AT its Spring Meeting in Washington this week, the International Monetary Fund (IMF) made a direct intervention in the general election with an undisguised appeal on behalf of the Tory party and its plans for even bigger austerity cuts.
The party political broadcast on behalf of Cameron and Osborne was made by IMF head, Christine Lagarde, who at a press conference went out of her way to praise the Tory led coalition’s policies of cuts and privatisations saying it is ‘clearly delivering results’.
With Osborne at her side, Lagarde waxed lyrical about the policies that have brought the NHS to the brink of bankruptcy, millions of workers and their families living in constant fear of being tipped over the edge into abject poverty, and where low-wages and cuts in the welfare state have resulted in a British capitalist system that relies of the charity of food banks to offset starvation.
She praised austerity and demanded that it be continued and increased, saying: ‘. . . what clearly has been demonstrated in the past is that the UK authorities are capable of adjusting to the economic reality in order to provide the right balance of spending cuts, revenue raising and in the order, in the proportion and in the pace that is appropriate to the economy.
‘I have no doubt that can continue to be the case in the future.’ She added that ‘it’s obvious that what is happening in the UK has actually worked’.
This party political broadcast on behalf of the Tories was undermined by the IMF’s own figures, announced the day before her speech.
In fact the state of British capitalism revealed by the IMF statisticians and economic forecasters who, unlike Lagarde, have to analyse actual figures and trends, paints a very different picture.
On the all important question of deficit reduction, which the Tories and Labour have made central to their economic plans, the IMF is distinctly pessimistic.
According to its figures, instead of any growth in the UK economy leading to the massive budget deficit being wiped out and transformed into a budget surplus of £7 billion in five years, the country in fact will in fact be £7 billion in deficit!
This blows out of the water all the claims by Osborne that the cuts in public spending promised in the Tory manifesto will turn a crippling debt into a healthy surplus.
The IMF bases its gloomy predictions on the fact that close inspection the figures showing growth, reveal that they are attributable to the services sector.
Any growth is dependent on financial services and retail spending, there has been no ‘revival’ in manufacturing or exports.
Meanwhile, high street spending is only increasing in this period of low wages and pay freezes thanks to the growth in personal debt, in the form of unsecured loans taken out by working people.
The huge amount of personal debt being run up is a time bomb waiting to explode not a sign of economic strength.
One of the big problems identified by the IMF in its gloomy prognosis on the state of British capitalism, is the ‘likelihood’ of uncertainty in the financial markets over a ‘messy outcome’ in the general election that would have a knock on effect for years to come.
Lagarde is clearly attempting to avoid such a ‘messy outcome’ by openly campaigning for the Tories to be elected outright to carry on cutting and privatising, dumping the entire capitalist crisis on the backs of workers.
The IMF’s great fear is that the working class will not passively accept seeing their lives destroyed to keep capitalism going.
Despite the fact that the Labour Party is equally committed to ‘balancing the books’ the IMF fears that the Tories will suffer defeat and that a Labour government, carrying the expectations of workers for an easing of austerity, will only open the floodgates of revolution when it attempts to implement its own austerity programme to rescue bankrupt British capitalism.
The outcome of the general election will raise point blank the issue of who rules. We must build the WRP and the YS to provide revolutionary leadership so that the working class settles the issue by taking power and putting an end to capitalism.