• Europe Between Disintegration and Revolt

  • By Walter Baier | 16 May 13 | Posted under: Euro
  • On 7-8 June the Alter Summit of the European Peoples takes place at the Velodrome in Athens. An alliance of more than 150 organisations – including trade unions, social movements, NGOs and political actors from all parts of Europe will publicly present a manifesto for the struggle for a democratic and social Europe.

    This new kind of alliance is the expression of a political ‘self-defence community’ in the face of an attack – unique in the history of Europe, at least after the Second World War – on the social state, public services and standards of living but also on democracy. On the other hand, the Alter-Summit movement hopes to throw open the door to political struggle for a political alternative in Europe.

    For this purpose it is necessary to take stock of developments so far.

    In the seventh year of the capitalist crisis we see the following picture: In southern and eastern Europe the austerity programmes imposed by the Troika have unleashed human catastrophes, but the goal for which they were implemented, the reduction of sovereign debt, was clearly not met.1

    The fiasco has reached such a dimension that the Director General of the International Red Cross announced the reorientation of his organisation’s programme with the following arguments: ‘Never since the Second World War were so many Europeans dependent on humanitarian aid […] Social tensions always rise when bread becomes too expensive. In addition, ever more young people with university degrees have no possibility of getting a job. They are beeing told that it will be years before things get better. It is no wonder then that hatred for politics has grown. There is bottled up rage, frustration and hopelessness here – an explosive mixture.’2

    With the reform of the Stability and Growth Pact in the European Parliament, which was passed against the votes of the left, as well as the Budget Pact ratified by the 25 member-states, who together were determined to impose a rigid austerity policy with authoritarian means, the situation has significantly deteriorated. In addition, the 17-country Eurozone and the EU entered into a recession in 2013. The IMF’s announcement of a turn for the better in the next year, which it attached to the negative prognoses it published for this year, is hardly credible. On the contrary, serious economists increasingly warn that the EU could plunge into a 10 to 15-year depression. One can only imagine what would remain of the social state, democracy and European integration afterwards.

    European capitalism is facing new historic challenges. The internal crisis is occurring against the backdrop of a shift in the balance of global economic power, which is illustrated by a detail in a mid-March Financial Times article: While the global pool of government bonds given a triple-A rating by the three most important rating agencies was reduced by 60%, there was a an upgrading of securities in a great part of the rest of the world. ‘Topping the list in the scale of credit upgrades since January 2007 are Uruguay, Bolivia and Brazil. The biggest downgrades were in crisis-hit southern Europe, with Greece seeing the steepest drop.’3

    A similar picture emerges from the growth prognosis published in the IMF’s World Economic Outlook this spring.


    IMF Growth prognosis 20134

    China                           8.0 %

    World economy            3.3 % 

    US                                1.9 %

    Eurozone                   - 0.3 %          

    Austria                         0.8 % 

    Germany                      0.6 % 

    France                        - 0.1 %          

    Italy                           - 1.5 %        


    The pattern of a global development at three speeds –

    • a sustained dynamic of ‘emerging markets’ and developing economies;
    • moderate growth for the USA;
    • recession in Europe, however uneven

    – troubles not only Europeans but threatens, as Olivier Blanchard, IMF Chief Economist, warns, the global economy as a whole, which can only be a strong as its weakest member.’5

    The road from the Lisbon Strategy announced 13 years ago at a special summit of the heads of states and governments, which was to make the EU into the most competitive and dynamic knowledge-based area of the world economy, to today’s actual malaise is in retrospect astoundingly brief.  

    The social effects can, as far as they can be expressed statistically at all, be seen from the Quarterly Review6 of the EU’s Commissioner for Employment, Social Affairs and Inclusion, László Andor, according to which in January there were 26 million people in the whole of the EU without a job (10.8%), with youth unemployment in January at a record high of 23.6%.

    From this perspective this testimony is also damning for the ‘crisis management’ of the countries and the EU. Since spring 2011 alone, 3.7 million people have lost their jobs, and the trend in the Eurozone is worse than the EU average.

    However, the data throw light on still another development, one that is politically very explosive for the project of European integration, as they show an average 10% higher unemployment rate in southern and eastern Europe than in the north and the centre.

    In view of these objective differences in social development it is not surprising that in recent years nationalist interpretations of the crisis have increased, which has led to the emergence and growth of right-wing extremist, and in some cases neo-Nazi, parties.

    With respect to the opening up of a democratic and social way out of the crisis, there are indeed class reactions to the crisis – strikes, demonstrations and new social movements – which have developed principally, but not only, in southern Europe. These deserve our attention.

    Without fear of exaggeration, we can characterise the current decade as exhibiting the most extensive mobilisation of trade unions and social movements against the policies of the ruling class since the end of the Second World War. And there is much evidence to suggest that the wave of protest will grow still further.

    The International Labour Organization (ILO) has come to the same assessment in a report it published at the beginning of April on the situation in Europe. ‘In the wake of the economic and currency crisis, the danger of social unrest in the EU has risen markedly in recent years, in fact, in terms of the indicators developed by the Organisation by 12% in relation to the level before the financial crisis.’7

    At the beginning of April, the London Independent reported that the two largest British trade unions, Unite and Unison, came out in favour of  discussing preparations for a general strike against austerity policies.8 In view of the curtailments of the right to strike in the Thatcher era, the discussion took on great significance, and the Independent did not fail to note that with the call for a general strike the unions would be using this most massive of actions available to them for the first time since 1926.

    The British trade unions’ discussions is part of a Europe-wide mobilisation against austerity policies. Let us recall the most striking actions of this Europe-wide resistance movement in the first half of the current year9:

    • At the end of last year the beginning of a month of sustained protest in Slovenia;
    • the strike of public transport workers in Athens;
    • mass demonstrations in February in Bulgaria against immiseration and for a new constitution;
    • 14 March – action by the European Trade Union Confederation on the occasion of the EU Summit;
    • beginning of March – million-person demonstration in Portugal with the slogan ‘Screw the Troika’ against the Memorandum;
    • 10 March – mobilisation of the two largest Spanish trade unions in alliance with 160 organisations in mass marches in all the country’s most important cities;
    • Massive protests in Cyprus;
    • 5 May – 100,000 demonstrate in Paris against austerity and for a Sixth Republic;
    • 1 June – mobilisation of the ‘squares movement’ in Portugal, Spain, Greece and Germany;
    • 22 June – demonstration of the British trade unions against the austerity policy of the Tory government.

    The style with which the Euro finance ministers, headed by the finance policy hardliners from Germany, Austria, the Netherlands and Finland, denied the Cypriot population a bearable solution to their country’s bank crisis shows that the confrontation is entering a new harsher phase.

    Up to now’, the Greek economist Yanis Varoufakis argued, ‘supporters of austerity and of the German approach to the Eurozone Crisis in the deficit countries (including France) have argued that we need to go along with Berlin and Frankfurt so as to inspire sufficient confidence in those who control the purse strings (in our willingness to “do our homework”) before they can yield to the inevitable eurobonds, to the logic of a banking union, to whatever it takes to bring about greater political and economic union.

    Alas, the Cyprus deal reveals how wrong this view was: Even though peoples throughout the periphery (in Ireland, in Portugal, even in Greece and Italy) have, however grumpily, bowed their heads to severe austerity and the removal of labour protection laws, the powers that be in Berlin and Frankfurt are shifting away from unifying moves, adopting increasingly authoritarian, divisive policies that are pushing the Eurozone in precisely the opposite direction to that dictated by political and economic sustainability.’10

    The resulting political dangers for European integration and the stability of countries is obvious. Growing worries about the future, which has also gripped parts of the ruling class and the political elites, is expressed in political-science discourse as well.

    In a recently published paper, the Friedrich Ebert Foundation (of the German SPD) has developed four possible scenarios for the shape of the Eurozone in the year 2020.11 Its point of departure is the recognition that the procedure followed up to now (Scenario A ‘muddling through’) of treating the financial crises as unique individual cases by always using the same policy mix of emergency loans and austerity, can no longer be continued as it practically excludes an economic recovery. It is notable that the scenario favoured by the authors, that of a completion of the economic and currency union through a financial union and a political union under democratic and social auspices (Scenario D) is considered improbable by them.

    The danger, they explain, is an uncontrolled breakup of the Eurozone (Scenario B) with negative and dangerous consequences. In the face of this dilemma, the study’s authors come to a remarkable conclusion for a political foundation12 whose mother party has up to now been unconditionally committed to European integration and political union: ‘The unlikelihood of completion of the monetary union by a fiscal union in the near future led to a situation in which the Core Europe scenario was widely perceived as the, not exactly desirable, but probable second best outcome of the current crisis.’ And then, in order to mitigate the bad taste of the nationalist separate path of this ‘second-best option’, they add: ‘An important difference was discussed between a Core Europe understood as a two-level model with a closed centre and a periphery lagging far behind, on one hand, and in modified form as a two-speed Europe, in which a vanguard of states proceeds towards fiscal and political union while leaving the door open for others to join, on the other hand.’13 However, the substance of a withdrawal on the part of the ‘Triple-A’ countries from European commitments, which follow from the currency union established as one of their conditions, cannot be so easily disposed of through semantic exercises.

    In view of the disaster, to which the scenarios investigated by the Friedrich Ebert Foundation also testify, it is astounding that not even a hint of a correction of the neoliberal orientation of the European Union’s economic and social policy is entertained. Not even the rather pragmatically presented demands of the Confederation of German Trade Unions (DGB) for sufficiently good, sustainable and high-quality jobs, regulation of financial markets, the financing of a Europe-wide investment programme through a special ‘New-Deal loan’14 receive any attention, although overcoming the social consequences of the crisis represents the crucial precondition for continuing European integration.

    The current crisis of European integration could be the harbinger of continued and deeper convulsions. The attempt to transform the European Union into an authoritarian austerity regime is very probably doomed to failure.  Nevertheless there is a danger of the a reactionary way out of the crisis in the form of a ‘Walpurgis Night on the Brocken of nationalism’ such as Rosa Luxemburg observed in 1918.15

    If the left wants to cope with its respnsibility in this precarious political situation as a European force, it must round out its social, economic and ecological alternatives by a programme for democracy in Europe.

    There are five criteria I think essential:

    • One cannot understand Europe as a unified state, among other reasons because Europe is not a nation. But we can think of Europe as a ‘commonwealth of European nations’ whose basis is the idea of democracy and subsidiarity. This would mean that the competences would be so divided between the Union and the countries that the Union would only have competence where that of the countries is insufficient. In the sense of a social and ecological reconstruction, these would have to include important responsibilities on social and ecological standards, bank oversight, redistribution policy, even European public services and European transfer payments. For this the European Union must have a substantially greater budget and new financing instruments at its disposal.

    • Its political legitimacy has to rest on a spare basic law that defines the norms of the common juridical space and regulates the division of competences between the various levels and institutions; and it must rest on a European citizenship on the basis of the equal rights of all people living in the Union, a proportional electoral law applied to the European Parliament and on effective parties on the European level.

    • The European Union needs a Charter of the Rights of Nations and Ethnic Groups, to which the right to self-determination and autonomy apply. They must be able to decide freely and democratically whether they want to belong to a country or to the Union. Moreover, within the Union each individual is entitled to join or not join a national community of his or her choice and to exercise his or her cultural, national and religious rights within the general juridical framework.

    • No European institution, neither the European Central Bank nor the European Court of Justice, can act as a quasi-legislative instance. The Stability and Growth Pact has to be abrogated. The European Parliament assumes full responsibility for European monetary policy. It exercises control of the European Central Bank.

    • The rights of the parliaments in relation to the executives must be strengthened at all levels. The European Parliament is accorded, in the framework that results from subsidiarity, the full right to decide on the European budget, pass laws and elect the European Commission. To guarantee the rights of countries and nations a second chamber of the European Parliament should be constituted.

    The question then is how such a new Europe can emerge in view of the elites’ revoking of the social-state compromise. The left would be ill advised if it were to withdraw precisely now from such an important battlefield. However, it would be equally unrealistic to overlook the fact that the carrying out of the authoritarian austerity regime, which we are now experiencing, destroys the basis for a calm and gradual reform of the European treaties. Instead, what would seem to be required, is a break whith their dominant logic, leading to a new foundation of the European Union. It is clear that the door can only be opened by defeating the current policy.

    Or in the by now almost classic words, with which the Italian Communist Altiero Spinelli, in the famous Ventotene Manifesto of 1944, summarised his vision of a new Europe: ‘In order to respond to our needs, the European revolution must be socialist, that is, its goal must be the emancipation of the working classes and the realisation of more humane living conditions for them.’

    Walter Baier is an economist in Vienna and Coordinator of the network 
    transform! europe. 


    1. The ratio of sovereign debt to GDP rose in Greece from 2009 to 2013 from 129 % to 176 %, in Portugal from 83 % to 128 % and in Spain from 54 % to 124 %. In the whole Eurozone, the debt level is now 90.6% of GDP, after being at 87.3% in 2011. In the EU the accumulated debt corresponded to 85.3% of the EU GDP; in 2011 it had only been 82.5%.
    2. Die Presse: http://diepresse.com/home/leben/1385374/Yves-Daccord_Sicherheit-ist-fuer-mich-der-groesste-Luxus?from=suche.intern.portal
    3. http://www.ft.com/intl/cms/s/0/9fcd5f10-9635-11e2-9ab2-00144feabdc0.html#axzz2OkdE3K2j.
    4. Chris Giles: ‘IMF cuts 2013 global economic outlook’, Financial Times, 16 April 2013: http://www.ft.com/intl/cms/s/0/03c36652-a66e-11e2-885b-00144feabdc0.html#axzz2RCpqjMOe.
    5. Ibid.
    6. European Commission: EU Employment and Social Situation Quarterly ­Review – March 2013,  http://ec.europa.eu/commission_2010-2014/andor/headlines/news/2013/03/20130326_en.html.
    7. ‘9th European Regional Meeting’,  http://www.ilo.org/global/meetings-and-events/regional-meetings/europe-and-central-asia/erm-9/lang--en/index.htm.
    8. ‘Britain‘s biggest unions put weight behind plan for general strike. Unite and Unison back mass action for the first time since 1926’,  http://www.independent.co.uk/news/uk/politics/britains-biggest-unions-put-weight-behind-plan-for-general-strike-8559027.html.
    9. The present article was completed in mid-April.
    10. Varoufakis, Yannis: ‘The Good, the Bad and the Extremely Ugly’, http://ec.europa.eu/commission_2010-2014/andor/headlines/news/2013/03/20130326_en.htm.
    11. Friedrich Ebert Stiftung. International Policy Analysis: ‘Future Scenarios For the Eurozone’  http://library.fes.de/pdf-files/id/ipa/09723.pdf.
    12. With a staff of 650 and an annual budget of 140 million Euros the Fridrich Ebert Stiftung represents the largest German party-related political foundation by far.
    13. Op. cit., p. 6.
    14. DGB Bundesvorstand: Ein Marschallplan für Europa. Vorschlag des Deutschen Gerwerksckaftsbundes für ein Konjunktur-, Investitions- und Aufbauprogramm für Europa“, Berlin 2012; http://www.dgb.de/search?search_text=Marshall+Plan&x=0&y=0 and  http://www.indepthnews.info/index.php/global-issues/1385-german-trade-union-tables-euro-marshall-plan.
    15. Rosa Luxemburg, ‘Fragment über Krieg, nationale Frage und Revolution’, in Gesammelte Werke, vol. 4, pp. 67.
    16. Altiero Spinelli, Ernesto Rossi: ‘Ventotene Manifesto’, 1944 (translation by E. Urgesi) http://www.altierospinelli.org/manifesto/en/manifesto1944en_en.html.

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