ON Thursday, a member of the powerful Bank of England Monetary Policy Committee, in an unguarded moment, blurted out the truth that exports from the UK to its largest trading partner the EU are ‘dead in the water’.
In fact, it is not just exports that are dead in the water but the entire capitalist system.
Even by their own rigged figures, it is clear that far from capitalism having survived the economic crash that burst in 2007, it is rapidly dropping off the fiscal cliff and heading for an almighty crash of epic proportions.
Consider the figures produced this week by the EU’s own statistical agency which show that economic activity in the eurozone came to a halt in the second quarter of this year.
At the centre of this complete stagnation of the zone’s economy are the three biggest economies of Europe, Germany, France and Italy. France recorded zero growth, while the powerful German economy actually shrank by 0.2%.
The French finance minister, Michel Sapin, had to publicly abandon all the promises made by the government to reduce its deficit and to demand that the European Central Bank (ECB) embark on a programme of printing money, a Quantitative Easing programme.
QE has completely failed to kick-start capitalism; its only effect has been to pour trillions of dollars worth of ‘free money’ into the banks which has then been used to fuel the speculative bubble in the financial markets that is already beginning to explode.
This call for QE in Europe is a complete reversal of the stated policy of the ECB, the EU and IMF ‘Troika’ in relation to eurozone countries facing economic collapse.
This policy is one of imposing draconian programmes of austerity cuts to wages and benefits, mass privatisation and wholesale sackings, especially in the public sector. This is the regime this Troika so brutally has been trying to carry out, notably in Greece.
What is terrifying the bourgeoisie in France, Italy, Spain and Germany is that in Greece, even aided by a government imposed directly by them to carry out its diktats and with the support of a treacherous reformist leadership, the working class have fought determinedly against austerity.
The thought of taking on directly the powerful working class in all the major countries of Europe is frightening the living daylights out of them, as it holds the immediate prospect of a revolutionary tide that will sweep the continent.
The economic crisis in Britain is also expressed in figures produced this week. All the feelgood figures released by the government to try and convince people that recovery is underway fall apart when examined closely.
The growth in Gross Domestic Product (GDP, the total wealth produced by the country) turns out not to be in industrial production (only a 0.3% increase) but in the service sector (up by 1%) and financial sector.
In other words any increase is being driven not by exporting manufactured goods but by domestic consumption by households – consumption that in this era of wage cuts is being funded through families using up any savings and finally resorting to debt – and financial speculation by the banks.
With personal debt in the UK at a record high of over £1.4 trillion pounds this is no recovery, it is a disaster that will soon explode as household debt becomes unsustainable and workers face ruin.
All these factors point in only one direction – a huge explosion in the class struggle across the UK and Europe as the working class fights it out with the banks and the capitalist class over who will survive this crisis.
With the working class strong and undefeated, the capitalist class are more and more forced to rely on the treachery of the reformist labour and trade union leadership to hold back the revolutionary tide.
The crisis of capitalism demands the urgent building of a new, revolutionary leadership within the working class to take this struggle forward to the victory of the socialist revolution.