Vol. 76/No. 37      October 15, 2012

In Greece, which has been in recession over the last five years, working people face some of the sharpest attacks. In exchange for loans from the so-called troika—the European Central Bank, European Commission and International Monetary Fund—the Greek government has imposed several rounds of cuts in government spending.

Since 2009 the country’s gross domestic product has dropped 25 percent. Wages of public workers have declined by up to 40 percent over the past two years, reported Agence France-Presse. And the official unemployment rate for youth under 25 has risen to 55 percent—up 11 percent from a year ago—the highest in the European Union.

The latest figures indicate that nearly all 17 countries of the eurozone trade and currency bloc are officially in recession, as defined by two consecutive quarters of declining gross domestic product. According to preliminary reports, this likely includes Germany, which has relatively low unemployment levels but faces declining exports.

At the heart of the deepening crisis in Europe is a slowdown in production, trade and employment across the globe. The World Trade Organization expects trade worldwide to expand by only 2.5 percent this year, down from 5 percent last year and 14 percent in 2010.

Unable to do anything to reverse the economic slowdown, the rulers in Europe are moving to postpone the related crisis building up in banking and government finance.

The European Central Bank has lowered its interest rate to close to zero and poured more than $1 trillion into bailing out banks and governments to stave off banking collapses and government defaults that threaten to tear the eurozone apart. The scheme, like moves over the last couple years by the U.S. Federal Reserve, amounts to printing money in hopes of spurring economic activity, as well as lowering the currency’s relative value to make exports from eurozone countries cheaper and more competitive on the world market. And like the Fed’s scheme, it is “having little impact,” notes the Wall Street Journal.

In early September European Central Bank President Mario Draghi announced that the bank will begin buying unlimited amounts of short-term government bonds from heavily indebted countries, such as Spain and Italy, to allow them to continue making payments to holders of government debt. The deals are contingent on agreement to impose more rounds of “austerity” measures under supervision of the troika.

One-day strike in Greece

Syriza party leader Alexis Tsipras addressed the Athens rally. According to the Journal, a poll released in early September shows that if elections were held today Syriza—the Coalition of the Radical Left—would win. Golden Dawn, the ultrarightist party that has been organizing physical assaults against immigrants would be the third largest party with 12 percent of the vote—up from 6.9 percent in the June election—surpassing the Socialist Party.

The day after the protest the Greek cabinet approved its latest round of austerity measures. The $17.4 billion package of cuts and tax increases targets pensions, wages and jobs. It includes raising the retirement age to 67 from 65, cutting pensions and slashing 15,000 public sector jobs as part of a plan to cut 150,000 government workers by 2015. The plan must be approved by the troika before the Greek parliament can even discuss it.

In Spain, tens of thousands rallied in Madrid Sept. 15 in response to the government’s latest budget plan to cut jobs and benefits. The action comes four days after a protest in Barcelona of some 1.5 million. Spain’s official unemployment rate is nearly 25 percent with more than half of workers under 25 jobless.

In Portugal, 500,000 people joined nationwide protests Sept. 15, according to organizers, to oppose a government plan that includes raising workers’ social security taxes by the equivalent of one month’s wages.

Bobbis Misailides from Athens, Greece, contributed to this article.  
 
 
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