New phase of crisis in country which could decide the fate of Europe

The rapid and disastrous series of events being played out in Spain are inexorably pushing the country deeper into the epicentre of the European crisis. There is an acceleration of the crisis on all fronts, with several powder kegs simultaneously approaching the fire of a “hot autumn”, which capitalism is powerless to avoid. The fundamentally weak position of the Rajoy government has been exposed, despite its “overall majority” won only months ago which the capitalists hoped would ensure a smoother ride out of the crisis, over the bones of workers, youth and the unemployed. Indeed, the Financial Times newspaper last week commented that, “This administration, in power for a little more than 7 months, already has the feel of a government approaching the end of its term” (FT, 06 August). How the government and its policies withstand the inevitable blows of the coming months, will ultimately depend on the extent to which workers, the unemployed and young people can develop their struggle to break from the road of economic and social depression. This in turn boils down to how a struggle capable of bringing down the government, and imposing a working class alternative can be built.

In the last months, the battle between the classes was intensified on all levels. Blow after blow, new and evermore brutal austerity measures are announced, with the latest raft of proposed measures worth over €102 billion being proposed by Rajoy for approval by European austerity-merchants. However, this escalating war on the living standards of the majority has run alongside scenes reminiscent of civil war, as miners in Northern regions took militant action in defense of jobs and communities, in a 65-day indefinite strike which may represent only the opening round in their struggle. Last week, hundreds of rural workers from Andalucia’s SAT union raided multi-national supermarket chains in Sevilla and Cadiz, under the slogan of “expropriate the expropriators”, led by United Left (IU) regional MP, Sanchez Gordillo, gaining unprecedented coverage and support and provoking debate, including on an international level. The next months will present an opportunity for a united and generalised movement to emerge, capable of drawing these militant sectors into a struggle capable of developing well beyond what we have seen so far.

Government sinking under depth of economic depression

The speed with which the government has been thrown into crisis corresponds to how quickly its pretensions to have a credible plan to solve the economic crisis were rubbished. Its election in November 2011, though far from an enthusiastic endorsement, did reflect that a substantial layer of people held out a hope that the crisis was more temporary and a change of government would lead to things beginning to improve. Within weeks, the country was on the verge of a European bailout for its banks, and now, amidst a deepening recession, the countdown to a second wider bailout has begun, with Rajoy almost openly admitting that it is now only a question of the bailout’s form and conditions.

The path along the road of Greek-style economic disaster down which austerity policies are pushing the Spanish economy is increasingly clear. And as data was published showing how the recession accelerated in the second quarter of 2012, Rajoy was busy working on his new super-austerity package, most probably linked to an imminent bailout request. Widespread pessimism on the economy is being reflected in opinion polls. The latest show that up to 97% estimate the economic situation as ‘bad or very bad’. Among the unemployed, whose ranks are steadily growing towards 6 million and 25%, a crushing 66% were shown to have ‘little or no’ hope that they would find work in the next period. This realisation of the depth of the crisis will be translated into a decision by growing layers to move into determined struggle to prevent an even greater catastrophe.

Illusion of a “strong government”

For many capitalist commentators in Spain and internationally, one of the consolations in the Spanish situation is the strength of the PP government, which holds a massive parliamentary majority. However, the crisis makes daily punctures in this illusion of strength. Recent opinion polls by El Pais in July, indicate that the PP government has registered the sharpest drop in support in history by any new government, over 14% down from when it took power only 7 months ago. Its is seen by wide swathes of former voters as a government of liars, which has broken all of its key election promises (such as the refusal to raise VAT or further cut public sector wages and unemployment benefits), in a process of rejection and radicalisation which will further deepen with the course of the crisis. Indeed, a new feature of the most recent wave of protests and strikes has been a prominent chorus of demands for the government to go. As this mood and demands develop, so too will the struggles and debates within and around the trade unions and the left on what strategy is necessary to do away with the government. These debates, which will see the question of the struggle for a government in the interests of the working class put under the spotlight, will be of crucial importance, and bring to life the debate around a revolutionary socialist alternative in a way not seen until now.

This is not the only front on which the government faces crises and obstacles. The desperation of the economic position it has been thrust into has generated confusion and divisions in its ranks at all levels. Reports at the beginning of the summer indicated that Rajoy had banned his Ministers from speaking on the government’s behalf following repeated instances of conflicting positions being put forward. Examples include provocative declarations by Foreign Minister, Margallo, labelling the European Central Bank as “sinister” and attacking the approach of German capitalism. Even the Financial Times has recognised how among leading cabinet figures, there are “3 competing voices” on economic issues. Such confusion and divisions reflect the disorientation of the government and the general panic of capitalism, which cannot come up with a credible strategy, rather responding to developments in a chaotic and desperate manner.

These divisions can be seen to emerge on every level, and will deepen further. In July, Rajoy was forced to withdraw a law which stripped local councils of substantial spending powers, in the face of a bubbling revolt from PP mayors on a state-wide level. In the same way, the dynamic of the crisis in Spain’s regions, with central government in an offensive on the budgets of autonomous regions which control a significant portion of public spending, does not spare the ranks of the government party. Last week, the PP President of the region of Galicia, seemed to join one of numerous regional revolts against the central government’s reforms, on this occasion a health reform which strips the right to public healthcare from ‘illegal’ immigrants. Such tensions and divisions, despite seeming minor at present, will inevitably be sharpened as the government moves deeper into the doldrums, and the prospect of splits and divisions in the PP on a political basis or indeed on a local or regional level cannot be ruled out, which could fatally weaken the government.

National question time-bomb

So we see how, despite its parliamentary strength, the government is faced with a minefield of obstacles and tensions which reduce its room for manoeuvre. Not least among these is the conflict it faces with its autonomous regions, which is linked to the explosive national question at the heart of Spanish capitalism. In this way, the austerity offensive that the government is taking to the autonomous regions, inevitably provokes a heightening of national tensions. They are seen as attacks by the central Madrid government against regions with historical national traditions, culture and aspirations, especially the Basque country and Catalunya. These regions have been at the forefront of the frontal opposition to Madrid’s agenda, joining 3 other autonomous regions in rejecting the regional debt and deficit “objectives” imposed on the regions by the government last month.

This episode is one of many which gives an indication of the problems the government will face, setting the scene for dramatic showdowns between ‘centre and periphery’, in a dynamic reminiscent of the national tensions brought to the fore by the Eurozone crisis. The government, fully conscious of this, is preparing itself, having recently passed a “Stability law”, to give it the power to force its will on the regions. This is a draconian piece of legislation, which authorises full-scale Troika-style intervention in regions which do not obey, with the power to simply push aside elected regional governments. It even authorises criminal proceedings against politicians seen as “irresponsible” in their administration of Rajoy’s wishes, with jail terms of up to 3 years! This law, an attempt to dispell any possibility of regional governments challenging austerity, is one thing to pass, but another to implement. It will lead the government into head-on collisions, stoking up already deep resentment and indignation in the state’s historic national communities.

The Basque country is set to witness elections in October after the collapse of the PSOE-PP coalition, which will be polarised along the lines of the national question, with two nationalist formations emerging as the biggest parties. Opinion polls putting right-wing nationalists, PNV, neck and neck with the new left-nationalist formation, Amaiur, legalised only just prior to the last general elections. In this context, even the current regional President, Patxi Lopez from PSOE, has been pushed to employ increasingly nationalist rhetoric, decrying the “rule by royal decree” of Rajoy. In Catalunya, the right-wing nationalist government is demanding a “fiscal pact” - a new change in its relationship to the central government which would allow it full power over taxes collected in the region, a similar position to that of the Basque country today. However, with the Rajoy government on an opposite trajectory, leading an assault on the power of the regions, such a demand is unlikely to win favour, and the confrontation set to deepen. The CiU government is threatening to organise a referendum on the question, or call early elections with debate polarised around the issue. Either would result in a powerful confirmation of the increased support for greater autonomy, including the question of separation from Spain, which has been a consequence of the crisis, and would be a further blow to the position of the PP.

Of course Spanish capitalism would do everything to prevent these regions, which represent the strongest remnants of the industrial economy in Spain, moving towards separation. This has been shown by the corresponding rise in the government’s own nationalism, Spanish nationalism. Leading figures like Aguirre, the President of the Madrid region, have made fiery and provocative calls to dismantle the power of the autonomous regions, reminiscent of the traditional far right position. But the reality is that capitalism is incapable of decisively solving the question. At all decisive episodes in its history, including the revolutionary period of the 1930s, these national contradictions explode onto the surface, only having been temporarily kept under control by the brutal repression of the nationalities by Franco afterwards, and then partially by the long economic boom of the post-Franco era. As in the 1930s, the defence of the right to self-determination of the nationalities, based on the democratic wish of the majority, is a key pre-requisite for the building of a united struggle of the working class in the Spanish state, on solid foundations.

Clearly, the reactionary bourgeois-nationalism of the Catalan government, attempting to shore up its social base with radical rhetoric whilst implementing brutal austerity itself offers no way forward for working people. However, the Madrid austerity offensive also tends towards the development of a left-wing manifestation of nationalism, beginning from the desire to fight against anti-worker policies. This has already had an expression in the rise of Amaiur in the Basque country, and further examples will develop. The question for Marxists is how, while emphasising the need for a united struggle against Spanish capitalism, this radical left nationalism can be channelled in an anti-capitalist, internationalist direction and form a vital part of the united movement necessary to bring about fundamental change. For example, the election of a left nationalist government in the Basque country, if it was really prepared to take on the austerity of the central government and put forward alternative socialist policies, would have an electric impact on the struggles of all workers and youth throughout the state.

However, if such a strategy is not developed, the national question can become a complication for the working class struggle as well as for capitalism, with implicit dangers on fragmentation. The movement necessary is a united one, based on a united front of all the genuine left and workers’ organisations, including the Basque and Galician trade unions, with the objective of stopping austerity and fighting for socialist change. The building of such a movement will be decisive in answering the question of whether the working class will develop the tools necessary to do away with this rotten government and its impoverishing policies.

Militant action shows power of impulse from below - organise the opposition to the union leaders’ strategy

The depth and scale of the government’s austerity measures are such that even the most right-wing of trade union leaderships would be incapable of preventing militant struggle developing. The main Spanish union leaders however, have done their very best! All the key developments of the class struggle which have been seen, have been the result of a powerful impulse from below. This was the case from the general strike of 29 March, which was called despite the wishes of the main leaders, to the explosion of the ‘indignados’ movement of 2011, to the massive public sector walkouts which developed from below following Rajoy’s last austerity announcements. Toxo and Mendez, respective leaders of CC.OO and the UGT, who refuse to concretise the threat of mobilisations and a general strike in the next period. In reality, their strategy seems to consist of hopeless negotiations with the likes of Angela Merkel and the King, along with a campaign for a referendum on austerity policies. This strategy has nothing in common with the instinct of organised workers, who when under threat have moved to take militant action, if necessary over the heads of their leaders.

The miners’ battle is set to kick off again in the autumn and, decisively, coincide with a more generalised movement, after a temporary pause in order for the next stage to be prepared. Their struggle had an enormous impact on wide layers of the population, who saw their struggle reflecting the type of determined resistance which the situation merits. Their indefinite strike of 65 days and militant action to defend their communities against repression enjoyed massive support, as their reception in Madrid with tens of thousands marching, testifies to. These workers represent an historic vanguard of the workers’ movement, having led the wider working class into revolutionary battles, with the Asturian commune in 1934, and the first successful workers’ battle against the Franco dictatorship in 1962. Their current struggle against extermination shows how this ‘vanguard’ status has stood the test of time. Following their example, and with their struggle’s continuation into the autumn, the right-wing bureaucracy’s task of keeping the struggle within acceptable limits will be significantly more difficult.

The popularisation of militant struggles like theirs, as well as the super-market expropriations and land occupations led by Sanchez Gordillo and the SAT union in Andalucia, will be translated into a push to go further than has been gone before. The latter struggle has swept across the international media shining a spotlight on the horrific conditions faced by the many for whom hunger is now a daily reality. In Andalucia, elements of Latin American landlordism exist side-by-side with ‘western’ capitalism, with over 50% of arable land owned by only 2% of the population, and an army of thousands of local ‘casual’ labourers with historically militant and revolutionary traditions, the historic basis of the SAT union.

The extremely heightened state-wide profile of Sanchez Gordillo and the militant SAT union also represents an historic opportunity for decisive inroads to be taken in the direction of the building of a strong pole of militant left opposition in the trade union movement and within the United Left party. Gordillo leads the CUT organisation, a component part of the IU (United Left coalition). Its main historic emblem is the town of Marinaleda, run along socialistic lines, where on the basis of assembly-based democracy, a publicly-run local economy has provided for full employment in the midst of 35% unemployment throughout the region. While only having 3,000 inhabitants, it nonetheless represents an example through which the un-thinkable benefits of an economy based on democratic public ownership on a bigger scale, can be explained. Gordillo is a regional IU MP and in recent months has led an unprecedented movement of opposition from below to the disastrous entry into government of IU in Andalucia, part of a PSOE-led cuts government. This movement, which has embraced dozens of rank and file assemblies of the IU and Communist Party, must now be extended beyond Andalucia, to a state-wide level. These is also a task to arm it with a clear alternative programme to that of the IU leadership, opposed to coalitionism with cut-making parties and with socialist proposals, including a rejection of the payment of the debt and the nationalisation of the banks. The strengthening of the SAT as a pole of militant trade unionism, combined with an organisation of the massive discontent within the base of the larger trades unions, still the decisive mobilising forces of the Spanish working class movement, would open up untold possibilities to advance towards the transformation of the trade union movement, in preparation for the explosive class battles to come.

For a movement to bring down the government! Prepare a working class alternative

The experience of two separate one-day general strikes, followed by a demobilisation of the struggle, will have convinced a wider layer of their insufficiency alone. Socialismo Revolucionario (CWI in Spain) anticipated this throughout the course of our campaign to build for the 29 March strike, emphasising the need for it to be followed up by a 48 hour strike, as the first step in a sustained and escalating programme of action. The PP government, under pressure from all sides and determined to persevere with the capitalist onslaught, must be met with a movement capable of bringing it down. While such a movement cannot be built by mere strikes alone, a campaign of sustained action, paralyzing the economy and showing the objective power of the working class in society would form an integral part of it. A 48-hour general strike across the Spanish state, linked to a calendar of escalating mobilisations, would be crucial in developing the confidence necessary to go further. A clear plan of struggle, including general strikes of a longer duration, and the beginning of key workplace occupations, should be developed. Democratic assemblies formed in workplaces and communities could play a key role in organising such a movement, agreeing on a plan for a fight which can go beyond the limits of the Trade Union leaders’ roadblock.

A movement of such proportions could expose the PP government’s weak position and bring about its disintegration or collapse. However, the movement must therefore prepare an alternative to replace it. Indeed, the PP government will most probably not last its full term, at least in its current form. Growing sections of the bourgeois who sense the government’s weakness, are arguing the case for a ‘national unity government’, of all the parties. They will also contemplate the imposition of a technocratic cabinet, as has been seen in Italy or Greece. Both of these options would mean the continuation and intensification of the bleeding-dry of the Spanish working class, and must be resolutely opposed by the workers’ movement.

The crushing depth of the crisis of Spanish and world capitalism poses the need for an offensive programme to break with the profit system and all its contradictions, and for such a programme to be embraced by the growing and ever-more militant struggles taking place. In this sense, the IU, up to 12% in most opinion polls, has been handed an historic responsibility. The policies of its leaders, despite raising key questions such as the nationalisation of some banks and strategic industries, is ultimately not up to the task. Their immediate proposals confine themselves to appeals for European Central Bank intervention, the creation of Eurobonds and similar measures. These proposals, which may offer breathing space to the economy if theoretically implemented, are not the basis upon which to challenge the crisis ridden capitalist economy which the EU seeks to defend with the austerity policies which it is wedded to. A programme beginning from a serious and sustained struggle, for the non payment of the debt, massive taxes on the rich to fund public investment and the nationalisation of the banks and key sectors of the economy under democratic control, could provide workers and youth in struggle with a road out of the crisis. Such policies, far from being compatible with remaining in the capitalist straight-jacket of the Euro and EU, would if implemented in Spain, be the first step in an international struggle for a socialist alternative, which should be built starting now with a coordinated general strike of the ‘peripheral’ countries. Such a programme should be a programme not for the entry into cuts-making coalitions with PSOE or other bosses parties, but a programme for a working people’s government. It is around the need for such a programme for the workers’ movement and a united front of the left, which the CWI will fight to further build its forces in Spain in the coming period.

Economy - Towards a troika bailout

No mercy from European capitalism

The government’s approach, in a desperate attempt to avoid the disastrous club of “bailed out” peripheral countries, has recently consisted of appeals for special treatment. Rajoy attempts to lean on the weight of the Spanish economy and its impact on European developments The government has fought for its bailout to come through the back door, through ECB intervention on bond markets to bring down its debt costs. However, hopes raised on the markets that the European Central Bank was preparing for an immediate large-scale intervention were dashed, when ECB President, Mario Draghi’s later declaration ruled out intervention until Spain had solicited a formal bailout. In a sense, the ECB has called the bluff of Rajoy, who at the last European summit in June blocked with the Italian government in an attempt to force the Eurozone powers to agree more far-reaching measures to stabilise their position. Despite a willingness to be more flexible with Spain than previously-bailed out countries, Draghi’s fundamental message is that no “solution” will be provided, even in the short term, without a humiliating bailout package, combined with a dreaded ‘Memeorandum of understanding’, imposing an economic ‘medicine’ tailor-made to depress the economy further and immiserate the working population.

As with the last bailout, the government’s attempts to skilfully portray itself as taking on the central European governments, “standing up for Spaniards” against German intransigence, have been laid bare. Fundamentally, the Rajoy government has done nothing to challenge its subordination to the diktats of German and European capitalism and imperialism. He has attempted to manoeuvre, taking advantage of the breaking of the Paris-Berlin axis, moving closer to Francois Hollande’s positions But it has also been shown how Spanish capitalism finds no reliable ally in other ‘PIGS’ governments and ruling classes. Rajoy’s alliance with Monti around the June summit was based on the narrow immediate national interests of both governments in pushing for faster measures, but represented no relationship of ‘peripheral solidarity’ or anything of the kind. This was graphically shown by Italian capitalism’s response to the recent ECB episode – new pressure on Rajoy to submit to a disastrous bailout in an attempt to end its association with Spain in the markets and win breathing space.

In the last months, Spain’s debt costs have intermittently surpassed those of already bailed out countries such as Portugal and Ireland. What the vulture markets attacks on Spain reflect is that the Spanih cocktail of mountainous debt and budget deficits, combined with severe economic recession is no less hopeless than those of Greece or Portugal etc. Indeed, when factors such as the size and weight of the economy, and the unique national and regional crises of Spanish capitalism are taken into account, Spain is a far bigger nightmare for investors.

The immediate future of the Spanish economy is clouded with innumerable uncertainties, not least over the capacity of European capitalism to put sufficient resources into a bailout of the scale that will be necessary. A partial bail-out through the buying up of bonds would merely represent a continuation of the panic-stricken approach, dealing with the economy’s problems only partially and in dribs and drabs as they become unsustainable, as was the case with the bank bailout. This approach will not end the brutal treatment of Spain by the markets in a lasting way, as the market’s preoccupations are not based on mere episodic problems, but a fundamental questioning of the viability of Spanish capitalism’s economic project, its capacity to overcome the debt quagmire and achieve growth.

This has been shown in the unprecedented flight of capital taking place, as profit-hungry investors flee the sinking ship of the Spanish economy. In the first 6 months of 2012, over 160 billion was taken out of the economy, with an astonishing 40 billion in the month of May alone. The fear-mongering of the establishment around the prospect of such a flight of capital in the event of anti-austerity measures being implemented becomes laughable, when it is shown that this very flight of capital is already proceeding apace, and spurned on by their austerity policies! And what is more, the nationalisation of the banking and financial sector and implementation of state controls on the movement of capital by an anti-austerity government, the only real way to combat such a flight of capital, is completely outside the logic of the PP, or any other capitalist party.

The brutal savaging of living conditions which is driving millions into poverty, with almost 40% of Spanish families now said to be in a situation of ”relative poverty”, contrasts with the rich, who continue to live it up. Spaniard Amancio Ortega, this year overtook US giant Warren Buffet as the world’s third richest man, with his fortune of 35 billion up by 32% on last year! Meanwhile, in the last 6 month period alone, 420,000 new people joined the ranks of the jobless. At the same time as being a graphic illustration of the brutal social injustice of the crisis, such data also sheds light on the vast wealth that has been accumulated in the savings accounts and cash reserves on the rich and big business, which if invested in job creation would help to transform the situation. However, the logic of capitalism in crisis, leads to this wealth being dormant, or even taken out of the economy, rather than invested. This poses clearly the need for socialist measures to seize this wealth, through massive wealth taxes in order to put in place a programme of massive public investment.

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