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The last week has seen a number of new developments in the ongoing saga of Greece’s Neo-Nazis, the Golden Dawn. First, they’re still rising in the polls, as formerly popular centrist parties like PASOK continue to fall. Next, when antifascists showed up to confront a party gathering on the island of Crete, police held the barricades and kept both sides separate. This prompted a fiery response from party spokesman Ilias Kasidiaris, who was caught on video barking threats to murder the demonstrators at police. This leads to the final update, renewed discussion in parliament about outlawing the party.
Could this be the beginning of the end for the Golden Dawn? Or will it simply push the troubled nation closer to a civil war?
Tonight’s features are radically different. The first is a lecture from a Yale course, History of Western Civilization, about the rise of Fascism in the 1930s. Focusing mainly on Hitler, it gives a frightening glimpse of just how aware and involved ordinary Germans were during his ascension to power.
ANTIFA: Chasseurs de Skins
The second is a documentary about the early days of the “Antifa” (anti-fascist) movement. Set in France during the 80s, it follows a number of poor or ethnic youths during the rise of Nazi skinhead gangs. Facing harassment and beatings, these punks and thugs found each other and started fighting back. (French with English subtitles).
Right now, in what might be the largest coordinated actions yet, the people of Southern Europe are engaged in an international general strike against ongoing austerity measures. Action today centred on a near-total shut-down of the Iberian Peninsula (Spain and Portugal) along with several-hour national shut-downs in Greece and Italy. Workers in France, Belgium, Germany and others are also supporting and participating. Air travel, trains, industry and services have all been affected by actions, and massive demonstrations have taken to the streets of countless cities. Clashes with police have been reported in Spain (81 reported arrested in Madrid so far) and several Italian cities.
Since last year, Europe has been gripped by an enduring debt crisis. With southern nations like Spain and Greece failing to recover from the collapse of 2008, they’re requiring large bailouts to keep making their payments on national debt to wealthier (northern) nations. In exchange central bankers have demanded harsh spending cuts (“austerity”). Unfortunately, the cuts have only further devastated economies while bailout uncertainty during bargaining sessions has driven interest rates on their debt far higher, driving a cycle of more cuts, bailouts and recessions which has infuriated the continent.
In response, Europe has been witnessing some of the largest and most intense protests in a generation. Town squares were occupied, hundreds of thousands took to the streets and pitched battles were fought with riot police. There’s been several general strikes now in each of the nations afflicted by the crisis and a growing list of fallen governments. Last week’s two-day general strike in Greece, for instance, saw 80 000 in the streets of Athens and a particularly fierce battle outside the parliament, awaiting the latest austerity vote.
Today’s actions are a landmark for organizing across borders, and for the participation of large traditional labour groups like the European Trade Union Confederation who don’t usually get involved in such actions. An accurate number of participants isn’t available, but it’s likely to be in the millions. Today’s actions show a growing rejection of austerity which is beginning to connect across the continent.
This issue isn’t going away, and the protests are only getting larger.
Later this month, officials meet in Brussels to attempt (again) to sort out this mess. As the consensus grows, even in capitalist circles, that austerity has failed, Europe is starting to run out of options. Greece has been pushed the brink of total economic, social and political collapse, with Spain and Italy not far behind. More cuts, at this point, only invite disaster. Millions of people sent a message today, and unless it’s received soon, we’re going to witness a much larger, longer shut-down.
It might be the best known story from 20th century history – the rise of a small fringe group of nationalists to power over one of history’s most terrifying totalitarian states which seemed poised briefly to actually conquer the world. From Bavarian beer-halls in Weimar Germany, economically devastated after the First World War, Hitler used a mix of vitriolic racism, co-opted socialist rhetoric and “Blackshirt” paramilitary violence to become the most powerful political force in Germany. Shortly thereafter, he was appointed Chancellor of the failing state and in a matter of years built one of history’s most frightening regimes. The war that ensued claimed tens of millions abroad and millions more in a genocidal campaign of forced extermination at home. When the dust settled, everybody swore two words, “never again”.
That wasn’t so long ago. I’ve known people who fought in that war, who sheltered Jewish children in their basements and who came to Canada fleeing the Holocaust. And yet, right now in Europe, we are watching this process start all over again. It’s no secret – the New York Times and the Guardian cover it often, yet everyone seems paralyzed with horror as the fascists acquire power at a frightening rate.
I’m talking, of course, about Greece, and the parallels are stunning. Not only one of the hardest-hit nations by the recent global economic meltdown, but also thoroughly punished by the rest of Europe with harsh bailout terms which have had effects much like the Treaty of Versailles, both by destroying the economy and generating incredible amounts of popular resentment. With the economy in ruin, they’ve seen some of the most intense political turmoil in Europe, with governments falling and huge fire-breathing riots regularly laying siege to the parliament. At the same time, they’ve witnessed a huge flood of immigrants as the rest of Europe closed their doors, stranding nearly all newcomers in Greece. Into this chaos stepped an explicitly Neo-Nazi political party with ties to the old dictorship – the Golden Dawn.
A year ago, the Golden Dawn had barely 1% support at the polls, they reached around 7% by elections over the next spring and summer, and are now rumoured to hold roughly 22%. After winning seats in parliament during the last round of elections, they’ve been effectively “legitimised”. With widely-publicized support from Greek police, they’ve been given a free hand to operate as they wish on the streets. Large gangs of fascist paramilitaries, often explicitly associated with the Golden Dawn have started campaigns of public terror, clearing public areas (video) and even neighbourhoods of “non-Greeks” and attacking immigrants, queers and political opponents. In many areas these “vigilante” squads have taken over much of local law enforcement, with police reportedly referring victims to them to ‘solve the problem’. They’ve begun “Greeks-only” social services like blood drives and food banks, and even offer blackshirt escorts to walk elderly ladies home from the bank, “protecting them from immigrants”. Given the breakdown of the Greek state and society, this has been welcomed in many areas, garnering considerable public support. Lines are now blurring in frightening ways between the party and what’s left of the Greek state, leaving entire areas under de-facto fascist rule.
This wouldn’t be the first movement to openly emulate Hitler, and even take power. Pinochet idolized Hitler and Mussolini, and countless other dictators (Suharto, for instance) have embarked on genocidal campaigns with horrific death tolls. Even Greece was ruled for the better part of a decade by a Junta with Neo-Nazi associations (they later met Golden Dawn founder Nikos Michalolikos in prison). The name itself is taken from Alistair Crowley’s old occult group, and like the Nazis they reject Christianity (too Jewish) in favour of occult and pagan symbols, even supporting a return to old Olympian gods like Pan (as the Nazis did with Norse mythology). They “sieg heil” often and their party’s symbol bears a stunning resemblance to a Swastika. They’ve even got a signature metal band – “Pogrom”. This isn’t just another far-right European party with an anti-immigrant platform, these guys are operating directly from Hitler’s playbook and it’s working.
There are, of course, those who are opposed. Beyond the heroic efforts of a few journalists to get in and tell the whole story, there are also those organizing at street level to oppose the Golden Dawn. Antifascist groups have been extremely active, connecting immigrant groups, radicals and the notorious Greek Black Bloc to defend what areas they can. Marches, patrols and brawls have taken place, though individuals involved face horrific personal consequences if singled out. A group of arrestees from a recent demonstrations were reportedly subjected to “Abu Ghraib-style humiliation” by Athens police in custody, being stripped, burned and beaten by police. Countless reports exist of Golden Dawn thugs fighting alongside riot police, and even receiving clubs and radios for the purpose (possibly even guns). Many are using the term “civil war” to describe the situation, and that’s starting to sound frighteningly accurate.
So what, in this dreadful re-enactment, comes next? Hitler didn’t win power in an election, he was awarded with it as the last of the old German state began to break down. The ongoing European debt crisis does not bode well here, nor does the precedent set when Europe’s elites replaced Greece’s Prime Minister late last year. Should desperate elites decide to throw their full support behind these fascists, this situation could escalate into a full-scale nightmare.
The spread of this movement is hardly limited to Greece, either. Golden Dawn has connections with nationalists in Germany and Italy, and has begun to organize within Greek communities elsewhere. Donation drives have now started up in New York, Montreal and even Toronto, seeking to reach out to the “Greek Diaspora”. Groups ranging from old-time antifascists to Greek community associations are organizing locally to oppose them (perhaps having a different view on immigration?). International connections like this only show how desperate the need for opponents to do the same – Greece needs our solidarity, now more than ever.
Greece is the crucible for many of the forces which have come to define our new, chaotic world. The IMF, central bankers, popular movments, a crumbling state, anarchists and fascists are all competing for the country’s future, and it’s far from certain who’ll win. Some cynically suspect that it was all a planned experiment from the start. Regardless, it’s only the tip of a far larger iceberg. As economic and climactic instabilities tear nations apart, the first world is already seeing a growing flood of refugees. Facing energy shortages and many bleak economic projections, many in power are beginning to worry. From France’s Socialists to our own Conservatives, governments have already begun restricting migration, cutting benefits and closing borders. As the pressures increase, the temptation for our governments to adopt authoritarian solutions is only going to get stronger.
We should all watch Greece very closely in the coming months, because if this strategy “works” in Greece, it will be tried elsewhere soon enough. No matter how much we might want it to stay buried in the past, fascism will always haunt us. Though almost universally detested, Hitler’s story is still one of the best known from recent history, and so there will always be some drawn to it. The Golden Dawn shows that even today, this type of movement can still easily take root. Groups like them exist in every country, including our own, just waiting for a similar chance. If antifascism means anything, it’s eternal vigilance. This can happen here and it is happening there. It’s high time we all started taking it seriously.
GOLDEN DAWN, 1980-2012. THE NEONAZIS’ ROAD TO PARLIAMENT – Borderline Reports
Fear and loathing in Athens: the rise of Golden Dawn and the far right – The Guardian
Amid the Echoes of an Economic Crash, the Sounds of Greek Society Being Torn – New York Times
Golden Dawn glows amid Greece gloom – Al Jazeera
The streets are in chaos. There’s bank runs and people are starting to stock up on canned food. The government is stockpiling arms, Neo-Nazis are marching in the streets and nobody knows what the country, or the wider world, will look like five days from now.
No, this isn’t a replay of Y2K. There isn’t a hurricane on the way, an oil shortage or impending Avengers-style alien invasion. This is the lead-up to the next round of Greek elections. New Democracy (conservatives) and SYRIZA (radical leftists) are tied at the polls, with a serious possibility that anti-austerity parties will win, possibly forcing a Greek exit (“Grexit”) from the European common currency. This has markets around the world in terror, many of which (China, Russia, Italy, Spain, America and others) are in serious peril themselves. It’s being called the “Election Apocalypse”.
I thought I’d heard it all. Apocalyptic doomsaying, after all, is one of my favourite topics. What’s happening in Greece, though, isn’t the (direct) result of climate change, peak oil or devastating warfare. The economic catastrophe didn’t come because Greece resisted the bailouts or austerity – so far the country has gone alone with all the demands, in spite of enormous popular resistance. Austerity failed, dramatically, plunging the country into a far deeper recession. This catastrophe is the direct result of every major establishment institution functioning exactly as it was “supposed to”. The real threat facing Greece represents the first real chance the Greek people have had to put the breaks on this process, an opportunity they should have had a long time ago.
Money is leaving the country’s banking system in droves, both to citizens($1 billion/day) and foreign investors fearful of the re-introduction of Greece’s old currency, the Drachma. Currency traders are already gearing up to deal with it, with the Drachma even accidentally showing up on Bloomberg’s trading board. Unemployment and poverty are at absolutely horrific levels. Strikes are breaking out everywhere, even threatening the elections themselves as municipal workers threatened to strike during the vote. There’s also funding problems within electrical utilities, threatening to plunge a third of the nation into rolling blackouts if it can’t find hundreds of millions for Russian natural gas soon. Oh, and the government bought a enormous stockpile of American weapons earlier this year, more than anybody but the UK and UAE in the first quarter. In short, Greece is collapsing under the weight of it’s own bureaucracies.
Perhaps the most horrifying part of this story is the rise of the Golden Dawn, a Neo-Nazi political party which won enough votes to enter Parliament in the last election. They’ve been involved with brutal attacks on immigrants and others, with widespread accusations of collusion with Greek police. It got worse last week when their spokesman assaulted a female opponent on national television. Warrants are out for his arrest, but he has not yet turned up and is attempting to press counter-charges. In response, massive anti-fascist marches have started taking to the streets, and they’ve dropped dramatically in the polls. All of this is set against a backdrop of growing anti-immigrant sentiment across Europe, in which Greece plays an important role as a geographic gateway to the continent.
If anyone has doubts that this catastrophe was the result of conscious efforts to punish the country, I’d urge them to read this piece by renowned business journalist Hugo Dixon. “Greece needs to go to the brink. Only then will the people back a government that can pursue the tough programme needed to turn the country around,” he argues, by cutting off bailout funds and other supports. These views are very common, and readily apparent to anyone who reads the business press (or actions of the ECB). Of course, if you follow those sourced you’d also know that real economists refute these guys all the time. Right now the Greek people, like those of Argentina and elsewhere before them, are being punished in the hopes that they’ll vote to continue dismantling their country.
The scale of the problem, of course, goes well beyond Greece. Not only have interest rates also rocketed up in Italy and Spain, but Spain is now facing another bailout. Markets around the world, even Toronto, have been heavily battered in recent weeks by the crisis, and (as always) there’s a serious fear that another massive stock market crash is on the way. For what it’s worth – it probably is.
The crisis in Greece needs to be seen for what it is – not the result of popular meddling or anarchist rioting – the onus for this like squarely on bankers and politicians. The ongoing bailouts show the horrendous cost, total ineffectiveness and callous disregard for everybody else. While people lose homes and jobs, banks are being given hundreds of billions to make the same mistakes over and over again, with exactly the same results. We’ve created a system which pays banks hundreds of billions of dollars to fail. Why would they do anything else?
Austerity and bailouts have not worked. They’re based on exactly the same flawed premises which drove the markets to disaster in the first place. The crashes of 2008, 2001 and 1989 weren’t caused by progressive social overspending, they were the result of overheated and deregulated markets where speculation came to dwarf real investment. Then, as now, nobody saw any difference between a million dollars created on paper through stock valuations and a million dollars created through actual production. Because it’s far easier to create value through speculation (in the short run), it became the focus of three decades of public and private economic policy. Until we come to grips with that, any attempt to jump-start failing global markets will hundreds of billions in bailouts and “quantitative easing” (money-printing through low interest rates) will only work toward re-creating these same bubbles. Austerity, the source of these funds, only makes things far worse by making devastating cuts to real public and private value (hospitals, schools, steel mills etc).
For the Greek people, this is a very grim choice. If they vote to stick with the terms of the bailout, they will be stuck with the austerity program which is devastating their country. If they vote to abandon it, the short-term chaos will be far worse, and likely spread far beyond very quickly. Either way, there’s a very real chance that the Greek Parliament will burn to the ground before this is over. If so, it’s leaders will have none but themselves to blame.
We all need to learn from this this Greek tragedy, before we all repeat the same mistakes and find ourselves facing a similar nightmare.
Once again, the European Union is spiraling toward oblivion. Not only are Greece’s re-elections a week away, but Spain is now in need of another bailout and Italy is beginning to sputter again. As the dangers involve swing once again from “quagmire” to “clusterfuck”, even the Toronto Stock Exchange is feeling the brunt of it. In response, one very clever graffiti artist has decorated the roof of Jackson Square with two choice words which would serve the EU’s leaders and bankers very well right now: “don’t panic”.
No, that’s not deja-vu you’re feeling, this really has been happening every couple of weeks for over a year now. At the core of the problem lies the way national debt is traded on bond markets, much like stocks or futures. Demand in these auctions and markets determines the interest rate on the debt, therefore fear of a debt-crisis-spiral (like seen in Greece) can easily drive a country’s interest rates through the roof (as they did to Spain and Italy today). The standard response is to cut debt and deficits (“austerity”), but since it’s far easier for interest rates to double than to cut a national debt in half, this usually does a lot more harm than good (as it has in Greece, Spain, Britain, and most of the Third World). Worst of all, the only thing really needed to kick off this cycle is to announce that you’re planning a bailout or austerity measures to send investors panicking, even if the national economy in question is relatively “healthy”.
They will, of course, panic, sooner or later. There is no way out of this crisis without a “correction” of some kind or another. Economies will topple like a row of dominos line up around the globe. When this happens, and it will, we’ll have one task that’s more important than any other: not panicking.
Good luck with that.
Over the past week the world has learned a lot about how Greek elections function. After a ballot is held, if there is no clear majority winner (there wasn’t), each party gets a chance at putting together a coalition to hold parliamentary power, in order of their success at the polls. If each of these parties fails, (which they did), the President has one last chance to meet with parties and form a “unity” government (they collapsed). When that fails (it just did), new elections are called (a month from tomorrow).
We’ve known for a few days now this was happening, with radical leftists Syriza coming in second place in the election and rising in the polls from there, it’s now acknowledged that they’d probably win the next round of elections. This set off a predictable wave of terror in the world’s financial community, causing markets to shudder and spreading rumours that Germany might be willing to budge on their hard-line austerity policies. At least as likely an outcome is that this would lead to a Greek “exit” from the Eurozone and probably the destruction of the European common economy as we know it. Syriza couldn’t have asked for a better reaction.
The Greek people may finally get their referendum on austerity, the mere mention of which was enough to see their elected Prime Minister deposed and replaced by a “technocrat” supported by Europe’s central bankers. In this climate, there’s every reason to expect they’re going to vote “no”, and most of the world knows it. Whether or not Syriza can effectively govern the country isn’t the issue – nobody’s doing that now. At best their win would be a “solution” but at worst it’s revenge, and I suspect either will do at this point.
How could they do this to us!?!
I’m sure that’s a question ordinary Greek people have been asking for some time now. Their economy was utterly destroyed, their government deposed, their “national character” thoroughly dragged through the mud. European financial elites made an example of Greece in their attempt to bully others into accepting austerity programs, and as long as the country’s creditors got paid, few cared what happened to Greeks themselves. Maybe now they will.
Will this be the catalyst for a massive market crash? That’s very possible, but if so, that doesn’t mean Greek voters (or rioters) are to blame. The world’s economies are like a powder keg right now, from Beijing to Boston. If it isn’t Greece it’ll be Spain, Italy or something else entirely. Financial elites have pointed fingers at everyone but themselves, but it’s clear no poor folks set this up – bubbles aren’t the product of union wages or welfare. Will poor folks suffer? Undoubtedly, but that’s on Goldman, not the Greek people. If anything, this only shows how desperately things have to change.
Greece is teaching a valuable lesson here: austerity is not inevitable. If we actually stand up, they will back down. These policies were driven by fear and panic, claiming the future of Europe was at stake. Only now are elites realising what kind of position this puts Greece in – they’re holding all the cards, and they just called everybody’s bluff.
Results are in for the most recent European elections – austerity did not fare well. In France incumbent Nicolas Sarkozy was defeated by Francois Hollande, the socialist candidate. In Germany, Angela Merkel’s ruling party suffered losses in regional elections. And of course, the Greek ruling coalition disintegrated in a flurry of protest votes. Today the leading centre-right “New Democracy” announced their failure to form a government, well short of the three days they were allowed. This has plunged the financial world into a panic, causing markets to drop around the globe.
They’re calling it “austerity fatigue“. Forced on nations across Europe and beyond, these cuts were hoped to revitalize Europe’s economies – instead they became both a political and economic disaster. Popular rage against the measures has been simmering for years (particularly in Greece), but lately it’s become very hard to ignore, especially as nations like Spain and Britain slip back into recession. Even large parts of the business press now openly condemn these measures. To quote the Globe and Mail…
Over the past two years, France and Germany have steered Europe through the debt crisis — though not always well. Germany and France declared an end to the flagrant flouting of deficit limits that led Europe into the crisis.
But the crackdown could not have come at a worse time — with the world economy slowing — and propelled Europe into a vicious austerity spiral. Cutting spending — which meant laying off state employees and ending stimulus programs — further slowed nations’ economies and produced less tax revenue, which meant more cuts were needed to meet deficit targets.
The rest of this week should be interesting, and will likely be beyond chaotic. Within the span of a single weekend, any hopes that we’d left the uncertainty and fear of last year behind us have been totally destroyed. Like one year ago, nobody knows if Greece will stay in the EU, whether Europe could survive such an exit or what that would mean to the rest of us.
Looking “across the pond” right now, it’s pretty clear where austerity is taking us. These efforts to loot and pillage entire economies have so far led to social and fiscal disaster. Canada is only starting down this path, but we only need to look at Europe to see where it’s leading. We still have time to stop this, before our cities too are choked with the black smoke of burning skylines, before public suicides become a standard form of protest and before cabals of bankers start replacing our elected officials with “technocrats” of their choosing. Again, I have to ask – what kind of maniac would willingly do this to our country?
All eyes will be on Europe this week, and there’s no telling what the situation could look like by Friday. It’s a complete clusterfucking quagmire, but it may also be the first opportunity to stop this madness before it gets any worse.
Yesterday, as an act of protest against austerity measures and the economic crisis, Dimitris Christoulas, a 77-year-old Greek pensioner, shot himself in the middle of Syntagma Square, outside the nation’s parliament. On him was found a suicide note encouraging Greeks to rise up. By the evening a crowd of thousands had grown in the park chanting “this was no suicide, it was a state-perpetrated murder”, with some battling riot cops. His action wasn’t unique, recent data shows a 18 percent increase in Greek suicides in 2010, and a 25 percent increase in Athens last year. Italy, too, has been witnessing this horrifying trend, with three high-profile suicides this week over personal financial nightmares, following two people who set themselves on fire last week.
These tragedies give a glimpse into the hellish personal conditions spawned by recent cuts, and the anger that’s brewing as a result. Youth unemployment has passed 50% in Spain and Greece, the highest numbers seen in over a decade. With welfare and other safety nets the axe, many are left with nowhere to turn.
Many have mused Mr. Christoulas’ death or one like it will have effects like that of Mohamed Bouazizi, a young Tunisian fruit-seller who set himself ablaze in front of government offices last January, sparking a revolution in Tunisia and arguably the Arab Spring itself. More protests are planned today in Syntagma Square.
Yesterday also marked a grim day of financial self-destruction as worldwide markets suffered their second-worst day this year so far, especially Europe. Since the lows of late last year most markets have been rebounding with a vengeance since then, with some gaining around 30% or more in value. This has had many analysts shaking their heads, arguing that nothing’s really changed underneath all the newly found enthusiasm and hype. Governments and central banks have been pumping the economy with printed money (“liquidity”, bailouts etc) for years now, and selloffs yesterday were sparked on both sides of the Atlantic when hints were dropped that they might not keep doing it. While it’s true that some economies (particularly on this side of the Atlantic) are seeing some signs of cautious improvement, there’s still a lot to be worried about in Europe and Asia, as well as again-rising oil prices, one of the main catalysts for the last collapse. Beneath all this are a few scary trends, like record-low volatility, a rise in insider-selling (corporate leaders selling their own stock) and the recent rapid fall of results vs. expectations (“the economic surprise index“). Of course predicting and analysing markets will always be a bit like astrology, but there are more than enough reasons to be concerned here. Another crash right now could spell disaster for many.
Austerity is only beginning, but it’s already proving to be a social and economic nightmare. It’s one thing to impose cuts on a populace which holds rallies and marches in opposition. It’s another to keep doing it when people start killing themselves in public squares as acts of protest. This is the worst crisis Southern Europe has suffered since the wake of WWII, and many elderly folks are now drawing parallels to the fascist dictatorships which they lived through in their youth. The region is a powder-keg, and if its rulers don’t change course it’s going to explode.
“The Tsolakoglou government has annihilated all traces for my survival, which was based on a very dignified pension that I alone paid for 35 years with no help from the state. And since my advanced age does not allow me a way of dynamically reacting (although if a fellow Greek were to grab a Kalashnikov, I would be right behind him), I see no other solution than this dignified end to my life, so I don’t find myself fishing through garbage cans for my sustenance. I believe that young people with no future, will one day take up arms and hang the traitors of this country at Syntagma square, just like the Italians did to Mussolini in 1945.”
Dimitris Christoulas’ Suicide Note
It’s budget time, and conflicts over “austerity” are continuing to rage across the western world. Canada’s budgets are out, Spain held a general strike Thursday and the situation in Italy and Portugal is continuing to worsen.
Greece and Italy
News from Europe just keeps getting more disturbing. Italy has now seen two men set themselves on fire to protest economic conditions. One did it outside a tax office, another outside the town hall over thousands in unpaid wages. Greece is taking an even scarier turn as the (unelected) government move on with plans to open 30 widely opposed “detention camps” for illegal immigrants, who they’re now attempting to scapegoat for their economic woes. This follows similar measures and proposals aimed at the Roma (“Gypsies”) in Italy and France.
These two nations are furthest along in “austerity” plans (especially Greece). They’ve both had their heads-of-state (Berlusconi and Papandreau) replaced by “technocrats”. Their economies are growing so toxic they threaten the EU itself, and austerity programs so have only worsened debt burdens by wrecking their economies. They’ve both seen enormous, riotous social unrest. Watching this from the relative security of a nation like Canada, it’s time to ask ourselves: is this is really the path we want to embark down?
Spain and Portugal
Spain yesterday saw a general strike grip the country, where (of course) some clashed with police setting tires and trash cans alight as barricades in the street. Yesterday, Spain announced their “austerity budget“, hoping to satisfy European Union creditors. It contains 27 billion in cuts, some of the worst cuts seen since the end of Franco’s dictatorship. Spanish unions and protest groups are pledging to keep fighting. Neighbouring Portugal held a similar general strike last week, and business analysts are again beginning to fear that either of the above (or Italy) may become “the next Greece”. EU Ministers met today to discuss raising the “firewall” bailout fund closer to a trillion dollars, fearing another debt-crisis and bailouts which could cripple the European banking system.
Thursday, Federal Minister of Finance Flaherty announced his “austerity” budget, as expected. During the speech a group of protesters raised a ruckus in the gallery and had to be “escorted out”. The day before, McGuinty released his, and the reality of the proposed cuts is beginning to sink in. Federally, over $5 billion in cuts have been announced, expected to directly result in about 19 000 public jobs lost over the next few years, raised eligibility ages for retirement benefits and gutted environmental oversight. The subject of new taxes was avoided, with the Conservatives hoping further investments in large resource-extraction projects like the Tar Sands and related pipelines will bring in more revenue. It’s being called the “least green budget in decades“, inflaming Environmental and First-Nations groups.
In Ontario, the main cost-cutting measure is a two-year public-sector wage freeze along with cuts to pensions. Over the next three years, cuts worth $17.7 billion are planned, with a third of it coming from wages. These measures follow a somewhat watered-down model provided by the Drummond Report, released earlier this year warning of dire financial consequences if Ontario didn’t deal with our deficits.
Canada isn’t Greece, Spain or Italy – we very clearly aren’t in the midst of a “debt crisis”. We aren’t even “sorta” grappling with one like France, Britain or America. We have the lowest debt-GDP ratio in the G7, our own currency and some of the world’s largest stocks of natural resources. Our economy was largely shielded from the shocks of the last five years for these reasons, and we needed a far smaller “bailout”. Our social programs aren’t all that lavish by European standards, and our economy is in far better shape. To say that Canada “needs” an austerity program is absolutely ludicrous, but that’s never stopped our politicians before.
The rapid spread of austerity programs, beyond borders and regardless of party in power, shows how widespread these problems really are. As much as I’d like to place the blame on Harper or McGuinty, they are only a few in the long list of politicians participating. Our new global economy has generated a global crisis, and it’s going to take a global movement to fight back.
Wages, pensions, social programs and other benefits have always been a battleground. They’re a part of the bargain we drive in exchange for our work and compliance with laws. Most of these rights and benefits were only gained at the end of long and hard-fought struggles. This bargaining session never ends – there’s always a mediation between us and those in power (bosses, the government, etc). There will always be efforts to peel back these gains and pay us less in one way or another. When this happens, people fight back. This is the subject of a very interesting paper now making the rounds online, Austerity and Anarchy: Budget Cuts and Social Unrest in Europe, 1919-2009 by Jacopo Ponticelli and Hans-Joachim Voth of the CEPR. From the ninety years they studied, they found “a clear positive correlation between fiscal retrenchment and instability”. These results were tested against all the usual explanations – recessions, democratic/autocratic governments and the amount of media coverage, among other variables, and none showed much effect (with the possible exception of limiting the powers of government’s executive branch…). The lesson here? If you begin to pay people less for their obedience, be prepared to expect less of it.
This fight is already underway. Big days to watch for include April 21st (Toronto), May 5th (Ottawa) and of course Mayday, May 1st (everywhere). There are already big conflicts underway in Quebec (students) and British Columbia (teachers, northerners), as well as many cities like Toronto and Halifax. With these budgets now on the table, Canada’s entry into this international conflict is now official. Austerity is everywhere and the effects are only beginning to be felt, but so is the backlash.
It sure is going to be an interesting spring.