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Vol. 76/No. 21      May 28, 2012

Greek rulers fail to form gov’t,
Europe crisis deepens
(front page)
The economic and political structures of Europe are wobbling as the Greek rulers fail to put together a government following May 6 national elections.

In the vote, the Syriza left bloc and the Golden Dawn ultrarightist party were the main beneficiaries of the deep anger against the austerity measures being imposed on working people by the capitalist rulers in Greece and the German-led European Union.

The political appeal of both groups is a radical program that combines nationalist opposition to foreign bankers and speculators with populist calls for an end to corruption and defense of the little person. Each party draws most of its support from young people, especially among the over 50 percent of youth who are unemployed.

Syriza, which is a heterogeneous coalition of leftist groups, has pledged to pull Greece out of the EU-imposed austerity, place banks under state control, call a moratorium on paying the country’s debt, and hire thousands of new public sector workers.

Since the election Syriza has refused to join a “unity” government, and its public support has grown, including from many who had voted for the Communist Party and for Golden Dawn. A new poll for Alpha TV predicts that Syriza would come in first in the new election projected for June 17, polling 23 percent of the vote and winning 120 of the 300 seats in parliament.

While losing some support to Syriza, the Golden Dawn continues to poll nearly 6 percent. “We will not quit until we free Greece from the bankers’ occupation,” party leader Nikolaos Michaloliakos told the American Free Press. “Greece belongs to the Greek people, not to the globalists.”

The group has also won support for anti-immigrant scapegoating and for projecting a “get things done” image with bands of young toughs that mobilize to “fight crime.”

There is no Marxist communist party in Greece—or anywhere else in Europe—that projects and organizes along a working class road to political power.

On May 11 German Foreign Minister Guido Westerwelle stated that Greece must proceed with the cuts agreed upon by the previous government, a sweeping 5 percent of the country’s gross domestic product, or face the prospect of not getting any more bailout money.

According to the New York Times, “Greece has about 2 billion euros [$2.5 billion] in cash left, which should allow the government to function until late July or August. Without the next bailout tranche of about 31 billion euros [$39.4 billion], the country would quickly default and eventually be forced out of the currency union.”

“Greek depositors withdrew $898 million from the country’s banks on Monday,” the Wall Street Journal reported May 15, “fueling fears of a bank run amid the growing political disarray.”

Spreading depression conditions

“Industrial production in the 17 countries that use the euro fell unexpectedly in March, leaving little doubt the region contracted for a second straight quarter in the first three months of the year and returned to recession,” the Journal reported May 14 from figures released by Eurostat, a European Union agency.

The contraction hit France and Spain among other countries, “highlighting that weakness has spread across the larger economies,” added the Journal.

Currently, Spain is the country most immediately hit by European, U.S. and other capitalists’ concerns over a disorderly Greek exit from the eurozone.

Last week, in an effort to reassure Spain’s lenders, the conservative government of Prime Minister Mariano Rajoy announced the partial nationalization of Bankia, the country’s fourth largest lender, hit by a real estate bubble that burst four years ago. Two days later it forced Spanish banks to take on an extra $38.1 billion of capital as a cushion against loans going bad.

Tens of thousands demonstrated May 12 across Spain against the austerity policies of Rajoy’s government. Unemployment stands at almost 25 percent, the highest among the eurozone countries, and at 50 percent for those under the age of 25.

These figures would be worse without hundreds of thousands of Latin American workers lured to Spain during the last decade by the then booming construction industry now going back home, and without many Spanish-born youth heading north in search of jobs in stronger economies like Germany.

The growing European crisis is hitting France as well, following the May 6 election of a new Socialist government headed by François Hollande.

Many large French companies, like the automaker PSA Peugeot-Citroën and the airline Air France-KLM, are reportedly preparing to announce large layoffs in the coming weeks and months.

On May 12 Crédit Agricole, France’s third-largest bank by market value, announced it had lost almost $1.3 billion through its Greek unit Emporiki. French banks are among the most exposed to the Greek crisis. Last year France’s main banks lost close to $16.5 billion through massive lending in Greece.
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