders. However, it is mainly a refinancing exercise rather than a wiping out of debt. Greece will receive bail-out funds of €130 billion or more – but these are loans from the European institutions and the IMF. The terms are less onerous than the previous bonds but, nevertheless, are new debt that will prove unsustainable. Most of the new bail-out funds will be used to recapitalise the private Greek banks (which have also suffered losses on the bond exchange) and to pay off previous debt and interest charges.

Official public holders of Greek bonds (the ECB, eurozone central banks, the IMF, etc) will not be suffering a haircut. While it may appear that the private sector is losing out, they are really “the lucky ones”, as commentator Nouriel Roubini says. They are getting €30 billion upfront as a sweetener (paid from the €130bn new bail-out funds). In 2008, all Greece’s debt was held by the private sector. Now, 77% of the debt is held by the institutions of the troika.
“The reality is that private creditors got a very sweet deal while most actual and future losses have been transferred to the official creditors”. “The reality is that most of the gains in good times – and until the PSI [public-sector involvement] – were privatised while most of the losses have been now socialised. Taxpayers of Greece’s official creditors, not private bondholders, will end up paying for most of the losses deriving from Greece’s past, current and future insolvency”. (Roubini, Financial Times, 7 March)
Moreover, eurozone private banks have received massive support from the ECB in the form of cheap (1% interest) three-year loans which, for the time being, will cushion the banks against their losses.

Greece’s Finance Minister Evangelos Venizelo (Pasok)
The second bail-out package will merely postpone the crunch for Greece. A report issued by the troika shows that, at best, Greece will still have a national debt of over 120% by 2020. This presages further drastic cuts in public spending, the sacking of 150,000 public-sector workers, and €45 billion privatisations by 2020. But if things go awry, the burden of debt (according to the troika) could peak at 170% in 2014 and still be 145% in 2020. “The new €130 billion that the official creditors have agreed to lend may not be enough even to cover Greece’s debt service [repayments to fund interest charges]”. (Financial Times editorial, 21 February)

“Greece is just not in a sustainable position on several counts”, commented Mats Persson, director of the think-tank Open Europe. “The extreme level of youth unemployment shows that the austerity cuts are fighting off any chance the country has of recovering. It will get worse; there’s no way Greece can get out of this”. (Daily Telegraph, 9 March) “‘It will happen’, said Stephane Deo, a UBS economist, referring to the next Greek crisis. ‘The market is already pricing in’ a second round of restructuring”.
From an economic point of view, the burden of debt in Greece is unsustainable. GDP fell nearly 7% in 2011, and is expected to fall by between 4% and 6% this year. Despite a series of general strikes and mass protests, the former Pasok government and, subsequently, the Pasok/New Democracy coalition appear to have got away with imposing devastating austerity measures. But, so far we have only seen act one. A recent comment in a Morgan Stanley bulletin recognises the likelihood of further social explosions: “Several episodes of social unrest have shown all too clearly that the extra-economic dimension of this tough adjustment programme is at times unpredictable”. (Greek Debt Restructuring, 24 February) In fact, the working class and middle class will be compelled to intensify the struggle against austerity measures that spell utter social-economic catastrophe.

Bundesbank president, Jens Weidman, has asked: What is the exit strategy? The ECB already has over €3 trillion of bonds and other collateral on its books (more than the US Federal Reserve). To reverse the liquidity injection it would have to sell a large part of these securities. But it is far from certain that this would be easily done, as many of the securities are considered too risky by private banks and finance houses.
The private banks are becoming more and more dependent on the supply of cheap credit from the central bank and from eurozone national banks. These public institutions have the first call on assets in the event of defaults. This in turn makes private investors wary of putting their capital into the private banks, as they would not get priority in the event of a default. In other words, they would bear the main losses of any banking collapse. This is giving rise to a situation where the ECB and the central banks are propping up zombie banks throughout the eurozone.

TWENTY-FIVE EU governments (with Britain and the Czech Republic opting out) have agreed a new fiscal pact. This is a legal straitjacket that aims to restrict governments’ budget deficits and national debt. However, it includes no measures that would concretely advance the eurozone towards a fiscal union. The pact limits ‘structural’ budget deficits to 0.5% of GDP (leaving room for arguments on the definition of ‘structural’). If the national debt of participating governments goes above 60% of GDP they will be compelled to take drastic, rapid measures to reduce the debt. In reality, these are completely unachievable targets for most EU countries. In so far as governments attempt to meet them, they will prolong or deepen the European recession. On the other hand, there are already indications – e.g. Spain – that governments will be forced to repudiate these unrealistic targets.

Jean Claude Juncker, head of the group of 17 euro zone finance ministers, with his Spanish counterpart.
Many national leaders believed that the pact was a necessary cover for German chancellor, Angela Merkel, to get political support for further bail-out measures in Europe. They assumed that the quid pro quo for agreeing to the pact would be an increase in the bail-out funds available to shore up the finances of EU/eurozone governments. The German government and Bundesbank, however, are still intransigently opposed to new measures to support governments with shaky finances.

WITHIN HOURS OF the agreement on the pact, the Spanish prime minister, Mariano Rajoy, unilaterally announced that Spain would not be committed to the 2012 target of reducing its budget deficit to 4.4% of GDP (which would involve €5bn additional cuts). He announced that Spain would aim at reducing the deficit to 5.8% of GDP (claiming Spain would still aim for the 3% target by 2013). Rajoy bluntly told EU leaders: “This is a sovereign decision by Spain”. He said that he had not consulted other European leaders: “I will inform them in April”.

Spain’s prime minister Mariano Rajoy with German chancellor Angela Merkel in January
Rajoy clearly fears the prospect of a volcanic social explosion if they cut as deeply as the eurogroup are demanding. Spanish GDP is expected to fall by at least 1% in 2012. Unemployment is already officially 24%, while youth unemployment is over 40%.
Other eurozone leaders are furious, but what can they do? The recent violent clashes between police and protesters in Valencia and Barcelona are an indication of the struggles which are coming. The eurosceptic Daily Telegraph commented: “At a stroke Rajoy has demonstrated breathtaking defiance, heart-warming patriotism and a different path to recovery. But even worse, he pointed out the elephant in the room: the eurozone is a monetary union, not a political one, and if members want to run their own affairs, neither Brussels nor Berlin can stop them”.


If the signs of growth in the US economy are sustained, it will possibly cushion the European economy, allowing a slight growth of exports to the US. However, the best scenario for Europe is likely to be a relatively mild recession, but with the prospect of prolonged stagnation. Unemployment is horrendous. Officially, over 24 million workers are jobless in the EU, while youth unemployment has soared above 50% in Spain.

THE SECOND GREEK bailout has temporarily stabilised the Greek government and defused the default time bomb ticking under the eurozone. But it is essentially a temporary fix which does nothing to resolve the underlying problems. It will not break the vicious spiral of repeated austerity packages, ever rising mass unemployment, falling tax revenues, and recession. Neither the eurozone leaders nor the G20 leaders have any policies to overcome this bleak situation.


It is clear that the EUrozone and beyond is on very shakey ground with littleprospect of this changing anytime soon. Capiatlism is bankrupt of ideas out of this crisis of its own making and is still looking to make us all pay for it.
Both the EU and the eurozone have already failed in their key objectives. The European Union was intended to overcome national differences, and particularly bury the historic antagonism between Germany and other European states. In the recent period, however, Germany has been seen as a dictatorial power, imposing harsh economic policies on the weaker European states. This has reinforced an upsurge of nationalism and xenophobia, with the growth of anti-immigrant, racist trends. At the same time, the eurozone was intended to accelerate the economic integration of EU countries. In practice, it has intensified the divergence between the stronger economies and the weaker countries, especially those of the Mediterranean ‘periphery’. The eurozone has become a time bomb under the whole world economy.
The idea that capitalist states could overcome their national limitations and achieve an integrated, harmonious Europe has been shown to be utopian. The unification of Europe is a task for the working class, which can only be achieved on the basis of workers’ democracy and socialist economic planning.

Greece on the edge, will the EU leaders let them go ?

At the present time, foreign creditors and the Troika (IMF, ECB and EU) are trying to impose a new round of severe cuts on Greece, including 20% wage cuts in the private sector and an immediate slaughter of 15,000 public sector job as part of the destruction of 150,000 jobs by 2015. At the same time, support for the parties supporting the technocrat government of Papademos is in sharp decline. In one recent poll, Pasok, the now neo-liberal former social democratic party, is down to 8%, from 44% in 2009, when it returned to power! The anger and fury about the cuts is now reflected in the hesitancy that ND, the traditional conservative party, and Laos, a right-wing populist force, - in alliance with Pasok behind the Papademos government - are trying to present to the public, before again surrendering to the demands of the markets. “I will not contribute to a revolution out of misery that will then burn the whole of Europe”, Georgios Karatzaferis, the leader of Laos, was quoted, trying to distance himself from the government he supports.



General strike, 7 February 2012

The former banker, Lucas Papademos, was presented in November as a ‘neutral’ technocrat, above the different parties to save Greece after the fall of the Pasok government. On taking over the job of Prime Minister, he had approval rates of 60% or more. Now his support is shattered, and the parties supporting him – Pasok, ND and Laos – have fallen from 83% combined in October 2009 to less than 45% today, with ND on 31% (from 33.4% in 2009) and Laos 5% (5.6%).


Still, the ruling class and their politicians can feel that the mood is explosive.

The failure of two years of severe austerity after decades of stagnation and crisis in Greece is now obvious. The capitalist media and TV channels openly discuss the vicious circle of cuts and further economic decline. It’s widely acknowledged now, that this policy of austerity is a blind alley and capitalist commentators now raise the idea of limiting austerity to allow some limited measures promoting growth. The Troika is more and more criticised for imposing their policies and making the situation worse.

Still no significant part of the Greek capitalists wants Greece to leave the Euro-zone, but the debate is in full swing now on what would happen if Greece is kicked out of the Euro or leaves the common currency itself. Parts of the Greek capitalists are trying to use this as a tool to demand more concessions from the Troika.




With the narrow vote of the Greek parliament last night narrowly voting through new austerity measures mentioned above to be able to qualify for the next installment of the bailout from the IMF. This looks dire for Greecea s it is. They are effectively bankrupt already huge huge unemployment and the suicide rate is shooting up in the last year.

Greek gdp fell 7.3% in 2Q 2011. Est. -5% for 2011. Unemployment est. to be at 1.2M in a country of 12M how can they pay the debt?

Answer is they simply cant. I have a feeling that the EU leadership the ruling class's in germany and France are preparing the ground now for a exit of teh Eurozone for Greece. To me the EU cannot afford to bail out Italy and spain and Greece i think they will sacrifice Greece to try and save the rest of this failed capitalist project.

As for democracy in Greece i think now its long gone. With elections called for April time but all parties manefesto's has to be passed by the IMF. If you think that is democracy having your manefesto passed by the markets first you can think again.

Its time for the greek workers to over throw their government once and for all and to refuse to pay any more of the debt. To urge the cancelation of the debt and the bringing into public ownership the commanding heights of their economy to begin to rebuild Greece under a socialist planned economy.

World capitalism teeters on the edge of disaster

More andm ore gloomy news meets us this week with the news that the world growth figures have been downscaled and world capitalsim edges ever slowly towards another global depression set to dwarf the great depression of the 30's. This is a real crisis now and one we are not getting out of anytime soon.

Only yesterday the worst-case expectation was that the UK’s Gross Domestic Product – the key measure of growth – fell by 0.1% between October and December. But today’s official figure from the Office for National Statistics reveals that the UK economy actually shrank by 0.2% in the last quarter of 2011, and is heading for recession.

Accumulated UK government debt broke through the £1 trillion mark as a dual consequence of falling tax revenues, continued support for the financial sector and higher welfare bills as a result of soaring unemployment.

Despite the ConDem’s stated intention to reduce the country’s dependence on debt, its combined corporate, public and household debt has increased to 507% of GDP and the country remains where it was in the league table of the richer nations when the crisis broke in 2007/8 – right at the top.


The world's economy is "deeply into the danger zone" because of risks from the eurozone, the International Monetary Fund (IMF) has said.

The IMF predicts the global economy will grow by 3.25% in 2012, down from an earlier forecast of 4%.

The growth forecast for the UK economy has been cut to 0.6% from 1.6%.

But the eurozone is set for a "mild recession" in 2012, with GDP expected to shrink by 0.5%, compared with a previous forecast of 1.1% growth.


Not one of the capitalist leaders of teh ruling class know how to solve this crisis and prescribe more austerity to deal with this sinking us further and further into misery . While the rich get richer the poor get poorer. The contradictions and failings of world capitalism are becoming increasingly clear for all to see now.

What we marxists argued at the time of the 2008 financial crash and after there is no way out of this crisis as there is little fat on the bone left to play with. With china's economy slowing and having a knock on affect in South America and Africa where it had been investing heavily wil be scaled back leading to recessions and even longer term depressions in other parts of the world. No where will escape this i feel and unless this rotten system of greed over peoples needs is brought to a end where the wealth of the working class is expropriated for the benifits of the 1%.

It is time society was re organised and the worlds resources planned for the needs of the planet and its people which can all be met if wealth was shared out equally. In a socialist planned society

Will Italy be next on the bailout list ?

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

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

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

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

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

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

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

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

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




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

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

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

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

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

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

Economic crisis in them and us Britain

this is the excellent editorial from this weeks edition of the socialist, a weekly paper by the socialist party of England and Wales. if you like this article and wish to view more just like this please do visit
www.socialistparty.org.uk


Wages fall: Office for National Statistics 2010 survey of hours and earnings

For a few at the top, Britain is still booming. In 2010, while the majority suffered the biggest squeeze on their incomes since 1977, the earnings of FTSE 100 chief executives rose by 32%.

The number of billionaires increased from 53 to 73. For the working class, by contrast, the economic crisis which began in 2007 has intensified a long-term trend for its share of the wealth to decrease.

The TUC has produced a report exposing the myth that living standards for the majority were increasing during the boom. On the contrary, the report shows that low-paid workers' incomes have fallen in real terms over the last 30 years.

The number of workers whose wages are at least a third less than median pay has soared from 12% in 1977 to 22% in 2009. Since 2007, as unemployment has rocketed and wages have been squeezed, poverty has increased dramatically.

In March this year the BBC Panorama programme carried out a survey of actual take-home pay. This showed that, on average, workers are taking home £1,088 less a year than two years ago when the sum is adjusted for inflation.

Their real pay has fallen by 5% since the beginning of 2009, which was half way through the recession. Nor is there any prospect of strong growth for Britain's economy, on the contrary stagnation is the rosiest scenario on offer.

As the weak growth in the US stutters, the IMF has also downgraded its growth predictions for Britain this year to just 1.5%, warning that there are significant risks of inflation, low growth and unemployment.

Nonetheless, the IMF has thrown some crumbs of comfort to chancellor George Osborne by backing the government's determination to forge ahead with the biggest cuts to public spending in 80 years.

This is the IMF whose policies have failed in Greece and whose structural adjustment programmes have caused untold misery to workers and poor people across the world.

The IMF's commendation is not, however, the unified position of the strategists of capitalism. The OECD has warned that if Britain's growth is lower 'than expected', as the OECD itself now predicts, the pace of the cuts should be reconsidered.

A number of capitalist economists, including some who wrote to the press supporting the government's strategy just a year ago, are now urging the government to rethink.

For example, Jonathan Portes, the director of the National Institute of Economic and Social Research, who until February was chief economist at the Cabinet Office advising the prime minister, said: "You do not gain credibility by sticking to a strategy that isn't working."

However, these commentators do not have a solution. Like Eds Miliband and Balls they are only arguing for the pain to be less deep but more prolonged.

Nonetheless Osborne's cuts will massively exacerbate the problems. George Osborne has attempted to brush off the criticism and to continue to insist that he 'has no plan B', however, the disastrous results of 'Plan A' are still to be played out.

The government's savage cuts are only beginning to be implemented. As more public sector workers are thrown on the scrapheap, and other cuts hit the public and private sectors, tax revenue will decrease and benefit claims, measly as payments are, will spiral.

The result will be enormous human misery and could even mean an increase rather than a decrease in the government deficit. There is no prospect of 'rebalancing' Britain's economy, of the puny manufacturing sector compensating for the cuts in public spending.

On the contrary, manufacturing is already suffering as consumer spending falls. It is already 2.1% lower than at this time last year, and is likely to fall further.

Production for need
The Con-Dem government can be forced to retreat from its plans. It has already been shaken by the TUC demonstration on 26 March - the biggest trade union demonstration in Britain's history.

On 30 June the government is likely to face the first coordinated strike against its policies by several trade unions. This has to be a step towards a one-day strike of the whole public sector.

This would terrify the government and give enormous confidence to the working class. At the same time a socialist alternative to the capitalist system needs to be put forward.

Capitalism is a blind system, based on the drive for short term profit. It is also in fundamental crisis.

The Socialist Party calls for the nationalisation of the big banking and finance companies. Compensation should be paid on the basis of proven need - without one penny going to the rich speculators who are demanding that the working class pay for the crisis for which they - the speculators - bear responsibility.

It would then be necessary to introduce a state monopoly of foreign trade - so that it would be a democratically elected government - not the market - controlling imports and exports, including capital.

A socialist nationalised banking sector would be democratically run by representatives of banking workers and trade unions, the wider working class, as well as the government.

Decisions would be made to meet the needs of the majority, for example offering cheap loans and mortgages for housing and for the planned development of industry and services and ending all repossessions of people's homes.

However, that would only be the start. The capitalist crisis has led to enormous economic destruction.

In Britain around 10% of wealth has already been lost as a result of the recession, due to factories and workplaces closing, resulting in 2.5 million, and rising, officially unemployed.

That is why a crucial step towards solving the economic crisis would be to also take all the big corporations that dominate Britain's economy into democratic public ownership.

This would then allow for production to be planned to meet the needs of all people and the planet and not for private profit.


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Socialist Party editorial

Economic crisis in 'the