Crisis, its Impact and Workers' Fight-Back
[This article comes at a time when the governments of the advanced capitalist countries are almost a year into a period of ruthless attacks on the working class in their countries. The whole of Europe, UK and the USA are witnessing huge cuts in public expenditure with the effect that people are being thrown out of public sector jobs, wage freezes are taking place everywhere with wage cuts in many countries and sectors, retirement benefits like pension are being slashed directly or indirectly, spending on education and healthcare is being brought down to ridiculous levels, and monetary policies (equivalent to “ printing money” ) are being taken which is directly resulting in hyperinflation. As a result, the working class of these countries is seeing a sudden, rapid deterioration of their living standards. People are without jobs, many are barely able to carry on, and healthcare is down almost to zero. Real wages are rapidly declining. In many of these countries a sizeable portion of the working class has been rendered homeless as they have defaulted on their home loans and mortgage payments.
But that is only half the story. Very soon after the attacks started, the working class of these countries started wide ranging resistance action in the form of almost continuous demonstrations and general strikes. These movements are spread over all the Eoropean states as well as the UK and the USA. These countries have been transformed into battlefields where the working class is battling valiantly against the attacks of the rulers.
The real roots of this situation lie in the events and policies taken by the ruling classes of these countries in the aftermath of the Crisis which began in late 2008.
The aim of the present article is to try to trace the linkages of these attacks with the policy response of the ruling classes to the Crisis. The Crisis itself undeniably reflects deep stubborn contradictions within the imperialist capitalist political economic formation.
But it is not our aim in this article to trace the roots of or analyse the causes of the crisis. Rather this article tries to trace the events and policy responses after the outbreak of the crisis which developed into the ruthless cuts on the working class. It also tries to give a representative picture of the movements of the working class, and trace some important trends, as well as analyse why the current extension of the crisis period into a period of austerity is only serving to further deepen the crisis.]
The unfolding of the Global Crisis which started in 2008 is marked by four distinct phases till date in which an overview of some economic indicators gives us a picture of the Crisis in its unfolding.
Also important is the reaction and policy changes of the states and ruling classes of the developed countries, and the unfolding response of the working class.
Phase 1: The Global Financial Meltdown, Credit Crunch and immediate Global Trade collapse
The beginning was the by now well known Financial meltdown.
Let us recall what happened. In a large number of developed countries (mainly the USA but also in European countries like Spain and Ireland), people were being enticed to “ buy” houses on loan . The institutions which were giving the loans were linked to the stock markets of the world by raising money through bonds, shares and other instruments of speculation. As the price of houses started increasing in these countries due to the frenzied buying, the speculation in the share markets in instruments and bonds related to these house loans assumed gigantic proportions. As the stock markets are all related, the whole world witnessed a “ rise” in wealth which was mainly due to the increase in prices of the shares and other instruments. It was generally forgotten that the real economy behind the housing boom consisted of millions of working class people, whose real earnings were not increasing. They had been abnormally “ enabled” to buy houses by the govt. steps of temporarily reducing interest rates of housing loans and by the soaring house prices.
At some point of time the interest rates started increasing again, and so the millions of poor “ house owners” started defaulting on their loan payments. Just as the speculation had started in frenzy, now the defaults became frenzy. As a result the house prices started falling. Automatically the prices of the shares and other instruments of speculation related to this bubble started dropping explosively. The so called “ wealth” which had accumulated in the stock markets deflated in a matter of days. Then started the wave of crashing and failing banks and financial institutions (remember Lehman Brothers, Fannie Mae and Freddie Mac and a host of other such institutions which went bankrupt because of the devastating “ loss of wealth” ).
So, to sum up:
The so called “ fictitious assets” of the financial sector (shares, funds etc), which all represent titles to capital, (and hence to extraction of surplus value in the form of interests, dividends or value appreciation) showed an unnatural explosive growth, which spiralled upwards in the world through speculation. At the time of the “ crash” the value of these assets came tumbling down. The resultant loss of Financial “ wealth” by means of totally devalued financial assets in 2008 last quarter is estimated to be about $50 trillion (equal to one year’ s GDP of the whole world).The point to note here (which will be relevant for the remaining discussion) is that apart from millions of ordinary investors who were ruined, a huge number of banks and financial institutions all over the world were also ruined by crippling losses. In technical terms, a large part of the finance capitalists (who are, and are becoming more and more, the controlling powers of the world) suffered huge losses.
Almost immediately the world credit markets showed a drying up of credit as banks, financial institutions and investors, hit hard by the meltdown suspended almost all financial activity .
Within a month of the beginning of the meltdown world trade collapsed .US imports declined by more than 18.6% and exports declined by 15.2%.World trade turnover turned negative in October 2008,reaching a record low 0f -33% in February 2009.
Phase 2:
From November 2008 started Phase2 with real production in almost the whole world declining rapidly which in economic terms was the beginning of a recession.
For the first quarter of 2009, the annualized rate of decline in GDP was 14.4% in Germany, 15.2% in Japan, 7.4% in the UK, 18% in Latvia, 9.8% in the Euro area and 21.5% for Mexico.
The picture in the US was as follows: US GDP declined by 6% in Q3 of 2008 and Q1 of 2009.
US Unemployment doubled to 10.1 %.
The effect on the working people, caused by closures and bankruptcies of companies, can be measured by the following data:
a) The crisis increased unemployment from 178 million (whole world) in end 2007 to 212 million in late 2009.
b) Amongst worst affected countries were:
i) Spain’ s rate was 20.05% in Q1 2010 up from 8.25% in 2007.This was the highest unemployment rate in Europe.(Almost trebled)
ii) Ireland had rates 6% in 2008, 11.9% in 2009 and 13.3% in 2010 (more than doubled)
iii) UK had 5.6% in 2008 which increased to 7.6% in 2009
The policy of the bourgeoisie and capitalist states of the developed countries in this period (till mid or end 2009):
The first stunned reaction of the states rapidly turned into a desperate rush to “ bail out” the bankrupt Financial Institutions from the crisis. This needs to be understood clearly. The banks and other financial institutions had taken trillions of dollars worth of people’ s money and had been speculating frenziedly with it (example the US housing bubble, but many more like it took place all around the world). The financial meltdown had overnight turned all these investments into worthless pieces of paper, and had brought the banks to their knees. Many of them faced bankruptcy. The very legitimacy of the imperialist world order was being questioned as was the legitimacy of the Financial and banking structure. (Remember that at that time processions were coming out proclaiming “ Capitalism is a failure” in most of the advanced countries and irate mobs were agitating in front of the banks and institutions.) So the capitalist states’ governments took the path of pumping in “ aid” – which in plain terms meant paying the trillions of dollars lost by the institutions in speculation from the Government coffers. This was proclaimed and strengthened later on as a “ stimulus” package but it is by now a published truth that the vast majority of the stimulus went as direct aid to the institutions(in the “ bailout” phase) or the recession-laden capitalists(in the later “ stimulus” packages). This once again clearly revealed that the banking and financial interests as also the capitalists control all the advanced capitalist governments and had them rushing to help them out in this time of “ crisis” .
Phase 3: The “ bailout” packages
But where did all this money come from? This question has a single line answer — the governments funded the bailout and the stimulus packages by borrowing from financial institutions, or “ printing” money at the state press, or borrowing from domestic and international investors through bonds etc. But the point to note is that this borrowing, in keeping with the very high magnitude of destruction of wealth of the finance sharks, was often a very high percent of the countries’ GDP.
This is measured in the second and fourth figures where we see the bailout and stimulus as percentage of GDP. A single glance at some of the main countries:–
Table 1: Bailout Pack
Country | Bailout as GDP% | Stimulus as GDP% | Total spending as GDP% |
USA | 7.31 | 34.57 | 41.88 |
UK | 19.32 | 1.15 | 20.47 |
Ireland | 48.25 | 0.27 | 48.52 |
France | 1.38 | 1.22 | 2.6 |
Spain | 5.22 | 5.31 | 10.53 |
Germany | 5.12 | 2.13 | 7.25 |
Italy | 0.69 | 5.87 | 6.56 |
Netherlands | 11.47 | 2.06 | 13.53 |
Portugal | 2.16 | 1.21 | 3.37 |
China | 0.18 | 46.65 | 46.83 |
Ireland | 2.16 | 1.21 | 3.37 |
The stimulus packages peaked in end 2009 but soon led to the third stage of the crisis.
Phase 4: The looming Debt Crisis
The borrowed spending of the European and US governments could not continue for long. Ultimately the very financial system and sharks who were controlling these borrowings found the debt burden of these countries too high for their purpose --- the looming spectre of debt defaults and sovereign bankruptcy made them raise the alarm. The economic indicator which shows why this alarm was raised is the sovereign (or public) debt to GDP ratio of the advanced countries. In roughly translated words it gives an indication as to how much of the coming year’ s production of a country has already been borrowed by it as debt.(Or, to put it more briefly, what part of a year the people of that country must work without wages to repay the debt burden incurred by its government) . A brief summary of some important countries is as follows:
Table 2: Public debt/GDP (%) and change in debt in 2010-2007 (%-points)
Country | 2006 | 2007 | 2008 | 2009 | 2010 | 2010 |
Germany | 67.6 | 64.9 | 66.3 | 73.4 | 75.7 | 10.8 |
France | 63.7 | 63.8 | 67.5 | 78.1 | 83 | 19.2 |
UK | 43.4 | 44.5 | 52.1 | 68.2 | 77.8 | 33.4 |
Ireland | 24.8 | 25 | 44.3 | 65.5 | 97.4 | 72.4 |
Greece | 106.1 | 105 | 110.3 | 126.8 | 140.2 | 35.2 |
Spain | 39.6 | 36.1 | 39.8 | 53.2 | 64.4 | 28.3 |
Portugal | 63.9 | 62.7 | 65.3 | 76.1 | 82.8 | 20 |
The Debt GDP ratios for the USA are shown below
2007 | 2008 | 2009 | 2010 | 2011 (estimated) |
64.4 | 69.4 | 84.2 | 93.2 | 102.6 |
– – – –
So, based on the above picture of looming debt crisis, the financial magnates and their hardliner political representatives started pushing for the next stage of the so called “ Crisis management” of the capitalists.
In a single line this next step was “ make the working class pay for the crisis” .
The logic was like this. As we have seen, the financial sharks were bailed out by the government by huge sums of money. This huge amount came from borrowings. Naturally this ‘ state’ debt would have to be repaid. But a Government repays its debt by ultimately staking a claim to a new part of the surplus of capitalist production which it extracts through indirect taxes on the working people and by reducing its welfare expenditure (which was financed from those same taxes). So in effect, when the government “ borrowed” to bail out the system, it was basically staking a claim to a new, additional surplus to be extracted from the working class in the coming years.
The debt crisis was just the signal for the Governments to start “ extracting” this surplus from the working class in the form of ruthless attacks on the working class. So we come to the fourth stage of the crisis which is continuing till date
Phase 5: Concerted attack on the working class
EU austerity drive country by country
07 /12/2010
IRISH REPUBLIC
The government asked for a multi-billion-euro rescue package from the EU and International Monetary Fund (IMF) on 21 November, to tackle a banking and budget crisis. It is expected to be worth about 85bn euros (£72bn; $114bn).
It is the second such euro-zone bail-out in six months, following the rescue arranged for Greece. In addition, the UK and Sweden have offered to lend bilaterally to the Republic to help shore up its economy.
Dublin resorted to the request, after much hesitation, because debt-laden Irish banks were struggling to borrow on financial markets. The state has already taken big stakes in the major banks and pledged to guarantee deposits. In September the government announced that the cost of bailing out the country’ s stricken banks had risen to 45bn euros, opening a huge hole in the government’ s finances. The increased cost will see the government run a budget deficit equivalent to 32% of GDP this year. It intends to bring that down to 2.9% by 2015.
The government has announced it will trim the deficit by 6bn euros in 2011 - the toughest budget in the nation’ s history. The grim details will be presented on 7 December.
It had already pledged to make 15bn euros of savings by 2014. But it then decided to bring 40% of those forward to 2011 to try to restore confidence after yields on 10-year bonds soared.
Government spending has been slashed by 4bn euros, with all public servants’ pay cut by at least 5% and social welfare reduced. Further austerity measures were announced on 24 November, including cutting 24,750 public sector jobs.
The government also plans: 2.8bn euros of savings in social welfare spending, a one-euro cut in the minimum wage to 7.65 euros an hour and a VAT rise from 21% to 22% in 2013, then to 24% in 2014. Child benefit has been cut by 16 euros a month, bringing the lower rate to 150 euros a month and the higher rate to 187 euros a month.
UK
The Conservative-Liberal Democrat coalition government has announced the biggest cuts in state spending since World War II.
Savings believed to amount to about £83bn (95bn euros, $131bn) are due to be made over four years.
The Chancellor, George Osborne, told parliament that 490,000 public sector jobs would be cut over four years because the country had “ run out of money” . Experts predict a similar number of job losses in the private sector.
Most Whitehall departments face budget cuts of 19% on average. The retirement age is to rise from 65 to 66 by 2020. Some incapacity benefits will be time-limited and other money will be clawed back through changes to tax credits and housing benefit.
FRANCE
France has announced plans to cut spending by 45bn euros (£39bn) over the next three years in order to meet the budget deficit target. President Nicolas Sarkozy has raised the retirement age from 60 to 62 and the full state pension age from 65 to 67.
GREECE
The Greek government has pledged to end its economic woes by making drastic spending cuts and boosting tax revenue in return for 110bn-euro (£95bn) bail-out from the EU and IMF.
It is now drawing on the bail-out money because a sharp downgrade of its sovereign debt rating has made its borrowing costs soar. Greece received a 20bn-euro tranche in May and 9bn euros in September. The next 9bn euros will be disbursed, the lenders say. They consider that Greece has made solid progress, despite missing its 2010 deficit target by an expected 1.5%.
The aim is to slash the budget deficit from 13.6% of GDP.
It will also curb its widespread early retirement schemes. The average retirement age is set to rise from 61.4 to 63.5.
Under the plan to slash the budget by 30bn euros (£26bn; $37bn) over three years Greece aims to: scrap bonus payments for public sector workers; freeze public sector salaries and pensions for at least three years; increase sales tax (VAT) from 19% to 23%.
NETHERLANDS
The centre-right coalition formed after months of negotiation on 8 October said it wanted to cut the budget by 18bn euros ($24bn; £15bn) by 2015.
SPAIN
The Spanish government has approved an austerity budget for 2011 which includes 8% spending cuts. Madrid has promised European counterparts to cut its deficit to 6% of its gross domestic product (GDP) next year, from 11.1% last year.
Government workers have had their pay cut by 5% since June, and salaries will be frozen for 2011.
The tax on tobacco is to rise 28%, and Madrid also plans to sell off 30% of the Spanish national lottery and a minority stake in the country’ s airport authority. Smaller savings include an end to a 2,500-euro cash payout for new mothers, known as “ baby cheques” . Madrid will also stop paying a monthly subsidy of 426 euros to the long-term unemployed.
Unemployment has more than doubled - to about 20% - since 2007. Among the youth, it is more than 40%.
ITALY
The Italian government has approved austerity measures worth 24bn euros for the years 2011-12. The cuts amount to about 1.6% of Italian GDP.
Italy aims to cut public sector pay and freeze new recruitment. Public sector pensions and local government spending are also being targeted. Funding to city and regional authorities is expected to be cut by more than 13bn euros. For the next three years there will be a freeze on public sector pay rises and cuts in public sector hiring, replacing only one employee for every five who leave.
Retirement will be delayed by up to six months for those who reach retirement age in 2011.
Provincial governments serving fewer than 220,000 inhabitants will be scrapped, as will several publicly funded think tanks.
GERMANY
The German government has proposed plans to cut the budget deficit by a record 80bn euro, or 3% of GDP, by 2014. The total deficit in 2009 was 3.1%, but is projected to grow to more than 5% this year.
The plans include a cut in subsidies to parents, 10,000 government job cuts over four years.
PORTUGAL
Portugal’ s borrowing costs have risen as investors appear to regard it as one of the weakest links in the euro-zone, like the Irish Republic and Greece.
The socialist government of Jose Socrates has announced a range of austerity measures aimed at cutting the deficit to 7.3% of GDP this year and 4.6% in 2011. In the austerity drive top earners in the public sector, will see a 5% pay cut. VAT will rise by 1%.
IN SUMMARY, this is how some of the European governments want to settle their accounts with the crisis:
Table 3: % of Bailout Spending to be clawed back from the Working Class
Country | Bailout Spending (Billion $) | To be clawed back from working class (Billion $ or €) | In a period of |
UK | 138.2 | 131 ($) | By 2014 |
Ireland | 16.9 | 15 (€) | By 2014 (now 2011) |
France | 34.3 | 45 (€) | By 2013 |
Portugal | 0.1 | ||
Spain | (83.7) * | 8% of govt. spending | In 2011 |
Italy | 2.5 | 24 (€) | In 2011-12 |
Germany | 119.9 | 80 (€) | By 2014 |
Netherlands | 98.7 | 24 ($) | By 2015 |
Greece | (17.7) * | 37 ($) | By 2013 |
*including private institute
– – – –
The fight back of the working class
As the above mentioned process of transferring the burden of the crisis onto the shoulders of the working class started, the working class of Europe, USA, UK and other advanced capitalist countries fought back in a spontaneous upsurge which started in late 2009 and lasted throughout 2010 up to the present. We will be looking at only two of the most important movements for lack of space.
The fight back of the working class
As the above mentioned process of transferring the burden of the crisis onto the shoulders of the working class started, the working class of Europe, USA, UK and other advanced capitalist countries fought back in a spontaneous upsurge which started in 2009 and lasted throughout 2010 up to the present. We will be looking at two of the most important movements.
Greece
For the events in Greece we have drawn on the articles of www.socialistworld.net. We present them below:
The first stirring against the austerity cuts was in February 2010. Hundreds of thousands of public sector workers took strike action in Greece, on Wednesday 10 February, in an impressive show of strength against the social democratic PASOK government’ s draconian social cuts package. An estimated 75% of public sector workers took part, rising to 90% amongst bigger concentrations of workers in the state sector.
24 February 2010: There was a comprehensive generalstrike, covering the whole of the public and private sectors of the economy. It was the second general strike in two weeks, preceded by a general strike of the public sector workers on February10, also characterized by massive participation and big rallies. The general strike involved around two and a half million workers and paralysed society, particularly the main cities, Athens and Salonica, where nothing moved. There was no media on 24 February or newspapers on 25 February.
11 March 2010: Greece was again brought to a standstill by the collective action of the organised working class. Workers from the public and private sector joined the third, and biggest, general strike in three weeks against the government’ s draconian austerity package. The action hit 90% of public sector workplaces and also up to 90% of large private sector concerns.
Greece’ s two union federations called the strike to protest at the additional €4.8 billion package of spending cuts and tax increases that the government announced 3 March, which was passed by parliament just days later. This was the third austerity package announced since the beginning of the year under the pressure of the EU directorate – they all add up to a total of about 20 billion euros. Protest rallies were called by the GSEE union and the civil servants’ union, ADEDY, and another organized by the Communist Party-led PAME trade union front.Athens saw a huge union demonstration of 80,000 to 100,000, one of the biggest street protests in recent years. Many more workers wanted to join the protests but could not attend because there was not a proper planning of the public transport system to assist workers join the demonstrations.
6 May 2010: workers across Greece took part in a huge general strike in angry opposition to a new ‘ austerity cuts package’ . The strike hit all public and private sectors and closed down airports, docks and stopped all public transport. In Athens over 200,000, possibly 300,000, marched in the biggest ever trade union protest.
29 June 2010: Millions of striking workers brought Greece to a standstill, as the national parliament prepared to debate legislation on ‘ reforms’ to the country’ s pension system and labour laws. This was fifth general strike over the last few months. Around 20,000 were on the main Athens union demonstration, with another 10,000 on the communist party linked unions’ demonstration. This was an important display of workers’ anger but smaller than the protest demonstrations last May when the demo in Athens was well over 200.000. Important strikes in various sectors are taking place almost continuously throughout Greece. Nearly everyday there are strikes and protests in Athens and other cities. Hospital workers, teachers, journalists, dock workers, bus, metro and rail workers, the workers in the Electrical Company, post office workers, local council workers, small shopkeepers, pensioners, even sections of the army, had all mobilized in the previous few weeks. Electricity workers occupied their bosses’ offices for 48 hours and 3,000 marched on parliament, protesting against the sale of their industry.
15 December 2010: Wednesday 15 December saw one of the biggest general strikes in Greece in recent years. The strike was 100% solid in the docks, shipyards and steel works, Coca Cola company and many other sectors, while it was close to 90% in the energy sector, Telecoms, the post, the water company, the banking sector etc. The rail system (excluding Athens Metro) came to a complete standstill. The number of sectors which responded to the strike call is too long to list. Even judges went on strike. Close to 100,000 demonstrated in Athens and tens of thousands protested in other cities despite a very rainy day and cold weather.
There was ferment in the education sector, with universities under occupation. A national meeting of the heads of the universities opposed proposals concerning ‘ education reform’ announced by the education minister. At the same time, meetings between lecturers and left wing students had taken place, for the first time ever, with the aim of co-ordinated struggles of the whole education sector.
The mass media was in turmoil, with the most important strike movement for 30 years in this sector taking place. Apart from the general strike on Wednesday 15 December, journalists and other workers in the mass media went on strike on Friday and Saturday.
Third wave of austerity attacks: Provoking the industrial action upsurge is the third wave of attack by the government and the EU and IMF since last May, when the memorandum between the ‘ Triad’ was signed. The massive reduction of the living standards of Greek workers, by 20% to 30 %, over the past months, and the extension of this attack to the private sector (attacks having begun with the public sector) is now followed by the destruction of collective bargaining and the speeding up of privatisations of all that is not privatised in the public utility sector (accompanied with new attacks against workers’ wages in this sector). The, in effect, abolishing of collective bargaining, hits every worker in Greece and in all sectors.
Huge anger: Anger over these new attacks is enormous. People in the streets interviewed on national state TV speak in the strongest condemnatory terms about the “ 300 liars and thieves” (i.e. the 300 members of the Greek parliament). The high ranking officers of the PASOK government and the PASOK party leadership are no more free to walk in the streets of the main cities, or go to traditional local tavernas in their parliamentary constituencies. They are not only shouted at and spat at, but even physically attacked by passers by who recognise them. On Wednesday, one of the leaders of the right wing opposition party, New Democracy (ND), who served in the previous government (the ND was in government from 2004 to 2009 followed by PASOK the government) who made the mistake of leaving the parliament building and walking to an expensive restaurant, was beaten up by workers, who shouted, “ Thieves, shame on you!” . The New Democracy MP only narrowly escaped severe injuries when a number of cool headed demonstrators “ protected” him from the rage of others, realising that the attack on the MP could harm the movement.
Finally, revolts against leadership start ... ...
21 January 2011: As the first lines of striking bus drivers’ contingents entered Syntagma Square, the main square in Athens city, a cry shook the air: “ Thieves... thieves... thieves...” It was repeated innumerable times! Hundreds of hands rose and pointed to the national parliament building at the opposite side of the square: “ This is a brothel, not a parliament - Fire to the brothel!”
Two and a half thousand bus drivers stood in front of the parliament, at just 2-3 meters from the riot police. The riot police were rather relaxed ... and were sympathetic to the strikers. The working class movement has no need of “ clashing for the sake of clashing” with the police, contrary to the methods of many anarchist groups ... (which are a regular feature in Greek demonstrations).
Slogans were chanted, very loudly and vividly, such as: “ Papakonstantinou, do as a favour... go to the window, and jump!” Papakonstantinou, the Greek minister of ‘ national economy’ , and a “ successful businessman” ... is one of the most hated people in Greece. ... Repas, the minister for transport, is equally, if not more detested by the masses: “ Repas, you too, do as a favour... resign and f*** yourself off!” protesters shout.
The bus drivers, the metro workers and the tram and trolley workers are on continuous strikes, nearly on a daily basis, since the beginning of December 2010. It is a continuous struggle that went all the way through the Christmas and New Years’ holidays. The government is pushing public transport on the “ fast track” to privatisation and is raising the cost of tickets on public transport in Athens and other cities (where public transport is private run already) by around 40%.
During the protest on Syntagma Square some workers began to express the idea that they should stay and occupy the square but then the union leadership called on the workers to move away. “ Go where?” Workers asked, puzzled. They had only been in Syntagma Square for 15 – 20 minutes. There was an immediate reaction against the union leaders by some of the most militant workers: “ We must not move! We must stay here, all day, all night!” they said. They started to discuss with other workers and argue that the demonstration should not leave Syntagma Square. The trade union leaders hesitated for a few minutes. They realised that the mood was against leaving. So the bus union leaders began to mix with the workers and try to convince them that the demonstration should proceed. “ There is no decision by our general meeting to stay here” they argued (but bus workers voted to occupy GSEE (TUC) offices). This was only half true and was an argument deployed by the bus union leaders to divide the workers. The workers’ proposal to stay in Syntagma Square was correct and had the support of the huge majority of workers present. The last general meeting of bus workers had voted for the demonstration to pass by the parliament building and to finish at the offices of the GSEE (the General Confederation of Greek Workers – the Greek TUC). This was not to offer fraternal greetings to the national union leadership but to occupy the GSEE offices in protest at the union leadership’ s insufficient support to their struggle!
The act of the transport workers’ occupying Syntagma Square and surrounding the parliament (and, as a next step, inviting other workers to join them), would act like a catalyst in the present situation. But this was exactly what the bus workers’ leadership was worried about on 13 January. They were determined to make the workers’ demonstration move out of the square! Tensions rose between the union leadership and the workers. Many workers become demoralised: “ How can the struggle develop with these people at the top?” they asked.
In the end, the union leaders decided to move out of the square with around 100 followers! The rest stayed in Syntagma Square but confused and disappointed, the big majority began to disperse. Finally, another couple of hundred followed the bus union leaders, concluding that, after all, occupying the GSEE’ s central offices was a worthy idea.
The few hundred workers who followed the union banner soon arrived at Omonia Square, the second best-known square in Athens.... The GSEE central offices are off the right hand side of Omonia Square, less than 10 minutes walk away. But the union leaders did not turn right but turned left!
Workers could not believe their eyes! Workers ran to the front of the demonstration, to block their way. “ Where are you going? You said we are going to GSEE!” No reply. Union bureaucrats merely pushed through to escape the anger of workers. An incredible scene developed. Workers formed two rows of human chains to prevent the union leaders from leaving. A struggle developed. “ If you want to go away, go, but leave the banner with us!” workers demanded of the union leaders. But the union leadership was determined to bring the demonstration to an end and they would not give the banner away! After some pushing and shoving, the union leaders managed to keep hold of the banner and to escape from the grip of the workers. About 100 hundred workers managed to maintain ranks and not to disperse. Their contingent continued to shout at the union leadership as it disappeared from the square: “ Traitors... traitors... traitors...”
Some observations regarding the events in Greece:
The movement was, at least initially, a united movement by all the Trade Unions of right, left and far left. It is a distinctive feature of this united Trade Union struggle that the mobilization of workers increased in clear steps at every stage.
However it is also clear that the right wing and the revisionist wing of the Trade Unions were clearly not in favour of a radical repeal of the whole policies of ruthless attack of the ruling class. As such they kept the movement limited to single day General strikes, even which possibly would not have taken place were it not for the intense hatred and anger of the rank and file workers.
As a result of this, with the gradual widening and intensification of the movement, the proletariat has started coming into conflict with the sold-out leaders of the TU-s. It appears that the situation is favourable for both intensification of the resistance as well as sharpening of the conflict with the leadership. In fact the first cannot happen without the second developing simultaneously.
However the most remarkable thing in the situation is that the Greek ruling classes are not in any position to rein in the attacks. Quite apart from their ideological stances (which openly advocates ruthless attacks on the workers as the only way out of the crisis), the objective development of the crisis worldwide and particularly in the EU and Greece leaves no way out for the ruling classes. The financial magnates and sharks who gave Greece its huge loans are now baying for the blood of the Greek proletariat. They want to recover their loans with crippling interest, and so are forcing Greece (its rulers) into clawing back the loan and interest repayments from the working class by throwing millions into unemployment, reducing wages and cutting privileges for the rest. However as this process of cuts deepens it is itself pushing the possibility of a recovery further and further away as more cuts means less consumption of the already starving Greek proletariat, further deepening the recession. So the attacks will go on increasing in savagery. The deprivation of the proletariat will deepen in leaps and bounds. This itself will rudely push the proletariat forward in its current movement.
The consciousness of the proletariat is not at the stage where it has arrived at the conclusion that the whole system is unviable and needs to be changed. The very picture of an alternative system is weak, extremely weak in the minds of the proletariat. But the inherent logic of the economic events of the crisis is preparing the objective grounds for questioning the very viability of the world imperialist system. Further; the very progress of the struggle seems to be demanding more and more the elaboration of an alternative system which can see an end to the crisis once and for all. Without this, in spite of the heroic efforts of the proletariat, there is possibility of the despair of defeat setting in.
What happened in France?
The immediate cause of the movement:
The immediate cause of the French workers’ movement was the Pension “ reform” pronounced by the Sarkozy Government.
Below we give excerpts from an informative article by David Murray [http://www.socialistproject.ca/bullet/441.php]. The conclusions drawn are of the author. The bold and italics have been added by us to highlight certain points which we thought important:–
“ The immediate aim of the reform proposed by President Nicolas Sarkozy and his government seemed quite clear. It was to raise the minimum retirement age from 60 to 62 and the age for retiring with a full pension from 65 to 67, with corresponding increases in the number of years of contribution required. But behind this immediate aim lies the ongoing objective of slowly undermining the public pension system, with the aim of pushing workers toward subscribing to private pension plans, to the greater profit of the pension funds. Private funds have never been able to develop in France to the extent that they have elsewhere.
This is not the first pension reform: previous ones in 1993 and 2003 lengthened the periods of contribution for the private then the public sector changed the method of calculating and indexed pensions on the evolution of prices rather than wages. Since 1993 the value of a pension has dropped by around 20 per cent. A million pensioners live below the poverty line and 50 per cent receive less than 1000 euros a month. (The minimum wage in France is currently 1337.70 euros a month.) Nor will this reform be the last. A further review of pensions will take place in 2013, conveniently after the next presidential elections.
The progress of the movement:
The movement against the reform began as soon as it was clear that there was going to be one, even before the exact details were published. The first one-day strike was on March 23, 2010, followed by two others on May 27 and June 24. After the summer break the movement took off again and indeed intensified, with 2.5 million demonstrators in the streets on September 7, reaching its highest point in mid-October, with days of action that put up to 3.5 million people onto the streets. And since they were not all the same people, the newspaper Le Monde has calculated that up to 8 million people were involved in the mobilizations at some point.
The days of action were called by the Intersyndicale, a coordinating committee of the French trade union confederations, all of which were represented on it, from the biggest to the smallest, from the most moderate to the most radical. The Intersyndicale continued to function throughout the eight months of the movement and had the undisputed authority to determine the timing of the big national days of action or one-day strikes.
This was not the first time that such an Intersyndicale had functioned. It was already the case, partially, in the movement over pension reform in 2003 (although the moderate Confédération française démocratique du travail – CFDT – French Democratic Confederation of Labour pulled out early after an agreement with the government and the radical Solidaires federation was excluded) and again in the movement in 2006 that defeated the CPE (an attempt to introduce a cut-rate minimum wage for young workers entering the job market). Very significantly, given the nature of the movement in 2006, the Intersyndicale was broadened out to include the student and school student unions. The Intersyndicale functioned again in the one-day strikes against austerity at the beginning of 2009.
...The backbone of the movement was the series of one-day strikes and demonstrations that built up from 800,000 demonstrators in March to 3.5 million on October. But around that backbone many other things were happening. On each national day of action many workers not only marched but went on strike. Some sectors could be counted on to take strike action every time, rail workers and teachers among others. The decision to have some demonstrations on a Saturday, the first one on October 2, was not well received by many militants. But it made possible the participation of many workers, especially in the private sector, who supported the movement but were not ready to go on strike, in many cases because it would have cost them their job. On top of the national days of action there were many local initiatives in areas that were bastions of the movement, above all but not only, in the area around Marseilles. And at a local level, the militants were often well to the left of the national union leadership, and the call was not to renegotiate the reform but for it to be withdrawn.
...The movement reached its high point in the second half of October.Following a day of action on October 12 many sectors remained on strike, either continuously or in a rolling fashion, and this continued after the day of action on October 19. The focus was now on the most militant actions. Key sectors engaged in ongoing strikes. All the oil refineries in France were out, as were port workers and lorry drivers (who in France are largely wage earners rather than being self-employed). Some of these sectors had their own specific motives to strike – plans for the privatization of ports, danger of closure and delocalisation of refineries. Another key factor was the massive mobilization in the movement of school students, who struck and blockaded their high schools, and to a lesser extent, university students.
At this stage of the movement the strikes were accompanied by forms of direct action. The oil refineries were not just on strike but blockaded, as were the ports. Dozens of tankers blocked off Marseille. There were blockades of motorways, railway lines and industrial zones. Financial support for the strikers poured in.
At the height of the movement, a poll taken on October 20-21 (Harris-Marianne) showed some remarkable results: 69 per cent approved of the strikes and demonstrations (92 per cent among those on the left); 52 per cent supported public transport strikes (77 per cent on the left); 46 per cent approved of blocking the refineries (70 per cent on the left) .... The combination of forms of struggle, from mass demonstrations to more militant strikes and direct action, not only gave the movement its breadth and depth. It also made it possible to escape from the “ all or nothing” trap – either a general strike or demoralisation and demobilization. Trade Unions’ Role:
The central role played by the trade unions is no accident. In the present period, they have a unique authority. Whatever may be thought of their errors, their failures, their weaknesses and their limits, individually and collectively, they are considered by millions of workers as instruments of defence. No political party has the ability to put millions of people into the streets......... This central role of the unions has something to do with the traditions of the French workers’ movement, but not only that. The unions played a central role during the general strikes of 1936 and 1968 and in many other movements.
It was the unity of the trade unions, which was not always the case in the past – far from it – that made possible a movement on this scale. None of them could have done it on their own...... But the unity that made the movement possible inevitably imposed some limits on it. The Intersyndicale was never going to call a full-scale, ongoing general strike to defeat the reform. Not only the CFDT and the smaller moderate unions, but also the CGT (as was already shown clearly in 2003) were not ready for that. ...Only the Solidaires federation consistently defended such a line but it was very much in a minority. Over and above the question of the general strike, the Intersyndicale as a whole did not take a position of calling for the withdrawal of the reform; Intersyndicale’ s main components proclaimed their willingness to negotiate, complaining of not being consulted......”
Finally, we reprint below some interesting comments drawn in the same article – “ Not Victorious, Not Defeated”
The movement was in the end not victorious. The government camped on its position, the law went through, the police broke the blockades of the refineries and imported oil from other countries. The movement began to lose impetus toward the end of October. But in the first place what happened was not inevitable.
...The strength of the movement is an indication of profound dissatisfaction with Sarkozy and his government. It crystallized around the issue of pensions, about which people have strong feelings. They think, entirely reasonably, that they have a right to retire on a decent pension at an age when they can still enjoy their retirement. But there are also other factors at work.There is a widespread feeling that this is one neoliberal measure too far, that after this there will be others, and that it has to stop somewhere. There is a questioning of what sort of society this is leading to. This is true even among young people. Probably many of the school students who demonstrated did not understand the fine details of the law on pensions. But they know they will have difficulty finding any kind of decent job, they wonder why people will have to work until they are 67 when there is so much youth unemployment, and in a more diffuse way they wonder what kind of society they are growing up into. There is also a widespread feeling, in France as in other countries, that it is ordinary people, workers, the poor, young people, who are being made to pay for the crisis, while bankers and brokers continue to rake in the money.
There has been resistance to neoliberalism in other countries ... across Europe. But it is certainly in France that resistance has been greatest over a long period. ...Whatever the precise developments over the coming months, the forces that were brought into action over the last eight months will continue to manifest themselves and the French working class will continue to be in the vanguard of resistance to neoliberalism and austerity in Europe.”
Some Comments on the French Movement:
Similar to our comments on Greece, the French proletariat is facing the contradiction of a surrendering TU leadership.
However it is clear that independent initiative is also developing amongst the proletariat. Another important difference from the Greek case is that there are already TU formations in France which are calling for all-out fight-back — Solidaire, FSU and FO.
As in other countries like Greece it is evident that the working class is yet to decide that there is no way out in Capitalism. This is obvious given the international defeat of the first offensive of the International Socialist Movement and the lack of a genuine Communist party or International.
In this situation the workers are battling it out on their own initiative and it stands to the credit of the proletariat of France (as well as Greece and other European countries) that they have started a united, clearly political struggle against the ruling classes. For, Political struggle it is as it unites the vast majority of the class in battling the ruthless onslaught of the bourgeoisie. It was (and is) a true and classic case of class battling class.
However as the attacks and further resistance movements gain momentum, it goes without saying that the question of an alternative to Imperialism – capitalism will have to be dealt with by the working class and its vanguard.
A few words regarding the coming days:
1. To the reader it might appear that the crisis is pushing the world capitalist imperialist system to collapse. But just consider the following facts – even during the worst days of the crisis (2008-2009) the richest section of the finance capitalists got richer. Actually, the crisis confirmed the classical prognosis that every crisis leads to a further concentration of capital amongst an even smaller fraction of society and impoverishment on a grander scale of the remainder of society (including an ever-increasing section of erstwhile capitalists).
2. So it is foolish to expect that as the crisis is becoming deeper and deeper the world imperialist system will collapse of its own. Unless the working class takes over the reigns of society, the capitalists will get out of any crisis on the death, blood and back breaking toil and misery of millions of proletarians.
3. But what is important is that the capitalists are unable to rule in the old way any longer. What does this mean? In the present scenario this means a number of things, all of which we will not discuss here. But one of the most important changes is the dismantling of the so called “ welfare state” . Actually, from the middle of the last century the imperialists had followed a policy of “ welfare” at home and exploitation in the third world. Did this mean that there was no capitalist exploitation in the advanced countries? No, exploitation was there as it is bound to be there in any capitalist country. But its effects were dulled by numerous welfare measures, like affordable healthcare, early retirement and state sponsored pensions, unemployment dole and etc. As a result there was a sort of “ Social Contract” between the bourgeoisie and the proletariat of these countries — class battles were long forgotten and declared by bourgeois propaganda to be relics of the past! It is this “ Social Contract” that the bourgeoisie are demolishing now! Various sections of the press are already dubbing this as dismantling of the welfare state.
4. It is this breakdown of the “ Social Contract” which is of immense significance. As we have seen, this has already resulted in the outbreak of class battles. And naturally, now that the proletariat has a lot to lose, is in fact getting attacked every day, so the objective requirement is the re emergence of class battles. As a necessary corollary, the revisionist and pro establishment unions and parties, which held sway over the working class for almost 70 years, will now of necessity face challenges as the class is faced with their impotence in the face of attacks. In other words, the objective situation is calling for formation of new class organizations which are of revolutionary nature.
5. It is in this overall context that we must reiterate that the capitalists’ every step is taking them deeper and deeper into crisis. As cuts increase and living standards plummet, the prospects of an industrial revival recede further and further away. This means even lower taxes for the Governments which will thus be in no position to come out of the Debt crisis without further drastic cuts. We assert once again that in this whole process the top few rich will get richer so it will not be a crisis for them. But all dreams or plans of re establishing the “ Social contract” with the proletariat will be unthinkable. In fact capitalism will increasingly have to continue ruling on the bones, blood and bodies of the proletariat.
6. It is based on this analysis that we can say that we are witnessing the beginning of an era of heightened class conflicts. The class battles which we have just described are evidence of this fact.
So to sum up for the moment, the Crisis is far from over; in fact it is just beginning to make its effects felt. And with each successive step taken by the Imperialist states they are getting deeper into it. And we are now seeing a classical revival of working class battles, albeit muzzled ultimately by the betrayal of the leaders. We look forward to the forthcoming class battles by our brothers in the advanced Countries and the way they settle accounts with the revisionist and reactionary betrayer leaders in the TU-s and ultimately the parties.
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