11) In Europe, the economic meltdown in Ireland threatens to spread to Portugal and even to Spain, which according to some capitalist economists is the fourth largest economy in Europe and “too big to save”.
Even Italy and Britain are not entirely immune from the effects of the European banking crisis – because that’s what it is – triggered by the events in Ireland.
The bailout of the Irish banks is an indication that it is a question, as Samuel Johnson said, of “hanging together or hanging separately”. Yet Ireland is likely to default on its debt – or ‘reschedule’ in the more diplomatic language favoured by capitalist economists – despite all the best efforts of the EU member states and the different national governments to bail the country out.
Osborne, let us recall, found £7 billion to help Ireland as a ‘good neighbour’. And yet he is no ‘Good Samaritan’ to the poor and the working class in Britain as he seeks to push through the biggest austerity package for 80 years.
12) The intertwining of the fates of all the economies of Europe through the sovereign debt crisis shows how crucial developments internationally are in shaping events on a national scale, sometimes decisively so.
The underlying assumptions of the ConDem government are that, despite the savagery of the cuts, eventually ‘all will be right on the night’. Events will work out in their favour, because of the ‘inevitable’ rebound of the economy.
The ‘normal’ economic cycle will reassert itself, it is argued, with a crisis followed by a boom and so the merry-go-round continues. These hopes will be dashed by the march of events.
This is not a ‘normal’ cycle similar to 1950-75 or even the weaker boom of the ‘noughties’. This crisis is totally unfamiliar in its character, depth and seriousness to both the current rulers and the ‘ruled’.
13) At best, the world economy will limp along; it will not immediately fully recover to its level prior to the crisis in 2008. This means that long-term, endemic unemployment will tend to be consolidated with minor ups and downs.
Millions of workers will be unable to be integrated back into industry. Where they do find a job, these will be short-term, part-time, and what in the US are called ‘survival’ jobs.
Workers take them in the vain hope they will climb back to the position they had in the past. But for a foreseeable period ahead, the era of full-time jobs, of rising or even stagnating living standards, is over for the majority of the population.
This was brutally illustrated to the Irish masses at the end of last year when their pay packets were ‘lighter’ by on average €250-300 a month! Hopes of improvement after they were forced to absorb a 15% cut in living standards have been dashed against the rocks of capitalist economic reality.
Profound changes in consciousness, already evident in many parts of the world but particularly in Europe, are under way. This affected particularly some countries such as Greece and Southern Europe in general, the so-called ‘peripheral’ economies.
There is an element of a pre-revolutionary situation if we take the objective phenomena of the economic catastrophe – if not yet fully expressed in the political outlook of the masses – present in Greece, and other countries in Europe.
Britain will also evince the same tendency at a certain stage because of the big changes in the objective situation.
