Eurozone crisis: Another “solution”

The countdown to “save” the euro and possibly even the European Union.

The latest deadline is 9 December, but even if an agreement is announced then there is no certainty at all of how long it will last. 2011 has already seen previous ‘solutions’ rapidly consigned to the dustbin.

While the financial markets are increasingly expecting, at the very least, a restructuring of the eurozone, with one or more countries leaving, the major powers are striving to avoid the probably catastrophic effects of a eurozone collapse on the European and world economies. This is why both the US vice-president and treasury secretary discussed with European leaders this week. The markets, most recently in the shape of Standard and Poor’s threat to downgrade 15 more eurozone countries, are also exerting their pressure on governments to act.

At bottom, all the solutions which are being proposed are based upon a concerted drive to cut living standards. For now the ‘weaker’ countries are being targeted. In the last few days drastic new austerity budgets have been announced in Ireland and Italy. In Ireland the latest €3.8 billion-cuts package is the seventh since 2008. But these are not simply measures to try to save the euro; they are part and parcel of the capitalists’ drive to solve their crisis at the expense of the working class and many sections of the middle classes.

This is why, outside the eurozone, Tory chancellor Osborne announced new cuts at the end of November. Even presently ‘prosperous’ countries will be threatened, for example clouds are starting to develop over the Netherlands where household debt is equal to nearly 250% of total income; in Portugal the figure is 129%.

While France and Germany are effectively dictating to the other eurozone countries what steps should be taken, there is also is a visible shift in European power occurring. Reunited Germany is not just playing the leading economic role but increasingly dominating the EU politically. However Germany’s demands for greater control over eurozone countries in return for continuing membership of the euro will create a backlash. The plans for a ‘fiscal union’ will, if implemented, mean attempts by France and Germany to control national governments.

Already in some countries like Greece and Ireland, opposition to austerity is being tinged with anti-German feelings. But while German imperialism has benefited most from the EU and euro, this crisis’s roots lie in the continuing world economic turmoil and the euro’s Frankenstein character.

Naturally, the capitalists’ attempts to solve the crisis in their own interests are meeting opposition; 30 November in Britain, 2 December in Belgium and the limited national strikes called for December 12 in Italy are the latest examples. But the labour movement has to link determined resistance to attacks with a vision of a better future.

This, however, cannot be achieved via the EU which is a mechanism for strengthening capitalism. A socialist alternative needs to be put forward, without this there is the danger that right-wing, populist nationalists will seek to take advantage of the crisis by blaming foreign ‘enemies’ and migrants. It is high time for the trade unions and left parties in Europe to plan concerted action to rally opposition and go onto the offensive against capitalism.

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December 2011