[DEBATE] : Callinicos: Bubble bursts for European elite

[Peter Dwyer]

Bubble bursts for European business elite




Protesting against the CPE youth employment laws in Paris last month  
(Pic: Jess Hurd/ reportdigital.co.uk)

The victory of students and workers in France against neo-liberal  
labour laws is the latest in a series of setbacks for the ruling  
classes across the continent, writes Alex Callinicos
It will soon be a year since the defeat of the European Union (EU)  
constitution in the French referendum. That marked the beginning of a  
series of defeats for the neo-liberal agenda in Europe that has sent  
a paroxysm of rage through the global business establishment.

“Europe Stalls on Road to Economic Change,” intoned the New York  
Times on Friday last week: “After this week’s extremely close  
election in Italy, there is a strong sense in Europe that, because of  
weak governments and divided publics, the continent’s big three  
countries are unable to make the economic changes that most political  
leaders agree are essential to restoring growth.

“At stake, in the view of many European experts, is the ability of  
countries like the big three – Germany, France and Italy – to  
adapt to a globalised world in which Europe’s high labour costs and  
low population growth could portend long term decline, not just of  
economic power but of political influence as well.”

Vulnerable

The problem is real enough. Unlike Britain, the main continental  
economies still have big manufacturing sectors. This means they are  
especially vulnerable to competition from low cost producers, above  
all in China.

The political, business, and media establishment across Europe is  
therefore firmly committed to the so called Lisbon agenda adopted by  
the EU in 2000. This is a package of free market “reforms” that  
would slash welfare provision and the protections that workers won  
during the 20th century.

The trouble is that there is an enormous gulf between the  
establishment and the mass of the population. Before the Italian  
elections an economist at Bank of America told the Financial Times:

“Italy needs a massive dose of pro-growth reforms, deregulation, and  
liberalisation of products and labour markets, privatisation to  
reduce the still large presence of the state and a big shake-up in  
the public administration.

“The electorate prefers more social protection and social spending  
than lower taxes and deep supply-side reforms.”

Italian big business had despaired of getting “reforms” under  
Silvio Berlusconi’s erratic and corrupt premiership. It hoped that  
Romano Prodi, who as Italy’s prime minister in 1996-8 carried out  
the spending cuts required for the country to join the euro, would  
provide a steadier hand. But his wafer-thin majority will leave his  
new government dependent on the votes of the far left Rifondazione  
Comunista.

Massive popular commitment to the welfare state is the rock against  
which the neo-liberal agenda has broken elsewhere in Europe. Gerhard  
Schröder’s centre left government in Germany started to implement  
“reforms” that slashed unemployment benefits.

In last September’s federal elections millions of voters deserted  
the two main parties, many to vote for the Linkspartei, a new radical  
left formation.

The mainstream parties were forced into a “grand coalition” under  
the conservative Christian Democrat leader, Angela Merkel, that  
business fears is too weak to make further inroads into the welfare  
state.

But it is in France that resistance to neo-liberalism has been most  
intense. The rebellion against prime minister Dominique de  
Villepin’s CPE law that would have made it easier to sack young  
workers is the latest in a cycle of revolt that has lasted more than  
a decade.

It began with the public sector strikes of November and December  
1995, which brought down president Jacques Chirac’s first premier.  
Then came the massive teachers’ strikes of May and June 2003, and  
the defeat of the EU constitution last year.

The defeat of the CPE left Financial Times columnist Martin Wolf  
almost frothing with rage: “In France, remarkably, the population  
seems to believe that everybody can – and should – be treated just  
like a civil servant.

“They seek a miraculous combination of almost absolute job security  
with rising prosperity. In a rapidly changing world, this is a form  
of collective cognitive disorder.”

Edwy Plenel, former managing editor of the French left-liberal daily  
Le Monde, raved that the victory of the no vote on the constitution  
marked the rise of “a national revolution” – a reference to  
France’s pro-Nazi Vichy regime.

This kind of abuse can’t mask the fact that, despite the fact that  
mainstream political parties and the mass media are solidly behind  
it, the establishment has completely failed to persuade the mass of  
people of the necessity or desirability of neo-liberal “reform”.

“The anti-liberal clerisy [intelligentsia] has basically won the  
intellectual argument in much of Europe,” whines Charles Grant of  
the Centre for European Reform, a Blairite think-tank. “They’ve  
fostered the view that liberal economics leads to a kind of  
Dickensian vision of child labour and old women crying in the  
streets.”

Movement

The element of truth in this is that, since the late 1990s, the  
movement against neo-liberal globalisation has emerged as a powerful  
political force in continental Europe.

A systematic critique of neo-liberalism has been widely circulated by  
the monthly Le Monde Diplomatique and by writers such as Pierre  
Bourdieu, Noam Chomsky and Susan George.

Attac, founded in 1998 to oppose international financial speculation,  
was an important force in the campaign against the EU constitution in  
France.

Its German branch has worked with the trade unions to oppose  
Schröder’s “reforms” and the EU Bolkestein directive that  
threatens the wages and conditions of service workers.

In Italy, the mass protests at the G8 summit in Genoa in July 2001  
and the anti-war movement have made opponents of neo-liberal  
globalisation an important force around Rifondazione Comunista.

But the problem for Europe’s ruling classes goes much deeper. The  
mass of European workers remain committed to the project of  
traditional social democracy to use the power of the state to protect  
them from the worst excesses of capitalism.

The mainstream parties of the labour movement have now abandoned that  
project and embraced neo-liberalism.

This opens up a space to their left. As the German elections showed,  
many social democratic voters, deserted by their traditional parties,  
are looking for a political alternative.

The challenge facing the radical and revolutionary left in Europe is  
to prove that they can offer this alternative, as Respect is trying  
to do here in Britain.

If they succeed, then the crisis of the European ruling classes will  
prove to be even worse than they already think.

© Copyright Socialist Worker (unless otherwise stated). You may  
republish if you include an active link to the original and leave  
this notice in place.




Dr Peter Dwyer
AIDC,
129 Rochester Road,
Observatory,
Cape Town, 7705.
South Africa.

TEL:    021 447 5770
CELL: 0847694133
FAX:   021 447 5884
www.aidc.org.za