"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:
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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.
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