Europe’s Dirty Secret: Financial Elite Looting Public Treasuries

Published on Global Research.ca, by Stefan Steinberg and Barry Grey, Nov. 19, 2010.

In a revealing admission concerning the relationship between capitalist governments and international financial interests, the Financial Times on Tuesday wrote of “Europe’s dirty secret.”

The newspaper editorialized against the plan of the European Union, the European Central Bank (ECB) and the International Monetary Fund to loan Ireland tens of billions of euros in order to guarantee in full the investments of international bankers and bondholders in the country’s failing banking system. 

Under the plan, Ireland will effectively surrender sovereignty over its economic policy to the EU and the IMF and agree to claw back the latest bailout of the global financial elite by imposing a new and even more savage round of attacks on the wages and living standards of the working class … //

… The most powerful financial firms were allowed by the political elites to emerge from the first stage of the crisis more dominant and wealthy than ever. Emboldened by these developments, at the end of 2009 global finance capital intensified its offensive, targeting Greece to establish a precedent for a global shift from stimulus to budget-cutting and austerity.

Last spring, under pressure from the banks and bond markets, the European Union adopted its program of austerity, launching historic attacks on what remains of the welfare state and all of the past social gains of the working class. The Irish crisis represents a new stage in this class-war offensive.

Its aim is a fundamental realignment of class relations worldwide. Whatever remains of welfare programs are to be obliterated. Wages in developed capitalist nations are to be slashed to a level comparable with low-wage “developing” countries. Conditions for the working class are to be rolled back to those which prevailed a century ago.

Such a social transformation cannot be carried out within the framework of the traditional methods of bourgeois democratic rule. In one country after another, workers and young people protesting against the budget cuts—in Greece, Portugal, Spain, France, Great Britain—have faced state repression.

An article in the Wall Street Journal this week, headlined “Crisis of Democracy Faces Euro Zone,” notes that the establishment of an EU-ECB-IMF troika dictating Irish economic policy means that the country’s “independence is no more than notional.” The author warns of the danger of social upheavals because “designing a new form of government that does not have democracy at its heart will anger voters and provide an opening to extremists.”

None of the measures being taken can resolve the crisis of the world capitalist system. More than two years on, it is clear that the crisis is not merely a conjunctural downturn, but rather a systemic crisis of the system as a whole. As in the 1930s, slump and austerity go hand in hand with ever more bitter international economic conflicts and the slide toward world war.

The global financial elite is on the offensive not because the working class accepts its demands. Workers in country after country have demonstrated their willingness to fight, carrying out mass strikes and protests. These struggles have to date been sabotaged and defeated because of the treachery of the trade unions and their allies in the official “left” parties and middle-class pseudo-left organizations.

New and greater struggles are coming. The critical issue is the building of a new leadership and new organizations of struggle, the fight for a socialist and internationalist program, and the development of revolutionary consciousness in the working class. This is the key to mobilizing the working class internationally to break the dictatorship of the banks and establish genuine democracy and social equality on a world scale. (full text).

Global Research Articles by Stefan Steinberg.

Global Research Articles by Barry Grey.

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