Capitalist crisis, a socialist alternative
Section Two: Europe at a turning point
The new global crisis of capitalism will have a huge impact on future developments in Europe as it takes place against a different background than the last recession in 1989-91. At that time, the problems of capitalism were over-shadowed by the collapse of Stalinism and its negative effects on the consciousness of the masses.
The process of globalisation has meant that the repercussions of a crisis in one continent, or in one major country, could spread across the world more rapidly than before. Dramatic changes in one part of the world can cause a domino effect. The illusion that Europe could somehow manage to avoid being affected by Asia's deep slump, a downturn in the US and international financial turmoil will be shattered.
The world economy is dangerously dependent on the US at the same time as the recovery in the US and the European Union is running out of steam. This in turn points towards an a world slump or a synchronised deep recession.
The US economy is already slowing down and is moving into a recession in the course of 1998. A slowdown in the US will mark the end of the weak recovery in the EU countries.
The impact of a US recession on Europe would be particular marked if the value of the US dollar begins to fall. Europe's exports have up to now been boosted by the depreciation of the western European currencies against the US dollar and the British pound, but these trends will most likely be reversed during 1999. The deustchmark has already regained strength against the US dollar and the British pound is set to fall as the country moves into a recession this year.
The recovery has reached its peak
A downturn in Europe has already begun in Britain, where a fall in manufacturing output and a profit squeeze have been accompanied by a slowdown in the service sector. Latest reports from both France and Germany indicate that the recoveries in both those countries are looking more and more fragile.
The situation in the world economy is more volatile then at any stage since the 1930s. There is a strong possibility that the world economy will experience a similar, disastrous crash-landing as in 1929. The factors that point in the direction of a crash are: the over-valuation of shares at the same time as the economy is slowing down, and companies are experiencing weaker sales and lower profit growth. This contradictory situation cannot last. Profit growth is a pre-condition for the continuation of the stock market boom. The longer this contradiction lasts, the bigger the fall. Whenever in the past the stock market reached such heights as today, it has fallen sharply. A crash could be triggered off by the banking crisis in Japan, a default on loans by a debt-ridden country or a new wave of competitive devaluations. Even a minor, accidental event could, given the present instability, trigger off a crash that will spread throughout the world.
Europe will, most likely, move into a slump rather than a recession in 1999, when the full impact of the global crisis is going to be felt. However, it is not possible to give an exact timetable, neither can we at this stage foresee how deep and how long this slump will last. Our prognosis has to be conditional in that respect.
A classical crisis of capitalism means…
The upheaval which erupted first in Asia is a classical crisis of capitalism, expressed in over-capacity and even over-production.
The present excess of unsold goods or capacity that cannot be used, what the bourgeois economists used to call a "a glut-economy", will give way to an enormous destruction of productive forces and job cutbacks on a global scale as the capitalists try to "balance" the market’s "supply and demand". The level of unsold goods in, for example, Japan is higher than any time in modern history. This is compelling Japanese companies to cut production and slash prices.
… Tougher competition from abroad
The European monopolies are facing tougher and tougher competition from abroad. Japanese capitalism and other crisis-ridden economies in Asia are bound to try to capture a bigger share of the market in Europe. The US market, especially when it is heading towards a recession, cannot absorb all the cheap goods exported from Japan and other crisis-ridden countries in Asia. On top of that, a widening of the US trade gap with Japan in particular can give rise to protectionist sentiments and growing demands for trade regulation, as in the 1980s.
This will give Japanese capitalism no choice other than to turn to European markets and the prices of Japanese goods are falling, due to deflation and a weak yen. The rapid increase in Japanese car exports to Europe (up 32 per cent in the first 11 months of 1997) is just one example.
As was pointed out in the British Financial Times 15 November 1997: "For Japanese car-makers, expansion in Europe is important at this point in their global business strategy, mainly due to the mature domestic market. The share of Japanese sales in the US has reached the politically sensitive level of about 24 per cent. Raising exports to expand sales (in the US) has become increasingly risky. The situation raises the importance of Europe as an export market to soak up excess production in Japan.." World-wide overcapacity in the car industry is on its way to becoming the equivalent of the entire North American car industry. According to the European Metal Workers Federation: "Hundreds of thousands of workers in the European car and auto components sectors are set to lose their jobs over next few years, because of overcapacity, stagnant demand and cheap imports."
In addition to that, US capitalism, after losing sales in Asia and faced with the prospect of falling profits, would try to increase its share of the European market. A weaker dollar would benefit US exports at the expense on its European competitors.
The outcome of tougher competition from abroad and slower export market growth will take its toll on European output in the coming period. In the words of the US Wall Street Journal 24-25 July 1998: "Declines on Wall Street and falling consumer demand have fuelled fears that the good times in the U.S. are nearing an end. The alarm is beginning to cause sectors (industries in Europe) to hold back on investment...and leading many analysts to believe that the rest of 1998 and beyond could prove a rough ride."
Consumption inside the EU, depressed by years of cuts, tax increases (on ordinary people) and persistent mass unemployment, cannot overtake exports as an engine for sustained growth. This will especially be the case if the majority of EU countries are trying to implement the strict financial framework laid down for European Monetary Union.
"The EMU would be particularly vulnerable during an economic downturn"
The austerity measures stipulated by the Maastricht convergence criteria in order to prepare for EMU prolonged the last recession in Europe. Now the majority of the EU governments have a dilemma. They have a lot at stake, both financially and politically, in making EMU work. But if they continue the same strict policy as before they will run the risk of puncturing the recovery in Europe.
The economic convergence inside the EU is mainly superficial. It is primarily the recovery and the relative stability of major world currencies since 1994 that have made it possible for the ruling classes and governments in Europe to take the first step towards EMU in May 1998. This was at a time when the EU was experiencing the fastest growth rate of this decade in many countries, aided by quite fast growth in the broad money supply.
The EMU has currently got full support from the ruling classes, the political elite and the top trade union leaders. But "Europe's people are against it. There is a marked lack of popular enthusiasm for the euro in Europe", wrote The British Economist 11 April 1998. Even Ireland’s vote on the Amsterdam Treaty showed that there is little popular support for EMU despite the Irish Republic receiving the equivalent of nearly five per cent of its GDP from different EU funds in 1997. No government can in the long run just ignore this lack of support.
The last recession in the early 1990s led to the collapse of the EU Exchange Rate Mechanism (ERM) and a wave of competitive devaluations across Europe.
A new recession, or more likely a slump, would once again make it impossible to maintain a fixed exchange rate and an all-European interest rate set by the new European Central Bank (ECB). This will mean that the EMU will most likely break up before 2002. Nevertheless, as The British Financial Times Guide to Economic & Monetary Union, July 1998 wrote: "The constraints of EMU could lead to extreme economic and financial tensions in time of crisis. EMU would be particularly vulnerable during a economic downturn."
There is a huge difference between the currently booming Irish economy and, for example, the slow growth rate that German and French capitalism have enjoyed in the recent years. On top of that, Italy, one of the countries that wants to be part of the EMU, is already on the verge of a recession and no chain is stronger than its weakest link. A pre-requisite for a single monetary policy, or a stability pact, are similar conditions in the different countries. Without this, a single economic policy, particular in the context of an impending global crisis, is not workable. The EMU project will therefore tend to blow apart when the world economy moves into a slump and the EMU countries diverge more and more.
The real test for the euro is still to come. It is one thing to bless the EMU project while the economy is recovering and another thing to implement the necessary changes in the face of economic storms (including the first post-EMU recession), political instability and social turmoil.
The tendency towards a world market divided by the three blocs, Japan, US and the EU/EMU, is undoubtedly compelling the countries inside the euro-zone to try, repeatedly, to go ahead with EMU. But not even the existing clique of EMU members is fully integrated, let alone Europe as a continent.
The British Observer, 3 May 1998, described what it called "The nightmare scenario": "With mounting economic turmoil and little popular support for the single currency, governments - particularly newly elected ones, untarnished by the euro - are likely to want to pull out. History shows that every significant currency union that hasn't been backed by full political union has fallen apart. Fund managers in the city are already working out how to take advantage of this. As with the collapse of the ERM in 1992, huge profits can be made if you play it right. Many are forecasting speculative attacks on the single currency in its first years of existence. ...But if a country does want to pull out, it will not be an orderly process. There is no mechanism in the Maastricht Treaty for withdrawal... The row over the European Central Bank will seem like a teddy bears' picnic compared with the rows as members countries fight for economic well-being. All will be pursuing different agendas, and all will want to amend, or simply break, the treaty."
For a socialist Europe – a workers’ Europe
Capitalism is still rooted in the nation state, which is not an economic category but a social formation that includes historical elements such as territorial property, a common language and culture, etc. Each different national bourgeoisie still depends on the various forms of protection provided by its state apparatus and government, despite globalisation and the fact that the EU has developed beyond being just a trade bloc. The barriers on the development of productive forces put up by the national state cannot simply be overcome by purely economic changes. It is a social question, which means that only the working class can bring the borders down and unite Europe on the basis of socialism and workers’ democracy.
However, the national state and national governments’ power and ability to act independently, against the will of the market (particular the global financial markets), have been reduced by the process of globalisation. That process has been accelerated by political decisions, such as the dismantling of capital controls, de-regulation, privatisation and the drive to create the most favourable conditions possible for capital. The Single European Act ("the single market"), various EU legislation and uniform regulations, tax-harmonisation, etc. have acted as means of stimulating further integration inside the EU. This, together with the political consensus established throughout Europe during the 1990s, has given rise to the illusion that EU is on its way to become a "super-state". This is certainly not the case. The new global crisis has already to some extent halted the process of globalisation. This could also spill over to Europe and thwart the process of further integration in the EU/EMU, particular when national governments are faced with economic problems that correspond to widespread political and social unrest.
But there is no solution on a national basis. Lasting, fundamental changes will only come about as part of an international socialist revolution. The need for an international programme and an International is more crucial than ever. The struggle against the bosses and the bourgeois governments will have to take an all-European shape. This will reinforce the need for an international outlook on the behalf of the working class. One effect of globalisation is that there is an increased awareness amongst workers that the struggle needs to be organised on a global or all-European plane, that workers will have to look for solidarity from brothers and sisters in other countries.
Globalisation has become a reality, thanks to the development of the world market, world trade, monstrous financial markets and the speed, size and interconnections of the movements of goods and information across the world. To counterpose to this fact the false argument that "the world economy was more integrated at the beginning of this century" could feed illusions of "a national, reformist road out of this crisis". Even the bourgeois left economist John Gray, from Britain, is much more correct when he writes: "Today’s world economy is inherently less stable and more anarchic than the liberal international economic order which collapsed in 1914. Like the hyperglobalizers, whose Utopian fantasies they effectively criticise, globalisation sceptics are trading in illusions. They cannot accept that globalisation has made the world economy today radically different from any international economy that has existed in the past; that would spell death to their hopes of a revamped social democracy. They are right in their belief that a more radically globalized world is less governable - such a world economy makes their vision of ‘continental Keynesianism’ unworkable. In truth a much less governable world is the inevitable result of the forces that have been at work over the past two decades". (John Gray, "False Dawn - The delusions of global capitalism".) From a bourgeois point of view, "today’s world is more ungovernable" this is why the global crisis of capitalism is also a crisis of imperialism, of all international bourgeois institutions of trade - and inter-governmental blocs such as the EU.
Europe isn’t working
The EU countries, North America/NAFTA and Japan are the dominant powers or blocs in the capitalist world. Europe is the largest of the three blocs, but also the one that, so far, has experienced the weakest expansion since the mid-1970s. According to an article in the US Wall Street Journal, the annual growth rate inside the EU averaged 4.8 per cent from 1961-70, 3.0 per cent from 1971-80, 2.4 per cent from 1981-90 and 1.7 per cent from 1991-97.
Moreover, unemployment has been persistently higher in Europe than in the rest of the advanced capitalist world, despite the fact that EU has a lower rate of employment than Japan and the US.
"Mass unemployment has become a scar across the Community (EU), threatening the social and political cohesion of a single market in which 10 per cent of the labour force are excluded from its supposed rewards ... The EC countries (now EU) have good reason to feel worried when they look beyond recovery to the future. For unemployment appears to be 'ratcheting up' from each cycle through the next. And the malaise runs deeper. Europe has high unemployment but also a miserable record of job creation compared to other developed countries. Twenty years ago the percentage of the US population of working age was very much the same as the EC. Since then the US has succeeded in increasing the numbers in employment by 30 million - three times as many as the Community", wrote Financial Times in Britain 21 June 1993. Since then the situation has gone from bad to worse.
Six million EU jobs were lost between 1991 and 1994, which was twice the size of any other contraction in employment since before World War II. Even an official report issued on employment by the EU commission in 1995, has to confess that: "On the evidence of the last 15 years, a high rate of GDP growth is not a sufficient condition for maintaining a high level of employment". This is just another way of saying that the European labour market that once provided full employment has turned into its opposite and unemployment will stay high whatever capitalist policy is adopted. It also explains why structural unemployment is as high as 10 per cent in the EU, and in the words of Leon Trotsky: "Structural unemployment is the most deadly expression of the decline of capitalism".
Overall unemployment inside the EU reached 11.2 per cent in 1997 and, according to the OECD, will just drop to 10.5 per cent in 1998, despite a recovery in investment, increased exports and rising domestic demand. Unemployment in the 11 countries that are taking part in the EMU project will be even higher, 12 per cent in 1998. On top of that, half of the EU’s unemployed have been out of work for more than a year. Youth unemployment (under 25s) is more than 20 per cent.
Casualisation and job insecurity
In "Capital" Karl Marx drew the conclusion that: "The greater social wealth... the greater is the industrial army... the greater is the mass of consolidated surplus-population... the greater is official pauperism. This is the absolute general law of capitalist accumulation." The crisis of European capitalism has meant that a huge section of the unemployed can no longer be described as part of the industrial reserve army but as the socially excluded, without any chance of entering the labour market. Many are no longer counted as unemployed. As many as 1 million withdrew entirely from the EU labour market in the recession of 1990-94. The industrial reserve army today is mainly made up by those in temporary and casual work.
The response from the bosses and the governments to the persistent high structural unemployment in Europe has been the move "to a more flexible labour market". A flexible labour market has meant: de-regulation (i.e. removing workers’ safeguards), low-wage employment, anti-trade union legislation, "flexibility" (e.g. annualisation of working hours, "zero-hour" contracts), workfare systems and the replacement of permanent jobs with temporary jobs. Those measures have been introduced as part of a general offensive against workers’ rights in order to push down wages, weaken the trade unions and create divisions inside the working class.
The threat of mass unemployment and job insecurity together with the lack of an organised national fight-back (or globally if necessary) on the part of the trade union movement has not made it easy for workers to resist the bosses' offensive. But the battle is far from over. A resolute stand from a group of workers against de-regulation and/or privatisation, as was the case with the bus drivers in the Danish town of Esbjerg in 1995, can spark off a movement from below despite the vacillation at the top of the trade unions.
Nevertheless, the European labour markets have changed in the past few years and "European companies are pushing Europe toward de-regulation much as American corporate titans led the way to de-regulate America a decade ago. And nowhere is the trend more evident than in Europe's labour market, which is now seeing its biggest-ever rise in temporary contracts... the temp boom has spawned a dual labour market, split between full-time workers and the temps or part-timers", wrote the Wall Street Journal, 4 June 1998.
De-regulation of the labour market is now a top priority as far as the bosses and governments are concerned. The policy of "flexibility and de-regulation" was endorsed by the EU at its "Job Summit" in Luxembourg in 1997. Jospin went to the US in June 1998, "to assess the sources of American dynamism".
In the 1980s, the bosses in Europe tried to copy the Japanese model (the "just in time" system, lean production, various forms of employment, etc.) but that model was no more when the bubble burst in Japan in the end of 1989. A slowdown in the US economy accompanied by higher unemployment will also strike a blow against the new model.
The implementation of a "flexible labour market", despite the treacherous role played by the union leaders, will force workers and the unemployed to step up the struggle to maintain welfare and workers’ rights. This is because more and more workers realise that what is lost will never come again and what is at stake is the very essence of a social welfare system - public education and health, unemployment benefit, job security, etc.
The traditions of organised struggle, collective action, are stronger in Europe than for example, in the US. This is not a guarantee of victory, but it shows the potential for huge battles in Europe, along the lines of the 1988 Wharfies’ (dock workers’) struggle in Australia.
The existing flexibility clauses, negotiated or forced on the workforce by the law will act as means of squeezing the workers when production and productivity growth start to slow down. Many workers, including skilled workers in full-time jobs, will learn that all the concessions made today, in order to "safeguard jobs", were made in vain.
The bourgeoisie will not intensify their attacks from a position of strength, but more out of desperation and against the background of an impending economic and political crisis. All these factors, together with the fact that there is a beginning of a more outspoken mood against capitalism and the dictatorship of the market, point in the direction of a struggle that will become more political. This in turn will pose the question of forming left wing opposition movements to organise the fight-back against the bureaucracy in the trade unions and the creation of new workers' parties.
Millions of jobs can be lost in the next recession
According to calculations made by the authors of the book "The global trap", Hans Peter Martin & Harald Schuman: "A further 15 million white-collar and blue-collar workers in the European union will have to fear for their full-time jobs in the coming years. That is almost as many again as the registered jobless in the summer of 1996."
After several years of jobless growth there is now, at least, a sign of a fall in the number of unemployed inside the EU. But this has occurred towards the end of the recovery and, as The Economist in Britain pointed in an article 13 June 1998, "Europe's problem has been that with each economic cycle unemployment has hit bottom at ever-higher levels. It is unlikely that the pattern has been broken."
The drop in unemployment has been accompanied by an increase in the number of part-timers, most strikingly in Britain and the Netherlands. Overall, one European worker in six is now a part-timer. This rises to one in four in Britain and nearly two in every five Dutch workers. The trend to more "flexible jobs" has gone farther in Britain than in other European countries. According to a report published by the Business Strategies consultancy, nearly half of the workforce will soon be covered by "flexible" arrangements, such as temporary contracts, self-employment and part-time jobs. It is not a coincidence that Britain is also the European country with the longest working hours, the most vicious anti-trade union legislation in the advanced capitalist world, and the EU country that has the biggest proportion of people counted as poor.
An upsurge in the struggle
It may appear paradoxical that capitalism enjoys its fastest growth rate just before a downturn. The reasons for that are, in short, that industries have reached full capacity utilisation and stocks are low, workers in jobs receive increases in real wages, more people are in work, and the better-off start spending their savings.
This can also have a positive effect on the confidence of the working class and stimulate offensive struggles by workers for increases in living standards. This was shown in Denmark when workers in April-May 1998 went on strike, in fact a partial general strike, in support of six weeks’ paid holiday. Similarly in Spain there is a movement for a 35-hour week and in France, where the return of fat business profits and the enrichment of the millionaires under Jospin (the present Prime Minister), has forced the union leaders to call for a substantial increase in wages and the minimum wage.
It is the struggle and the conditions today that prepare the working class for what will take place tomorrow. How the workers will first react when faced with a new recession or slump depends on many factors. These include: what is the existing mood amongst the workers, how confident is the class, and what is the level of consciousness when the new crisis set in?
The developments in countries already hit by the recession and the slump are showing what can happen in Europe as well. What is the most striking feature is how fast the consciousness has changed in those countries.
The economic meltdown in Indonesia has been followed by a social collapse and the beginning of the Indonesian revolution. The workers in South Korea have launched an offensive against job losses and social insecurity. In Russia, where the coal industry is facing an agonising death under capitalism, the miners have organised several strike actions against the failure of privatisation.
In all those struggles the masses have started to raise some anti-capitalist demands, including nationalisation, or re-nationalisation, and expropriation of companies and the capitalists’ wealth.
The capitalist crisis of the former Stalinist states, where Russia is on the brink of economic collapse and widespread social upheavals despite the latest IMF bail out in July 1998, tends to undermine the position of the EU countries even further.
On top of that, the reaction against the market and mafia-capitalism in eastern Europe and the former USSR will also have an effect on the outlook of workers and youth in western and southern Europe. This time the effects on the consciousness will be of a fundamentally different character than in the beginning of the 1990s. The change will be directed against capitalism and the dictatorship of the market.
The impending crisis is the most serious that the bourgeoisie in Europe have confronted since the 1930s. At the same time, the working class in Europe is, on the whole, intact and remains the most powerful social force in society. So far its strength and ability to fight have only been partially demonstrated.
A new political terrain
The collapse of the Stalinist states neither fundamentally strengthened capitalism, in the sense of providing the opportunity for a long period of growth, nor fundamentally weakened the working class in the advanced capitalist countries. Now the political and ideological effects of the collapse are becoming less and less of an obstacle in re-building the workers' movement on socialist lines, and in building the forces of genuine Marxism, that is Trotskyism.
Today’s crisis of capitalism has been accompanied by a deepening of the crisis of reformism and the remaining Stalinist parties. The crisis of reformism in the 1990s has expressed itself in the bourgeoisification of the old traditional workers' parties. Increasing layers of workers and especially youth no longer regard Social Democracy as "their" party. While still being able to score electoral victories as workers vote against the openly right-wing parties, workers are coming to expect less and less from the Social Democracy in the way of social reforms and better living conditions. The monolithic character of the old Stalinist parties, the southern European Communist Parties, has eroded at the same time as these parties are moving rapidly towards reformism. This is a recipe for new divisions and splits in those parties. The workers' movement, and the Marxists, are in a new and uncharted political terrain. The present situation facing the working class as well as our organisation, has no real precedent in history.
The protracted death agony of reformism and Stalinism has created a big vacuum on the left. This will, at a certain stage, give rise to the development of new broad socialist parties, that will reflect and express in an organised form the ongoing change in the consciousness of the masses. However, it is impossible to predict when and under what conditions such formations will appear. The task of Marxists today is not to wait for such a development. The best way to prepare for such a decisive change in the process of radicalisation, which will only come about after a change in consciousness, big upheavals and experience from the living struggle itself, is to build strong revolutionary forces today that can make an impact on the workers and youth who will constitute new mass formations.
However, these new formations will not have the same stable character as the old former traditional workers' parties, which after all were operating on the basis of the post-war 1945 upswing. The new formations will be more unstable and fluid. The pressure from capitalism, and the fact that reforms can only come about as result of a conscious and determined struggle, will mean that these formations will soon face the moment of truth. We see this, for example, with the PRC in Italy, the most left-wing mass party in Europe, which is heading towards a split on the question of what should be the party's attitude to the Italian government.
For revolutionary Marxism, the coming years will be more favourable than the previous years. The youth will almost certainly be the first group in society that will react to a changed situation and many youngsters are going to be prepared to join a revolutionary party. The key for building the CWI and its European sections is therefore a turn to the young workers, school students and students.
Europe after the collapse of Stalinism
The collapse of Stalinism redrew Europe's political and social map. The old division between the Stalinist East and the capitalist West is thing of the past. Capitalism has been restored in the former Stalinist states of Europe and the former USSR. The emerging bourgeoisie in those countries, though weak and corrupt, are eager to establish close economic, political and even military ties with the EU countries and NATO. Today's Europe is foremost a continent divided by capitalist exploitation (the struggle between capital and labour), inequality, race and sex discrimination, national oppression and a growing gap between the richer and the poorer countries or regions.
The existence of a Stalinist bloc acted as a superglue that brought the capitalist countries together and locked the US into the European continent. But in the present new world disorder there is no such superglue, and old rivalries and tensions have re-emerged. At the same time, US imperialism is striving to expand its world influence and maintain its military presence in Europe.
The Balkan wars of the 1990s - a warning
The restoration of capitalism in the Balkan peninsula and the eastern part of Europe created instability and uncertainty. Yugoslavia’s disintegration meant wars and civil wars, for the first time since 1945, on Europe's doorstep. The tragedy in Bosnia created the biggest refugee catastrophe in Europe since the end of the Second World War.
The intervention from the EU in former Yugoslavia was a disaster. It helped start the war in Bosnia and exposed the EU as being utterly incapable of formulating a common foreign or security policy. This was once again repeated in the EU’s failure to work out a common response to the spontaneous and confused revolt against gangster-capitalism in Albania in 1997. The only thing on which the EU could reach an agreement was support for a military intervention by Italy in order to stop refugees fleeing from poverty-ridden Albania. The intervention was a military adventure with the aim of strengthening the foundation of a fortress Europe.
The Balkan crisis and the development of a civil war in Kosovo in 1998 have shown that the national question in the Balkans cannot be solved on the basis of capitalism, and there is a tendency towards barbarism in the weakest links of the European capitalist chain.
The horrifying wars in former Yugoslavia have sent a dire warning to workers and youth throughout Europe of what can happen if the workers fail to combat racism and reaction. If the working class suffers defeat after defeat, all the dark forces in the society will emerge and drag civilisation closer to barbarism.
The proposed extension of the present EU, the so-called enlargement process, will, if it ever takes place, eventually turn the newcomers into second-rate members, who will be held to ransom by the dominant powers inside the EU. An enlargement would increase the EU’s population by around 30 per cent - but its GDP by only 4 per cent. In the words of The Economist in Britain, 31 May 1997: "This would certainly be a big drain on the EU budget, with the potential to bankrupt the common agricultural policy and to cause regional and structural aid to rocket". This explains why the present EU members are in fact very reluctant to extend the EU eastwards. The outlines of a fortress Europe shows that dream of a capitalist united Europe, of a single European entity, will never come through. The special crisis of European capitalism is giving rise to centrifugal tendencies inside the present EU as well as amongst some of its members.
The June 1998 Cardiff EU summit showed that the governments inside the EU are navigating without a compass and are retreating from the previous illusions of EMU as the springboard for political union.
Both France and Germany (and not only because Kohl needed help in the election), supported by other nations, declared that the era of big European government is over and the power of the EU Commission has to be reduced. This was a confirmation of what has been obvious for some time: there is a growing political division inside the EU and the bourgeoisie in Europe has still to decide what role the EU should play in the post-Stalinist world. There is a growing, untenable contradiction between the proposal of a single economic policy and the national governments’ drive to diminish the influence and authority of the EU bureaucracy.
From "bourgeois triumphalism" to a crisis of confidence
The downfall of the Stalinist regimes in 1989-91 meant an international victory for capitalism, mainly in a political and ideological sense, and marked the end of the old post-war world relationships. A wave of bourgeois triumphalism swept over Europe in the early 1990s.
The collapse of Stalinism was hailed as the ultimate success of the so-called free market and liberal capitalism. The consciousness of all classes and sections of the society was affected by the historic events that took place in the former USSR and Stalinist Europe.
The ruling class in Europe hastily concluded that the old capitalist policy of easing class conflicts and recession; state-intervention, public works, "welfare-policy" and the traditional "social partnership" was totally outdated. Neo-liberalism was declared as an official global doctrine and shock therapy was ordained for Russia and the ex-Stalinist parts of Europe.
Nevertheless, even sections of the European bourgeoisie have now started questioning the alleged success of neo-liberalism and could be compelled, like the Japanese bourgeoisie, to implement some Keynesian measures as a response to a looming recession and social upheavals throughout the continent. Although these measures, or a "dose of inflation", will be short-lived and with little effect.
Today, the world bourgeoisie is facing a deep crisis of confidence. What was supposed to be a new world order has been a new world disorder which breeds crises with increasing speed.
The false idea of the superiority of the "free market" also penetrated the labour movement and the left. In general, consciousness fell back. Bourgeois propaganda was echoed by the leading cliques inside the traditional workers’ parties (Social Democratic as well as Communist) and the trade union movement. The right-wing turn on the part of the leadership was summed up in the words of Dennis MacShane, a former International Metalworkers Federation official and now a British Labour MP: "The choice of the left is no longer what kind of socialism it wants, but what kind of capitalism it can support." (quoted in "One World Ready Or Not", by William Greider).
Europe was the continent that gave birth to modern capitalism and the independent organisations of the working class. The post-war upswing and the strength of organised labour were the main reasons behind the creation of the welfare state. But another reason was the existence of a Stalinist Bloc based on a planned economy, although bureaucratised, in the "other half of Europe" (which for a time in the 1950s and 1960s was on the way to narrowing the gap with the West). Social reforms in Western Europe were one way to overcome the legacy of the 1930s depression and to avoid workers being too impressed by the achievements then being made in Eastern Europe and the USSR on the basis of state ownership and a planned economy.
The power of organised labour and the radicalisation that swept all over Europe in the 1970s made it possible to maintain, and in some cases strengthen, welfare and workers' rights, despite the ending of the post-war upswing in 1974-75.
This 1970s radicalisation of workers and youth was reflected in the formation of left currents inside the trade union movement, the traditional workers' parties and youth organisations. This particular expression of the process of radicalisation probably arrived at its highest level at the beginning of the 1980s, when the left became a dominant force inside the British Labour Party, and after the historic election victories scored by the Socialist parties in Greece and France in 1981.
From reforms to counter-reforms
However the U-turn from reforms, nationalisation, etc. to counter-reforms made by the Socialist-Communist government in France within a year of its 1981 election symbolised that traditional reformism had reached an impasse. At the same time, Thatcherism in Britain and Reaganism in the US signified that the bourgeoisie was preparing a class war against the working class and its organisations.
Generally, the reformist and the Stalinist leaders of the labour movement failed to organise a fight-back against the counter-offensive launched by the bourgeoisie in the 1980s. Instead they turned to the right and started to advocate or implement counter-reforms. The workers were taken by surprise and were not prepared for this development. Even where struggles did break out the national leaders usually settled for a rotten compromise or isolated the militant sectors. Many activists became demoralised and disorientated, and subsequently dropped out of activity.
The relationship of forces was changing inside the European labour movement, to the advantage of the right. This, together with the failure to defend jobs and living standards even when the economy was recovering or booming, alienated ordinary working-class people and youth. A trend towards a decline in trade union membership or level of organisation started to set in, particular amongst working-class youth.
The seeds of the last steps in the bourgeoisification of the European Social Democracy and left parties were sown in the 1980s. A new upsurge in the class struggle as a response to the downturn in the economy in 1989-90 could have cut across or halted that process, but the opposite took place. The fall of the Berlin Wall reinforced the right-wing trend inside the labour movement and marginalised the old left.
The collapse of Stalinism put a temporary brake on the development of a socialist consciousness and caused widespread confusion. In the ideological and political sense the working class was disarmed. Moreover, with the collapse of Stalinism, many reformist and also so-called communist leaders, particular inside the Italian PCI (then the biggest Communist party in the "West"), saw no reason to pretend that they were still committed to the idea of a socialist transformation of society. The process of bourgeoisification accelerated and became almost irreversible when it became obvious that the new generation of workers did not regard these parties as their parties or as a vehicle for serious social changes.
The breakdown of the Stalinist bloc and the restoration of capitalism in eastern Europe and Russia was a historic watershed. Its negative effect on the level of consciousness is still a complicating factor in the process towards a general revival in socialist consciousness and the belief in the viability of an anti-capitalist alternative. But the consciousness and the conditions that exist today are different from the situation that existed in the beginning of the 1990s.
The Social Democratic/Socialist parties’ roots inside the working class, in the trade union movement and the firm electoral support enjoyed were mainly sustained on two factors: (1) The unique post-war upswing that gave rise to reforms and full employment and (2) A reaction against the crimes of Stalinism. These twin pillars have crumbled away and the character of Social Democracy has changed, fundamentally.
These parties are now on the centre-left (it is questionable if some can be described as even being on the "centre-left") in bourgeois politics. This is why the development in the 1970s, when the class struggle and the radicalisation led to a turn to the left inside the labour movement, did not repeat itself in the 1990s. Instead, every main class battle in Europe since 1993 has had a tendency to expose the huge gap that exists between the leaders and ordinary workers.
A big vacuum to the left
An enormous vacuum to the left has been created in European politics and this has made it possible for Communist parties in countries such as France, Portugal and Greece to at least maintain an important level of electoral support amongst organised workers.
The vacuum to the left and the potential support for a socialist working-class alternative has partly been shown in the important electoral gains achieved by the revolutionary left in France; the increased vote (from two to five MPs) for the Socialist Party in Netherlands (not on the revolutionary left) in the May 1998 general election; and above all in Ireland where, in 1997, Joe Higgins (representing the Socialist Party, the Irish section of the CWI) won a seat in the parliament on a clear socialist ticket.
But in this volatile political situation there is a danger that the reaction against the EU/EMU and globalisation could, under certain conditions, take the shape of an upsurge in right-wing populism, nationalism and racism.
The coming years will feature elements of a pre-revolutionary crisis as well as the menace of the extreme-right and neo-fascist terror. But the most striking features will be the intermediate and transitional stages between a non-revolutionary situation, that could even feature elements of mild reaction, and a situation moving in the direction of a pre-revolutionary crisis.
A pre-revolutionary situation arises when - as Trotsky explains in his book On France: "The nation stops going forward, when modern technology has advanced to a point where it can assure a high standard of living to the nation and to all humanity; but the capitalist property system which has outlived itself, dooms the masses to ever-increasing poverty and suffering.
"When the bourgeoisie find itself in a blind alley, a political crisis erupts and the petit-bourgeoisie is in a state of instability and fluidity".
The situation today features many of these characteristics. However, the present level of consciousness and the political weakness of the working class will result in a protracted development towards a situation that can fully be described as pre-revolutionary.
Distrust for the establishment
The level of distrust and contempt for the capitalist Establishment and the undermining of support for bourgeois institutions has reached an unprecedented level. Only 17 per cent of the people questioned in an opinion poll in Belgium said that "they live in a working democracy". Corruption scandals, the constant abuse of power and positions, a widening democratic deficit, and the idea that there is one law for the rich and another for the rest has exposed the rottenness at the heart of the system.
The erosion of support for capitalist institutions and state authority is also an indication of a change in consciousness. Events like the horrifying paedophile scandal in Belgium can trigger off a mass movement that calls for far-reaching social and political changes.
The discontent that has accumulated is on its way to being transformed into a more widespread anti-capitalist mood, although not in a straightforward way but in the context of a deepening social and political polarisation.
The fact that struggles have become more bitter and often lead to clashes with the police has steeled the new generation as well as the old. Even sections of the middle class and farmers have experienced attacks from the repressive forces of the state.
Further experience from the living struggle itself, extraordinary abrupt turns in the domestic as well as the international situation, will tend to diminish the legacy from the past. Europe is on the eve of such abrupt change as the continent is approaching a new millennium just as the crisis of global capitalism will start to be felt.
European workers’ movement in the 1990s
Our last World Congress in December 1993 took place against the background of an upsurge in the class struggle in western and southern Europe. The strikes and mass demonstrations, that began in France, spread across Europe. As the US magazine Business Week commented at the time: "Trade union militancy is on its rise in Italy and Belgium, two countries always under the strong influence of events in France. Workers have been inspired by their successful French colleagues. There seems to be a domino-effect, although every national protest is caused by domestic events." This movement reached its peak when Belgium (during the Congress itself) saw its biggest strike movement since the general strike in 1936.
These strikes and protests exposed the discontent and anger over economic and social hardship that existed and showed that the masses were prepared to struggle. It was the starting point of a new phase in the extremely complex process of radicalisation in the 1990s. This process has its own conjunctural ups and downs, and these fluctuations have become sharper in the aftermath of Stalinism’s collapse.
The strength of the working class and the limit of right-wing reaction in this period was seen in Italy at the end of 1994, when a ten-million strong general strike and the biggest demonstration in Rome (organised by the trade unions) since 1945 forced the right-wing government to resign after only a few months in office.
In 1995, workers and students in France took to the streets in a movement that the French paper Le Monde described as: "A mass reaction of the French against financial globalisation – a collective attack on anxiety over threats to the good life which has prevailed since the Second World War." This strike against a proposed wage freeze in the public sector, social cuts and de-regulation (the Juppé plan) and further action paved the way for defeat of the right-wing parties in the general election held in 1997.
But what was laid open in the strikes was that workers and youth did not trust the main opposition party - the so-called Socialist Party. Workers rejected the Juppé plan and the proposed austerity measures, but they doubted that a government led by the Socialist Party, the only governmental alternative, would have meant a real change in the running of the country. This, together with the role played by the trade union leaders, explains why the struggle did not develop into a struggle to overthrow the government, despite its unpopularity and the huge popular support for the strikers.
The French workers are undoubtedly at this moment the most advanced detachment of the European proletariat. The movement of 1995 and the lorry drivers’ strikes and blockades have been followed in the run-up to the world cup by a strike wave involving pilots, airport baggage handlers, Paris Metro workers and rail workers. One-day protest marches by workers from six different industries brought the capital’s traffic to "a fuming, honking standstill". Even the biased bourgeois press has been forced to concede that there is widespread support for the strikes and the right to strike. Even a middle-class ‘marketing executive’ at a Paris airport commented to a British Guardian reporter: "France is about the only place left in Europe where we still believe that taking to the streets or walking off the job can make a difference… Governments come and go, political parties rise and fall, and yet there are still strikes here more or less all the time. Good luck to them if they’re not being treated fairly."
At the same time, the right fumed at the strike wave, with Raymond Barre (ex-Prime Minister) calling the Air France pilots’ strike "profoundly scandalous". He was joined by ‘socialist’ senator, Michel Charasse, who said that anyone who went on strike during the world cup was "an egotist who loves himself more than his country". The position in industry is matched by the social frustration of the victims of French capitalism, particularly the unemployed and above all the unemployed youth.. They live in the ‘doughnut of deprivation’ around most large French cities. In the US and Britain towns tend to rot from the centre, but in France, the poor, the unemployed, the second- and third-generation immigrants have, in the words of an Independent (British newspaper) reporter, "been swept into the first ring of suburbs". Here, youth unemployment is more than 40% and sometimes is well in excess of 50%.
The national unemployment rate is 12.5% and under the Jospin government there has hardly been a dent made in this figure. Despite the radical gloss of the government, it has moved to implement the general policies of the European bourgeoisie, of introducing flexibility and deregulation. Jospin’s policy has been a combination of appearing to make concessions, like the largely empty proposal for the 35-hour working week (accompanied by flexibility and a worsening of working conditions), while systematically attempting to undermine the rights and conditions of the French workers. This is a harbinger of his government’s intention to begin to dismantle state control of industry and ‘restrictions’, that is, the defence of workers’ rights. In the Air France strike, the government held out against the strikers until they agreed a deal which was, in the words of the Financial Times (Britain), "in marked contrast to past experience, when the government had all too often caved in". At the same time, there have been small steps, but nevertheless important ones, in the direction of deregulation. These include privatisations and "emphasis on encouraging entrepreneurship". In fact, the Jospin government is the best that the bourgeoisie can hope for at this stage.
The lack of a clear political alternative has not stopped workers and youth from taking the road of struggle, but has undoubtedly acted as an obstacle in developing the movement beyond the point of making a determined stand against cuts, worsening living conditions, corruption and the Establishment (including the politicians) in general. It has been the anger from below that has compelled the trade union leaders to call, sometimes very reluctantly, for action.
The present trade union leaders are not leading, they are misleading and derailing the movement. This explains why the bosses and governments have been able to continue and even intensify their attacks against the workers throughout the 1990s. This is why the working class and its organisations have not been able to defend the previous level of social welfare, jobs and its former position at the workplaces, and why there have been setbacks.
Only resolute and consistent struggle can force the bosses and the government to make at least temporary concessions. But even small victories in this situation of a general trend towards a decline in living and working conditions can have an electrifying effect on the mood and spark off a broad movement. This is not only on the national arena but also on an international plane. The tendency for struggles to become more global has been expressed in the Euro-strikes against cut-backs in the car industry, the rank-and-file support for the Liverpool dockers, the mobilisations against Maastricht in Amsterdam and Luxembourg 1997, and the all-European impact of the successful strike action by the French lorry drivers in 1996. That strike has had a lasting impact and inspired, for example, the Norwegian transport workers to organise an historic strike, including both national unions, in June 1998. As one Norwegian trade union official said: "France is showing that it is worth fighting".
Germany and France are key countries
Neither France nor Germany has yet experienced such drastic slaughter of welfare and cuts in public spending as, for example, Britain or Sweden, the latter a former capitalist model of welfare. France and Germany are key countries as far as the European revolution is concerned.
The German and French ruling class, particularly the latter, always haunted by the spectre of "a new 1968", have tried to act in a less provocative way than some of their foreign colleagues. However, a new downturn in the economy will tend to compel the bourgeoisie in those countries to adopt more brutal measures. In the beginning, their counter-attacks will probably be directed against singled-out sections of the working class.
The fact that those attacks will be carried out by a Socialist-led government in France and probably a Social Democratic-led government in Germany will have profound effects on consciousness. This, of course, will be a risky affair for the French and German bourgeoisie as the whip of counter-revolution can provoke a mass revolt. The workers in France and Germany have not suffered the same defeats recently as, for example, the British workers, and will therefore organise a fight-back marked by confidence. The French workers have collected a lot of experience from their industrial and political struggle over the last ten years and have kept alive the tradition of taking to the streets in a period when the official dogma from the European trade union leaders was that "mass actions belongs to the past". The power of the German working class has only started to be shown. The most likely defeat of Kohl and the CDU will mark a breaking point in the situation, that will be the case even if the election will give way to a grand coalition between SPD and CDU. Although, it cannot be ruled that the impotence of the SPD and Schröders "Blairism" could result in the re-election of Kohl. However, a possible new SPD government under Schröder will enjoy little breathing space before having to confront an economic down-turn and an EMU that lies in disarray. Huge class battles in Germany will have repercussions throughout Europe.
Particularly the eastern part of Germany, former DDR, is facing the future risk of rapid social deprivation and sharp political polarisation. The growth of the east German economy is already lagging behind the national growth rate and unemployment has reached 18 per cent in the east. The problem of absorbing the former DDR has become increasingly apparent over the past two years, despite the recovery and despite the net transfers of more than $570 billion dollars from the west since 1991.
A new phase - worsening social conditions
Both struggles in Europe and consciousness are passing through a new phase, from expressing what workers "don't want" towards a struggle that shows what "we want": a shorter working week, minimum wage, an increase in social benefits, etc. A change in consciousness is on its way. Europe today is not the same continent as in 1993, at the time of the last World Congress. Europe is heading towards a situation that will include elements of a pre-revolutionary crisis, restricted to elements only because of the weakness of the subjective factor.
Casualisation and the creation of a dual labour market are going to give birth to a counter-reaction from workers and unemployed. Mass unemployment and impoverishment of a big section of the population is tearing society apart and is a permanent source of social instability.
The existing social conditions in working-class estates, immigrant areas and de-industrialised cities are so depressed and the mood so desperate that it will simply explode into riots if an organised movement, like the action by the French unemployed (supported by those in work) at the end of 1997, does not show a way forward.
The unemployed teachers in Greece, in June 1998, occupied 30 schools being used as examination centres. Their action was joined by others, including teachers in work, an indication of the bitterness of the struggles which lay ahead. The demonstrations were attacked by riot police, in many towns with a brutality never experienced. Huge defensive battles lie ahead, which can on occasion, take the form of local civil wars where whole villages or towns come out in support of workers fighting to save their jobs and communities. The example from the struggle put up by the Spanish miners could be repeated in other countries. In the beginning of 1998, miners on strike "strewed flaming pit props and upturned coal wagons across Asturia’s new motorway to Madrid trying to make the region a no-go area", reported the British Independent 17 January 1998. Several times the miners were attacked by riot police. One was killed by a car, others were hurt on the barricades. However, the miners received huge support from the region’s population, with many youth joining them on the barricades.
The struggle against unemployment and job insecurity will once again raise the question of workers’ control, of nationalisation of companies that are proposing cut-backs or closures. It will also bring back demands to open the books, for a programme of public works and the need for a plan in order to create millions of new jobs. Instead of the bosses’ and the governments’ false proposals for a mis-named shorter working week, which are often nothing more than "annualised" working hours accompanied with a wage decrease, the demand will be for an immediate cut in the working week without loss of pay and under conditions set by the workers. Those are the demands that we as Marxists need to stress and put in our programmes for action.
The death agony of capitalism has made it virtually impossible for the trade union leaders to act as mediators in the struggle between labour and capital. This has reinforced the tendency, described by Trotsky, as towards, "the trade unions growing close to and growing together with the capitalist state". However, even if this tendency has been particular marked in countries like Sweden and Austria, it has not been completed. The trade unions, despite their bourgeois leadership, still have a dual character. That means that we have to avoid both the danger of being too much restricted by the limits set by the structures of the unions: we have to be prepared to go beyond those structures if that is needed in order to develop the struggle, and the danger of simply dismissing the unions as "hopeless bureaucratised organisations". The imminent crisis of European capitalism will have profound effects on the trade unions, especially when the class struggle makes its inroads into the unions and the members start to fight back against the leaders’ right-ward turn. The task of forming and organising opposition groups or more informal networks will be posed, even in countries where there has been no tradition of rank-and-file movements.
The crisis of capitalism is also reflected in a crisis of bourgeois democracy. There is no stable or "strong" government in Europe. Nearly every established party has experienced a sharp decline in, and ageing of, its membership over the last 10-15 years. Official politics have become a matter of careerism and enrichment.
The "Americanisation" of the political system in Europe is not only reflected in the fact that there is little difference between the established parties, but also in lower turn-out and the fact that official politics alienates ordinary people.
No party enjoys the same firm support as they did in the past. Voters today cast their vote more against something than in favour. This has meant that election results just mirror the existing mood on the polling day and is the reason why the pendulum can swing so sharply in a short period of time.
Alienation of workers and youth
The British Conservative Party, once the most successful bourgeois party in the world and with a mass membership, has seen its membership collapsed from one million to around 300,000, with an average age of 64 years. "By the time the Conservatives will next be fighting for a government, the party will, on a straight-line trend, have ceased to exist. It will have no members. Most will have thrown in the towel. One quarter will have died", according to a report presented at the Conservative Party Conference 1997.
The German Social Democratic Party (SPD), once the strongest and best-organised workers' party in Western Europe, is becoming more of a pensioners’ society. More than a quarter of its membership is over-60 and its membership has been in continual decline for 20 years. The position of the CDU (the main right-wing party in Germany) is even worse: nearly 40 per cent of the membership are over 60.
CDU will probably lose the coming general election in Germany and Kohl’s government will be replaced by a Social Democratic-led government. If this happens, it is yet another devastating defeat for the European conservatives. First Major in Britain, then Juppé in France and now Kohl in Germany. Moreover, the Dutch conservatives, who were in power from 1918 until four years ago, were also defeated in the last general election (1998) in the Netherlands.
The bourgeoisification of Social Democracy does not mean that these parties will just disappear from the scene. Workers will still vote for them as a means of stopping the right, if there is no other mass alternative available in the elections.
The reaction against neo-liberalism has undermined the support for the traditional right-wing parties and boosted Social Democracy's electoral support. However, this is a temporary phenomenon. The newly elected Social Democratic governments can soon, when faced with a new recession and aggravating class contradictions, become even more unpopular than their predecessors.
However, the crisis of the traditional bourgeois parties has also compelled the ruling class to become more and more dependent on the Social Democrats or, in the case of Italy, the PDS. It was the PDS, whose leaders now do not want to call themselves a party any more - just "Democrats of the Left" - which made it possible for the Italian bourgeoisie to carry out a massive programme of budget restraint to qualify for the EMU. It was the Social Democrats that implemented Thatcherism on an all-European scale, something the traditional right was not capable of doing.
It is the combination of the bourgeoisification of the traditional workers' parties and the disarray of the traditional right-wing parties which is shaping a new political landscape in Europe.
Social Democracy has captured the ground that earlier was occupied by liberals or bourgeois centre parties.
The traditional right is squeezed from the right by right-wing populists, who are winning votes on an anti-immigrant platform and through demagogic attacks on globalisation. They are also squeezed in "the centre" by the Social Democrats, who are becoming more like the Democratic Party in the US under Clinton.
It is a sign of the times that on the one hand, Clinton and Blair are trying to set up a new international organisation with the aim of giving "formal direction to the general trend in which liberal, labour and socialist parties are abandoning government ownership and tax and spending programs" according to the press. On the other hand, the conservative parties in Europe are lining up with Berlusconi's Forza Italia. The former French Prime Minister Balladur has come out in support of the National Front's demand for "national preference", another word for sacking immigrants, restricting their allowances and rights. This policy is already carried out in towns controlled by the National Front. Throughout Europe, the openly right-wing bourgeois parties are politically redundant as far as the bourgeoisie is concerned. In Britain, for the time being, the Tories remain shattered after their general election defeat and saddled with an inept leader who is widely perceived as a stop-gap before a more serious figure emerges to lead the Tories out of the wilderness. In France, the right-wing parties remain defeated and divided, with a section of the Gaullists flirting with the semi-fascist Front National.
Racism and the ‘hard Right’
Two factors have acted to undermine the traditional right-wing bourgeois parties. On the one hand, the bourgeoisification of the former social democratic parties and some of the ex-Stalinist parties such as the PDS in Italy, has meant that they are now reliable props for the maintenance of bourgeois rule. They have the added advantage, at least in the initial period when in government, that they can give a radical gloss to the implementation of the programme of the bourgeoisie. If the same policies were tried by the traditional right-wing bourgeois parties, they would immediately provoke mass opposition, as was the case in France in 1994-95. On the other hand, the traditional bourgeois parties have been outflanked on the right by the extreme right, neo-fascist and semi-fascist organisations which have re-emerged in the past period.
The worsening of the social situation has undoubtedly led to a strengthening of racism and on its back, the parties of the ‘hard right’. In five countries in Europe, Austria, Italy, France, Belgium and Denmark, parties with pronounced neo-fascist or fascist tendencies have scored more than 5% in elections. In three countries, Austria, Italy and France, they have taken as much or more of the vote as, for example, the Liberal Democrats in Britain at this stage. In addition to this, in Germany, the German People’s Union (DVU) netted almost 13% of the vote in the eastern state of Saxony-Anhalt on an ‘anti-foreigner’ platform. They have been assisted by the similar ‘anti-foreigner’ approach of the CSU, the CDU’s partner in Bavaria. A Turkish couple who had lived in Germany for 30 years have been threatened with deportation twice, because of the alleged criminal record of their son, aged 13.
It is in the main the worsening social conditions, and the lack of any socialist and revolutionary alternative at this stage, which has given success to the DVU and other fascist organisations. Only 2% of the Saxony-Anhalt population are immigrants, whereas there is 25% unemployment in the region. Recently, the neo-fascist organisations have given their propaganda a ‘worker-friendly’ slant. They marched on May Day linking their anti-immigration propaganda for the defence of ‘German labour’: "There are six million Germans unemployed and seven million foreigners in the country. It’s not hard to see the connection."
For want of any other explanation and alternative, this propaganda has found an echo amongst sections of the youth. A quarter of the voters under the age of 25 in Saxony-Anhalt voted for the DVU. These developments undoubtedly reinforce the need for us to continue with our anti-racist, anti-Nazi work, particularly through the YRE. We have to consider whether we can take initiatives on an all-European scale to counter the fascists and neo-fascists. Our sections in Belgium and France, as well as in Sweden, have recently conducted excellent and very effective anti-fascist work.
Main trend to the Left
At the same time, we have to maintain a balanced approach towards perspectives for the fascists and far-right. We cannot underestimate the significance of recent successes for the neo-fascists. But at the same time, the main trend in the next period, particularly under the blows of recession and slump, will be towards the left. One of the consequences of an economic collapse is not just social polarisation but the development of the political ‘extremes’. The re-emergence of the hard right must be set against the background of the recent dramatic success of the Trotskyists in France. Overall they got 5% of the vote in the recent regional elections, but 8% among the under-25s and in some regions this was in excess of 10%.
The re-emergence of the proletariat will be the main feature of the coming situation. This is shown not just by events in France, but even in traditionally sedate Switzerland the trade unions have recently rejected the labour accord that goes back to the 1930s, because of an increased militancy amongst workers arising from significant job losses in Swiss industry. Switzerland’s record of being one of the most strike-free of any developed countries could be broken by the actions of the trade unions in the next period.
Even more significant is the near-insurrectionary anger of Greek workers at the brutal austerity programme implemented by the ‘socialist’ PASOK government. The Simitis government has announced a widespread privatisation programme which began in the banking sector. Workers in the state-owned Ionian Bank promptly went on strike for six weeks in protest against a decision to sell off a 51.4% stake in the bank. The governor of the bank fled from a shareholders’ meeting in terror clutching his underwear and shoes after outraged union members ‘shredded his suit’. Workers at Olympic Airways and dockers at Greece’s two main ports have been involved in the fight against measures from a government which is clearly seen as bourgeois by the Greek workers.
This is a harbinger of the future. There is a vacuum which can be filled, for a time at least, by the right. But the main trend throughout Europe is to the left which, in the first instance, will limit the development of the ultra-right. At the same time, one of the consequences of a rapid change in conditions, predicated on the economic calamities which loom, is a polarisation between revolution and counter-revolution. The flirtation of the traditional right-wing bourgeois parties with some of the ideas which have assisted the rise of the hard right is an indication of the way that the bourgeois parties as a whole will move in the future.
With their traditional territory now occupied by the ex-social democrats and ex-Stalinists, the traditional right have flirted with the idea of moving even further to the right. Thus in France, Eduard Balladur, the former Gaullist prime minister from 1993-95, believes that nationality and immigration are the only issues that clearly separate the opposition from the ‘left-wing’ government of Jospin. Since the emergence of the Front National 15 years ago, a section of the Gaullists have toyed with their ideas and even with an alliance with them. Ten years ago, right-wing Gaullist, Charles Pasqua, proclaimed that Gaullists and extremists "had the same values". Now Balladur, supported by the Gaullists’ secretary general, has called for a commission to consider withdrawing "family and medical benefits from mainly north African and black African settlers who do not hold French citizenship". He is opposed by the Gaullist president, Jaques Chirac, and the national chairman of the party, Séguin, and other Gaullists. Former defence minister, Charles Millon, has formed a popular movement called La Droite, seeking closer links with the Front National (FN).
The process of political polarisation and fragmentation tends to drive the right wing further to the right or give room for the development of new extreme right-wing parties. In France the traditional right, the Gaullist RPR and the UDF (Union for Democracy), moved into a deep crisis after losing its big majority (four-fifths of the seats) in the 1997 parliamentary election with endless rivalry at the top, plus being rocked by corruption scandals, etc. It is an open question whether the right will come out of this shambles. This is raising the possibility of regroupment on the right, including National Front without Le Pen, as one possible outcome of this crisis.
A reaction to the crisis the capitalist states are facing will be also a stronger move towards racist measures. This means they will try to deepen the division of working class along "racial lines" in order to "divide and rule". Racist policies are also carried out by the social democratic governments in Europe. But the absence of a mass socialist alternative and further social deprivation could pave the way for a temporary upswing and support for the extreme right beyond the level of elections. Which in turn will encourage fascist groups to step up their attacks on socialists, immigrants, homosexuals and disabled people, a serious threat to workers and youth, which we have to oppose. This is particularly so in a period when the struggle is on a low level and in the aftermath of a setback or defeat. The answer of the socialists to this threat is the mass mobilisation by workers, and anti-fascist and immigrant organisations. Our responsibility is not just to appeal, for example, to the unions to act, but to act in organising anti-racist campaigns, also against state racism. We also have to take into account that a massive anti-racist movement may quickly develop into a more generalised anti-capitalist one.
The formation of national governments or broader coalition governments, something that could be posed in several European countries in the near future, could also give way to an increase in support for the far-right.
There will be years in the future that will include elements of mild reaction. It could take the form of right-wing governments that could be on the lines of Berlusconi's short-lived government in Italy in 1994 or a future right-wing government in France based on regroupment of the right. But that is not the most likely perspective in the short term.
Workers and youth against the market
The coming crisis in Europe will first of all be reflected in a change in the consciousness of the masses. That change has already started, and at the time of writing, most notably in France. France is the most advanced country in Europe, as far as the class struggle is concerned. A very wide section of the population in France has been out in struggle. The movement of the unemployed, at the end of 1997 and at the beginning of 1998, got support from two-thirds of the population and shocked the establishment, despite the fact that this particular movement was small in numbers.
We are moving away from a situation where workers and youth are reacting against the effects of the market towards a phase in the complex process of radicalisation where the reaction will be more directly against the market, the capitalist system. Consciousness, which is lagging behind events, will begin to catch up with reality. This will open up a new chapter in the history of the struggle for socialism in Europe.