By Nicolás Barros
Europe is not transiting smoothly through what appears to be its final decline.
The BRICs (Brazil, Russia, India and China) are acting as its official gravediggers. Germany and
France are benefiting in the short run while the rest of Europe is hurting and sinking deeper into crisis. The past centuries of environmental destruction in Europe, as well as globally, are taking their toll on the environment and natural resources. Workers and the population at large are watching the degradation of their living standard before their eyes, as they lose the global position of privilege that they historically held as a product of semi-colonial exploitation in other parts of the world.
After World War II and the creation of the European Union, the European bourgeoisie thought that they would be reborn as a global empire, overcoming past defeats; however, the barbarians are already at the gates. The fascism of Hitler, Mussolini and Franco in the 20th century foreshadowed this decline, and had shown the barbaric extent to which the ruling class, terrified by the ghosts of Marx and Engels, would go to try to save itself.
Europe and the United States are two empires, both in historical retreat, both have passed their peak and now both are in precipitous decline. However, they will not necessarily disappear quickly of their own accord or in a linear way.
The outstanding feature of Europe is that it is the home of all the original capitalist powers, each having run its full course from dominance to descent, succeeding each other in history as the most prominent at a regional or global scale (this includes Austria, Hungary, Portugal, Russia, Holland, Spain, France, Germany, England, and Belgium).
Aside from the economic and political relevance of each individual country, Europe consists of nation-states consolidated by centuries of historical power and cultural dominance, built upon structures of production more advanced than those in other parts of the world. Also important is the strong secular tradition of Europe. The current regional confederation was born and consolidated as a defensive mechanism against both the emergence and the consequences of the fall of the surrounding worker states.
The current precipitous fall of both Europe and the United States is partially due to the emergence of China, India and Brazil. The new emerging empires will not be like the old ones and as a result of their internal contradictions they will be much less stable.
It is important to highlight that there has been no quantitative growth in the global productive apparatus as a whole (in terms of means of production and exchange) and what we have seen as a result of the movement of the centers of production from their previous locations in Europe and the US to new areas, including continental Asia and Latin America (in principle).
Europe is a net exporter of capital. Some of the enormous profits obtained by European companies have ended up invested in companies outside of the European Union. Thus some German and French productivity does not return to those countries (at least not as capital assets) while in the rest of Europe this capital simply does not exist. Therefore future productivity will fall irreparably along with this decline in investment. In each country this will manifest itself in a different way.
The issue of regional debt is completely irrational. Italy owes 1.4 trillion US dollars, 115.8% of its Gross Domestic Product, (GDP) to France, which is Italy’s main creditor! Spain’s total debt is 1.1 trillion US dollars, with the following amounts owed to these countries: 238 billion to Germany, 220 billion to France and 114 billion dollars to England.
Germany took a different economic path than its neighbors, responding to stagnation with anti-inflation measures, which have only deepened its recession. This was done even though the country has a fiscal deficit of only 3% of their GDP and currently a 12% unemployment rate. Germany has raised sales taxes from 16% to 19% and progressively increased the retirement age from 60 to 65 years since 2006.
If we take into account that two thirds of the economic growth of Germany between 2000 and 2008 was due to exports, we can understand why it is the world’s second largest exporter, which allows it to maintain a commercial market surplus. One way this is demonstrated is that 40% of its sales are to other European countries, nine times greater than its sales to China.
The European Union has collectively lowered the price of exports in order to be competitive in the new economic climate, which in turn has stopped the growth of its industrial apparatus of manufacturing and distribution. This has allowed for its control over the centrifugal European markets. The German government utilizes a market strategy that severely limits domestic consumption by freezing salaries in Germany. As a result, the German economy grew very little, only 14%, between 1995 and 2010. It had the smallest and slowest growth rate in Europe for that period except for Italy. It exported the capital of its multinational corporations instead of re-investing it in its domestic economy.
The Greek case is paradigmatic. It had already received a second loan installment of 10.5 billion US dollars, which it used only to build up a currency fund for the purpose of preventing an attack from major global investors in sovereign debt. From those loans, not a single cent went to addressing any of the problems of the Greek population. The problems of the Greek economy “are being resolved” by meeting the demands of their creditors, including the lowering of the fiscal deficit from the current 13.6% to 8.1% of the Gross Domestic Product (GDP) for 2011. The Greek Parliament approved an initiative to sell the state owned railroad system (OSE), the nickel production company named Larco, the state gas industry (DEPA), Athens International Airport, 20% of the assets of the telecommunication company of the Balkans (OTE) and all public lands (including several islands). The recipe followed was, mass worker layoffs (private and public), raising the retirement age and privatizations, etc. Sound familiar?
There are other emblematic examples like the country of Romania. Political leaders there propagandized for the need to enter the European Union as a mechanism to overcome Romanian backwardness. Not withstanding that the remittances that workers outside the country send back to Romania are the fourth largest part of its Gross Domestic Product, similar to the situation when Nicolai Ceausescu was in power. Adding injury to insult is the situation that Romanian seasonal migratory workers are detained, beaten, jailed and deported from the surrounding “sister” European Union nations of Italy, Spain, Switzerland and Belgium.
Behind the debacle of the Euro Zone and the massive bailouts for Greece, Spain and Portugal is actually the rescue of the European banks that hold the huge debts owed by these three countries and by Italy, which only owes 3 trillion dollars. When one speaks of a European setback this includes the loss of the dominance of its commercial enterprises and above all its industrial power. This does not impede the gross concentration of wealth of many European multinationals, which continue to be global leaders in their lines of industry. Yet, every year this concentration diminishes. Of the 50 largest corporations in the world, 22 are European. Ten of these belong to the industrial sector while the remaining 12 belong to the financial, insurance and distribution sectors.
Another crucial issue is that European natural resources are substantially depleted. Asia, Latin America and even the United States have much larger reserves of natural resources than Europe. Without a source of cheap labor and available natural resources the future is inescapably dim, again not necessarily in a linear way. Europe is being confronted by the growing cost of preventing environmental disasters in vulnerable ecosystems after centuries of uncontrolled human destruction such as pollution of potable water, pasture lands made non-arable, and unsafe disposal of solid and liquid human waste as well as waste from industrial and nuclear plants.
All of the current rehabilitation efforts do not even begin to transform the careless processes that created this destruction. The costs would be enormous just to create partial and localized solutions to some of the most pressing concrete environmental problems. Centuries of mining, mainly of coal and non-metal minerals, have created a serious degradation of the natural landscape, destroying forests, hills, grasslands, etc.
A sector of the bourgeoisie and some of its political allies have been working, since the middle of the last century, to consolidate a transnational capitalist ruling class throughout Europe. This group believed that the American model was a clear indicator of the effectiveness of this plan. History has shown the flaws in this plan. Europe, unlike the United States, cannot carry out that design due to its different stage of development. The unique characteristics of this period in capitalism do not, in any way, support this desire.
The great European arrogance has led to a situation where only France and Germany can maintain their imperial domination, supported by the oppression of other states. The rest of the European countries are on their way to becoming semi-colonies (some clearly already are) of France and Germany or at least are considering that sooner or later they will abandon the European Union. The rest of the countries see an irresistible necessity to break away from the European Union soon, more specifically from Germany and France.
In short, what has the European Union, along with the associated individual governments, done to mitigate the problems? It has at all costs lowered costs (at least since 2006), increased the layoffs of public employees, outsourced companies to Asia and the Pacific, and increased the permanent reserve army of labor by 15% in some countries and by 25% in others. A classic measure used to serve this purpose has been the expansion in every way no permanent lifetime employment: contracting out some activities of the companies or sub-contracting to third parties, reducing hours of work to one third full-time or increasing part time work, paying piecework rates, establishing false but legal employment arrangements (like false front companies), pseudo-cooperatives, etc. Today, the main European countries have included on their menu of operations these different measures that were in part copied from the USA and in the past only utilized in semi-colonial countries.
Salary cuts have been applied to public employees in Romania, Greece, Portugal, Spain, Italy, Great Britain, Hungary, Malta, Slovakia, Poland, Bulgaria and Lithuania. Job security has decreased to unprecedented levels. 45% of workers in Spain between the ages of 25 and 29 have only short-term employment contracts. At the same time, labor conditions have worsened, workplace abuse and workplace accidents have increased, and salaries continue to decrease. From 1980 to the present, the working class share of the wealth that they produced has decreased from 70% to 58%; in Spain it is only 54.5%, while percentages in Italy, Luxemburg, Ireland and Finland are even lower. This decline happened during times of economic growth both globally and in the European Union.
Another problem for the workforce is that people can’t make their mortgage payments because of rising interest rates, layoffs or decreased income, all of which are becoming the norm in Ireland, Hungary, Belgium, Poland and Spain. The anti-crisis formulas always include the increase in the workweek to 60 hours. Great Britain, Hungary, Estonia, and Spain are some of the countries that have already opted for this solution.
The French and German plans have exploded; there will soon no longer be a European Union, only a heterogeneous amalgamation of countries in a state of confrontation, some maintaining their current role as semi-colonies while others are in transition to that status and still others will simply distance themselves from the European Union. Regimes like those in Italy, Poland, Belgium and the Balkans are still frozen in the past, and have not been able to effectively respond in any way to this crisis.
The new Russian bourgeoisie, born simultaneously with the new Chinese bourgeoisie during this late stage of capitalism, is particularly vicious, shows no restraint and has a uniquely immoral and cynical conscience about taking advantage of the era it finds itself in. Born in and sitting on the remnants of the cadaver of the most important revolution in history, these opportunists see themselves propelled by a new “Manifest Destiny” that supposedly justifies their imperial ambitions. They keep watch on the movements of the French-German axis, which they respect, and respond by acting accordingly, like the well-behaved children that they are.
Turkey is also in a good position in relation to Europe. The country has abundant natural and energy resources and a history with traditions built on the conjoined Maghreb, Arab and Persian bourgeoisie. Of course, there are internal problems. The future of the European economic diaspora will also be an event that will influence Turkish reality.
It is possible that Europe and the United States could form a bloc after the crisis, even though this would definitely be to the detriment of US imperialism. However, an alliance between the European Union and Russia would put the US at an even greater disadvantage and would raise the spectre of a more brutal inter-imperialist competition.
The social superstructure can only reflect the regression, in this case the shift to the right, of the political spectrum. A shift that involves social and political issues like sexism connected to gender violence, xenophobia and the growth of the ultra-right wing, as well as the suppression of the left, both in its electoral actions and in its structural integration into the struggles of the working class and the oppressed instead.
The growing importance of fundamentalist churches in defining the bourgeois agenda is another variable that is spreading all over Europe with greater or lesser degrees of renewed virulence. This is seen especially in relation to social issues such as abortion, divorce and issues of the full spectrum of the queer community. These are signs of fundamentalist church political actions with a renewed strategy in order to influence bourgeois governments and regimes by pushing them to the right.
In every European country there are new ultra-right wing political parties emerging and growing. In some cases they already have a strong electoral presence while others are gaining influence. In the Netherlands there is the PVV (Liberty Party), in Denmark, the Party of the Dane People, in England, the English Defense League (EDL) and in Hungary the Jobbik, etc.
Germany has built right wing citizen’s armies twice before in history. Could what is coming be a repetition of the past, possibly a 4th Reich? In the November 2010 elections in Austria, the ultra-right Freedom Party (FPO) won 15% of the April, 2010 vote for its candidate for president and 27% of the vote in the 2011 Vienna municipal elections. This probably has to do with the widespread fear within the middle class of Turkish immigrants, who represent 16% of the population and 25% of elementary and high school students.
The events taking place in North Africa and the Middle East will also have an immediate impact on Europe, where the large numbers of immigrants from those countries could use the tactics learned from the North African struggles to fight the oppression that they are victims of in Europe. The previous struggles of immigrants in Europe surely had an influence on the uprisings in North Africa and the Middle East. Now the European immigrants may reproduce them in the near future. New contingents of immigrants may also look towards Europe’s shores and contribute to creating important political movements.
In economic terms there will also be consequences. In the short run this will result in an increased price of oil, an essential commodity that comes in large quantities from North African and Middle Eastern states. It could be replaced quickly by oil from Russia and the former Soviet block countries or even Latin America. In terms of commerce we will see serious challenges to some European imports of industrial and intermediate goods if the changes lead to new international realignments.
Europe has many possible future scenarios. We may not know exactly what will happen, but none of the foreseeable options will maintain or strengthen the current European Union. Confrontations will be inevitable and will come with the violence that always occurs with inter-imperialist confrontations that have to do with gaining hegemony over the markets or making others pay for self-created crises.
The key to the situation, of course, is in the hands of the working class movement. From within the productive apparatus it could emerge as the backbone and muscle of a wider movement for social change, connected to their co-workers, the immigrants and other super-exploited sectors of society. Such a movement should raise a program proposing to make the still formidable industrial apparatus work for the actual needs of the working class and the oppressed instead of for the convenience of the big multinationals. Although workers have represented an important source of resistance, they have not yet succeeded in moving past addressing the issues of economic gains (such as union struggles around working conditions and wages) and advancing to represent a political challenge to the regime.
A program for such a political challenge in Europe should be based on concepts like:
l Full employment and jobs for all, including immigrants, at union wages.
l The right to political and union organization for all unemployed workers and immigrants, including the right of immigrants to vote and run for office.
l Compulsory repayment of financial capital from large companies to maintain job producing and environmentally sound investments which have been transferred from manufacturing to financial services or shifted to outsourcing of jobs. Increasing corporate taxes and maintenance of capital to maintain jobs and services and funding for public services.
l Massive investment under community and workers control in projects related to the treatment of industrial, hospital, home and radioactive waste and rehabilitation of environmental disaster areas.
l Full rights and social benefits to all minorities and immigrant communities including the preservation of their languages and cultures. Eliminate all forms of racism, racial discrimination, gender discrimination and discrimination based on sexual preference and orientation.
l Full funding for free education and training for youth from pre-school, for apprenticeships and to graduate school levels.
l Immediate repatriation to countries for all military invasions made anywhere in the world.
l Drastic reduction of budget allocations for security and military spending.
l Support for a Socialist Confederation of Europe, based on national self-determination.