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Eurozone crisis: German rifts revealed by bailout
Frontline article by Phil Butland, June 2010
The bailout of Greece may have averted a eurozone meltdown, but it has opened rifts in the German ruling class who resent paying for Greek debt. At the same time the Left Party faces tough choices, writes Phil Butland.
In the wake of the Greek crisis Bild Zeitung, the German equivalent of the Sun newspaper, made a predictable attack on Greek workers. Bild promoted the idea that all Greeks are comfortably off and work a few years in public service non-jobs before taking well paid early retirement. With headlines like "Billions for Greece, and what about us?" it tried to drive a wedge between "hard-working German tax payers" and "lazy Greeks".
Chancellor Angela Merkel has stressed that Greece should commit itself to a "credible and sustainable reform programme". Meanwhile, Merkel's government is planning severe cuts in local government and rises in health charges, to accompany an assault on the unemployed. In short, both Greek and German workers must pay for the crisis.
Not everyone falls for this ideological assault. The recent conference of the Left Party passed a motion entitled "We are all Greeks". In Baden-Württemburg the public sector union, ver.di, issued a leaflet with a similar heading, asking why there is "no more talk of the burst finance bubble, of a financial system which is fully out of control and has brought the whole world to the edge of the abyss". Both the Left Party and ver.di in Baden-Württemburg are mobilising for two demos on 12 June under the slogan "We won't pay for your crisis".
Despite winning last year's election, the German government is weak. Merkel's Christian Democratic Union lost a million votes at recent elections in North Rhine Westphalia (NRW). The vote for their neoliberal coalition partners, the Free Democratic Party, was much lower than last year's national result. The Social Democratic Party (SPD) also had their worst ever result in NRW. In contrast, the Left Party got 5.6 percent entering the NRW parliament for the first time.
This creates the possibility of a "red-red-green" government in NRW. At the time of writing it looks like the SPD will reject this option and go for a coalition with the CDU. But a "red-red-green" government would be popular among Left Party supporters - 94 percent of whom want coalition talks. Yet going into government in conditions of crisis would be a real challenge to the Left Party's claim to be a party "unlike any other".
NRW is €125 billion in debt, and less money is available to local government than before. Put simply, any party in office will be forced to make cuts unless it has the support of a massive movement on the streets and in the workplaces, which currently doesn't exist.
This problem is not new. In Berlin and Brandenburg, the Left Party is the junior partner of a coalition government which is cutting jobs and services. The Left Party finance minister, Helmuth Martow, admits, "The lower than expected revenues force us to examine more closely which expenditure is necessary; it is already the case that cuts cannot be prevented if we want to maintain the debt level and reduce net borrowing." In order to prove that "the Left Party also is fiscally competent" (their words), the Left Party in Brandenburg and Berlin stands on the other side of the barricades to workers fighting cuts and job losses.
At the recent party conference Marx21 magazine gave out a well received leaflet urging the Left Party in NRW to set clear conditions before entering a government. These conditions, such as no cuts, no job losses and no student fees, are already official national policy. Also the Left Party will not join a government until the troops are withdrawn from Afghanistan and the Hartz IV employment laws are scrapped. Yet, as the next election approaches, there will be a renewed debate in the party between the "reform socialists" and those of us who orientate on the extra-parliamentary movement.
Much will depend on how the German trade unions react to the government's attempt to deal with the crisis. It is perhaps significant that, despite massive attacks on the unemployed and pensions, there has been no frontal attack on the German unions. This year the two main unions, ver.di and IG Metall, accepted rotten pay deals without a real fight, but they have not experienced serious defeats.
In this fight the existence of the Left Party could play a decisive role. One of the main reasons for the creation of the Left Party was that tens of thousands of militant workers broke from the SPD. This political shift has not yet been matched by an industrial upturn but, if workers are forced to defend themselves, we cannot discount the possibility of a serious fightback.
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