Europe’s economic crisis

Photo by endiaferon
Students protest in Athens

By Jane West

As the Euro-crisis unfolds and Greece heads to new elections, the left party, Syriza is capturing the support of most of those in Greece who want to reject the austerity programme imposed by the EU.

It is striking that the impact of the world developments, and particularly the growth of the left in Latin America, has clearly interacted with this political leadership of resistance to austerity in Greece. It was recently reported in the Guardian, of Syriza’s leader, Alexis Tsipras: ‘one of his heroes is Venezuelan leader Hugo Chávez, with whom he shares the same birthday.’


While Syriza has not yet developed a fully coherent economic alternative for Greece, its position of completely rejecting the imposed austerity, yet seeking a new settlement for Greece whilst retaining the Euro as its currency, is appealing to the popular mood. But of course the EU, led by Germany, will not allow rejection of austerity while retaining the Euro. So if Syriza wins the coming election an immediate deep crisis will occur.

The rise of Syriza is the largest left wing reflection of both mass resistance and the beginnings of the break-down of the neo-liberal consensus for austerity and cuts in Europe.

Of an entirely different political character, but showing further crisis in this neo-liberal consensus, is Martin Wolf’s (in Friday 18th May’s Financial Times) swingeing attack on Cameron for failing to shift to growth oriented policies through state-led investment programmes, taking advantage of the current zero per cent interest rates. The article’s headline said it all: ‘Cameron is consigning the UK to stagnation’.

The voices for different variants of an economic approach for ‘investment not cuts’ is swelling across Europe. But bourgeois governments across the continent remain determined to resist this for ideological reasons and for maintaining the class relation of forces. Implementing a policy of state led investment would place the state, rather than private capital, in control of the forward dynamic of the economy. Private capital prefers a double-dip recession to growth that shifts control of the economy towards the state.

Of course no such inhibitions affect some other countries in the world – most notably China. China’s state-led stimulus, following the financial crisis, kept its economy growing through the world recession and upheaval. China’s GDP has grown by over 40% in the last four years while the US has grown by one per cent and the EU’s economy has actually contracted.

The website of Socialist Economic Bulletin is well worth looking at as it carries three recent articles on both the present economic trends in the West and the economic approach of China.