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

Trump's attempt to divide Russia & China is failing, badly

Geopolitical Economy Report   Donald Trump claimed he would "un-unite" Russia and China, but the US divide-and-conquer strategy is failing. In a meeting in Moscow celebrating the 80th anniversary of their nations' victory in World War Two, Presidents Xi Jinping and Vladimir Putin reaffirmed that "China-Russia relations have reached the highest level in history" and will "jointly resist any attempts to interfere with and disrupt the traditional friendship and deep mutual trust between China and Russia". Ben Norton explains.     Related:   Why China supports Russia

Protesters Stalk & Confront Israeli Minister Through NY Streets!

The Jimmy Dore Show   Israeli National Security Minister Itamar Ben-Gvir, who is also a convicted terrorist and Jewish supremacist, has been touring the US, speaking on college campuses and meeting with political groups, and he even traveled to Mar-a-Lago. His visit has been met with widespread protests, however. Ben Gvir was confronted by pro-Palestinian demonstrators in New Haven, Connecticut, following a speech he gave at Shabtai, a private Jewish society at Yale that’s not officially affiliated with the university. Jimmy Dore and Americans’ Comedian Kurt Metzger discuss how Ben-Gvir’s security detail was able to assault protesters with impunity — and that in fact police officers approach an assaulted protester to demand that he step away from Ben-Gvir’s group.

Το νέο ψευδοδίλημμα που κατασκεύασε το καθεστώς Μητσοτάκη για να κρατηθεί στην εξουσία

του system failure   Ένα από τα βασικά χαρακτηριστικά ενός καθεστώτος, είναι η έκδηλη αγωνία του να διατηρήσει την εξουσία. Ως απόρροια αυτής της προσπάθειας, είναι και ο σχεδόν απόλυτος έλεγχος της μαζικής (παρα)πληροφόρησης, δηλαδή, ότι ακριβώς κάνει το καθεστώς Μητσοτάκη.   Η αγωνία αυτή είναι φανερή και σε άλλους καθεστωτικούς μηχανισμούς, όπως οι εταιρίες δημοσκοπήσεων, που πασχίζουν να εμφανίσουν μια εικόνα ανάκαμψης για το καθεστώς, προκειμένου να διαμορφώσουν, ως συνήθως, το επιθυμητό κλίμα. Τελευταία, τα καθεστωτικά προπαγανδιστικά φερέφωνα, έχουν κατασκευάσει ένα νέο ψευδοδίλημμα, στοχεύοντας τον μέσο Έλληνα ψηφοφόρο και την ανάγκη του να νιώσει ασφάλεια, σε όλα τα επίπεδα.  Και για να συμβεί αυτό, έπρεπε προηγουμένως να κατασκευάσουν ένα ανερχόμενο αντίπαλο δέος απέναντι στον Μητσοτάκη, που όμως θα τρόμαζε τους, επιρρεπείς στις απότομες πολιτικές αλλαγές, "νοικοκυραίους". Και το βρήκαν στο πρόσωπο της Ζωης Κωνσταντοπούλου και την Πλεύση Ελευθερίας. Είναι σ...

From the United States to Europe, Criticizing Israel Is Becoming a Crime

by Kit Klarenberg     Part 2 - ‘Drastic Rise’   In a grave testament to the speed with which U.S.-based pro-Israel organizations, including several prominent Jewish advocacy groups, sought to capitalize on October 7 for their own purposes, two-and-a-half weeks after Palestinian fighters breached Gaza’s infamous apartheid walls, Republican lawmaker Mike Lawler proposed H.R. 6090, also known as the Antisemitism Awareness Act. Lawler is a major recipient of Israeli lobby funds, with the influential lobbying group AIPAC gifting him $392,669 in 2023 and 2024 alone, his largest donor by some margin. His bill would require the Department of Education to consider the highly controversial International Holocaust Remembrance Alliance (IHRA) working definition of antisemitism (which critics argue conflates criticism of Israel with antisemitism) when determining if cases of harassment are motivated by antisemitism, raising concerns that it would violate the intent of Title VI of the...

Uber CEO plots ‘opening up’ of Iran with Israeli-tied monarchist opposition group

A livestreamed Iranian royalist chat revealed a network of foreign-educated elites plotting to plunder Iran’s economy after realizing their dream of regime change. The CEO of Uber, Dara Khosrowshahi, has drawn criticism following his participation in an online discussion workshopping ways to exploit Iran in the event of regime change. The event wad hosted by NUFDI, the main DC-based advocacy group for the monarchist movement surrounding Reza Pahlavi, whose father was the last reigning Shah of Iran.   The discussion, marketed by one prominent online Pahlavi booster as an effort “to present designs that could be quickly implemented in Iran after the fall of the Islamic Republic” and “the establishment of a sound government,” was held to cobble together a loose plan for the privatization of Iran’s economy following an apparently to-be-determined regime change scenario. It’s unclear whether the vision laid out by the two Iranian expats represents a concrete blueprint for toppling the g...

Israel's Destruction of Gaza is "Our Generation's Kristallnacht" Warns Yanis Varoufakis

Glenn Greenwald  

China and Russia vow deeper partnership and global coordination

CGTN Europe   China and Russia reaffirmed their strategic partnership, vowing to deepen political trust, coordinate in international affairs, and promote an equal multipolar world. President Xi Jinping and President Vladimir Putin emphasized cooperation in various fields, including trade, energy, technology, and culture. They also committed to upholding multilateralism, international law, and opposing unilateral sanctions. The presidents signed a joint statement to strengthen comprehensive strategic cooperation, exchanging over 20 documents on various sectors. President Xi will attend Russia's Victory Day celebrations, further highlighting their close ties. 

Inside Iran's Savak torture museum

The Grayzone   Caution: This report contains depictions of simulated violence that may upset some viewers. Max Blumenthal tours one of the most disturbing museums on the planet. Set in Tehran's former Ebrat Prison run by the anti-sabotage unit of Shah Reza Pahlavi's Savak intelligence services, the museum is filled with shockingly graphic exhibits featuring lifelike mannequins recreating the hideous torture tactics deployed to repress dissidents rebelling against Iran's monarchy. Many mannequins on display represent notorious torturers who either fled or were executed after the Islamic revolution in 1979, while others are modeled after famous prisoners locked away in Ebrat like the current Leader of Iran, Ayatollah Khamanei.  

From the United States to Europe, Criticizing Israel Is Becoming a Crime

by Kit Klarenberg     Part 3 - ‘Targeting Critics’   Such brazen pro-Israeli lawfare is a longstanding tradition in modern American politics. In 1977, two amendments to the Export Administration Act and the U.S. Tax Code were passed. In theory, they prohibited U.S. citizens and companies from complying with foreign boycotts against any country considered “friendly” to Washington. In reality, it was specifically intended to counteract the long-running embargo of Israel by the Arab League. Most U.S. allies adopted the prohibition, in some cases ironically damaging their relations with Israel. Then in 1987, Ronald Reagan designated the Palestine Liberation Organization (PLO)—at the time recognized almost universally as the Palestinian people’s legitimate representatives—a terrorist entity, but enacted a waiver the next year permitting “contact” between White House officials and the group. This fudge meant the Organization was forced to shut down its D.C. office and cease mo...