THE European Central Bank has reported that outflows from the Spanish banks reached 74bn euros (£59bn) in the month of July, twice the previous monthly record.
This means that Spain is rapidly following Greece over the edge of the abyss and down the plug-hole, dragging the rest of the EU and the euro with it.
Spain’s Statistics Office has confirmed that the slump has deepened throughout 2010 and 2011 and is set to plunge lower still in 2012.
On top of that, the Catalonia region of Spain has appealed to the central government for 5 billion euros to stave off the closure of hospitals, schools and elderly people’s homes, and has insisted that there must be no conditions attached to the loan.
‘The money that we are asking for is our own Catalan money that is being administered by the Spanish government,’ said a spokesman, awakening bourgeois fears that as the crisis deepens Spain itself will disintegrate.
Now the Morgan Stanley bank has come onto the scene to state that Portugal will not meet its deficit target of 4.5% of GDP, and that it will have to have a second bail-out in the autumn.
The EU is now awaiting a Spanish bail-out request along with a ‘memorandum’ handing over Spain’s financial sovereignty to the Central Bank, so that it will be administered from the EU, as is Greece.
Meanwhile, the Italian Prime Minister Mario Monti has warned that Germany’s insistence on blocking the European Central Bank from acting on its own to bring down countries’ borrowing costs by buying their worthless bonds could lead to inflation in Germany.
Earlier his month, Monti warned of the rise of nationalism, saying that ‘The biggest tragedy for Italy and for Europe would be to see the euro become, because of our failures, a break-up factor which awakens the prejudices of the north against the south, and vice-versa.’
Meanwhile, the Greek government is seeking its own way out of the crisis.
It intends to step up the war on the working class by launching Chinese-style ‘economic zones’ with special tax and regulatory breaks in a desperate bid to attract foreign capital.
For these zones to survive, they would have to be able to compete and even undercut their Chinese and Vietnamese competitors, returning the European working class to a 19th century existence.
Other countries such as the UK are seeking to embark on this Greek course of developing a slave labour economy. This is what the Tory propaganda about the British working class being bone idle is all about. It is to suggest that the working class needs a good thrashing, not negotiations.
Meanwhile, the economic and financial crisis intensifies as the Spanish and EU banks and industries head for the greatest crash in their history.
This is the context of the argument between Clegg and Osborne over whether there should be an emergency tax on the rich.
Osborne ruled out Clegg’s proposal because very soon there will have to be massive attacks on the working class and the middle class to save the banks and the bosses, that is the very same rich, from going under with the rest of the EU economy.
There is no doubt that the EU and the euro crisis are leading the bosses to impose slave labour and mass unemployment all over the EU, wiping out all savings, benefits and living standards.
Greece has been like a laboratory for this onslaught on the working class. There, the crisis has reached the stage of a state pogrom against migrants. In this the Greek bosses are slightly ahead of the EU bourgeoisie as a whole.
This same crisis is however driving the much more powerful working class and the majority of the middle class to a socialist revolution. The task of the hour is to build the Fourth International throughout Europe to lead this socialist revolution, to replace the EU with the Socialist United States of Europe, a giant leap in liberating workers worldwide from capitalism and imperialism.
