Over the last 14 months, I have published several posts dealing with aspects of the Eurozone crisis and the struggle against the imposition of austerity across Europe. In this post, I will bring them together in one narrative. My general focus is on uneven and combined development in Europe as the underlying structural dynamic of the crisis, neo-liberal restructuring and its limits, the move towards authoritarian government as well as issues of resistance in the European core and periphery.
|Photo by apasp|
The EU’s demands for direct oversight over Greek budgetary spending in order to ensure that promised cuts are actually implemented in exchange for further bailout payments provides the background for this post. Drawing on Rosa Luxemburg’s analysis of capitalist expansion, it is outlined how such a process of providing ever larger financial assistance to peripheral countries until direct control over these countries’ finances are demanded is not a unique historical event. Instead, it is closely related to the underlying structural dynamics of capitalism. Attempts to overcome crises through outward expansion tie the periphery closely into the development of the core, while increasing the unevenness of development between core and periphery at the same time.
This is the first part of a review of the book Crisis in the Eurozone (Verso, 2012), in which Costas Lapavitsas et al establish the uneven way of how different countries have become integrated into the political economy of the EU, which is at the heart of the Eurozone crisis. While Germany experiences an export boom, peripheral countries such as Greece have for years absorbed these exports without being able to increase their own competitiveness. The book also illustrates well how the current problems go right back to the design of Economic and Monetary Union (EMU) in the 1990s and the related change in the balance of power between capital and labour in favour of the former. The establishment of EMU and the related institutionalisation of neo-liberal economics in Europe were from the very beginning in the interests of capital and here in particular transnational European capital, as it allowed employers to play off workers from one country against workers from another country. As the institutional bias of EMU put systematic downward pressure on wages across the Eurozone, trade unions were weakened and put on the defensive.
It is generally assumed that German workers have greatly benefitted from their country’s export success and that they are, therefore, the key winners of the current Eurozone crisis. In this post, I dispute such an understanding. I demonstrate that German export success has been built on drastic cuts in social welfare benefits, downward pressure on wages and an increasing informalisation of the German labour market. Workers’ falling share in wealth as well as the general increase in inequality in German society is the dark underbelly of success. Hence, the enemies are not workers of other countries, but capital as a whole, which uses the crisis for an attack on workers in Europe’s core and periphery alike.
|Photo by Michael Fleshman|
Europe and the limits of neo-liberalism
This post analyses the Eurozone crisis against the background of European integration around neo-liberal restructuring since the mid-1980s. Internally, this was realized in the Internal Market programme and the establishment of Economic and Monetary Union. Externally, neo-liberal restructuring was sustained in successive waves of further enlargement as well as the EU’s external trade policy Global Europe. The increasing unevenness within the EU political economy is a result of these policies and ultimately indicates the limits of sustaining capitalist accumulation through constant deregulation and flexibilisation. A radical departure from neo-liberal economics is required, if the situation is to be turned around.
|Photo by endia feron|
Although neo-liberal restructuring has reached its limits in Europe, this does not automatically imply that it will collapse. In this post, I discuss several potential future scenarios, including an extended period of muddling through based on increasingly authoritarian rule in the periphery, a right-wing xenophobic backlash as well as progressive responses moving us beyond neo-liberal restructuring.
In the second part of my review of Crisis in the Eurozone (Verso, 2012) by Lapavitsas et al, I further engage with discussions about potential future scenarios. The focus is on the suggested debtor-led default by Greece combined with an exit from the Euro. For this to work, the authors are clear that drastic change is necessary including the nationalization of banks, thereby changing the balance of power between capital and labour in favour of the latter. Equally important is a change in the nature of the state, reflecting the underlying shift in the balance of class forces and ensuring that labour’s interests are at the top of the agenda.
From 8 to 11 November 2012, European anti – neo-liberal globalisation movements met in Florence/Italy to discuss strategies towards another Europe. This post reflects on the tensions between various movements, the disagreement over whether reform or transformation is the way forward, as well as the achievements and alternative possibilities. This meeting demonstrated that the European left is currently weak and fragmented. Nonetheless, it also indicated potential alternatives. Especially the Alter Summit process, launched at Florence 10+10, provide reason for hope.
Prof. Andreas Bieler
Professor of Political Economy
University of Nottingham/UK
Personal website: http://www.andreasbieler.net
26 January 2013