When this newsletter is sent out, Ireland will be the first country that exits a Troika program. Unfortunately, the difference for the people will not be that big, because austerity continues. The same counts for people in other countries like Spain or Portugal, who want to follow Ireland on this path. Any country that believes it can get out of the crisis by austerity, will have austerity forever.

The current situation is characterized by a Troika that still pushes for even more austerity and by governments that are doing window-dressing by claiming to see a positive development for the times ahead, which will never become reality if the current policy is continued. Neither in the Troika nor in the national governments, talks are about what should really be on stage: a significant debt relief in many countries – not only for the public, but also the private sector -, a restoration of public services and significant investment for facing some of the great challenges of our time, such as climate change and energy shortage.

By publishing this newsletter with reports from the countries affected by the Troika, we hope to be part of a growing movement that one day will be able to change this.

Greece

When the Troika left its review mission for Greece in November, there was a big dispute about the numbers in the foreseen budget for next year. The Troika estimates the deficit of the budget at least 1 billion euros higher than the government does. In the meantime, the Greek parliament voted for the budget without the consent of the Troika. Troika seems to intend to postpone all important decisions and pressure about the Greek Memorandum to avoid a political crisis in Greece in the next six months: the Greek government could lose its tight majority in the parliament and fall, provoking general elections. This risks indeed to disturb the EU Presidency agenda (Greece delivers an European president in January, for six months) at a politically sensitive moment (European elections). So, after a lot of noise and threatening to postpone further negotiations about the payment of the next bailout tranche to the beginning of next year, the Troika calmed down and returned to Athens on the 10th of December.

Further delays and additional deficits will worsen the debt situation, because those have to be financed with additional short term credits from the financial markets, for which Greece has to pay much higher interest rates than for Troika loans. Neither the additional cuts demanded by the Troika nor the window-dressing by the Greek government can lead the country out of the crisis.

Even without further cuts demanded by the Troika, next year will again be a disaster for many people in Greece. At the end of the year, a ban on home foreclosures runs out and there is a dispute with the Troika on if and how it should be renewed.

While the country still suffers from an official unemployment rate of 27 per cent, there are more layoffs planned. To fulfill the demands of the Troika, the Greek government agreed to fire an additional number of 14,000 employees in the public sector next year.

There are strikes in universities, the health care sector and ministries, where many of these dismissals could take place, and protests by teachers, who are affected by planned closings of schools. Besides that, mobilizations by trade unions and students took place during the visit of the Troika in November and before the voting of the budget in parliament.

With the Greek winter now starting, the high prices of energy again become a problem for many people. In northern Greece, the first schools had to shut down because of lack of money for heating. Many people try to heat their homes by burning wood, because they were cut off from the electricity net for not being able to pay the bills.

In the last weeks, at least three people died by breathing in the poisonous carbon monoxide, or got burnt to dead in house fires. The price of electricity has increased by 59 per cent since 2007, while the income of the poorest 10 per cent of Greeks was in 2012 less than half of what it was in 2009. In many cities, people form comittees of solidarity that organise the sharing of electricity, in an act of civil disobedience.

Ireland

In December, Ireland became the first country that agreed to exit from its Troika agreement, without any additional precautionary loan or guarantee – something that had widely been assumed necessary. The Irish government is that way boldly signaling its ability to continue without external aid. However, this may be rather a message than actual reality. Ireland will still be subject to surveillance of its ‘progress’ on implementing reforms by all three of the Troika bodies, on a six-monthly basis (under the Troika agreement it was every three months).

While the Troika and the government are doing their best to promote the return to the markets as a success story, the reality of the people in Ireland looks quite different. In its final report, the Troika criticizes the failure of the government to reach the target of planned cuts in the health sector – by 200 million euros instead of the promised 600 million euros. In the budget for 2014, the government plans to reduce the deficit by a further 2.5 billion euros; the health care sector is one of the biggest posts that are targeted. For example, the Irish medical card system (holders of this card get free medical treatment) will be reviewed: the government aims to reduce the number of people eligible for this program. Furthermore, while people now get sickness benefits after three days, this period should be increased to six days.

Since the outbreak of the crisis, the number of unemployed has nearly tripled from 107,000 to more than 296,000 people. Public debt raised from 91 per cent of GDP in 2010 to 121 per cent in 2013. Household debt raised to 200 per cent of GDP, while the value of assets for which the debt was created in the first place, has halved since the outbreak of the crisis.

Portugal

Similar to Ireland, Portugal intends to come back to the financial markets as well. To achieve this, the government is willing to pay a high price. At the beginning of December it made a debt swept, postponing the payment of debts due in 2014 and 2015 for three years. This will cost an additional 290 million euros in interest in the next two years.

In the 2014 budget, the government plans cuts that count up to 3.9 billion euros, which is equivalent to 2.3 per cent of the Portuguese GDP. Wages in the public sector should be cut between 2.5 per cent (wages from 675 euros per month) and 10 per cent (wages above 2.000 euros per month), while working time should be raised from 35 hours to 40 hours a week.

Next to that, the government intends to reduce all pensions above 600 euros a month by 10 per cent, but it is still in consultation with the constitutional court about approval, since this court already rejected a similar measure some time ago. In contrast to the cuts that ordinary people suffer from, companies are helped by the government as their tax rates will be decreased.

At the beginning of December, Portugal sold 70 per cent of its mail service, a profitable public company, to the stock markets. Further privatizations are planned for the water company and the national airline company TAP.

There are discussions between the Troika and the government about the minimum wage and wage bargaining. The Troika demands a lower minimum wage and further liberalization of the labor market, which is something that even Portuguese employers rejected as they fear a further drop in domestic demand. While the government claims to see light at the end of the tunnel, the latest statistical figures from September say that domestic demand in Portugal was down 1.5 per cent, investment 3.3 per cent and consumption 1.2 per cent compared to the same time last year.

When the parliament voted on the budget, a mass protest took place in front of the building, where people demanded the resignation of the government. One week before that, police officers protested against cuts and workers of the mail services started a strike against the privatization of their company.

Cyprus

In order to get the next tranche from the Troika, the Cypriot government had to prepare a plan for privatization of state enterprises by which it should earn 1.4 billion euros. According to this plan, the telecommunication company, the electricity company and ports should be privatized before the end of June 2016. Trade unions held protests against these plans. On the 14th of December, trade unions organised a mass rally.

Spain

Despite a warning under the new Two Pack legislation which requires countries’ budgets to be ‘approved’ by the European Commission, Spain claims to have completed all necessary reforms for its EC loan package and that its banking sector is ‘improving’ so much that it will not take up the remaining emergency funds that were made available. As with Ireland, the other celebrated ‘exit’, Spain will continue to have to submit to six-monthly monitoring of the progress of its required reforms, until 75 per cent of the emergency lending provided by the EU (41 billion euros of a 100 billion euros package) is repaid.

After a constitutional reform to prioritize debt repayment over people’s rights (promoted by the Troika and without any social consultation) the government started to implement privatizations in the public sector and cuts in essential public services such as education, health care and social services. Retirement age has been delayed, living conditions worsen, pensions have been frozen and labor rights cut.

Spain has seen many big mobilizations against austerity in the last years and civil society is organising and taking action. Examples are: citizen platforms succesfully preventing house evictions or auditing debt, workers struggling in the health care or education sectors and collectives fighting cuts and corruption through the courts. In response, the government is now planing a new anti-protest law to criminalize protests (with fines of up to €600.000).

Italy

Like Spain, Italy has come under pressure from the European Commission to re-assess its national budget under the new Two Pack-legislation, which gives the Commission the right to conduct surveillance and perform analysis of planned national budgets. EU commissioner Rehn stressed that Italy needs a debt structural adjustment equal to half a percentage point of its gross domestic product, while it is currently only at 0.1 per cent. The consequence from the point of view of the Commission is that the country does not qualify for the EU’s “investment clause” that would allow it to exclude some public funding from its budget deficit calculations, because the government’s spending plan will not cut Italy’s national debt fast enough.

On Monday the 9th of December, thousands of farmers, lorry drivers, pensioners and unemployed people took the streets in Italy as part of a series of protests against the government and the European Union. Demonstrators stopped train services by walking on the tracks while striking lorry drivers disrupted traffic by driving slowly and blocking roads. Further protests are planned.

Slovenia

Despite having big problems in the banking sector, Slovenia still hopes to escape the Troika. Recently a stress test in the banking sector took place, the results of which should already be published when this newsletter is send out. There are expectations that bad loans could count up to 7.9 billion euros (around 20 per cent of GDP). However the Slovenian central bank, which said that it would already know the results of the stress test, is optimistic that the government can recapitalize the banking system on its own. It is said that a sum of up to 4.7 billion euros could be necessary for this.

Who we are and why we write this newsletter

This is the first newsletter of Troika Watch. With this newsletter, we want to cover news about the Troika, the situation in the countries affected by it and the opposition and resistance against it. We hope that this can help connecting struggles and be a contribution to strengthen resistance against austerity policies.

We are a group of people that mostly know each other from meetings like the European Social forum, Firenze 10+10, the Altersummit, EU in crisis or Blockupy. Some of us work for progressive NGOs like the Bretton Woods Project, CEO, CADTM or TNI, others are activists in networks like Attac or ICAN.

We plan to publish this newsletter once or twice a month in English, French, German, Greek, Italian, Portuguese and Spanish. You can subscribe to this newsletter at www.troikawatch.net/lists and contact us by sending an email to info@troikawatch.net .

Greetings from Amsterdam, Athens, Berlin, Bruxelles, Frankfurt, Kopenhagen, Lisbon, London, Barcelona and Thessaloniki,
The TroikaWatch Team

Source: http://www.troikawatch.net/1st-newsletter-of-troika-watch/

Marking the sixth day of relentless blockades, occupations and mass demonstrations that many warn may set off “a spiral of rebellion” across Europe, protesters—marching under the banner of the ‘Pitchfork’ movement—gathered Saturday in Rome, Turin and Venice, Italy.

“Activists wearing Italian flag masks and white nooses around their necks rallied outside the European Commission’s office in Rome and took down a European flag outside before being chased off by police,” AFP reports.

According to the report, police violence against protesters persisted across Italy. In Venice, police fired tear gas at protesters outside the city’s train station and in the northern Italy city of Turin—the epicenter of the latest wave of anti-austerity revolt—students paint bombs were met with force.

“There are millions of us and we are growing by the hour,” said Danilo Calvani, a farmer who has emerged as one of the protest leaders. “This government has to go.”

“These protests show Italy’s massive crisis of political representation,” said Duncan McDonnell, a political scientist at the European University Institute in Florence. “These people don’t feel that anyone’s actually listening to them … It really shows how there are big sections of Italian society that don’t feel represented by anyone – political parties, trade unions, interest groups or business.”

What began in January 2012 when a group of Sicilian farmers and trucking companies staged a nine-day blockade to protest austerity-driven increases to fuel and fertilizer prices, the Forconi or Pitchforks movement has swelled into a national mobilization of small businessmen, low-paid workers, students and the unemployed taking a stand against the leading regime.

The week of actions are leading up to plans for a “peaceful invasion” in Rome starting Wednesday where demonstrations will reportedly persist until demands for a wholesale government changeover are met.

The protests have gained the support of other Italian opposition groups including the anti-establishment 5-Star Movement, whose leader Beppe Grillo urged in an open letter to leaders of the security forces to “no longer give protection to this political class that has brought Italy to its knees” and instead join their Italian bretheren.

“In the forthcoming demonstrations,” he wrote on his blog earlier this week, “order your lads to take off their helmets and fraternise with the citizens. It’ll be a signal that is revolutionary, peaceful and extreme.”

Grillo continues:

This moment in history that we are experiencing right now, is a very dangerous one. The institutions have been delegitimised. The electoral law has been declared unconstitutional. Parliament, the Government and the President of the Republic are arbitrarily carrying out their functions. [...]

The management of the public resources, of social services, of the health service, of education and of law and order, is in a mess. The economy is collapsing. [...]

Italy has lost monetary sovereignty, fiscal sovereignty and it’s about to lose its economic sovereignty with the most likely hypothesis being that of strangulation by the recessionary policies of the International Monetary Fund. Most of the citizens are being kept in the dark about the real situation that the country is hurtling into, thanks to a disinformation regime that places Italy in the 70th position on the “freedom of the press” ranking [...]

The disturbances that took place yesterday throughout Italy were mostly caused by the exasperation of the people because of their quality of life and the arrogance of a political class that is not doing without any privileges, but is just intent on perpetuating their own existence. Yesterday’s protests could be the beginning of a conflagration or the precursor of future uprisings that could perhaps be uncontrollable.

Following the success of ruling Prime Minister Enrico Letta during a confidence vote in parliament Wednesday, organizers vowed to ramp up their actions until the party in power stepped aside.

“If the government wins the confidence vote on Wednesday and the politicians remain in place, all the pitchforks in Italy will move on Rome for a peaceful invasion,” said Calvani.

This latest wave of demonstrations began on Monday when a series of small demonstrations sprang up across the country with reports of police violence and tear gas attacks.

In Turin on Tuesday, Italian independent reporter Mattia Marinolli writes, various demonstrations converged in the central square, Piazza Castello, where police responded to a number of hurled stones with “barrages of tear gas.” Reportedly after the skirmish, when protesters demanded that the officers remove their helmets, some did—adding fuel to Grillo’s and others’ call for national solidarity with the demonstrations.

According to Reuters, Interior Minister Angelino Alfano told parliament earlier this week that the wave of unrest could “lead to a spiral of rebellion against national and European institutions.”

Source: https://www.commondreams.org/headline/2013/12/14

Following the end of World War II, the Italian workers’ movement was rapidly gaining strength. In some towns the fascists had been kicked out by Resistance forces (as before the war, these were usually led by socialists and anarchists), and embryonic workers’ councils were governing. The Communist Party in particular won mass support for its involvement in this movement.

When Allied forces swept across the country, destroying this fledging power of ordinary people was next on the agenda after finishing Mussolini’s regime.

When the liberal Italian state was reconstructed, mechanisms were put in place to make sure that workers did not take power. In addition to the already-existing powerful secret society, P2 which was heavily involved in the anti-working class Strategy of Tension in the 1960s and 70s the covert and yet official organisation ‘Gladio’ (‘sword’ – its logo is pictured, above) was set up.

http://libcom.org/history/operation-gladio-italy

 

More than 4,000 riot police were dispatched to maintain order as some 25,000 protesters marched through the capital on Saturday. There were moments of tension when demonstrators passed near the headquarters of an extreme-right group, but police intervened when a few bottles were thrown.

Later, demonstrators threw eggs, firecrackers and smoke bombs outside the Finance Ministry. Police reacted by dispersing the protesters, detaining 11 of the demonstrators. There were no reports of injuries.

Ahead of the march police detained some anarchists believed to pose a security threat.

The protests were accompanied Friday by a 24-hour nationwide strike that caused disruptions for travellers. Train service was guaranteed in most cities for morning and evening commutes, but airports in Rome, Naples, Milan and Bologna had to cancel some flights. Some school and health workers also went on strike.

The USB and COBAS unions organized Friday’s strike to protest austerity measures reducing transportation budgets. USB union co-ordinator Pierpaolo Leonardi accused the Italian government of imposing EU directives without concern for the impact on workers.

Source: http://www.cbc.ca/news/world/italy-anti-austerity-protests-draw-thousands-to-rome-1.2126917

How terrible, how sad, said the politicians from Italy to England. Pope Francis called the shipwreck a “disgrace” and offered prayers for the victims. Italy took the easy route saying, quite understandably, that it was a problem for Europe as a whole.

But less than a week later, the drowning of some 363 migrants off the coast of   the island of Lampedusa has already fallen out of the main news. Had the victims been white Europeans or Americans instead of Syrians, Somalis and Eritreans, no doubt there would be more soul searching.

Even in the immediate aftermath, it became clear that the deaths could have been avoided then and there. How was it that in the combined surveillance forces of the Italian coast guard (backed up by European and American security systems of all kinds) did not spot the foundering boat quickly enough?

The first on the scene were local fishermen Vito Fiorino and Francesco Colapino. They personally pulled dozens of migrants out of the water. But they said they were frustrated by the Italian coastguard. They took an hour to arrive (even though the boat sank only some 700 or so metres off the Lampedusa coast) and, by their accounts, refused to help.

This latest loss of life, however immense, adds to the already huge figure of some 20,000 people estimated to have died in similar circumstances in the Mediterranean since the mid-1990s.

“Murderous Europe”, a statement by Migregroup, a Euro-African network of campaigners for the human rights of migrants, rightly affirms the deaths were in no way inevitable or an act of fate.

The deaths in the seas between Europe and Africa, as well thousands more in the deserts of Sinai, Algeria and Mali  (not forgetting Syria) are the consequence of a war against migrants.

How else can the European Union order control mechanisms and surveillance systems bearing hideous names like Frontex and Eurosur be described?

Migregroup says that while people traffickers are denounced as the guilty parties, it is actually the states of Europe who refuse to issue visas to those seeking asylum or a new life in Europe, thus pushing people into so-called illegality.

There are an estimated six million illegal migrants in Europe who are victims of the “securitarian logic” of the EU’s Shengen Agreement.

Whilst decrying the warring regimes in Syria, Ethiopia and Somalia, European states, including Britain, refuse to offer asylum to those fleeing persecution or poverty. Instead the EU has signed agreements with Algeria, Morocco, Tunisia and Libya to make these states stem the flow of migrants.

Article 4 of the Universal Declaration of Human Rights, which asserts the right of freedom of movement and choice of domicile, clearly does not appear to be on the EU lawmakers’ horizon.

While Italian agencies and international NGOs struggle to help survivors with totally inadequate funds and against obstruction by the Italian state, the real money is of course elsewhere.

The dire situation facing millions in Africa is because as far as the global big powers are concerned, they are simply collateral damage.

While the US state is in shutdown mode, hundreds of millions of tax dollars continue to be poured into making Italy “a launching pad for the wars of today and tomorrow”. While officially saying there are no US military bases in Italy, there are in fact 59 Pentagon-identified US bases in the country, including the Sigonella Naval Air Station near Catania in Sicily – less than 100 miles away from the African coast and even less from the island of Lampedusa.

Since 2008, the Pentagon has spent an estimated $31 million on a Global Hawk complex at Sigonella, part of its “global war on terror” programme for military operations in Africa.

The responsibility for the deaths in the seas of the Mediterranean lies on the shoulders of the European states and their co-criminals in the Pentagon.

Corinna Lotz
A World to Win secretary
8 October 2013

http://www.aworldtowin.net/blog/war-on-migrants-behind-lampedusa-tragedy.html

               Associated Press  German flags wave in front of the Reichstag building in Berlin.

FRANKFURT—Immigration to Germany hit a 17-year high last year as Southern Europeans flocked north to escape economic recession and search for jobs, fueling the debate over the consequences of immigration for the German economy.

In all, 1.08 million people moved to Germany last year, or 13% more than in 2011, Germany’s statistics office said Tuesday, indicating that the euro zone’s debt crisis is reshaping the fabric of European society as well as the economy. The biggest increases came from people moving from the stricken economies of Spain, Greece, Portugal and Italy.

“Until recently, Germany was an emigration country, but now people are flocking to Germany in search of work, as their home countries are mired in recession,” said Wolfgang Nagl, a labor market expert at Germany’s Ifo institute.

The number of people moving to Germany from Spain jumped 45% in 2012 from a year earlier, excluding German expatriates, to 30,000. About 42,000 people moved to Germany from Italy, marking an increase of 40%, while the number of immigrants to Germany from Greece and Portugal rose 43% for each country in 2012, highlighting an acceleration of a trend that began in 2010 after the Greek crisis erupted.

While some German cities, such as Duisburg in North Rhine-Westphalia, are reportedly struggling to cope with the influx of poorer Roma families from Bulgaria and Romania who often don’t speak German and whose children need to be quickly integrated into schools and apprentice schemes, most economists believe that Germany is benefiting from the immigration boom.

They argue that the influx of foreign workers will help alleviate shortages of skilled labor in some sectors of the economy—such as engineering, information technology and health care—as unemployment in Germany remains near its lowest level since reunification in 1990.

“Germany certainly benefits from the recent rise in immigration,” Mr. Nagl said. “The Greeks, Spaniards and other people moving to Germany contribute to economic activity—they rent out flats, they go to the shops to purchase food and other things, they pay taxes and generally contribute to the social security system.”

According to the Expert Council of German Foundations on Integration and Migration, or SVR, immigrants are on average 10 years younger than Germany’s native population and are also more likely to have a university degree.

“Germany is reaping the measurable rewards of free movement thanks to skilled immigrants from other EU countries. This has received too little attention to date,” said SVR Chairwoman Christine Langenfeld.

Like in previous years, most immigrants in 2012 came from neighboring Poland, the statistics office said. Immigration from Slovenia was up 62% as the transition period toward free labor movement ended in May 2011. The number of Hungarians moving to Germany rose 31%.

Costanza Biavaschi, an economist at the Bonn-based IZA Institute for the Study of Labor, also dismissed concern that Southern Europeans move to Germany to live off its social welfare system. “It’s not true that immigrants have higher welfare takeup rates,” she said, adding that they “are usually well educated, young and ambitious and I don’t see compelling evidence that they are benefit scroungers.”

Today’s big event was Italy’s 10% auction. Buyers can’t ignore yield, and I suspect many were “encouraged” to participate. But a decent Italy auction doesn’t change the brutal facts. Electoral fall-out blankets the Euro battlefield, but it was decisions made years ago that have brought us to this blasted heath. Markets are caught in…

Stalemate.

On one side you have the disbelief on the Italy election (although why markets are surprised we cannot fathom) and all that entails about rising uncertainty on the Euro. On the other is the fact buyers need to invest. In the short-term expect the pressure to invest to win out – Italian and peripheral yields will consolidate and even tighten again. Risk off will quickly become Risk-on!

From there it becomes a debate about whether the Italy election was just another minor stumble that can be glossed over, or is it part of a more significant fundamental shift? I suspect market fears, uncertainty, and the global fundamentals will likely see the Euro crisis reveal itself again in four distinct ways in coming months:

1. The Politics of Austerity
2. Banks
3. Sovereigns
4. Renewed Unwind Fears

Austerity has failed: Listen to the language Bersani is using in Italy: trying to put together an administration based on reform and “easing of austerity”. 5-Star leader Grillo has made clear his anti-austerity convictions. Euro Elites must be having conniptions.

Austerity is the very core of the Euro Elites’ belief structure and anything less is heresy. But, across Europe from Hollande (in France) to Athens the political patience with austerity, and its increasingly apparent failure, is in the air. Austerity has done nothing to improve sovereign finances (actually increasing the imbalances in most cases!), and destroying economies with the resulting high social costs. Self-inflicted recession has not worked. There is no point in clinging to a failed ideology of austerity. The Euro Elites won’t accept that without a struggle.

So Europe needs a plan B – Growth… but a commitment to growth would require a much closer fiscal and monetary union akin to the United States of Europe to avoid moral hazard and free rider risk. It would also require yet another rejig of the ECB. There simply is not the bottom-up political appetite to support any of that. Sure, some of the Euro Elites would love to inflict top down “emergency/crisis” union, but it won’t happen because it would immediately crash against national politics!

If you fancy an academic explanation of failed austerity try this: http://www.voxeu.org/article/panic-driven-austerity-eurozone-and-its-imp…

European Banks remain Rotten to the Core: If austerity has failed economies, it’s singularly failed to address the banking crisis. The US has spent the last 5-years deleveraging and recapitalising its banking system, and that is now paying off with growth in personal and commercial lending, restoring housing markets and seeding growth.

What did Europe do? Debated banker salary caps and the self-immolation of the financial system through a transactions tax! The Elites singularly failed to address bank’s previous fatboy lending practices – they remain essentially over-levered, over-regulated and dangerously exposed to European risk. Every policy response, like long term LTROs or even OMT, was a hasty panicked infusion of liquidity to keep the banks in pretend and extend mode. Draghi did a superb job keeping the illusion going.

But aside from that, all Europe has done to address the banking crisis at its core is make a series of promises about “save the Euro at all costs”. Talk is cheap. And has done nothing to make Europe’s bad banks safer. Instead, they became even more bloated and exposed to Euro risk!

Sovereigns remain in Crisis: The poor South is caught with the wrong currency – uncompetitive, unproductive and unable to deflate to compete. Even Ireland’s status as the poster boy of austerity is bogus – economic growth is largely on the balance sheet of tax sheltering multinationals.

The results of austerity are all too obvious – rising unemployment, social tensions, and electoral dismissal. Although some of the crisis economies have done much to try to restructure and redirect their economies, in the teeth of the Austerity gale it’s proved pretty much impossible. It takes years for economies to become as lethargic as the south has become, and it can’t be turned around overnight.

Renewed Fears for the Euro: The core tenant of belief of the Euro – austerity is failing. There is no easy way to redirect the institutions of the Euro to create growth. The bloated Brussels bureaucracy would be a highly imperfect tool to sponsor European growth – although I am sure they will tell us otherwise.

The ECB’s reluctant acceptance of its de-facto role of lender of last resort is heavily qualified by the need for countries to sign up to austerity prior to ECB OMT support – that is increasingly politically unacceptable in the wake of the Italy election. A new easier OMT will be required with all the national votes and treaty changes that will require.

If you thought the European crisis was over…
it’s probably only just beginning. Sure, we may not see bond yields immediately rack back up into the stratosphere, but a period of further political panic and change is coming! What’s done cannot be undone..

And notice, yet again, I never mentioned Germany once in the above analysis.

http://www.zerohedge.com/news/2013-02-27/if-you-thought-european-crisis-was-over

by Francesco Raparelli

http://www.dinamopress.it/news/italy-from-crisis-to-crisis

The scenario is very uncertain, yet it is worth to try and guess some developments. Uncertain, because the financial markets attack on Italian bonds has not fully unfolded yet. Within hours, we will hear how dramatically our yield spread over Germany has widened. But there is one thing we can be sure of: the markets stand for Monti – and if not for him, for continuity with his policies. Same desire, same hooliganism, from the ECB and the IMF. At its World Policy Conference in Cannes, the IMF wondered how come Italy had not yet requested Europe’s financial assistance, negotiating and signing that agreement that would place Italian governments under external control for the next 10 years.

Monti knows he’s desired by many, especially amongst those who count. That’s why, as soon as he got back from Cannes, he offered his resignation and declared himself “free” to play his own game. If, as it seems, he’ll be the new leader of the centre, the road will be clear for a coalition of progressives and moderates. If this won’t happen, given the situation and with the old tycoon just round the corner, it will not be impossible for the Democratic Party (PD) and the Christian Democrats (UDC) to reach an agreement before the elections even take place.

However it goes, the PD leader Bersani will likely become prime minister, in a scenario resembling the 2005-2009 Grosse Koalition in Germany and Papademos government in Greece. It comes as non surprise that – in his latest book written with Mep Sylvie Goulard on (!) democracy in Europe – Monti praises the grand coalition political model as the ideal for current times. The only model that can ensure the superiority of technocracy over politics, and deliver structural (neoliberal) reforms thanks to the neo-corporatist docility of trade unions. In the very likely case of Bersani as Prime Minister, Monti will be Super-Minister of the Economy. The Italian paradox will also see, amongst the left-outs, the neo-populists of Grillo side by side with Mr B and the Northern League.

It’s from the Italian paradox that we have to start, if we are to understand the relation between the national and European mobilisations of the autumn and the collapse of the Italian government. Up until September, Monti seemed undefeatable. The only blatantly neoliberal European leader deeply loved by the left. The only one who could destroy public pensions, national collective bargaining, health care, schools, and precarious and young people in general, without Italian’s major trade union, the CGIL, blinking an eye. It took the ETUC and the proclamation of general strikes in Spain, Portugal and Greece, for the CGIL to at last call a 4 hours-only strike. A strike, on 14n, then generalised and strengthened by the students and youth movements virtually alone.

In that sense, 14n opened a crack that initiated a new phase. Italians no longer seem to fancy the technocrats. The youth in the streets is being joined by metalworkers (national strike 6 Dec.) , healthcare workers (national strike 11 Dec.) and many others.But of course the neoliberal management of the sovereign debt crisis requires the full involvement of progressive forces and of the CGIL at government level. The confederation is desperate to put its hands on the Labour Ministry, while the progressives are boldly eager to play the ‘responsible guys’ as usual. And ‘leftist’ Vendola (SEL) might hope to conquer some low-budget Ministry for himself. Amen.

It is in such a context that the constituent and European challenge becomes more ambitious and needed for movements. We will have to be smart, if we don’t want the Italian winter to turn into a freezing electoral vortex. We need to relaunch the political initiative at continental level (in mid-march in Brussels and everywhere in Europe), enhance the accumulation of recent youth rebellions and prepare new ones. The relationship between revolts and autonomous institutions cannot but be immanent and recursive at the same time. The karst nature of movements should not be seen as a barrier, but as an opportunity to locally root the conflicts (the wave of occupations on #6D in Rome is one example), while extending social and political relations beyond national borders.

From cities to Europe and return, that’s the ‘permanent transition’ we should go for. Knowing that the bosses will hit us hard and in many cases – as seen on 14N in Rome – very violently. And knowing that the European and world crisis will get deeper and deeper, and the savagery of original accumulation can only be opposed by a rebellion of constituent nature.

Roma, Sunday 10-12-2012

On the 11th December healthcare strike and the occupation of CTO Hospital in Rome (IT only):

http://www.dinamopress.it/news/dalla-difesa-allattacco-le-battaglie-sulla-sanita
On the 6th December metalworkers and students strike and the occupation of vacant homes by the housing movement (IT only):

http://www.dinamopress.it/news/6d-lets-strike-lets-unite

No wonder the protesters are back. They are angry at the backdoor rewriting of the social contract

• Ha-Joon Chang

Rioters beat a policeman during a rally against government austerity measures in Athens. Photograph: John Kolesidis/REUTERS

Throughout the 1980s and 90s, when many developing countries were in crisis and borrowing money from the International Monetary Fund, waves of protests in those countries became known as the “IMF riots”. They were so called because they were sparked by the fund’s structural adjustment programmes, which imposed austerity, privatisation and deregulation.

The IMF complained that calling these riots thus was unfair, as it had not caused the crises and was only prescribing a medicine, but this was largely self-serving. Many of the crises had actually been caused by the asset bubbles built up following IMF-recommended financial deregulation. Moreover, those rioters were not just expressing general discontent but reacting against the austerity measures that directly threatened their livelihoods, such as cuts in subsidies to basic commodities such as food and water, and cuts in already meagre welfare payments.

The IMF programme, in other words, met such resistance because its designers had forgotten that behind the numbers they were crunching were real people. These criticisms, as well as the ineffectiveness of its economic programme, became so damaging that the IMF has made a lot of changes in the past decade or so. It has become more cautious in pushing for financial deregulation and austerity programmes, renamed its structural adjustment programmes as poverty reduction programmes, and has even (marginally) increased the voting shares of the developing countries in its decision-making.

Given these recent changes in the IMF, it is ironic to see the European governments inflicting an old-IMF-style programme on their own populations. It is one thing to tell the citizens of some faraway country to go to hell but it is another to do the same to your own citizens, who are supposedly your ultimate sovereigns. Indeed, the European governments are out-IMF-ing the IMF in its austerity drive so much that now the fund itself frequently issues the warning that Europe is going too far, too fast.

The threat to livelihoods has reached such a dimension that renewed bouts of rioting are now rocking Greece, Spain and even the usually quieter Portugal. In the case of Spain, its national integrity is threatened by the separatist demand made by the Catalan nationalists, who think the austerity policy is unfairly reducing the region’s autonomy.

Even if these and other European countries (for other countries have not been free of protests against austerity programmes, such as Britain’s university fees riot and the protests by Italy’s “recession widows”) survive this social unrest through a mixture of heavy-handed policing and political delaying tactics, recent events raise a very serious question about the nature of European politics.

What has been happening in Europe – and indeed the US in a more muted and dispersed form – is nothing short of a complete rewriting of the implicit social contracts that have existed since the end of the second world war. In these contracts, renewed legitimacy was bestowed on the capitalist system, once totally discredited following the great depression. In return it provided a welfare state that guarantees minimum provision for all those burdens that most citizens have to contend with throughout their lives – childcare, education, health, unemployment, disability and old age.

Of course there is nothing sacrosanct about any of the details of these social contracts. Indeed, the contracts have been modified on the margins all the time. However, the rewriting in many European countries is an unprecedented one. It is not simply that the scope and the speed of the cuts are unusually large. It is more that the rewriting is being done through the back door.

Instead of it being explicitly cast as a rewriting of the social contract, changing people’s entitlements and changing the way the society establishes its legitimacy, the dismembering of the welfare state is presented as a technocratic exercise of “balancing the books”. Democracy is neutered in the process and the protests against the cuts are dismissed. The description of the externally imposed Greek and Italian governments as “technocratic” is the ultimate proof of the attempt to make the radical rewriting of the social contract more acceptable by pretending that it isn’t really a political change.

The danger is not only that these austerity measures are killing the European economies but also that they threaten the very legitimacy of European democracies – not just directly by threatening the livelihoods of so many people and pushing the economy into a downward spiral, but also indirectly by undermining the legitimacy of the political system through this backdoor rewriting of the social contract. Especially if they are going to have to go through long tunnels of economic difficulties in coming years, and in the context of global shifts in economic power balance and of severe environmental challenges, European countries can ill afford to have the legitimacy of their political systems damaged in this way.

http://www.guardian.co.uk/commentisfree/2012/sep/28/europe-riots-root-imf-austerity?CMP=twt_gu