THE UN’S International Labour Organisation has issued a dire warning of the disaster that will follow on from Greece being evicted from the EU or from a eurozone split into two warring groups, ‘the creditor states of the north and the debtors of the south’.
Last month’s figure for the 17-nation eurozone showed that there were 18 million unemployed in the zone, with Spain and Greece having over 50% youth unemployment and between 25% and 21% unemployment overall.
Spain immediately requires 100bn euros to attempt to stop the gigantic withdrawals that are taking place from the Spanish banks, at such a rate that they will shortly be completely cashless.
This crisis is not just threatening to split the EU; the Spanish regions are demanding billions of euros from the central government to keep going vital social programmes, without any additional austerity measures. If they don’t get what they want then Spain itself will begin to break apart.
Yield rates are too high for Spain to carry on selling its debt, and the European Central Bank president, Draghi, has been saying that there is a deal with Chancellor Merkel of Germany for the ECB to buy 100bn euros of Spanish banking debt, to try to keep the Spanish banks from going under and make it easier for Spain, and Italy, to sell more of its debt.
If the Spanish banks do not get this 100bn euros then their goose is cooked.
Now, the German ECB policy-maker, Jorg Asmussen, has said that the bank can only buy vast quantities of Spanish banking debt bonds if the International Monetary Fund is involved in drawing up the conditions for the loan. This would propel Spain down the Greek road and drag Italy and Portugal after it.
Italy is in fact next in line after Spain for a banking bail-out!
Now the International Labour Organisation of the UN has weighed in to warn the eurozone leaders of the kind of crisis that they are creating for the whole of the world economy.
The ILO says that just Greece leaving the eurozone would see Spanish unemployment reach 27.7% and push youth unemployment above 51.3 per cent, higher than even the occupied Palestinian territories.
According to the ILO even the EU’s economic power- house, Germany would see 10% unemployment.
A complete break-up of the eurozone would see French unemployment reach 17%, and leave over 30% of Spaniards out of work.
The ILO predicts that a eurozone collapse would see 34% youth unemployment in France and 59% in Spain. No wonder Cameron and Osborne are paralysed by fear, like rabbits in the headlights of powerful cars, as this crisis emerges that many bourgeois economists predict will see a capitalist government having to buy up all of the UK’s banks to try and save them.
There are already tremors of this crisis in the UK with the news that GM is halting production both in its Luton and Ellesmere Port plants for a week from September 24th.
In 1917, Lenin, after the February revolution and before the second October revolution, wrote a pamphlet called ‘The Threatening Catastrophe and How to Fight It’, in which he urged workers to organise to expropriate the bosses and the bankers and to organise a planned socialist economy as the only way to deal with the catastrophe that the 1914-18 imperialist war was causing in Russia.
Today, Europe and the world are threatened by an even bigger catastrophe of slump, mass unemployment, wars, and starvation, caused by the crisis unleashed by the 2008 banking collapse.
There is only one way to halt this ‘threatening catastrophe’ and that is for the working class of Europe to build sections of the Fourth International to lead the European socialist revolution to replace the EU with the Socialist United Stated of Europe, a huge stepping stone to smashing imperialism and capitalism worldwide and establishing the world socialist republic.