Markets force savage austerity measures on Spanish workers

Recent public disagreements between Europe's political elites over how to contain the eurozone debt crisis have increased capitalist speculators' nervousness, leading to a sharp increase in borrowing costs for Spain and Italy's governments.

One aspect of the crisis they all agree on, however, as Socialist Party (Ireland) TD (MP) Joe Higgins explains below, is to make the working class pay for the capitalist crisis through cuts in jobs, living standards and public services.

Lest anybody thought they had gone on holidays for the summer, the dictatorship that is constituted by the financial markets reasserted itself with some vehemence this week by pushing the cost of borrowing to the Spanish state to over 7%.

The markets are clearly stating that the same merciless ruthlessness that was deployed against the Greek people will now be visited on the Spanish nation.

As in all their dealings, the profits of the financial speculators come before all else and if the Spanish working class have to be further bled economically to achieve this, well that's capitalism.

In the wake of the most recent revelations of a horrific crisis in the Spanish banking system (following a property bubble which, like Ireland, is dragging down the domestic economy), a new round of horrific austerity has just been announced. Over the next two and a half years the plan is to raise €34.4 billion in extra taxes and secure €22 billion in cuts.

Unemployment benefits are to be cut. Public sector workers, already hit by sharp wage cuts, are in line for a further axing of jobs and wages. The higher VAT rate goes from 18% to 21% while the lower rate which encompasses even food, goes from 8% to 10%. Already 25% are unemployed with youth unemployment at a crushing 50%.

The recent EU Summit agreed in principle that the European Stability Mechanism could directly fund the Spanish banks.

This was to save face for the Spanish prime minister Rajoy with a desperate pretence that the Spanish government would not find itself in the same position as Greece, Portugal and Ireland.

Troika

In these countries, every three months, cold blooded bureaucrats from the European Union, International Monetary Fund and European Central Bank - the 'Troika' - arrive in their capitals to determine whether they are inflicting sufficient pain on their people to keep up the disastrous policy of salvaging the European bankers, speculators and financial system generally from their crisis.

Currently the sharpest opposition to the effects of austerity is being mounted by striking coalminers [who have temporarily returned to work on instructions from their trade union leadership] especially in the north west autonomous region of Asturias.

There are about 8,000 miners with up to 30,000 downstream jobs depending on them. Rapid closure is certain if a savage 63% cut in subsidies announced by the government in June is implemented.

The subsidies are also for programmes of diversification to other forms of enterprise in the mining regions as mining is due to be phased out by 2018.

Relatively small in numbers and facing misrepresentation and abuse in the establishment media, the miners' strike to save their communities has inspired millions across Spain. They marched to Madrid arriving on 11 July and were greeted by tens of thousands of supporters. Coming to plead their case, their government sent riot police and rubber bullets to greet them.

One week later the movement against austerity broadened with possibly millions turning out in 80 cities in opposition.

The establishment in the European Union is worried. Spain has a population of 37 million. It is the fourth largest economy in the Eurozone and the twelfth largest worldwide. A default here would bring the financial markets system crashing down.

But they are also worried about popular resistance to their austerity agenda to bailout that system.

As in every other country in the EU, the political party that the Spanish working class built to represent it is in the camp of the establishment and austerity, but the Spanish workers have a long tradition of struggling for a different way going back to the revolutionary movement for socialism that was crushed by the fascist Franco in the 1930s.

A renewal of that revolutionary tradition would set Spain, and indeed Europe as a whole, on a radically different course from the unremitting crisis and despair that capitalism in crisis means.

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In The Socialist 8 August 2012:

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