THE WORLD Bank stated yesterday that 90% of the world’s economies have been plunged into a slump by the coronavirus pandemic, inflicting global carnage on a greater scale than even the 1929 crash and Great Depression.
It predicts that GDP on a global scale will fall by 5.2% this year, led by a fall of 9.1% in the European Union, and 6.1% in the US and in Japan.
The World Bank points to China, the deformed workers state, as the only major state in the world that will grow – by 1% – this year.
The World Bank concludes: ‘Deep recessions triggered by the pandemic are likely to leave lasting scars …’ and predicts ‘a crash of more than 13% this year in global trade volumes.’
In fact, the economic downturn in the US triggered by the pandemic has now been officially declared a recession. The National Bureau of Economic Research made the designation yesterday, citing the scale and severity of the current contraction.
It said activity and employment hit a ‘clear’ and ‘well-defined’ peak in February, before collapsing with 40 million unemployed, created in just three months.
In Germany, factory output has plunged by almost a fifth, while in April there was a massive 18% fall in production compared to the previous month, smashing the record for the biggest output plunge ever, for a second straight month. The country’s car industry took the brunt of the collapse with vehicle production plummeting by 75%. Italy’s statistics body Istat has predicted that the Italian economy will shrink by 8.3% in 2020.
Meanwhile in the UK, Heathrow airport has warned of making 25,000 job cuts. Rolls Royce last week unveiled plans to slash 3,000 jobs across the UK, and the giant oil company BP has joined in the jobs massacre announcing it will be slashing 10,000 jobs by the end of the year.
The UK banks are now in a huge crisis. The Tories have already handed out billions to businesses to keep them going through government-backed loans from the banks. Now their fear is that when these companies and industries go bankrupt they will bring down the banks who will be left with tens of billions of pounds of toxic debt.
The Bank of England has calculated the debt will be over £36 billion. The banks are demanding that the government must pay this debt, and rescue them with a super-austerity war on the working class.
The reality is that in the USA, the EU and the UK the working class is now fighting for its life and the future of its children.
This developing situation has led to the massive support for the ‘Black Lives Matter’ movement where hundreds of thousands of workers and youth have marched all over the world, and where the statue of a Bristol slaveowner was dumped into the river.
Workers now understand, especially after the experience of the 12 years of Tory austerity following the 2008 crash, that they are to be forced to save the banks through massive wage cuts, job cuts, speed-ups, and mass sackings, with a zero future for their youth. It is this prospect that has given the current struggles a much sharper edge.
There is no doubt that ruling class attempts to make the working class pay for the bosses’ crisis will touch off massive revolutionary explosions not just in the UK but throughout the capitalist world, from the UK to the USA and throughout the EU.
The bosses will not be able to repeat the post-2008 Austerity Programme. Workers in the UK and throughout the world will rise up. They will force their leaders to call general strikes, and if their leaders won’t, they will replace them.
They will occupy the factories to stop them closing, and build Councils of Action in every town and city to organise revolutionary general strikes to bring down the government and bring in workers’ governments and a socialist planned economy to put an end to capitalism and its crisis.
Now is the time to join the WRP and the Young Socialists to lead the revolutionary struggle that is developing to its victory.
Now is the time to build sections of the International Committee of the Fourth International to lead the victory of the world socialist revolution and replace bankrupt capitalism with worldwide socialism.