Skip to main content

The Eurozone’s ‘New Austerity Model’

"The Eurozone economy has never really recovered from the 2008-09 financial crash and recession. Austerity policies—that played a major role in preventing a sustained Eurozone economic recovery for the past five years—are now evolving into still newer forms. Events in the recent past in Spain, measures approved in just the past week by the newly formed Renzi government in Italy, and proposals being debated at this very moment by the Holland government in France all point the way to the new forms of austerity now taking shape in the Eurozone.”

No longer just cuts in government social programs and elimination of subsidies for the working poor, as before, the ‘New Model’ for Austerity emerging in the Eurozone consists of direct attacks on workers’ wages and incomes. The plan is to hold down wages in order to lower business costs and price of exports. Boosting exports in turn, it is hoped, will lead to more investment which has been steadily declining for years in the Eurozone. This scenario takes place under the cover of what is being called ‘structural economic reforms’ in general and, specifically, ‘labor market reform’ as the central element of general structural reforms.”

In Italy, 70% of all new hires have been temp workers. Temp means lower wages, fewer benefits, far less job security, and employer ‘rights’ to layoff and fire at will. The chronic high unemployment and the large number of low wage temp jobs translates into wage compression in general, with few exceptions, for the rest of the Eurozone working class.”

In addition to high unemployment and temp hiring, which will continue as a dual force already depressing wages, the new 3rd force of ‘labor market reform’ will extend wage cutting further, targeting the non-temp, permanent Eurozone working class in Italy, France, and elsewhere in particular.”

Another way must therefore be found in France, Italy, and the core northern economies now slipping into recession in order to generate an export-driven recovery. ‘Internal devaluation’ to reduce labor costs will have to take another form. That ‘other way’ is ‘labor market reform’—i.e. wage reduction by another name targeting the non-temp permanent employed workforce.”

With Italy well on its way to implementing ‘labor market reform’ as a new form of Austerity, France is close behind but has not yet launched a similar labor policy. Pressure by Eurozone capitalists and elites across the region—especially central bankers—is now growing and demanding that France speed up the process. Indicative of this pressure are recent public statements by Jyrki Katainen, who will assume the role of vice president for jobs, growth, investment and competitiveness on November 1 for the European Commission. Katainen last week praised Italy’s new labor market reforms, declaring 'it is a very good thing they are dong'. On the other hand, he criticized France, saying 'France should do more'. The IMF, Germany’s government, and central bankers throughout the Eurozone have all added their voice, in a growing drumbeat of demands that France more quickly introduce serious labor market reforms and other structural reforms.

At the same time, as in Italy and Spain, other prior forms of austerity apparently will continue, as France has indicated it will proceed with previously committed spending cuts of 50 billion Euros.

But boosting exports by labor market reform and wage compression raises the still deeper question of ‘who will they increase exports to? If the global economy—from China to Japan to Latin America, and even the USA in 2015 should it raise interest rates—continues to slow, as it clearly is now doing, who will buy the Eurozone’s exports?”

Full article:


The European neoliberal economic empire sent a message, to Berlin this time, and is ready to accelerate processes for a catholic implementation of the destructive policies tested in Greece, to secure big capital's interests.

With the biggest economy of the eurozone adopting such austerity measures, there will be no "good examples" for anyone to turn to, no excuses. The anti-austerity front will collapse and the European plutocracy will declare final victory.



Federalism means however, that the same policies will be applied totally, definately and very soon, also against German citizens and workers.



... we should expect a new attack quite soon against the spreads of Spain and Italy, forcing these countries to turn to ECB permanently as the exclusive source of funding, which means that they will adopt new austerity measures and further dismantling of the social state and labor rights, as required by the banks and multinational cartels and as it happens again and again in Greece.



We will start with Italy and Spain. We will order rating agencies to attack, exclude them from markets and throw them to the ECB trap. They will be forced to take similar measures, as Greece did, in order to receive liquidity. Then, we will attack France and Germany.



It is characteristic that, according to many articles, which were forgotten quite fast so that the public opinion to focus on Hollande's "extramarital" affair, the biggest amount of these cuts reaching 30 billion euros, concerns cuts in levies paid by firms on labor, which actually means new cuts against labor and for the benefit of the big corporations.

Comments

Popular posts from this blog

Oct. 7 Reports Implode: Beheaded Babies, NY Times Scandal, & More

Glenn Greenwald    

Israel’s Descent Into Madness & the Holocaust Comparison

BreakThrough News   Rania Khalek was joined by Tarik Cyril Amar, a historian from Germany and associate professor at Koc University in Istanbul, to discuss Israel’s descent into genocidal fascism. Prof. Amar addresses whether it’s useful to make Holocaust and Nazi comparisons and the real reason behind the West’s unshakeable loyalty attitude when it comes to Israel’s barbarism.   

Zionist and US imperialist criminals are about to grab the natural gas off shore Gaza

globinfo freexchange   As the genocide against Palestinians of Gaza is about to be completed with an act of unprecedented brutality by the Zionists and butcher Netanyahu through the bombardment of about 1.4 million civilians in Rafah, it seems that they have already set their next primary goal. Which, in short, is to grab the natural gas resources off shore Gaza, together with their US imperialist buddies whose contribution to the genocide has been undoubtedly critical.     As already reported , in 2007, Hamas came to power and Israel launched an offensive on Gaza Strip, leaving behind 1,400 dead Palestinians, but taking with it the gas fields. Within a year, Israel announced the discovery of the Leviathan natural gas field, which did include Gaza's riches, valued at 453 billion dollars. But Gazans have been denied around 47 billion dollars in revenue. As for Tel Aviv, it's gunning to become a new hub. At that moment in time, that is 2022, Russian oil and gas were sanctioned.

Neocon Queen Victoria Nuland Ends Her Reign: Exposing a Catastrophic Career

Glenn Greenwald    

Το σκάσιμο της φούσκας Μητσοτάκη με νέα επίσημη χρεοκοπία και οριστικό τέλος της μεταπολίτευσης

του system failure   Τα αποτελέσματα των εκλογών της 25ης Ιουνίου ήταν λίγο-πολύ αναμενόμενα όσον αφορά τις πρώτες θέσεις με βάση και τα αποτελέσματα της πρώτης κάλπης του Μαίου. Αν συμπεριλάβουμε και το ποσοστό της αναμενόμενης αποχής, δεν μας έδωσαν κάποια ιδιαίτερη έκπληξη. Αυτό όμως που φαίνεται να αιφνιδίασε ακόμα και το συστημικό κατεστημένο, είναι η είσοδος των δύο υπερσυντηρητικών, ακροδεξιών κομμάτων Νίκη και Σπαρτιάτες, με το τελευταίο να έχει ξεκάθαρες διασυνδέσεις με τον πρώην Χρυσαυγίτη, Ηλία Κασιδιάρη. Παρά τη μεγάλη νίκη Μητσοτάκη, οι μιντιακοί ινστρούχτορες της καθεστωτικής προπαγάνδας εμφανίστηκαν σε γενικές γραμμές "μουδιασμένοι" και αυτό οφείλεται στο γεγονός ότι το συστημικό κατεστημένο (δηλαδή τα μεγάλα οικονομικά συμφέροντα που ελέγχουν και το σύνολο των μεγάλων ΜΜΕ πανελλαδικής εμβέλειας), πέτυχε μόνο έναν από τους τέσσερις μεγάλους στόχους που είχε θέσει εξ'αρχής. Μιλώντας με ποδοσφαιρικούς όρους, ουσιαστικά έχασε με σκορ 3-1.   Ο μεγάλος στόχος πο

Τυχαία γεγονότα στην τριτοκοσμική μπανανία των Βαλκανίων

failed evolution   1) Συμβαίνει το μεγαλύτερο σιδηροδρομικό δυστύχημα στην ιστορία της χώρας. 2) Γίνεται αστραπιαία επιχείρηση μοντάζ των συνομιλιών του σταθμάρχη από μηχανισμό του καθεστώτος, πριν ακόμα φτάσει στα χέρια των αρχών, προκειμένου να αποδοθεί η τραγωδία αποκλειστικά σε ανθρώπινο λάθος και να βγουν από το κάδρο οι πολιτικές ευθύνες ανώτατων κυβερνητικών αξιωματούχων. 3) Αναπαράγεται το παραποιημένο υλικό αστραπιαία από ναυαρχίδα της καθεστωτικής προπαγάνδας. 4) Τοποθετείται επικεφαλής στην επιτροπή-παρωδία πρωτοπαλίκαρο του καθεστώτος Μητσοτάκη που εργάζονταν παλιά στην ίδια αυτή ναυαρχίδα. 5) Η επιτροπή κλείνει άρον-άρον την υπόθεση αποκλείοντας ουσιώδεις μάρτυρες που είχαν προειδοποιήσει επανειλημμένα τον αρμόδιο υπουργό για τον κίνδυνο μεγάλου δυστυχήματος. Σταματάει έτσι και η όποια σε βάθος διερεύνηση για την τσιμεντοποίηση του χώρου και την απόπειρα συγκάλυψης της τραγωδίας.  

The Shadowy, Intelligence-Linked Group Driving the US Towards War With Iran

"United Against Nuclear Iran does not miss an opportunity to try to bring the United States closer to a military conflict with Iran. And on the other side of the equation, they also have worked very hard to oppose efforts to de-escalate the U.S.-Iran relationship."   by Alan Macleod   Part 7 - A Lesson From History   The history of Iran has been intimately intertwined with the United States since at least 1953 when Washington orchestrated a successful coup against Prime Minister Mohammad Mosaddegh. Mosaddegh had refused U.S. demands to stamp out Communist influences in his country and had nationalized the nation’s oil. The U.S. installed Shah Mohammad Reza Pahlavi as a puppet ruler. An unpopular and authoritarian ruler, the Shah was overthrown in the Revolution of 1979. Since then, it has become a target for regime change, and its nuclear program is something of an obsession in the West. Often orchestrated by UANI officials while they were in government, the U.S. has carried

How the CIA oversees the Ukraine proxy war on Russia

Geopolitical Economy Report   Several reports in mainstream US media outlets show how the CIA has helped to direct the proxy war against Russia in Ukraine, and played a role in causing the conflict in the first place. Ben Norton examines the evidence.   Related: Confirmed: US imperialists wanted to drag Russia into a war with Ukraine since at least 2019

Israel Carries Out Most Sadistic Massacre, Opens Fire On Gaza Aid Convoy

Richard Medhurst  

The real reason behind TikTok ban

Glenn Greenwald /  Richard Medhurst