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A socialist newsweekly published in the interests of working people
Vol. 77/No. 8      March 4, 2013


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(front page)
Crisis grinds on workers as
Europe production declines
Gov’t ‘austerity’ hits hardest in Greece,

Louisa Gouliamaki/AFP/Getty
Seamen at Greece’s Piraeus port Feb. 6, day that riot police forced end to strike. Workers in Greece are among hardest hit as propertied rulers in Europe make workers pay for their crisis.

Manufacturing output is declining throughout Europe, making any economic recovery or improvement in the conditions of working people there very unlikely in the near term.

In the last quarter of 2012, gross domestic product, a measure of goods and services, declined throughout the eurozone at its fastest pace in four years, affecting all 17 nations in the currency and trade bloc.

World trade slowed last year with major export-driven economies like Japan and Germany shipping less than in 2011. Imports to many countries of Europe from the U.S. also fell in 2012, a sign of shrinking markets on the continent.

In the less developed and less productive countries of Europe, capitalists’ profits are under enormous pressure and their governments mired in debt. This is spurring a multifront assault on the living standards of working people, as the propertied rulers struggle to compete with capitalists of other nations while imposing fiscal austerity to stave off a collapse of government credit.

Workers in Greece are among the hardest hit.

“I earn less than 500 euros [$667] a month as a result of the government’s cut in the minimum wage last year,” Dimitris Georgiou, 28, a worker in the cargo section of Athens International Airport, told the Militant. “I am still living with my retired parents and help out with the expenses, since they can’t make a living with their low pensions.”

“We used to be able to go out to a restaurant, to do things, to have some entertainment once in a while,” said Nikos Gkiolias, a steelworker and former striker at the Elliniki Halivourgia plant in Aspropyrgos outside Athens. “All that is over. You work to eat. I’m not even discussing the situation of the unemployed here.”

Basic necessities such as heating and health care have become out of reach for many.

“With most of us getting a 500 to 800 euro pension a month, we can’t afford heating this winter and many don’t have the money to buy medicines they need,” Giorgos Demiris, 71, told the Militant.

“One of the biggest impacts has been on the national heath care system,” said Sofia Roditi, a leader of the union spouses’ committee for workers at Elliniki Halivourgia. “To get a serious disease is a death sentence, unless you can afford private hospitals, which of course most workers and retirees can’t.”

Official unemployment rose to 27 percent in November, more than 6 percent higher than the previous year. For youth 15 to 24 years old, 61.7 percent are without a job, according to Greece’s Statistics Agency.

“In a country of 11 million, only 3.7 million people have jobs,” reports the Wall Street Journal, and “economic activity has shrunk by over 20%” from four years ago.

“We now see homeless people sleeping everywhere in the streets of Athens. This is new,” said Maria Plessa, an airline worker. “You can tell they are recently homeless from their clothes, blankets and so on. They were working jobs like mine not long ago.”

The Greek government’s latest round of tax hikes and spending cuts, including slashing of wages and pensions, is expected to lead to a further 4.5 percent decline in gross domestic product in 2013, the Journal said. Throughout 2012 it has dropped more than 6 percent. One round after the other of cuts and tax raises have been levied against working people as conditions for loans from the International Monetary Fund, European Central Bank and European Commission. The continual loans are being used to stave off default on payments to holders of government bonds.

Like Greece, Spain is among the heavily indebted countries of Europe where a contraction in employment is being exacerbated by government austerity measures.

In the fourth quarter of 2012, official joblessness stood at 26 percent. For youth aged 16 to 24 it was 55 percent. Under these circumstances, “being paid for the work you do is no longer something that can be counted on in Spain,” according to a Dec. 16 New York Times article.

Most often workers stay in these jobs because they don’t see other prospects. The Times article reports on a 36-year-old ceramics factory worker near Valencia owed $13,000 in back wages, construction workers doing 12- to 16-hour days on false company promises that getting the job done early would guarantee payment, and even workers whose wages depend on local government financing, such as bus drivers and health care attendants, sometimes working without pay.

“While Spain and Italy are enacting growth-squelching spending cuts and tax hikes to rein in their budget deficits,” the Journal wrote, “they still stand to see their government debt burdens increase as their economies continue to shrink.”

Production slows in Germany

Germany, the continent’s dominant economy and leading manufacturer, has seen its production output slow, with its gross domestic product declining 2.3 percent last quarter. At the same time, unemployment figures remain much lower than in other eurozone countries—officially 6.9 percent.

The German economy is heavily dependent on export of goods and capital to the rest of Europe, and the adoption of the euro currency and trade bloc in 2002 was pressed by Berlin to give German capitalists further advantage in this regard. But the more recent contraction of economies in Europe and consequences of mounting indebtedness has led to a decline of German exports on the continent, which Berlin has been trying to compensate for by boosting its exports to Asia.

In France, among the economically stronger nations of Europe, manufacturing output dropped 2.3 percent in the fourth quarter, according to government figures. Official unemployment, now at a 13-year high, is 10.7 percent.

The bosses’ drive in France is being promoted by the Socialist-Party-led government of François Hollande. French union officials agreed to concessions with the employers’ group Medef in January that “include giving employers more flexibility to reduce working hours … without incurring union strikes,” reported the Times. “High levels of compensation that courts can award to laid-off workers would be trimmed. The five-year period that former employees now have to contest layoffs would be reduced.”

Meanwhile, U.S. world exports rose 4.5 percent, a small increase compared to the 15.8 percent rise in 2011. At the same time, the U.S. economy has similarly shown no sign of recovery, with persistently high joblessness and a 0.1 percent decline in gross domestic product in the fourth quarter of 2012. Rather, the modest export increase is evidence that U.S. bosses have recently made greater progress in driving against workers’ wages and working conditions, giving them an edge for now in the cutthroat competition for world market share.

Bobbis Misailides and Natasha Terlexis in Athens, Greece, contributed to this article.

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