Wild optimism at Davos


The annual meeting of the World Economic Forum at the Swiss ski resort of Davos, ended last Saturday.

The four days of the forum had been characterised by a desperate optimism from the bankers and politicians who lined up to proclaim that the world crisis of capitalism was over.

They faithfully echoed the speech made by US president Barak Obama earlier this month when he unequivocally stated that ‘An economic recovery has begun’.

With Obama’s confident prediction ringing in their ears, representatives from the eurozone countries were quick to claim that the pledge last year by Mario Draghi, the head of the European Central Bank, that the bank would buy up the huge debts of European countries, had headed off a collapse of the euro.

Prime minister David Cameron was similarly upbeat claiming that the corner had been turned and the savage austerity measures were working and that they would be continued into the foreseeable future.

This promise to drive on with endless cuts was reinforced by the German chancellor, Angela Merkel, who said that there would be no let-up in the austerity measures throughout Europe adding that it was ‘vital to keep driving down labour costs’.

It was left to the head of the Swiss USB bank, Alex Weber, to pour cold water over the proceedings when he noted that the ‘mood (in Davos) borders on complacency – the mood has been good, in brackets, too good to be true.’

Weber is not exaggerating, behind the blind optimism of the bourgeois political ‘elite’ lies the grim reality of the crisis.

According to the International Monetary Fund (IMF) the eurozone countries will see their economies contract by 0.2% this year overall.

For the weak individual economies the contraction is much worse – 1% for Italy and 1.5% for Spain.

In the UK the economy has contracted by 0.3% in the last quarter of 2012 alone, leading bourgeois economists to talk of Britain entering into a triple dip recession with no end in sight, regardless of what Cameron and Osborne claim.

The prognosis from the IMF was even gloomier than that of Weber. according to its head, Christine Lagarde, ‘downside risks remain significant, including prolonged stagnation in the euro area and excessive short-term fiscal tightening in the United States.’

What is really worrying the IMF is the revolutionary situation that is building up to a breaking point across the world as a result of the crisis.

In particular, they are terrified of the record unemployment levels, especially amongst the youth.

Figures released by the International Labour Organisation reveal that world unemployment rose by 4.2 million in 2012 to over 197 million, a figure that is set to increase dramatically in 2013.

Internationally, youth unemployment is over 74 million with the biggest increases being recorded in the advanced economies of the West with 35% of youth out of work for six months or more.

The figures for individual countries such as Spain and Greece vastly exceed this percentage with over 55% out of work in Spain and Greece approaching 60%.

Merkel summed up the position of the capitalist class towards the unemployed when she said that high unemployment levels are ‘the price Europe has to pay to become more competitive.’

This is the price capitalism is demanding that the working class and young people of the world pay – a lifetime of unemployment and poverty.

This situation has created a revolutionary uprising of workers and youth throughout the world, they are not prepared to make this sacrifice in order to keep a bankrupt and historically redundant capitalist system afloat.

The urgent task of the hour is to build revolutionary parties of the International Committee of the  Fourth International in every country to lead the fight to put an end to capitalism forever through the world socialist revolution.