THE EUROZONE crisis was finally, officially recognised as the time bomb that will bring down the entire capitalist banking system at last weekend’s meeting of the G8 powers in America.
At the insistence of US President Obama the bankruptcy of Greece and the inevitability of it crashing out of the euro was placed centre stage at this gathering of the most powerful capitalist nations in the world.
This destroyed forever the fiction that Greece is somehow at the ‘periphery’ of Europe and insignificant in terms of the world capitalist economy.
At the summit Obama and Cameron spent the weekend demanding that Germany bail out the entire economy of Europe by pumping trillions of euros into the banking system to stave off a collapse that would engulf the entire world.
This was rejected out of hand by German Chancellor Merkel, and the G8 meeting broke up with just vague promises that something would be done.
The real depth of this crisis was openly expressed last Friday when Robert Chote, chair of the Office For Budget Responsibility, and the British government’s expert on economic forecasting, spelt out what the Greek exit from the euro would mean for the UK economy.
A Greek collapse, according to Chote, would lead to Britain entering a deep recession that would permanently scar the country’s economy and from which ‘it may never recover’.
He said: ‘That means not just that the economy weakens and then strengthens again — it goes into a hole and comes out — but that you go down and never quite get back to where you started.’
All talk of this being a cyclical crisis of the capitalist system, recession followed by growth, has now been abandoned as it becomes undeniable that capitalism is gripped by its greatest crisis that cannot just be weathered until the good times roll again.
The revolutionary implications of the crisis came out in an interview given by Alexis Tsipras, the leader of the radical left Syriza Party that won massive support in the Greek elections on a platform of rejecting the austerity measures demanded by the Eurozone, a success set to be exceeded at the next elections in less than four week’s time.
He said: ‘On the one side there are the workers and the majority of people, and on the other are global capitalists, bankers, profiteers on stock exchanges, the big funds. It’s a war between peoples and capitalism.’
Although Tsipras can correctly describe the revolutionary content of the crisis it is clear that he has no solution to it. He is against Greece leaving the euro and believes that the threat of a worldwide collapse will force the banks to rescue Greece without demanding that the working class pay through savage austerity measures.
This is a dangerous reformist pipe-dream. The crisis is not confined to Greece but has spread throughout Europe with the Spanish banks teetering on the brink of collapse with every one of them having had its credit ratings cut by the international agencies. One of these banks, Santander, is a major high street bank in Britain.
Behind Spain stands the rest of Europe, and the whole continent would have to be bailed out, an impossible task as any attempt at pumping artificially created money in to stop this collapse will inevitably lead to the kind of hyper-inflation last seen in Germany during the 1920s.
Then the entire currency collapsed, only this time the collapse will be on a European-wide scale. The war between the working class and the capitalist class can only be resolved by the working class putting an end to capitalism by taking power through the European socialist revolution.