Skip to main content

The Eurozone’s ‘New Austerity Model’

"The Eurozone economy has never really recovered from the 2008-09 financial crash and recession. Austerity policies—that played a major role in preventing a sustained Eurozone economic recovery for the past five years—are now evolving into still newer forms. Events in the recent past in Spain, measures approved in just the past week by the newly formed Renzi government in Italy, and proposals being debated at this very moment by the Holland government in France all point the way to the new forms of austerity now taking shape in the Eurozone.”

No longer just cuts in government social programs and elimination of subsidies for the working poor, as before, the ‘New Model’ for Austerity emerging in the Eurozone consists of direct attacks on workers’ wages and incomes. The plan is to hold down wages in order to lower business costs and price of exports. Boosting exports in turn, it is hoped, will lead to more investment which has been steadily declining for years in the Eurozone. This scenario takes place under the cover of what is being called ‘structural economic reforms’ in general and, specifically, ‘labor market reform’ as the central element of general structural reforms.”

In Italy, 70% of all new hires have been temp workers. Temp means lower wages, fewer benefits, far less job security, and employer ‘rights’ to layoff and fire at will. The chronic high unemployment and the large number of low wage temp jobs translates into wage compression in general, with few exceptions, for the rest of the Eurozone working class.”

In addition to high unemployment and temp hiring, which will continue as a dual force already depressing wages, the new 3rd force of ‘labor market reform’ will extend wage cutting further, targeting the non-temp, permanent Eurozone working class in Italy, France, and elsewhere in particular.”

Another way must therefore be found in France, Italy, and the core northern economies now slipping into recession in order to generate an export-driven recovery. ‘Internal devaluation’ to reduce labor costs will have to take another form. That ‘other way’ is ‘labor market reform’—i.e. wage reduction by another name targeting the non-temp permanent employed workforce.”

With Italy well on its way to implementing ‘labor market reform’ as a new form of Austerity, France is close behind but has not yet launched a similar labor policy. Pressure by Eurozone capitalists and elites across the region—especially central bankers—is now growing and demanding that France speed up the process. Indicative of this pressure are recent public statements by Jyrki Katainen, who will assume the role of vice president for jobs, growth, investment and competitiveness on November 1 for the European Commission. Katainen last week praised Italy’s new labor market reforms, declaring 'it is a very good thing they are dong'. On the other hand, he criticized France, saying 'France should do more'. The IMF, Germany’s government, and central bankers throughout the Eurozone have all added their voice, in a growing drumbeat of demands that France more quickly introduce serious labor market reforms and other structural reforms.

At the same time, as in Italy and Spain, other prior forms of austerity apparently will continue, as France has indicated it will proceed with previously committed spending cuts of 50 billion Euros.

But boosting exports by labor market reform and wage compression raises the still deeper question of ‘who will they increase exports to? If the global economy—from China to Japan to Latin America, and even the USA in 2015 should it raise interest rates—continues to slow, as it clearly is now doing, who will buy the Eurozone’s exports?”

Full article:


The European neoliberal economic empire sent a message, to Berlin this time, and is ready to accelerate processes for a catholic implementation of the destructive policies tested in Greece, to secure big capital's interests.

With the biggest economy of the eurozone adopting such austerity measures, there will be no "good examples" for anyone to turn to, no excuses. The anti-austerity front will collapse and the European plutocracy will declare final victory.



Federalism means however, that the same policies will be applied totally, definately and very soon, also against German citizens and workers.



... we should expect a new attack quite soon against the spreads of Spain and Italy, forcing these countries to turn to ECB permanently as the exclusive source of funding, which means that they will adopt new austerity measures and further dismantling of the social state and labor rights, as required by the banks and multinational cartels and as it happens again and again in Greece.



We will start with Italy and Spain. We will order rating agencies to attack, exclude them from markets and throw them to the ECB trap. They will be forced to take similar measures, as Greece did, in order to receive liquidity. Then, we will attack France and Germany.



It is characteristic that, according to many articles, which were forgotten quite fast so that the public opinion to focus on Hollande's "extramarital" affair, the biggest amount of these cuts reaching 30 billion euros, concerns cuts in levies paid by firms on labor, which actually means new cuts against labor and for the benefit of the big corporations.

Comments

Popular posts from this blog

UN says Israel is committing crimes against humanity & 'extermination' in Gaza

Geopolitical Economy Report   The United Nations Human Rights Council published a report that concluded that Israel has committed war crimes and "the crimes against humanity of extermination" in Gaza. Ben Norton analyzes the statements by UN legal experts.

Day 1900: Julian Assange still in prison and under slow-motion execution by the Anglo-American imperialist criminals

failed evolution   On 11 April 2019, the Ecuadorian government of traitor Lenin Moreno, invited the Metropolitan Police into the Ecuadorian embassy in London, and they arrested Julian Assange . Since then, Assange is kept in Belmarsh high security prison in London, without actual charges.   The real reason world's number one political prisoner is still kept in this high security prison, is because he exposed horrendous war crimes carried out by the US imperialists and their allies.   The ruthless Western imperialist regime wants to punish the No1 real journalist in the world and make him an example for any Whistleblower or real journalist who will attempt to expose its big crimes in the future.   And the Anglo-American axis has now become officially a fascist coalition , framed by the rest of its Western pets. UK's Home Secretary Priti Patel, one of the most ruthless ever, decided to extradite Julian Assange to US. No surprise of course. The only question we had in mind is

Exposed: How Biden & Ukraine’s Fascists Worked Together to Block Peace with Russia

BreakThrough News   Newly released treaty negotiation documents show that Ukraine and Russia were very close to ending the war—more than two years ago, in April 2022. But U.S. imperialists and NATO have worked with and strengthened the right-wing in Ukraine to achieve their long-term goals in the region, including endless war, no matter how many people die. Brian Becker is joined by Eugene Puryear, co-host of The Freedom Side , to discuss the newly revealed documents showing how the Ukraine war nearly ended two years ago but were sabotaged by the intervention of the White House and the Ukrainian far-right. They discuss how Ukraine’s economy has been totally mortgaged to U.S. and European interests. 

BlackRock & Wall Street banks are profiting from Israel's crimes in Gaza, UN says

Geopolitical Economy Report  Top UN human rights experts called on Western weapons corporations to stop sending arms to Israel, saying they could be complicit in war crimes. Asset managers like BlackRock and Wall Street banks are also profiting. Ben Norton looks at the evidence.

Socialism or Barbarism: What’s at Stake in this Election & Beyond

Double Down News   Roger Waters meets Fiona Lali. Fiona Lali is the independent candidate for Stratford & Bow.   https://www.fionalalircp.com 

Israeli documents show expansive government effort to shape US discourse around Gaza war

As the Gaza war rages, Israeli funds target US college campuses and push to redefine antisemitism in US law   by Lee Fang and Jack Poulson   Part 3 - Substantial Israeli government involvement in American politics   Haaretz and the New York Times recently revealed that Chikli’s ministry had tapped a public relations firm to secretly pressure American lawmakers. The firm used hundreds of fake accounts posting pro-Israel or anti-Muslim content on X (formerly Twitter), Facebook and Instagram. (The diaspora affairs ministry denied involvement in the campaign, which reportedly provided about $2m to an Israeli firm for the social media posts.) But that effort is only one of many such campaigns coordinated by the ministry, which has received limited news coverage. The ministry of diaspora affairs and its partners compile weekly reports based on tips from pro-Israel US student groups, some of which receive funding from Israeli government sources . For example, Hillel International, a co-foun

What UK did in Gaza is SHOCKING & no one's allowed to talk about it

Double Down News   EXPOSED: Britain's Secret Role in Gaza  

Συνασπισμός προοδευτικών δυνάμεων με ηγέτη τον Γιάνη Βαρουφάκη

... για να γλιτώσει η χώρα μια και καλή από τη Μητσοτακική λαίλαπα   failed evolution   Η διάσπαση του κεντροαριστερού χώρου καλά κρατεί, όπως ακριβώς ήθελε η ντόπια ολιγαρχία.   Ο στόχος όμως της στρατηγικής ήττας ΣΥΡΙΖΑ και η επαναφορά ΠΑΣΟΚ στη θέση της αξιωματικής αντιπολίτευσης, απέτυχε και πάλι.  Απέτυχε και η απομάκρυνση Μητσοτάκη από την ηγεσία της ΝΔ και ύστερα από αυτό το Βατερλό στις ευρωεκλογές, οι ολιγάρχες θα πρέπει να είναι στα κάγκελα και να κάθονται σε αναμμένα κάρβουνα. Οπότε χρειάζονται νέα εναλλακτική. Επιχειρήθηκε άλλο σχέδιο, την τελευταία στιγμή και στο πόδι, με βάση το οποίο οι αποστάτες της ΝΕΑΡ θα πήγαιναν στο ΠΑΣΟΚ, έτσι ώστε το ΠΑΣΟΚ με τις έδρες τους, να έκλεβε και τη θέση της αξιωματικής αντιπολίτευσης από τον ΣΥΡΙΖΑ. Απλά, γρήγορα και εύκολα. Το σενάριο διαδόθηκε από καθεστωτικά φερέφωνα που προσπάθησαν να δημιουργήσουν το κατάλληλο κλίμα. Φαίνεται ότι, τουλάχιστον προς το παρόν, κάηκε γρήγορα. Επιχειρείται τώρα νέο σχέδιο με σύνθεση ΣΥΡΙΖΑ-ΠΑΣΟΚ και ε

Israeli documents show expansive government effort to shape US discourse around Gaza war

As the Gaza war rages, Israeli funds target US college campuses and push to redefine antisemitism in US law   by Lee Fang and Jack Poulson   Part 1 - Redefining antisemitism   Last November, just weeks into the war in Gaza, Amichai Chikli, a brash, 42-year-old Likud minister in the Israeli government, was called into the Knesset, Israel’s parliament, to brief lawmakers on what could be done about rising anti-war protests from young people across the United States, especially at elite universities. “ I’ve said it before, and I’ll say it again now, that I think we should, especially in the United States, be on the offensive,” argued Chikli. Chikli has since led a targeted push to counter critics of Israel. The Guardian has uncovered evidence showing how Israel has relaunched a controversial entity as part of a broader public relations campaign to target US college campuses and redefine antisemitism in US law. Seconds after a smoke alarm subsided during the hearing, Chikli assured the l

De-dollarization is growing: Even the US Federal Reserve (reluctantly) admits it

Geopolitical Economy Report Countries around the world are seeking alternatives to the US dollar. IMF economists say de-dollarization is "broad-based". The Federal Reserve reluctantly admits that it is happening. Ben Norton analyzes the latest research.