ON Thursday the European Central Bank (ECB), after months of prevarication and splits within its ranks, finally took the decision to launch the eurozone’s own Quantitative Easing (QE) programme.
ECB president, Mario Draghi, announced that from March the ECB would be pumping 1.1 trillion euros (£830 billion) in what has been described as a ‘last-ditch attempt’ to save the euro and with it the entire capitalist economy of the eurozone.
This vast amount of paper money will be handed directly to the banks and hedge funds in the hope that this free money will be used to invest in the frankly knackered industries of Europe leading to a miraculous kick-start to economic growth.
In reality, all this paper money has only ever been used by the banks to engage in a frenzy of speculation on the world stock markets – inflating the price of shares throughout the world and in the process creating a giant bubble amongst financial assets that will explode and bring down the entire world banking system.
While fuelling this unsustainable inflationary bubble, QE will drive the euro into the ground completely debasing the currency – it has already dropped dramatically in value against the dollar and pound within hours of its announcement.
Draghi and the ECB are aware of this, but having tried every other weapon in the arsenal of capitalism – zero interest rates, savage austerity measures etc – they have been left with no other tactic.
This desperate act by the majority of the ECB was taken in the teeth of ferocious opposition from the German delegates.
The German fear is that, as the strongest economy in Europe, they will be left to pick up the pieces when the whole QE experiment blows up, forcing them to bail out not just the weak economies of southern Europe but the much bigger economies of Italy, Spain and France. Added to this is the German fear of the inflationary train this move sets in motion.
In 1923, the policy of the Weimar Republic, to print money in order to pay off the huge German debt incurred through punitive war reparation imposed on them, led to hyperinflation and directly to the rise of fascism.
This danger of hyperinflation dominates the thinking of German politicians and they recognise that QE, no matter how it’s dressed up, is precisely printing money to avoid unrepayable debt.
Added to this inflammatory situation is the massive political crisis facing the bourgeoisie caused by the revolutionary upsurge amongst the working class against austerity that is sweeping Europe.
With the debt-ridden countries of Europe praying that QE will somehow provide economic salvation that will put off the inevitable confrontation with a powerful working class, and the German bankers demanding the smashing of the working class through even more savage austerity, the eurozone can only explode, bringing down the weak, dependent British capitalist system with it.
The spark for destruction will undoubtedly be struck with next Sunday’s election in Greece.
The predicted victory for the left Syriza party, with its pledge to end the austerity measures imposed through diktat by the EU, ECB and IMF, a pledge that passively expresses the active revolutionary determination of Greek workers that they have had enough of poverty and starvation just to pay off the bank debts, will bring the crisis to a head.
The German bourgeoisie are demanding that Greece, which has been left out of any ‘assistance’ under QE, must repay its debts to the banks at whatever cost to the working class. Any refusal will result in it being thrown out of the eurozone resulting in a sovereign debt default that will see banks collapsing across Europe, as well as leading workers in other countries to demand similar defaults as an alternative to impoverishment.
The revolutionary implications of this huge economic and political crisis are inescapable – 2015 will be the year of revolutionary struggles across Europe.
The task of building parties of the Fourth International to lead these struggles to the victory of the European socialist revolution as part of the world socialist revolution has never been more crucial.