THE EUROPEAN Commission yesterday issued a dire warning that Europe and the EU is suffering ‘an economic shock without precedent since the Great Depression’ and forecast that any recovery will be ‘incomplete’.
The EU economy commissioner Paolo Gentiloni called for the EU to rise up to this crisis by making a ‘decisive, joint European action.’
This urgent call for a united response from EU countries follows figures showing that Eurozone gross domestic product (GDP, the total price of all goods and services produced in a year) will plunge by a record 7.7% this year, with the weak economies of Greece and Italy experiencing the biggest hit with almost a tenth of their GDP wiped out.
While these fragile economies will be hit hardest, Germany, Europe’s biggest economy, is not far behind with a projected drop of 6.5% in the country’s GDP. Unemployment will shoot up from 7.5% last year to 10% with one in five workers unemployed in Greece and Spain.
Gentiloni’s desperate call for the EU to pull together amounts to a plea for Germany and the bigger economies of the north to come to the aid of the more fragile economies of the south – the so-called club Med countries – warning that: ‘Such divergence poses a threat to the single market and the euro area.’
His plaintive plea came just days after the top German constitutional court delivered a terminal blow to any chance of ‘decisive, joint European action’ by ruling that the European Central Bank (ECB) had gone beyond its legal mandate and ‘manifestly’ breached the rules when it embarked on a massive bond purchase scheme already topping 2.2 trillion euros.
These bond purchases are fundamental to the ECB’s desperate scheme to pump euros into the Eurozone countries under ‘pandemic QE’ which it launched in March to prop up the failing economies of Europe.
Now the highest court in Germany has ruled that both the ECB and the European Court of Justice, which rubber stamped this attempt at bail-out, broke all the rules of ‘proportionality’ in attempting to dictate broad economic policy.
The German court made it clear that as far as the German ruling class are concerned it wants no part in bailing out the EU and, in the words of the court’s president, Andreas Vosskuhle, ruled for the first time in history that ‘the actions and decisions of European bodies overstepped their legitimate competence, and therefore have no validity in Germany.’ At a stroke the German court has killed the EU stone dead.
Behind this seismic rupture is the determination that any bailout of the weak southern economies is dependent on them placing themselves under the domination of the powerful bankers in Germany and the Netherlands.
Their demand is no bailout money without the bankers seizing complete control, inflicting massive austerity and privatisation on them, in order to pay off these massive debts incurred in an attempt to try and prevent complete economic collapse.
Previous bailout plans have already been rejected by the Italian government, on the grounds that they were a Trojan horse for the EU Commission to take over their economy, out of fear of revolution, as workers refused to submit to the dictatorship of the EU and its bankers.
Under the impact of the world crisis and the revolutionary resistance of the working class the EU is literally being torn apart. The dream of a united capitalist Europe today lies in tatters as the capitalist class, in all the nation states that comprise it, are tearing each other apart, as the most dominant sections of the European ruling class prepare to bankrupt the weaker countries for their own survival.
This crisis is revolutionising the working class across Europe. It is gripped by a revolutionary determination not to be brought down along with the collapsing capitalist EU. The issue immediately before the working class is to put the EU out of its final misery by seizing power and advancing to socialism.
What is absolutely necessary to lead this struggle is the building of revolutionary sections of the Fourth International in every country to lead the socialist revolution and unite the working class into a common struggle for the United Socialist States of Europe.
This will unify the productive forces of Europe into a planned economy that will produce on the basis of from each according to their ability to each according to their need, getting rid of the capitalist law of the jungle!