Current crisis of eurozone comes in parallel with the disclosure of its intrinsic class character. In this context there is no solution in favour of the working class interests into the Eurozone. Solutions that are proposed increase the contradictions and the social cost without promising the improvement of living level of the majority. At the other side every effort to surpass Eurozone and EU (by the formation of ALIAS and LIBERA as Vasapollo – Martuffi and Arriola describe or the return to national currencies) should have as precondition the implementation of a coherent and radical policy against the interests of capital and in favour of working class.
Formation of euro, before a decade, was the termination point and the rewarding of a long unification process that started in the first postwar years. At a first glance its aim was the promotion of a peaceful regulation of deeply competing economic and national contradictions. In reality tried to solve three different types of competition: between rivalry states, against the foreign competitors and especially theUSAand, the most serious against the working class. The current crisis of eurozone (which first of all is a capitalist crisis) marks a very special, unprecedented, balance of forces in each one of these wars.
In the most serious war, against the working class interests,BrusselsandFrankfurthave achieved till now a blow of historical significance to the working rights. Looking at the Eurostat announcements about the labor cost we could see that since 2010 against the general increasing tendency of labor cost there are 3 exemptions:Greece,IrelandandPortugal, the countries that have accepted till now the terms of Memorandum of Understanding which accompany the bail-outs. We could imagine what will happen in Spain and Cyprus soon, if they follow the example of the three first countries or what will happen toItaly after a few months. From many other examples, which reveal the strict class interests that serve the so-called “rescue mechanism”, I distinguish privatization plan. What is happened now in Greece could be compared only to what happened inRussiaat the beginning of the decade of 90’s. The sell-off of the whole public wealth: not only energy or water utilities but still land, mountains, islands!
In the roots of this barbarian policy, which will bring much more absolute and relative poverty of the people, there is a long-term, strategic characteristic of nowadays capitalism. Ernest Mandel, very successfully, had said that formation of EU was the response of European capitalism to the development of the productive forces. Perhaps, in 60’s, even the following decades, EU contributed positively in the development of productive forces. But now EU not only set obstacles in this progressive trend (that shows the huge revolutionary possibilities of our epoch) but amputates violently this dynamic. So EU, demanding social spending cuts, wages reductions and privatizations serves the interests of the whole capital against the liberating mission of the working class.
In this context, as a long term and not coincidental or easily reversible tendency, we should consider many more negative developments of last period like the constitutional coup d’ etat we had in Greece and Italy at November with the appointment of two bankers as prime ministers. It is obvious that EU could not be seen any more as guarantor of democratic liberties as many people believed especially in the countries which had military regimes till ‘70s.
Formation of euro was a decisive step in the international intra-capitalist competition. Deutsche mark was inadequate, “too small to gain” the battle against US dollar. Euro in the previous decade made gains in this battle in favour of German capital, not only financial but manufacturing too. A crucial role in this currency war in favour of euro played its exchange rate. Its overvalued non–competitive exchange rate helped investments portfolio managers to substitute dollar with a currency which was promising bigger gains. At the other side the most countries of the periphery of the Eurozone, because if this exchange rate, suffered a de-industrialization, which meant the loss of hundreds of thousands of working seats.
The supremacy of the common currency (comparing it to the D Mark and to the dollar today) couldn’t be seen separately from the loss of the monetary independence and especially of the weapon of the devaluations of the other European countries, namely:Ireland,Portugal,Spain,ItalyandGreece. Just these countries that now are at the brink of collapse and some of them after it. Today’s end was predictable if we were setting, a decade before, the following question: What will happen to a country addicted to devalue its currency every decade at a ratio of 10-15% when this country will see its currency to be appreciated against dollar by 70% during a decade? This happened toGreece,Ireland,Portugal, etc. All the other explanations of the crisis about generous welfare state or costly public sector inSouth Europeare ridiculous.
From a different point of view, sovereign debt crisis of peripheral countries of Eurozone is the sacrifice, the cost that Europeans paid in the context of the currency war between US and EU or, in real terms, between US dollar and euro. Germanynever could participate in this war without euro’s help. So, German’s gains from Eurozone are not only the merchandise exports through all over the Eurozone after the removal of devaluations risks or the multiplying effects that embodies in its economic structure from the economies of scales. It is too the current and future seigniorage gains from euro which are estimated even at 2-3 bn of euros speaking about the future income which ECB could earn from seigniorage – related investments. Aspects of this escalating currency war is capital controls that Brazil and Argentina have announced as a means to halt the liquidity influx that caused the Quantitative Easing I and II of FED, the recent Japan and China’s agreement to stop using dollar in their bilateral transactions and many others. Common character of all these cases is a slow but stable reduction of dollar’s role. In this context, a strong euro, with increasing attractiveness and continuously (de facto) expanding to new countries and territories from East Europe and Balkans toAfrica andMiddle East constitutes a special means which facilitates the imperialist expansion of German against USA.
Crisis of Eurozone reveals a totally new balance of power among different states. I will use a term that inGreeceis used in every day life, knowing that causes shocks: German occupation, or more distinctively German economic occupation. Perhaps someone would say thatGreece(where the German Task Force which has been settled toAthensdecides even for the last detail of public expenses) is an extreme case. But there are many other indications which show that in the EU happens what was happening in the “Animal farm” of George Orwell: “some animals are a bit more equal than the others”. The most characteristic is the recent abandonment of the principle of unanimity during the decision making.
As a result, Eurozone crisis is transforming deeply the essence and the form of EU towards a more reactionary direction.
Which are the solutions in this phase?
From ruling class there are discussed basically two kinds of solutions. The first is more social-democratic including the collectivizing of the debt with the parallel issuance of euro-bonds at least for a part of the public debt. This isn’t a radical plan! For first time was proposed by Jeean Claude Juncker and Jiulio Tremonti… The most serious with this proposal is that doesn’t explain why Germany today could accept to bear such a weight, that is calculated from 20 till 25 billion bn. during a decade, for easing the borrowing cost of the indebted countries when has been proved that debt machine is an ideal excuse for the application of the neoliberal agenda. Even, supporters of this proposal underestimate the conditions whichGermanywould impose for the mutualization of the debt.
The most possible scenario, almost sure, at the current period is a solution which will mix new amounts of liquidity to the banks (like 1 trn. Euros that gave ECB in December of 2011 and January of 2012) with new austerity measures. In this course the contradictions will be increased with the expansion of the crisis to new countries. The recent 1 trn. Euros of ECB didn’t averted, only postponed the explosion of crisis inSpain, for 6 months. At the same time the implementation of new austerity measures, because of Stability Pact and Euro Plus Pact will increase the capital gains against the wages.
At the other side the only viable solution, which reflects working class interests, is the immediate exit from Eurozone and from EU. The propose for the formation of a coalition of countries like the Latin-American ALBA and a common currency between the countries of South Europe (ALIAS and LIBERA as propose Vasapollo, Martuffi and Arrriola) is an internationalist solution to the current Eurozone crisis. The most important is that this solution gives a safe and creative exit to the development of productive forces in our epoch. In this context is a response which respects and follows the tendencies of development of modern working class. If we want to serve this tendency we must, from now, describe the context of this coalition, so to distinguish it from alternative efforts of German economic fundamentalism who is thinking, for example, to split Eurozone in two different parts: N-euro and S-euro. A coalition of south-European countries, or more broadly from countries with comparable productivity level, should based in nationalized banks and industry, in controls to capital flights, in a modern industry policy aiming to boost employment or food sufficiency.
There are many points which are open to the discussion, the historical evolution and the development of class struggle. For example: Could a formation like this exclude the law of value, much more as it operates in international level? Is possible to have equal relations in international trade or what kind of countervailing measures could be adopted, recognizing law’s presence? …and many others…
As a conclusion I wanted to highlight the necessity to enrich our reflections and response with a strategic view, comparable with the challenges of our epoch, as they are described by the 3rd industrial revolution of additive manufacturing and the knowledge’s explosion. Analysis and proposals of Vasapollo, Martuffi and Arriola in the book “PIG’S Awakening” is a successful response to this challenge…