THE EU is still reeling from Friday’s decision by Standard and Poor’s rating agency to downgrade France’s triple-A status, at the same time as it cut the credit rating of Italy, Spain, Cyprus and Portugal by two notches, with Cyprus and Portugal given ‘Junk Status’, while Austria, Slovakia, Slovenia and Malta were further downgraded.
This decision was akin to hammering several large nails into the EU’s coffin. It will make it impossible for these countries to borrow the money that they need to carry out their government’s programmes, while their banks will be downgraded and the EU pushed over the brink to destruction.
In fact, the short fuse has already been lit with the collapse of the Greek debt talks, when the international banks refused to accept an EU-IMF diktat that they would have to take up to a 75 per cent ‘haircut’.
Greece has to repay £14bn euros by March, and is now set to declare bankruptcy, and quit the euro, a change that will throw the banking system into its its deepest crisis ever, and turn the EU states into a revolutionary inferno.
So far, the EU and the IMF diktat has produced in Greece an official 18.2 per cent unemployment rate with 220,000 workers losing their jobs in a year, with only 230,000 of the 910,000 currently unemployed receiving some kind if unemployment benefit. Youth unemployment (15-24 age group) is now at 45.5 per cent.
Greece has already left bourgeois democracy behind having an unelected, imposed prime minister and government. The class struggle is now set to reach explosion point, where only the revolutionary overthrow of capitalism and the imposition of the dictatorship of the proletariat can prevent the emergence of a military police dictatorship that rules by decree, state violence and mass arrests.
The EU crisis has also led to a non-elected government in Italy. The results of the Greek debacle and the downgrading of its credit status will see huge clashes in the streets, again with the working class faced with imposing its own dictatorship as the only alternative to military/police dictatorship.
EU non-members of the eurozone such as Hungary have seen their currency destroyed, while their debts are all in euros. It already has a right-wing government that has brought in a new constitution that is trampling all over basic rights.
Watching the events in Hungary are the workers of the Baltic States, that joining the EU has reduced to penury, and who are now considering just why were they so keen to quit the USSR.
Meanwhile, in the UK, the collapse of the euro and the eurozone will expose the chronically indebted nature of British capitalism, with some £5 trillion of foreign debt, to the full force of the developing economic whirlwind.
The deepening crisis will reveal to the full the treacherous nature of the Labour Party under Miliband and Balls. They will be denouncing strikes over pensions and wages and will be knocking on the door of the coalition and asking to be allowed entry, all to try and save backward, out-of-date British capitalism.
Yesterday, the French PM Francois Fillon was defending his government’s economic policies and assuring the bankers that France would push ahead with reforms and debt reduction.
His message to the French people is ‘don’t panic’. But the panic has already begun with the prospect that Sarkozy will lose the presidential election and that the emergence of a Socialist Party president will collapse the French bourgeois system and pose the working class taking power.
German Chancellor Angela Merkel also spoke on Saturday, saying Europe still had a ‘long road’ ahead to restore investor confidence. She remains absolutely determined that Germany will not allow the European Central Bank to become the lender of last resort in the euro crisis, and risk the return of a Weimar super-inflation to Germany.
The essence of the euro crisis is that it is bringing the EU states to the brink of revolution as the only way to prevent economic catastrophe and rule by military/police dictatorships.
The question of the hour is the building of sections of the Fourth International all over Europe to lead the developing European socialist revolution to its victory.
