By: Alex Lantier
Source: Global Research
http://www.globalresearch.ca/as-popular-opposition-ggrows-austerity-budgets-imposed-across-europe/
The French, Spanish and Greek governments all
announced multibillion-euro austerity plans yesterday in the face of massive
popular opposition.
The French budget presented by the Socialist
Party (PS) government of President François Hollande is the harshest since the
austerity budgets of the early 1980s under PS President François Mitterrand. It
calls for €30 billion (US$38.6 billion) in deficit cuts, including €20 billion
in tax increases and €10 billion in spending cuts.
The Spanish budget calls for €13.4 billion in
spending cuts in the fourth major package of austerity measures passed this
year following the election of the conservative Popular Party (PP) last
November. The ministries whose budgets will be most severely cut include
Agriculture, Industry and Education.
Greece’s coalition government—which includes the
right-wing New Democracy (ND), the social democratic PASOK, and the Democratic
Left (DIMAR)—announced that it will unveil a plan Monday for €11.5 billion in
spending cuts. Plans for these cuts were first announced in July, but the
government initially failed to reach an agreement on how to distribute them.
In each country, the new austerity measures are
being pushed through in defiance of public opinion. On Wednesday, millions of
workers throughout Greece walked off the job and hundreds of thousands
protested in a one-day national strike. On Tuesday, tens of thousands of
protesters opposed to the cuts marched to the parliament in Madrid and were
brutally attacked by riot police.
In France, Hollande’s popularity ratings have
fallen to 43 percent as job losses and austerity measures antagonize voters who
elected him in May.
These events demonstrate the impossibility of
fighting social austerity in Europe by supporting the bourgeois “left” parties,
the European Union (EU), or European capitalism. In a matter of months, the
promises made by the official parties have proven worthless.
Hollande cynically promised that “austerity is
not an unavoidable destiny.” The Greek coalition government received the tacit
support of the bourgeois “left” SYRIZA party, which ran against it ostensibly
on an anti-austerity platform, but then pledged to be a “responsible”
opposition that would not call strikes and would continue to support the
European Union.
As for the PP—elected on the basis of mass
hostility to the austerity policies of the previous social democratic Spanish
Socialist Workers Party (PSOE) government—its pretense that it would not pursue
Greek-style austerity in exchange for an EU bailout of its banks is fast
evaporating.
The PP’s cuts to pensions and social spending
and its attacks on labor rights are the most severe since the collapse of the
fascist Franco dictatorship. Reductions in national state spending of €16.5
billion, €27 billion and €65 billion passed in January, April and July—combined
with deep cuts in regional government spending—are sinking Spain’s economy.
One quarter of Spanish workers and 52.9 percent
of Spanish youth are unemployed, and despite pledges for bank bailouts the
economy is contracting. The International Monetary Fund anticipates a 1.2
percent contraction of Spain’s economy, though the government’s cuts are based
on apparently overoptimistic projections of a 0.5 percent contraction.
Spain now pays more to service its debt than it
spends on unemployment benefits or the budgets of its national ministries.
Since the global economic crisis began in 2008, its public debt has more than
doubled, jumping from 35.5 percent to 75.9 percent of gross domestic product
(GDP), and the interest rate it pays on its debt has surged as a result of
speculation against Spanish bonds by the banks and finance houses.
Spain’s banks are poised to request another €60
billion bailout as the Spanish real estate collapse continues to undermine
their balance sheets.
The effect of such policies is most clearly seen
in Greece, whose economy is now projected to plunge by 7 percent this year,
instead of the previously projected 4.7 percent. Since the Greek debt crisis
began in 2009, its economy has contracted by roughly one quarter.
Der Spiegel reported that, due to
this continuing collapse, EU authorities expect Greece’s budget shortfall to
reach €20 billion. They will then demand more cuts in Greece beyond the €11.5
billion Athens is currently proposing. As laid out in July, these include €5 billion
in cuts to the Labor Ministry budget (mainly to pensions) and attacks on
Greece’s devastated public hospitals.
These massive cuts—the corresponding amounts
would be $802 billion in the United States, £82 billion in Britain and €136
billion in Germany—will ravage a society in which those workers who have
managed to keep their jobs have already seen wage cuts of 30-50 percent.
The negotiation of the cuts will place take amid
deepening conflict within Greece’s political elite. There is speculation that DIMAR
might collapse, as at least three of its 17 parliamentarians have declared they
plan to vote against the cuts.
Greece’s Financial Crimes Squad (SDOE) recently
released a list of thirty politicians, including former ministers and top
parliamentarians of ND, PASOK and SYRIZA, who are suspected of tax evasion or
other forms of fraud.
France’s austerity package cuts €10 billion from
the national budget of €376 billion by imposing a wage and hiring freeze on
public sector workers, imposing a 5 percent across-the-board cut in the
ministries’ projected budgets, and cutting €2.7 billion in health care
spending. The Defense, Finance and Ecology ministries are reportedly
particularly hard hit, with losses respectively of 7,234, 2,353 and 1,276 jobs.
As for the €20 billion in tax increases, half
are to be achieved by closing certain corporate loopholes, and half by
increasing taxes on individual households.
The PS government and the media have trumpeted
the fact that roughly half of the individual tax increases will be borne by
“affluent” households. This is an attempt to obscure the anti-working class
character of the Socialist Party’s policies. The tax rate for the top income
tax bracket is to be raised to 45 percent, and yearly wage income over €1
million is to be taxed at 75 percent.
To seriously examine these measures, one must
briefly enter the realm of French tax policy—which means confronting what Karl
Marx, in The Class Struggle in France, called the “sheer swindling”
that characterizes France’s financial affairs.
In 2010, the top 1 and 10 percent of the French
population took in €181 billion and €515 billion, respectively. Nonetheless,
the increase in the top tax bracket and the tax on wage income over €1 million
combined will raise only €530 million nationwide. The total of €6 billion
raised by increasing taxes on the affluent, including by closing some corporate
loopholes, does not amount to a substantial portion of their income.
In part, this is because of a complex system of
tax exemptions that Hollande’s measures do not seriously touch. These
exemptions allowed billionaire Liliane Bettencourt to pay a 9 percent effective
tax rate in 2010 on the hundreds of millions of euros she earned on her $24
billion fortune.
In part, also, it is because most income in the
ruling class is interest income on capital holdings, not wages—which means that
Hollande’s “75 percent tax” does not seriously impact most members of the
financial aristocracy.
Nonetheless, the austerity budget was denounced
by sections of the press, with Figaro Magazine titling its lead
article “Enough is Enough.”
Sections of the bourgeoisie supporting the PS
are arguing that the current austerity budget is only a down payment on deeper
attacks on the working class being prepared by the PS government. These include
proposals for labor market “reforms” to facilitate hiring, firing and forcing
workers into short-time work, as well as for €30-50 billion in cuts to
corporate funding of social security.
An editorial in Le Monde stressed the
need for a “true ‘competitiveness shock’ in our country.” It stated: “The 2013
budget does not really contribute to it. Promised cuts in the labor market and
the financing of social spending will be decisive in this regard. Today’s
budget shock will only be meaningful if it is rapidly complemented by a
powerful competitiveness shock to give France the electroshock therapy it
needs.”
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