Archive | May 2012

The Promised Recovery in Europe Won’t Save Workers

Europe continues to be wrecked by an economic crisis that threatens further unemployment, recession and outright social turmoil. Much time has been devoted to detailing the potential disaster in the weeks ahead as Spain faces a potential banking meltdown and Greece struggles with a major political crisis following the collapse of the post-dictatorship ruling consensus. I, however, wish to dwell on what the alleged salvation will look like for countries at the epicenter of the global financial crisis.

It is worth examining Estonia first, a country that has received the fawning praise of the most neo-liberal of policy advocates. The country has experienced a painful “internal devaluation”, a euphemism for policies that are unrepentant class warfare against workers. Unemployment soared and wages crashed in 2008 and 2009 from austerity policies. Having experienced a massive economic contraction of 14.3% in 2009, the economy saw a recovery in 2010, a recovery that is still being promised to countries like Greece and Portugal who’ve wielded similar austerity policies against workers and the wider public.

But that light at the end of the tunnel isn’t what it’s made out to be. While Estonia’s unemployment rate has fallen from over 18% to 12.1% in 2011, It has since stalled around the 12% mark compared to the pre-crisis level of 4.7%. It’s only a partial recovery as unemployment remains stuck between crisis peak and pre-crisis low. We can see a parallel story in the U.S. which hasn’t even faced Europe’s twin monetary and financial crisis:

For countries like Greece and Spain with unemployment rates above 21%, with still more contraction and austerity to come, the promised recovery will have a resemblance to the ongoing crisis. What growth there will be will materialize in bonuses for executives while the recovery in employment will be minimal as companies rely on existing work-forces and internships so profits aren’t dented.  High unemployment, reduced wages, and hollowed out public services make up the new normality from which future recessions will start.

It isn’t hyperbole when pundits warn that younger generations will experience a reduced standard of living from that of their parents. The middle class is being phased out. After all, in a country like Greece the middle class was built out of the public sector that is now being dismantled by the IMF and European Union. In Spain and Portugal the dismantlement of the middle class is achieved through labor reform laws that enable further downsizing and increased work hours for those who aren’t laid-off.  Under the Tory government in the United Kingdom there is a workfare program that gives companies free labor from the ranks of the unemployed. In nearby Ireland, the country’s low corporate tax rate was left untouched while the Irish public endures a new property tax to bailout out their rotten banking sector. All of this amounts to a one sided class conflict in which the wealthy annex more of the economy by socializing loses and generating new profits through free labor or reduced wages.

Economic growth and competitiveness will remain the buzzwords of political and economic discussion, but to make a real difference in the standard of living of working people we’ll have to find new objectives. The much sought economic alternative isn’t in a political party or a collection of tents. It’s the class leverage of workers to shape policy in their own flagrant self-interest.


The Struggle in Chile

The mass student protests that started in 2011 continue on into 2012. This past Monday saw thousands again pour out into the street. In the city of Valparaiso, there were particularly violent episodes between police and students. One such group participating in the movement is the Front of  Libertarian Students, libertarian in the anarchist meaning. Will do my best to translate their anthem:

in the Fel (Font of libertarian-socialist students)
to make the revolution,
for communism,
direct action, mobilization.

for our fallen,
our duty is battle.
let’s go comrades,
to create popular power
I am libertarian,
I give my life to the struggle
-for this-
I am libertarian,
I give my life to the struggle

kids of the classroom,
we do battle against Capital,
in all the streets,
our chant will be heard


laborer, student,
we have a tradition:
united against exploitation


Merkel Wields the Markets Against Greece

Stock markets falling, rumors of bank runs, contagion spreading across the Euro Zone, it’s hard not to see this as the long anticipated climax to the crisis. But instead of climax, we may be replaying a previous chapter from last fall when alarm last swept global markets over a combined financial and political crisis in Italy.

Like Greece today, Italy didn’t have a government that could deliver the austerity desired by European leadership. Berlusconi at the time was presiding over a collapsing coalition government as political allies like the Northern League broke ranks and called on him to step aside. All the while, markets turned on Italy, demanding interest rates above 7% on Italian government bonds. The country had been thoroughly engulfed in financial crisis. In the end, the markets prevailed and dislodged Berlusconi in mid November. A few days later, Mario Monti became Prime Minister as an unelected technocratic. The Italian political class submitted to European leadership and backed Monti in his neo-liberal reforms of the Italian economy, a process that still continues this year.

A similar script is now being pulled out against Greece after it voted against the political preferences of both markets and European creditors. Like Italy last fall, Greece’s economy is being made to scream until capitulation is reached. Speculation of a bank run in Greece has strangely started with government officials and media outlets as opposed to the rumor prone social media. It has the appearance of a fear campaign to alter the results of the June 17 elections in favor of centrist parties that support the austerity program. The fear campaign is already having results that would please Greece’s international credits. The latest poll numbers have New Democracy regaining enough support that it and PASOK could form a majority government.

If momentum holds, Angela Merkel will win this standoff, but victory isn’t without a cost. The showdowns in Europe  have hollowed out the Greek economy and increasingly erodes Spain, Italy and Portugal. The market turmoil alone will further worsen the downturn in southern Europe. Spain is now pouring billions of euros into its distressed banking system while markets fret over a Greek Euro Zone exit. Europe may still be brought back from the brink but not without taking serious economic damage from this standoff with the Greek electorate.

Assuming the scare tactics don’t backfire by causing a full blown bank run in Greece, we can already see the stage being set for the next debilitating standoff. If opinion polls hold up in Greece, New Democracy and PASOK rally just enough support between the two to form a government. They have the task of pushing through more austerity, provoking another general strike and showdown inside parliament and outside parliament. Under such a scenario, we will no longer be anticipating an “Argentina moment” of revolt and bankruptcy, we’ll be anticipating a Bastille moment and the toppling of the despised Greek political class.

Greece’s Fear Barrier is Crumbling but not yet Destroyed

Greece’s twin economic and political crisis is building to new heights as PASOK’s Evangelos Venizelos has failed to reach a deal for a coalition government, setting the stage for another round of elections. June 10th and June 17th are the suggested dates for the second attempt by voters to forge a new government. These dates give Greece just a small window of time between the vote and when the country is scheduled to run out of cash. With an economic crisis and electoral politics mixing, we can be assured mainstream politics will try to rally its base with the most overstated disaster scenarios yet.

This imminent election campaign will resemble a paternalistic Mubarak speech to rebellious Tahrir Square more than it will resemble a functional representative democracy. Already New Democracy leader Antonis Samaras is attacking anti-austerity SYRIZA, denouncing the party as irresponsible and threatening the country’s Euro Zone membership. SYRIZA requested Samaras rescind his letter committing to the bailout’s austerity measures. Samaras rejected the demand, saying he would not sign onto the country’s ‘destruction’. This kind of rhetoric will only sharpen now that SYRIZA is leading the first post-election opinion surveys.

This is a cynical attempt by Greece’s center-body politics to pass off the disastrous product of their rule onto SYRIZA. An exit from the Euro is likely not because SYRIZA is polling well but because New Democracy and PASOK brought the Greek economy into dysfunction. Their economic medicine not only worsened the debt crisis, it spawned adjacent crises like the rise of the Golden Dawn party, mass unemployment, and a crumbling healthcare system. They would have Greek voters believe that SYRIZA is entirely culpable for a possible bankruptcy and Euro exit even though SYRIZA hasn’t spent a day in power.

Such fear tactics were deployed in the first round of elections to little success as 40% of Greece abandoned the two main parties. We can’t be certain they’ll fail so decisively this second time around. These elections will be taking place amid mounting threats from European officials that they’ll cut off funding support to the country. The continue flight of cash out of the country‘s banks will likely hasten, and New Democracy and PASOK would lay the full blame on SYRIZA. In short, SYRIZA will become the twenty-four seven scapegoat for any market activity that drives the country closer to a Euro exit.

Since the crisis emerged, politicians both inside and outside of Greece have made terrible choices that weighed the crisis heavily upon workers, pensioners, unemployed, and youths. Last Sunday’s election was a rare moment when those politicians payed a political price for their decisions. Now those politicians are trying to escape that political punishment. The second round elections will be an enormous test of Greek resolve to remain outside the grips of New Democracy and PASOK, the parties that engineered the country’s impoverishment. Greeks already cracked a hole in the fear barrier that constrained the country’s political life. Now they must bring that barrier to the ground.

An Election in Greece, a Quake in Europe

It’s hard to overstate the significance of Sunday’s general election in Greece. In the 2009 general election, the two neo-liberal parties in New Democracy and Pasok collected a combined 5,308,261 votes. Together, they could only manage to collect roughly two million votes in yesterday’s election. Their austerity policies since 2009 repelled three million voters from Greece’s political center and into the arms of the left-wing and the nationalist right-wing.

This result does strike of inevitability. Indeed, make people poorer and they’ll punish you at the ballot box. But thus far we’ve only seen voters alternate between the two mainstream parties. In Spain, voters threw out the ruling socialists who worsened a downtown with austerity and replaced them with a right-wing government that imposed further austerity. The same occurred in neighboring Portugal. For years we’ve seen politics reduced to punishing the incumbent rather than a vote in favor of a fresh policy prescription. In Greece, this alteration between the two neo-liberal parties was fundamentally broken. Yesterday, in the mind of Greek voters, it was more dangerous to cast a ballot for the two mainstream parties than it was to vote for the nationalist right-wing or the anti-capitalist left-wing.

With Greek voters having overhauled the composition of parliament, the task is now underway to form a government with a combination of parties out of the seven which were elected. No party won more than 20% of the vote; another figure that commentates on its own. Parties opposed to EU-IMF austerity demands hold a 151 seats of the 300 total seats in parliament. The significance isn’t that they’ll form a new government; anti-austerity parties consist of Neo-Nazis at one end, Marxist-Leninists at the other. What matters for both Greece and the whole of Europe is that these parties would collectively deny any coalition government the votes needed for the new austerity packaged demanded by the Troika in June.

Any combination of parties in a coalition government would have to include one party that wants some kind of alteration to the current bailout conditions imposed on Greece. This fact is solidified by Pasok party head Evangelos Venizelos proposing renegotiation in his plan to form a coalition government. This is from a man who previously insisted on following European diktats to the letter because the alternative was alleged to be disaster. The days of IMF and European officials dealing with a fully complicit Greek government are over.

The European response to the Euro crisis has wielded both the carrot and the stick. The stick is that if Greece deviates from the bailout conditions the Troika will cut off funding support, resulting in an uncontrolled default and possible Euro exit soon after. The carrot not just for Greece but for Portugal, Spain and Italy is that a fiscal union will come into effect, a fiscal union being indispensable for the monetary union’s stability. If the stick is wielded against Greece after all the austerity it subjected itself to, why should Portugal, Spain and Italy endure further austerity if the fiscal union is a bluff by Angela Merkel?

The Euro crisis has dragged on for several years now. European politics have been an effort to delay a disastrous climax rather than to expedite a resolution that preserves the livelihoods of the Greek, Portuguese and German public. Long overdue, one country’s public has finally intervened and thrown down the gauntlet to both the Greek and European political class. No more taxes and budget cuts can be extracted out of the Greek public. If the existence of the Euro is at stake, the cost of saving it must be carried elsewhere.

May Day Live Blog

7:10 – police charge into the flank of a retreating protest march in Montreal:

6:47 May Day events in New York City are well underway:

Much of the action has been occurring in Montreal, however. Teargas has been fired at an anti-capitalist march and rock were thrown by some demonstrators at police and shops. You can find a live blog dedicated to Montreal here:

2:33 -Estimated 10,000 protesters in Berlin:

12:25 – The labor march in Paris:

11:37 – The UGT labor confederation protest in central Lisbon. The larger CGTP confederation held a demonstration elsewhere in Portugal’s capitol. The two unions differ on the labor reform demanded by the Troika with the UGT signing on and the CGTP rejecting it:

11:10 – Video showing LGBT activists participating in Cuba’s annual May Day parade:

10:25 – One of the rare instances of violence today in Turin where police and protesters scuffled in a relatively minor clash:

Another isolated instance of violence occurred in San Francisco where a crowd reportedly damaged a bank and set a car on fire.

9:40 – Puerta Del Sol in Madrid, Spain:

9:20 – The first May Day event may have taken place last night in Quebec. For the past week, some of the student demonstrations have started at night and a few continued past midnight. Video of last night’s march:

9:10 – In Marseilles, France the Greek flag makes yet another appearance in a European demonstration:

8:58 – Protests and marches are underway over much of the world to mark May first. Out of admiration for their 2011 revolution, I begin with a very large protest in the Tunisian capital held by the labor confederation UGTT: