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Europe Capitalist EU is fast coming apart at the seams

Far from isolated incidents, recent developments in Italy and Spain are symptoms of a pan-European crisis, writes KEVIN OVENDEN

IT’S like a game of Whack-a-Mole. No sooner had European leaders congratulated themselves on the formation of an Italian government, after a punishment beating earlier in the week, than the centre-right Spanish government of Mariano Rajoy faced collapse on Friday.

That’s the Rajoy whose repression of democracy in Catalonia earned plaudits in Brussels six months ago and was meant to herald a strengthened right-wing government in Spain.

The “end of the Italian political crisis” after three months without a government amounts only to the creation of a highly conflicted administration whose economic programme runs counter to the deflationary, austerity rules of the eurozone and EU.

It is also a government whose interior ministry will be in the hands of a hard-right racist. But that was not a bone of contention with the Italian president and EU elites.

How could it be — the interior minister in Berlin says “Islam has no place in Germany,” his counterpart in Vienna is of the far-right Freedom Party and threatened detention camps for refugees in Italy already exist in Greece under the EU-Turkey deal of shame.

Following discussions, according to the Italian media, with the governor of the European Central Bank and other EU officials, Italy’s president vetoed the initial choice of a finance minister highly critical of the euro.

He’s been demoted to European affairs minister in the new government. While it shows that there is a great gap between the anti-elite demagogy and the conventional reality of the League and Five Star Movement who make up the government, the idea that this is the end of the crisis is fanciful.

Rather, despite a hefty anti-democratic whack last weekend, the mole is going to pop up again, and not just in Italy. For that is but one aspect of a deeper and continent-wide crisis.

In Britain especially, thanks to Brexit myopia in the conservative and liberal media, the dramatic events in Europe tend to be seen either as discrete or through a narrowing London lens.

In fact, what is happening in Europe is best understood as an “organic crisis,” fittingly to adopt the term associated with the great Italian Marxist Antonio Gramsci.

It is not a series of events contingent on a bad set of economic figures here, an electoral upset there or a scandal like the corruption that has been revealed in the Spanish centre right.

That’s why those who were pointing to modest current growth forecasts in Italy and Spain as evidence that the storm will pass were missing the point.

It is a deep-seated crisis of politics, economy and society rooted in the twin failures of the EU and its decades-long model of organising capitalist Europe.

The first failure is the promise that further European integration would lead to rising prosperity for working people. In fact there has been the most enormous squeeze on working-class living standards.

It predates the post-2008 crisis years and the policy of brutal austerity to make working people pay for the bailout of the financial system, whose astronomical debts reappeared on government balance sheets.

It began in the so-called good years prior to the crisis.

The second is that far from diminishing national antagonisms, the EU and euro have exacerbated them, with an inbuilt structural imbalance between a core centred on Germany and a periphery, including the European south.

Italy is a case in point of both failures. In the early 1990s both Italy and Britain were forced out of the precursor to the euro, the Exchange Rate Mechanism: Italy temporarily, Britain permanently.

Though we should recall that in the late 1990s Tony Blair and his ultras were very keen on Britain signing up to the single currency.

Remember that whenever Tony Blair, Peter Mandelson or Alastair Campbell pop up offering advice to the Labour Party today on Brexit policy.

Italian capital did sign up to the euro and embarked on an enormously damaging path to do so. It was a political choice by the Italian elites.

A key reason was that it enabled them to present the imposition of neoliberal nostrums — such as privatisation and weakening workers’ rights — not as some domestic policy choice, but as a necessity of “being European,” which meant following the capitalist EU rules.

One result of the removal of fundamental questions of the organisation of the economy and society from the national democratic sphere was the winnowing of the political system.

The centre left and centre right converged on increasingly narrow social terrain. The result was seen spectacularly in Italy at the general election in March. Both historic poles of the political system failed to reach combined the level of support for the insurgent Five Star Movement alone.

A similar process, to varying extents, is seen across Europe — even in Germany.

The two-party system that stabilised western Europe at the end of the 1970s in a kind of “anti-1968” is in a historic crisis.

So is the claim that the EU had transcended the national conflicts that have violently erupted across the continent in its modern history.

Membership of the EU and eurozone provided a potent weapon for Italy’s elites in squeezing the popular layers. But it came at a price.

Twenty years ago Italy was second only to Germany in the EU in the share of its economy accounted for by manufacturing. Since then it has lost nearly 20 per cent of industrial capacity.

Some 30 per cent of enterprises have defaulted on debt. Unemployment is among the highest in Europe and, when wider measures than the claimant count are used, probably approaches 30 per cent of those wanting permanent full-time work but unable to find it.

State-aid rules have prevented stabilisation of the banking system except by keeping it in private hands and transferring risk to small depositors.

The reason for the political earthquake in March is not to be located in the migration flows or contingent events of the last couple of years, but in over a generation of big business policy that has failed.

The response from the European political class to that evident failure is light-minded, arrogant and reactionary.

This week the EU budget commissioner said that a dose of finance market frenzy would teach Italians how to vote “properly” in future. Commission president Jean-Claude Juncker said Italians need to learn to work hard, pay taxes and deal with corruption.

Corruption? The Luxembourgeois former prime minister of a tax-haven knows a thing or two about that.

That utter political failure in his own country of Belgium, Guy Verhofstadt of the European Parliament, wagged his finger at working people in southern Europe telling them that they have to rally behind the EU in its incipient trade war with Donald Trump.

The unemployed worker in Bari is meant to support the bosses of BMW in Bavaria in a spat with Trump, but at the expense of any feeling of solidarity with the distillery worker in Kentucky?

Offered as a counterpart to another round of self-flagellation by working-class Europe is the chimera of “reform” of the EU and eurozone, ostensibly dealing with some of its failures, so great that even serious proponents register them.

But what reform and how? It’s a historical irony that in Britain, the land of supposedly hard-headed rational empiricism, sections of the intelligentsia and even of the labour movement take refuge in abstract calls for reform of the EU.

To give one example as a reality-check. For three years the German government and the EU have had a secondary spat with the International Monetary Fund over Greece.

They wanted the IMF in the Greek memorandum programme because it brought its ruthless powers of implementing structural adjustment, pioneered in the murderous shock therapies imposed on Latin America, much of Africa and eastern Europe.

But they rejected the IMF economists’ reasoning that the Greek debt is unsustainable without the kind of write down that often happens in the corporate sector.

This week Angela Merkel’s party in Germany said that it would rather the IMF no longer has a role in the special measures imposed on Greece than accept that a lot of the debt must be written off.

If the central axis of the EU is more fanatical than even the IMF, what hope of reform – realistically, on a timeframe that could come to the practical assistance of people in Italy, Greece and in parts of other countries who have been hurled back 20 years?

And the only “reform programme” in town is that of France’s Jupiter, Emmanuel Macron. Its thrust is to improve the standing of French capitalism with respect to German, and its answer to the European economic disparities is to hand yet more power to undemocratic decision-making.

More immediately, it is a plan that is going nowhere. It is predicated on him carrying through a massive onslaught on the French working class and social state. His plan is to cut state-led demand by €100 billion in the next few years.

The unelected banker prime minister of Italy, Mario Monti, managed to cut €300bn in four years from 2011. Behold the result.

There is something quite obscene in soi-disant liberal European English commentators lionising Macron while bemoaning that their weekend in Paris was disrupted by striking rail workers fighting for their rights and livelihoods.

And the British labour movement has a place in all this. It is doubly unique. Britain has voted to leave the EU and voters indicate that they may elect a left-led government. Neither of those conditions obtains in the rest of the EU.

The left in Britain has a chance to be truly European. So long as it takes seriously developments across a whole continent, rather than an echo chamber in a couple of contiguous WC1 and SW1 postcodes.

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