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Neil Faulkner

EU Summit: the dictatorship of finance capital

(10 December 2011)

Published online by Counterfire, 10 December 2011.
Copied with thanks from the Counterfire Website.
Marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

Neil Faulkner: The task we face is nothing less than to build a continent-wide mass movement of resistance capable of overthrowing finance capital, nationalising the banks, and establishing democratic control over the economic future.

The leaders of the EU have just agreed to drive the European economy deeper into slump. Four years after the credit crunch, three since the banking crash, amid collapsing demand and rocketing unemployment across the continent, they have voted for more of the same.

But imposing a decade of austerity means shutting down parliamentary democracy. Already, unelected bankers’ governments have been installed in Athens and Rome. Now, across Europe, the proposal is for unelected EU officials to control budgets, impose cuts, and execute sanctions against national governments that fail to comply.

Finance capital – the world’s banks – created a get-rich-quick casino-economy in the Nineties and Noughties. The result was the biggest bubble of inflated asset-values in the history of capitalism. And the consequence of that, in October 2008, was the biggest ever crash.

Since then, bankrupt banks crippled by bad debt have been propped up with trillions in public money. Now the same banks are refusing to fund the states that bailed them out. In the language of the neoliberal elite, there is ‘a lack of market confidence’. Because of this, a swathe of European states hover on the brink of bankruptcy, threatening another financial crash.

The price of ‘market confidence’ is austerity on the scale of the Thirties. Finance capital’s bad debts are to be paid back through massive cuts in the jobs, pay, benefits, pensions, and public services of working people.

The EU has become a gigantic financial engine for redistributing wealth from workers and the poor to the banks, from welfare to profit, from labour to capital. The EU is waging a class war on behalf of finance capital against the ordinary people of Europe.

There is, moreover, no end in sight. The cuts feed the depression. Years of austerity budgets have deflated demand and increased unemployment across Europe. The aim of the EU pact announced at the latest summit is now to institutionalise austerity at a European level. There is to be more of the same, year upon year, stretching into an indefinite future, with the implementation of the cuts freed from any form of democratic control.

Sanctions will be imposed on states that fail to meet stringent targets for balancing budgets and cutting debts. Annual budget deficits are to be restricted to 0.5% of GDP, and there are to be annual 5% cuts in any excess national debt above an agreed maximum of 60% of GDP. In the context of a deepening slump, this is a fiscal recipe for massive deflation and economic prostration.

The plans made at the latest EU summit will cast us into the vortex of an economic death-spiral. And, anticipating embittered resistance, the neoliberal leaders of the EU are constructing a dictatorship of finance capital to police the plunge into abyss.

But they are weak. They are divided among themselves. Crisis intensifies competition between rival capitalists and nation-states. That is why Cameron has walked away, determined to defend the British ‘financial services industry’ against EU regulation and taxation. That is why there is uneasy muttering about ‘German domination’.

They are also uncertain. Establishment economists – the witchdoctors of neoliberal ideology – understand in their more lucid moments that austerity is causing demand to collapse, tax revenues to fall, and bad debts to mushroom. Our rulers have no solution.

Most importantly, the neoliberal political and business elite is widely hated for its greed, corruption, and lack of democratic mandate. While their class continues to enrich itself, everyone else faces austerity and disenfranchisement, and tens of millions have already participated in strikes and mass demonstrations against them since the crisis began.

This is the real fracture-line across the EU. Not that between the ‘Merkozy’ axis and the PIGS of the periphery. Nor that between Cameron and the other 26. It is the line between classes – between the bankers and rich on the one hand, and the great mass of ordinary working people across Europe.

The task we face is nothing less than to build a continent-wide mass movement of resistance capable of overthrowing finance capital, nationalising the banks, and establishing democratic control over the economic future.

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