THE defeat for the Italian Prime Minister, Matteo Renzi, in Sunday’s referendum to change the Italian constitution and concentrate the political power in his hands in order to carry out EU dictated ‘reforms’ was even more decisive than predicted.
In a large turnout Renzi was humiliated with 60% voting against his plans and by extension voting against the diktat of the EU bankers who were insisting on him imposing an austerity regime that would make the Italian working class pay for bailing-out the country’s bankrupt banks.
The fall-out from the vote, and Renzi’s immediate resignation, was swift as the eurozone’s third largest economy was plunged immediately into a financial and political crisis that will bring down the whole banking system.
The first casualty was a 5 billion euro ‘rescue plan’ that Renzi had pledged to bail-out one of Italy’s largest banks, Monti dei Paschi di Siena (BMPS). BMPS desperately needs to raise money by the end of the month to avoid collapse and having to be wound up.
It was rated as the ‘weakest’ bank in this summer’s stress tests conducted into the financial health of the main European banks – quite an achievement when it faces stiff competition from Deutsche Bank (designated the greatest threat to financial stability by the IMF) and the British bank RBS (only saved from bankruptcy by having its debt nationalised by the UK government).
Renzi’s master plan to stop the banks from collapsing was the creation this year of a 5.25 billion euro Atlas fund that channels private funds into the banks, avoiding the need for a public bail-out. Given that the Italian banking system has 360 billion euros of debt it is not surprising that this fund quickly ran out of money.
With Renzi gone and his Atlas fund bust the only alternative for the bankers is to insist that the new prime minister activate a government bail-out under the strict ECB rules of ‘bail-in’. These are that bank depositors are the first to pay by having their savings and wages held in the bank confiscated as ‘unsecured loans’ to the bank.
Renzi recoiled from this last year after the suicide of a pensioner, who had his life savings seized, in an earlier collapse of a small provincial bank. This led to a massive wave of hatred amongst Italian workers that threatened to topple the government, hence the creation of the Atlas fund.
With both the fund and Renzi history, the only way open to the bankers of Europe to stop the complete and utter devastation of the entire Italian banking system, and the inevitability of this bringing down every other bank across the continent, is to do to the entire working class what it did to that pensioner.
This will inevitably lead to an explosive revolutionary confrontation between the capitalist class and workers. This confrontation is rapidly developing across Europe and Britain. On the same day as the Italian referendum, the German finance minister, Wolfgang Schaeuble, was delivering yet another ultimatum to the Greek Syriza government, a blunt warning that they must impose yet further austerity cuts if they want any more ‘loans’ from the EU to help pay off the staggering 330 billion euros debt owed to the banks.
Already Greek workers have had their wages, jobs and pensions cut along with every social benefit. They have endured massive increases in taxes and privatisation, now Schaeuble is insisting on more cuts and a ‘liberalisation’ of the labour market.
He wants Syriza to go all the way to discipline the working class and smash Greek trade unions. This will lead to an all-out class war in Greece which will pose point blank the question of workers taking power. What is clear is that there is no reformist ‘peaceful’ way out of this crisis for the working class.
Only the overthrow of capitalism itself through socialist revolution offers any future for workers and youth today in every country. What is urgently required is a revolutionary Marxist leadership in the working class prepared to lead this struggle. It requires the building of the WRP in Britain and sections of the Fourth International in every country.