The purpose of this blog is to provide analytical commentary on formal and informal labour organisations and their attempts to resist ever more brutal forms of exploitation in today’s neo-liberal, global capitalism.

Tuesday, 22 November 2011

The imposition of austerity and the move to authoritarian government - Part I

While bankers have caused the global financial crisis, it is now working people who are asked to pay for the bill. Austerity programme after austerity programme is passed across Europe. But people fight back and make clear that they are not prepared to accept this without a fight. Unsurprisingly, it is in this situation that there is a clear shift towards undemocratic, authoritarian government.

In Europe, nobody has experienced the suffering more than Greek people, who are constantly confronted with new austerity programmes to ensure that international finance can be repaid. As it was written in the Observer in June, ‘a year of wage and pension cuts, benefit losses and tax increases has taken its toll: almost a quarter of the population now live below the poverty line, unemployment is at a record 16% and, as the economy contracts for a third year, economists estimate that about 100,000 businesses have closed’ (The Observer, 19 June 2011). The most recent rescue package, put together by the EU in October, was yet again linked to further cuts. ‘In most polls, voters … have increasingly vented their frustration at austerity measures. Cuts in the bloated public sector, reductions in pay and pensions, new taxes and privatisations of airports, state lotteries, the Greek water supply and the postal service are part of the deal agreed by Papandreou’s government’ (Guardian, 31 October 2011). It is difficult to understand the motivations behind the former Greek Prime Minister George Papandreou's decision to announce a popular referendum on this package. Did he suddenly remember the popular, left roots of his once socialist party PASOK? What was less surprising, however, was the speed with which European politicians condemned the decision and Greek politicians put pressure on Papandreou to revert his decision (BBC News, 3 November 2011). A rejection of the 'rescue package' by the Greek people in a referendum was highly likely. This would, however, have endangered Greece's ability to pay its interests and debts with private finance and here especially French and German banks. In the end, plans for a referendum were cancelled, Papandreou had to resign and Lucas Papademos, an unelected former banker, was installed as the new Prime Minister with a cabinet of technocrats backed by the leading parties (BBC News, 16 November 2011).

Shortly afterwards, it was Italy’s turn. With 'international financial markets' increasing interest rates for new loans, the Italian government moved rapidly to announce further budget cuts. Then, Prime Minister Berlusconi stepped reluctantly down. In place of his government was then put a new government of technocrats, consisting of ‘business leaders and other experts’, as the BBC put it (BBC News, 17 November 2011), led by Mario Monti, a former EU commissioner. The rationale was the same as in Greece, a situation of national emergency would require economic specialists, technocrats to solve it. Elected politicians or even the people through new elections could not be trusted with such a task. And yet, to transfer power to technocrats is not a neutral decision. These assumed experts are steeped in neo-liberal thinking with the goal of servicing the interests of international finance above all else. They are not impartial decision-makers, they are the ones with the task to ensure that unpopular measures of austerity against the people are carried out at all costs.

Nevertheless, resistance carries on. Whether on the streets of Athens or in the preparations for November 30 in the UK, when there will be the largest public sector strike for decades, people are not prepared to accept that they have to pay the bill for others. This struggle is decisive. It determines whether the post-war gains of the working class can be maintained or whether neo-liberal restructuring accomplishes the full dismantlement of welfare states in Europe. The stakes are too high for working people to entertain the thought of defeat. To overcome the crisis requires more democracy, not less, and authoritarian government must be resisted.

Prof. Andreas Bieler
Professor of Political Economy
University of Nottingham/UK

Personal website:

22 November 2011

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