World crisis driving forward the European socialist revolution!

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THE BOURGEOIS financial markets opened yesterday to the unprecedented news that Germany has sold 3.9 billion euros of debt at a negative rate of interest.

What this means is that international banks and investors have bought this debt, which is repayable in six months time, at a rate of interest that guarantees they will get back less than they have loaned Germany – something that has never happened before.

Why these investors, who make their vast profits buying up debt throughout the world and demanding high rates of interest on the repayments, should suddenly opt to accept a loss is because there is simply nowhere in the world that is a safe bet to invest in as far as the capitalist markets are concerned.

Germany consequently is seen as a ‘safe haven’, or rather a safer haven than anywhere else.

Given that only last month it was reported that all the ‘smart’ money was running to the US as a ‘safe haven’ and now just a few weeks later it is Germany’s turn, it is clear that the international capitalist banking system is in complete disarray and in a state of panic, desperately scouring the world for any shelter from the impending collapse.

If Germany is reckoned to offer some level of safety the same cannot be said of any other countries in Europe, both inside and outside the Eurozone.

Also on Monday, it was revealed that the cost of borrowing for Hungary, which is outside the Eurozone, has been driven up amid fears that it faces the prospect of immediately defaulting on its sovereign debt.

To try and raise a short-term loan to keep going, the Hungarian government sold £18 billion of bonds to be repaid in six weeks and were forced to accept an interest rate of 7.7%.

7% interest rates on such deals are reckoned by bourgeois economists to be the ‘tipping point’. at this level it is impossible for a country to repay its loans without the most savage ‘austerity’ measures being imposed on the working class.

Such measures range from the complete privatisation of industry and utilities, the destruction of all social benefit systems, pensions, health services and full-scale wage cutting and unemployment.

These are cuts that will far exceed anything so far seen in countries like Greece which has born the brunt of the euro crisis so far.

This was made clear by the German finance minister, Wolfgang Schauble, who said in a recent radio interview that Greek leaders had to speed up the repaying of their debt to the world banks, adding ominously that Germany will be ‘pushing harder for that’.

Schauble was speaking in advance of the European Commission, the IMF and the EU Central Bank (the Troika) descending on Athens to assess the savage cuts already imposed on the working class and to demand even more.

To rub salt into the wound, the Greek prime minister, Lucas Papademos the unelected ex-EU banker imposed on the country by the Eurozone leaders recently stated that Greece would default on its debt in March unless the trade unions accept further cuts in pay for their members.

The Greek working class have answered this threat with continuous strike action involving public and private sector workers, with even judges taking action.

What is clear is that capitalism cannot survive without imposing cuts that are so savage that life for workers becomes intolerable.

This crisis is driving the working class of Europe, and the world, forward to a socialist revolution that will expropriate the capitalist class and the bankers. What is required above all else is to build revolutionary parties of the International Committee of the Fourth International in every country to lead this developing socialist revolution to victory.