In June 2011 the Greek government agreed a four-year cuts programme of €28 billion, and was told by the EU that was €5.5 billion too little.
Italy’s latest cuts total €70 billion, again over several years. Ireland’s, about €8 billion. Portugal’s, the same. Spain’s, €15 billion.
In total the governments reckon €135 billion of cuts might get them straight. The Financial Times (16 September) reckons €230 billion for the one-off loss if the governments don’t meet their IOUs. Suppose those €135 billion cuts are represented by one apple, and €230 billion is one orange.
The European Union’s economy produces 90-odd apples and 50-odd oranges each year. The assets of the European System of Central Banks total about 15,000 apples or 9,000 oranges.
If the EU were like a family, with a family income of £30,000 a year and easy access to lots of credit, the south European debt crisis would be like an unlucky family member in trouble because the bank has called in an overdraft of between £300 and £600.
The family would help out the unlucky one. The EU is not like a family. The governments of the EU are set on using the crisis to cut social overheads and clear the terrain for new competitive profit-making. Even those governments which have no problems on the credit markets — Germany, and Britain too — are cutting.
The principle of the cuts is not to seek spare cash, for the emergency, from where it is plentiful, but the opposite: to use cuts to widen the gap between poor and rich and reinvigorate profit-making.
The assets of Italy’s wealthy classes (more numerous and richer than Greece’s) amount to 70-odd apples and 40-odd oranges (“close to €10,000bn”: Corrado Passera, head of Italy’s largest bank, FT 17/09/11). France’s, Germany’s, and Britain’s wealthy would each own comparable stashes.
Rich Greeks’ wealth in Swiss bank deposits alone amounts to four apples and three oranges (€600 billion: Der Spiegel, 7 February 2011).
The total market value of shares on the London Stock Exchange is about 15 apples or nine oranges, and the increase in that market value between June 2010 and June 2011, two apples or one orange.
The total market value of shares on the Frankfurt Stock Exchange is about seven apples or five oranges, and its increase between June 2010 and June 2011, two apples or one orange.
The governments want to make each national working class pay the cost of plans to make its national finance-capital a good competitor on global markets — or, for the south European states, at least to allow the commercial banks to get their money back and have the losses of eventual default or write-off fall elsewhere.
Above all, the governments want to stop the working classes of Europe uniting and focusing attention on the hundreds of “apples” and “oranges” held by the wealthy and big business.
The measures that would resolve the crisis in the interests of the working class and at the expense of the wealthy, rather than the other way round, are: expropriation of Europe’s banks and high finance, and their conversion into a Europe-wide public service for banking, mortgages, and pensions, under democratic control; taking-over of the south European debt “gap” by EU and eurozone institutions; a tax on the wealthy and on property across Europe; establishment of social and welfare minima across Europe, levelling up to the best levels achieved in different countries.
Unite the labour movements of Europe in a battle for a workers’ united Europe!
