OFFICIAL figures released yesterday show that the economy of the 17 nations that comprise the eurozone suffered an overall crash of 0.6% in the fourth quarter of last year – leading to the situation being dubbed the St Valentine’s Day Massacre of the eurozone.
For the first time in history the entire European economy shrank on the course of a calendar year.
The contractions accelerated dramatically as the year progressed, with the rate of decline in output for the fourth quarter being 0.6% while the drop in the third was 0.1%.
The decline in economic output was dramatic in every country across Europe, from the weak economies on the so-called ‘periphery’, Greece, Portugal and Ireland, right through to the economic powerhouse of the region, Germany, which recorded a disastrous 0.6% drop – leading to headlines proclaiming the ‘euro crisis has arrived in Germany’.
France, the second largest economy, slumped by 0.3%, the Netherlands saw its GDP decline by 0.2% while the third largest economy, Italy, went down by 0.9%.
Most dramatic was the crash recorded in Portugal, where the GDP for the fourth quarter contracted by a staggering 1.8%.
This crash in the capitalist economies of Europe (the UK which is outside the eurozone recorded a similar contraction of 0.3% in the same period) is a dramatic slap in the face for the economic pundits and politicians who were confidently predicting just a few weeks ago that Europe had ‘turned the corner’ and that the crisis was over.
Even as the figures were announced, leading German bankers were going on record as saying this was a ‘temporary period of weakness’ in the German economy and that the ‘outlook is very promising’.
This wild optimism is entirely false, without any foundation. The capitalist economy of Europe is crashing down around the ears of the bourgeoisie and nothing they do can arrest this crash.
All the austerity measures being imposed by the diktat of the European Central Bank (ECB), the International Monetary Fund (IMF) and the world bankers have failed.
Proof, if needed, is to be found in Portugal which has been held up as the ‘poster boy’ for austerity with a government that has slavishly imposed on the working class every single instruction from the bankers and driven the working class to the wall in the process.
The reward has been a catastrophic collapse of industry and economic output and the consequent driving up of unemployment.
This is the future that this crisis-ridden capitalist system holds for the entire working class and small farmers of Europe.
Every small percentage drop in economic output represents the closing down of entire industries and mass sackings of millions of workers.
The last unemployment figures for the eurozone in November 2012 showed that 18.820 million people were out of work. yesterday’s figures can only lead to a massive increase in these numbers.
The response of the capitalist class to mass unemployment has been uniform across the region: to cut benefits while driving down the pay of those still in work to slave wage levels.
What is clear is that for capitalism to survive it must do so by smashing up unprofitable industry, creating unemployment on a mass scale, driving wages down to below the poverty line, and leaving the unemployed to starve or work for nothing in the 21st century equivalent of the workhouse.
The working class across Europe is refusing to lie down and accept this fate.
A revolutionary upsurge is already sweeping the continent and it is set to assume gigantic proportions as the crisis intensifies and the class struggle reaches a point of eruption.
The burning issue of the hour is to build the revolutionary leadership of the International Committee of the Fourth International throughout Europe to lead this struggle to the victory of the European socialist revolution.