The Eurozone Commits Collective Suicide!

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THE Eurozone committed ‘collective suicide’ last week when EU finance ministers met and agreed a deal that they heralded as a historic breakthrough in the fight against Covid-19 and the economic devastation it has caused – especially to the weaker EU economies.

This meeting followed on from a video conference held two weeks ago by the 27 heads of the European Union to decide how to finance the huge bail-outs of the banks and industry in the face of the coronavirus pandemic.

This conference saw a split between countries, including Italy, Spain and France who are facing complete economic collapse due to nationwide lockdowns, and the so-called northern bloc countries of Germany and the Netherlands.

The demand at this meeting for the mutualisation of debt by spreading it across the entire Eurozone was soundly rejected by Germany and the Netherlands who demanded that the poorer countries of Southern Europe pay through the nose for any loans from Europe.

This conference broke up in acrimony and reconvened last week to try to reach a compromise. The deal they struck late last Thursday was supposed to unlock £438 billion of EU support for countries hit hardest by the pandemic.

It was reached after the Netherlands rowed back on its demand for ‘economic surveillance’ of countries getting money from the European stability mechanism (ESM) – which is designed to bail out struggling member states.

In return, Italy, Spain and France dropped their demand for the so-called coronavirus bonds – designed to provide loans to their countries at the same low interest rates enjoyed by Germany and the Netherlands.

This messy compromise fell apart at the weekend when the Italian prime minister, Giuseppe Conte, denounced it as a ‘trap’ that would simply pile extra debt on nation states already collapsing under the weight of existing debt.

Despite the fact that his own finance minister had agreed to this deal, Conte vowed that Italy would never accept EU bailout funds with all the strings that they entail and that require Italy to take on even more debt that will certainly crash the economy of the country.

Conte is only too aware that the Italian working class will not stand for the country being taken over by the EU commissioners imposing on them the kind of brutal austerity that the ESM, as part of the Troika, inflicted on Greece.

Greece was bankrupted, and its industry privatised in order to pay off the debt to the EU bankers. Italian workers are determined not to suffer the same fate.

Yet that is what this deal would mean if accepted. It states: ‘Any euro area country requesting this support remains subject to the EU’s fiscal and surveillance frameworks.’

The EU and Eurozone have been shattered by this crisis, with the noted economic historian Professor Adam Tooze writing that the ESM started out life after the 2008 banking crisis as a ‘humiliating disciplinary device’ and that: ‘The Eurozone crisis has in memory become almost akin to a European civil war.’

The mayor of the Italian city of Stazzema wrote to German chancellor Angela Merkel saying bluntly: ‘The next victim of Covid-19 will be Europe unless there is more solidarity between states.’

In the present coronavirus crisis, that civil war between the EU states has been laid bare as the ruling class in every country drops the facade of unity in the scramble to survive, driving forward the intense rivalry that can no longer be hidden. Calls for ‘solidarity’ are pointless.

With this latest futile attempt to agree a means of bailing out Italy, Spain and France (three of the biggest economies in Europe) dead in the water, the entire EU is disintegrating rapidly.

The determination of the working class across Europe not to submit to the dictatorship of the bankers and EU commissioners is vastly accelerating this collapse.

Immediately, the working class throughout Europe is posed with the question of bringing down this bankrupt capitalist EU and going forward to the United Socialist States of Europe.

Central to this struggle is the requirement to build revolutionary parties of the International Committee of the Fourth International in every country to lead the struggle for the socialist revolution to victory.