Greek crisis lays bare illusions of EU project

[Shih-Yu Chou]

Vol. 76/No. 22 June 4, 2012

Greek crisis lays bare
illusions of EU project
(lead article)

BY LOUIS MARTIN
The deepening crisis shaking Greece has put into sharp focus the
unfolding and intractable crisis of the European Union—a political and
trade alliance of 27 countries dominated by German imperialism—and of
the eurozone, the monetary pact of the 17 among them who share the
euro currency.

The financial meltdown is rooted in a deep contraction of world
capitalist production and trade.

Thus far the capitalist rulers of Europe and beyond have pumped
massive loans to postpone the impending bankruptcy of the Greek
government and the consequences this would have for the European
Union, as well as world capitalist finance.

But the underlying problem of slowing production and trade remains
unaffected, barring any way out of further financial and economic
crises.

Under these conditions, increasingly divergent interests within the EU
are brought to the fore. The disintegration of this utopian union
among competing bourgeois nations becomes increasingly inevitable. The
forms and time frame remain unpredictable. But what will be left is
what was there before and during the EU’s existence: separate and
sovereign capitalist governments.

The EU was put together in the 1990s by Berlin, with the support of
Paris, as a counterweight to the common market between the U.S.,
Canada and Mexico established in 1994 by Washington. What worked well
at first only built up contradictions of a union between countries
with sharply different levels of productivity and development.

These differentials appeared to be mitigated as the less developed
economies such as Ireland, Portugal, Greece and Spain benefited from
massive low-interest loans—promoted by Berlin and Paris in order to
expand markets for their goods and capital.

A decade later the former are massively indebted, their economies
contracting and left without the option of devaluing their currency.
The latter are holding bad debt and facing shrinking markets.

Bourgeois politicians in Europe, the U.S. and other imperialist
countries are debating ways of slowing down Greece from leaving the
euro, in fear that a disorderly “grexit” could trigger bank runs,
financial panics, political instability and social unrest.

This is the overall meaning behind so-called growth proposals promoted
by newly elected French President François Hollande, Italian Prime
Minister Mario Monti and others, with the support of President Barack
Obama.

The “growth” track is ostensibly counterposed to “austerity”— the
slashing of social services and government jobs, along with tax
raises. This approach has accelerated the economic contraction of
several countries, while sparking social unrest among working people
and others.

But the actual content of so-called growth policies amounts to no more
than what the Financial Times calls “some magical mix of stimulus and
austerity that restores both budgetary balance and growth.” This
translates to more loans, some currency devaluation (inflation), tax
breaks to businesses and other “stimulus” measures, while continuing
to try to crank up labor “productivity,” press down wages and slash
government expenses.

What Greek workers face
Meanwhile, in Greece the economic and financial crisis has
precipitated a political crisis.

In the recent May 6 elections, New Democracy and the Socialist Party
(PASOK), the two incumbents, were soundly defeated. With none of the
main parties having enough votes to form a majority or coalition
government, new elections have been set for June 17.

New Democracy and PASOK are campaigning on warnings of devastating
consequences if the country leaves the eurozone—which they say is
unavoidable without further austerity.

According to recent polls, the Coalition of the Radical Left, or
Syriza, is projected to get more than 20 percent of the vote, bringing
it neck and neck with New Democracy. While supporting Greece’s EU
membership, Syriza campaigns for a three-year suspension of loan
payments; nationalizations of banks; and the reversal of wage cuts,
public workers’ layoffs and the voiding of collective bargaining
agreements.

The Communist Party of Greece (KKE) is campaigning for abstract
slogans and reforms within the framework of capitalist rule. It
demands Greece’s withdrawal from the EU, the cancellation of its debt,
“socialization of the wealth” and “workers’ and people’s control from
the bottom up.” The KKE got 8.5 percent of the vote in the May 6
election.

In the midst of a crisis that devastates the lives of millions of
workers and middle class layers, the fascist-minded Golden Dawn got 7
percent of the vote in the May election with its anti-foreign bank
demagogy and anti-immigrant thuggish violence. But contrary to what
some liberal pundits say, fascism is not at the gate.

Fascism is a mass movement of desperate middle-class layers,
demoralized workers and lumpen elements, mobilized in the streets to
smash working-class organizations. Before this could happen, workers
will have their own opportunity to take power.

What Golden Dawn is doing is exploiting the crisis to garner cadres
for such a reactionary movement.