Inflation rips through Europe as working class rises up over wages

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EMPLOYEES at the European Central Bank (ECB) are the latest to join workers across Europe in demanding wage increases to meet the spiralling inflation that is raging across the continent and plunging millions of workers into poverty.

Carlos Bowles, an economist at the ECB and vice president of the IPSO union, said: ‘It seems like a paradox, but the ECB isn’t protecting its own staff against inflation.’

He added: ‘Workers shouldn’t have to take the hit when prices rise so much.’ But that is precisely what the bosses and bankers intend – not just in Europe but in the UK and US – to make the working class ‘take the hit’ for the capitalist crisis.

The paradox Bowles is talking about is that the ECB, along with the other world central banks, is supposed to ‘protect’ the entire capitalist system from inflation.

In fact, the central banks, by pumping trillions of worthless paper money to prop up bankrupt capitalism, have caused the inflation that is now out of control.

ECB workers are demanding at least a 5% wage increase to keep up with the massive surge in inflation while the bank insists it won’t budge from a 1.3% increase.

Germany, where the ECB has its headquarters, has hit a record inflation rate of over 6% while the eurozone as a whole recorded a rate of 4.9% last month. Clearly, for the ECB, the way to hold down inflation is to hold down wages and make workers pay for the capitalist crisis.

Across Europe from Spain to Sweden workers have responded to this attack on their livelihoods with an unprecedented wave of strikes.

In Italy last week, a national one-day strike was called by the Italian General Confederation of Labour demanding an end to attacks on wages, pensions and job insecurity.

Transport workers in France have organised a series of strikes over pay and conditions while Austrian metalworkers recently won a 3.6% pay increase for 2022 – an increase that will be wiped out by inflation.

Until now, wage negotiations throughout the eurozone have not kept up with inflation, with pay increases averaging around 2.5% – way below the 5 or 6% that currently exists and that are set to increase dramatically in the new year following the staggering increase in energy prices by 27.4%.

In Germany, the economic powerhouse of the EU, negotiated wages of unionised workers rose on average by 1.3% in 2021 – the smallest increase since 2010.

With Europe fast going into another lockdown as a result of the Covid pandemic the entire economy of the EU is heading for collapse with workers facing a drop in real wages that will plunge them into poverty. Already, the capitalist class in Europe is following the lead of the ECB in taking aim at workers’ wages.

James Watson, chief economist for Business Europe, made it plain saying surging energy costs have been ‘a shock on incomes’, adding: ‘But if you try to compensate by raising wages, there’s a risk that it is unsustainable and that we enter into a wage-price spiral.’

This view that wages cause inflation was expressed forcibly by a leading official of the US Federal Reserve Bank, Loretta Mester, who, in an interview with the Financial Times, put wage increases alongside the Omicron pandemic as the main factors that have sent US inflation skyrocketing to a 30 year high.

The working class throughout Europe, along with workers in Britain, are rising up in defence of their living standards, and are prepared to take action against a capitalist system that is determined to force a reopening of the economy despite the raging Omicron pandemic to inflict the inflationary crisis on the backs of workers.

The immediate issue of the day for the working class in Europe, along with workers in Britain and the US, is to put an end to this bankrupt capitalist system once and for all.

This means building revolutionary sections of the International Committee of the Fourth International throughout Europe and the WRP in Britain, to organise and lead a revolutionary struggle to overthrow capitalism and go forward to build the United Socialist States of Europe.