Europe's peoples have had enough


Europe is revolting. In past weeks, every day in one city or another across the continent, we have seen strikes and protests in one form or another.

This week saw a general strike in Greece, massive protests by the indignados in Spain, public transport strikes in Portugal - and Spain - and protests and strikes by aluminium, steel and public-sector workers in Italy.

Today mass protests will erupt again in Portugal as the indignados movement that brought out a million into the streets of the country on September 15 - the same day there was another massive turnout into the plazas in Spain - joins action called by the country's largest trade union, CGTP.

And it's not just in the continent's south. On Sunday mass demonstrations are expected in France, calling for a referendum over the EU Fiscal Compact, better known as the "permanent austerity" treaty.

The focus of popular anger is "Europe's austerity madness" as Paul Krugman puts it in his latest column in the New York Times.

But it also reflects a wider rejection of a political elite that is rolling back basic democratic rights, from protections at work to welfare support and gains for women and minority groups, privatising as well as slashing public services.

A slew of economic data this week confirmed what is now patently obvious to anybody but the criminally insane and economists - austerity is not working. Eurozone business confidence fell to a three-year low and a number of other indicators across the continent pointed towards recession.

Most damning for the architects of austerity, lending is shrinking and unemployment is rising in Germany, which was until now a mainstay for growth in the 17-nation economic and monetary bloc.
The eurozone economy stagnated in the first three months of the year and contracted by 0.2 per cent in the April-June period. Economists now expect another economic contraction in the third quarter. The European Central Bank meanwhile released data that showed lending to households and companies fell by more than expected in August.

Yet the madness continues. This week Spain, Greece and France pushed ahead with fresh programmes of spending cuts.

In Greece, at least €11.5 billion (£9.1bn) will be axed from the national budget. In Spain there will be another €20bn of cuts. In France President Francois Hollande's government is going for a €30bn cuts package. What do these huge numbers mean in practice?

A cuts package nearing agreement by the Greek government will see wage cuts, a rise in the retirement age from 65 to 67 years, cutbacks to pensions - lengthening the contribution period to get the minimum pension - cuts in benefits for the disabled and the sick, cuts to health benefits, cuts to unemployment benefit for workers temporarily laid off in the construction industry, in hotels and in other sectors, new cuts to spending on hospitals and an average 12% reduction in the salaries of soldiers, police officers and judges.

In Spain the "depression budget," as Socialist economy spokeswoman Inmaculada Rodriguez Pinero describes it, will see the wages of millions of public-sector workers frozen for the third year in a row and pensions cut in real terms.

And there'll be no relief for collapsing health services, schools and social services. Culture will also take a massive hit, with cuts hurting renowned institutions such as the Prado and Reina Sofia museums, another self-defeating move that will no doubt hit tourism.

Already over a million Spaniards are queuing at the doors of charities for food handouts and other aid. That's a tripling since 2007, according to Caritas. And it is not just in the south. In France poverty is on the rise - particularly among the young, including students.

The health effects of mounting misery are being felt too. A quarter of Portuguese are now suffering from depression, a new study has found.

The perversity of the austerity, which is destroying the capacity and desire of 300 million-odd people to spend, was highlighted yet again this week. Despite all the cuts it turns out that Spain's spending is actually set to go up. That's because of a soaring social security bill to pay benefits to the unemployed and interest-rate payments on sovereign debt that have been driven once again by international speculators.

These wonks are right in just one respect - that without growth a country's finances will go from bad to worse. This is something that the new mechanism to "save" struggling eurozone states, the €500bn European Stability Mechanism that forms part of the EU Fiscal Compact, will not fix. On the contrary. It will bury them deeper into the ground. The fund will swallow up about a quarter of the cuts Spain has just pushed through in its own budget in order to save itself, and around a third of those planned in Portugal.

The reality is the latest round of EU centralising moves, from banking union to the Fiscal Compact that Hollande wants ratified in parliament next month - even at the cost of splitting his Socialist Party - are based on a huge lie: that greater integration and renouncing national sovereignty are essential to fix the continent's financial and economic problems.

Spain, Italy, Portugal and Greece don't need an international rescue. Their own ruling classes have more than enough to bail their nations out. In Italy, private wealth stands at €8.6 trillion according to the Bank of Italy - more than four times the country's public debt mountain of around €2tn. A moderate tax on the top 1 per cent could bring up to €15bn annually into the state coffers. And then there's the hundreds of billions in dodged taxes, facilitated by tax amnesties and tax havens that cash-strapped governments across the currency bloc like to talk about but never shut down.

Even Portugal, the poorest of EU nations, can dig itself out of its own hole if it wishes. The government caused outrage by proposals to raid the incomes of workers through a massive rise in social security contributions, a measure now withdrawn after the mass protests earlier in the month.
The government needs to save €4.9bn in 2013. The CGTP trade union confederation knows how it could plug that hole and indeed beat that target. Its budget proposals unveiled last week would raise €6bn - a new 0.25 per cent tax on financial transactions (€2bn), a 10 per cent surcharge on dividends targeting the largest shareholders (€1.7bn), a higher 33.33 per cent rate of corporation tax for larger companies with turnover above €1.2 million to be implemented in a progressive fashion (€1.1bn) and a plan to combat fraud and evasion through deploying more inspectors, setting targets to reduce the black economy and by broadening the tax base (€1.2bn).

But that plan would of course mean Portugal's 1 per cent paying their dues. There are dozens of other costed proposals out there that could tackle Europe's debt burden and provide plenty of funding for growth, jobs and public services without raiding the pockets of working people.

Take Italy again. International missions like Afghanistan are conducted in the name of peace and humanity but are instead resulting in death and destruction. Withdrawing from these commitments would not only save lives abroad but save Italians a tidy €616m according to campaign group Sbilanciamoci!

But these solutions don't fit the priorities of the current crop of EU leaders. Their number-one goal is to protect the billionaires, the corporations and the banks. And so amid penury for ordinary people, plans roll on for writing blank cheques - including the €100bn bailout of Spain's reckless bankers, underwritten by millions of ordinary Spaniards and their European brothers and sisters.

Opinion polls across the EU show an ever-growing popular rejection of European governments and their neoliberal policies. In Spain almost three-quarters of Spaniards disapprove of Mariano Rajoy's handling of the economy.

More serious for euro supporters, a majority in a nation that once was a bastion of support for the EU now think the single currency is bad for the economy. And if it can't deliver on that, what's the point of it at all?

A question no doubt on the minds of a great many people in a Europe now in open revolt.

Tom Gill blogs here . This article first appeared in The Morning Star.