An Autumn of Discontent is the Result of Europe’s Endless Pursuit of Austerity
September was advertised as a turning point in the Euro Zone crisis, but after a week of mass anti-austerity protests in Spain, Portugal and Greece, the only thing I can take out of this month is that politicians are still unable to stop the continent’s unrelenting decline into social turmoil. Despite the efforts of the European Central Bank to stabilize the banking and monetary aspects of crisis, the recession deepened by austerity measures threaten any stability earned by central bank action.
Heading into October, Europe faces three trouble spots on its southern “periphery”. Like in previous years, Greece is nearing a confrontation both inside and outside parliament whenever the latest austerity measures are brought forward for a vote. The Greek state is in collapse with police turning residents to the fascist militia of Golden Dawn in crime disputes involving migrants. Social services are in free fall with the former ranks of the Greek middle class turning to charity services for food and medicine. This level of dysfunction being deepened by another round of painful budget cuts is too much for the Greek public to tolerate.
When the IMF recently pushed Greece’s finance minister to pursue more wage and pension cuts, the finance minister pointed to a bullet hole in the window and asked the IMF representative: “Do you want to overthrow the government?” Europe, again pushing for more counter productive austerity, risks sending Greece into a full nervous breakdown with unpredictable consequences. It’s not only EU and Euro Zone membership at stake, but the viability of Greece’s post military junta democracy and even the wider stability of the Balkans if extreme nationalists like Golden Dawn continue to advance into Greek mainstream politics.
While Greece is further along in a painful austerity program, Portugal is quickly catching up in terms of political dysfunction, public opposition to austerity, and an entrenching economic depression with no obvious exit. Any semblance of political stability in Portugal was lost in one speech by prime minister Passos Coelho when he announced a 7% increase on the contributions of workers to social security. If that wasn’t politically explosive enough, he added that there would be a tax cut on the social security contributions of employers. The measures were justified by the prime minister in the name of economic competitiveness. A week later, around 660,000 protesters filled the streets in outrage over the government’s plans. A day after the protest, the crucial coalition partner in the government came out against the tax measure. The measure would formally die at a summit of Portuguese statesmen on the 21st of September. All of this still leaves the Portuguese government scrambling to find the billions of euros in budget cuts and tax increases needed to comply with the country’s IMF and European Union adjustment program. In a tactic borrowed from Greece, Portugal’s creditors have threatened to withhold loans if the austerity drive doesn’t continue.
While smaller countries like Portugal and Greece have been of sufficient concern to European policymakers since the crisis erupted, the deterioration of a country the size of Spain threatens to bring the whole European project crashing down on itself. Austerity has intensified long standing regional tensions in Spain with Catalans in the northeast desiring more political autonomy while the ruling Popular Party in Madrid and European Union seeks more centralization to eliminate regional budget deficits. The regional authorities in Catalonia threaten Madrid with a referendum on independence, while Madrid insists it has the constitution and national authority on its side in preventing a referendum. In October and November, Galicia, the Basque Country, and Catalonia all have regional elections, all three regions having longstanding and relevant nationalist movements. With a “bailed-out” Spain only promising additional rounds of austerity, the political center of Spain risks losing more voters to regionalist parties who promise a better future with stronger autonomy or even outright independence.
This retreat of the political center is happening across Southern Europe. It’s most obvious in Greece with once dominant parties like center-left PASOK polling 8% as opposed to the 43% it won in the 2009 general election. Following the latest austerity announcements in Portugal, the ruling social democrats lost 12% in just a few weeks with the Portuguese Communist Party and Left Bloc (ally of Greek Syriza) rising to 24% of public support. In Italy and Spain, voters are similarly shunning the parties that have governed for decades. Europe’s plan to keep the monetary union together depends on national politicians complying with austerity in exchange for loans. As we are seeing this autumn, the streets of Barcelona, Madrid, Lisbon and Athens are increasingly restive and ready to sweep those politicians aside.