Summit Meeting of the European Union

The new compromise signals the intensification of the anti-people offensive

The dramatic language used by the plutocracy and the bourgeois media analysts, who characterised the EU summit on the 28/29 of June as the “most crucial for the future of Europe” was another attempt to mock and spread illusions amongst the peoples that the EU and the bourgeois governments-centre-right and centre-left- can tackle the people’s problems and provide a pro-people way out from the crisis.

For two years every EU Summit has been characterised as “historic” or the most “crucial”, while the capitalist crisis in the EU and Eurozone has continued to deepen. And on each occasion it has been demonstrated that every EU Summit has added another link to a long chain of anti-people measures escalating the anti-worker assault in all the EU member states irrespective of their fiscal circumstances and the level of their state debt.

Every time it is made public that steps have been taken in the direction of overcoming the capitalist crisis, the major difficulties of its management by the bourgeois class become apparent. Every time there is an appeal to the “principle of solidarity” inside the EU, they further reveal the enormous contradictions between the bourgeois classes of its member states, especially amongst those of the major capitalist economies.

At the same time the breast beating by the mercenaries of the system regarding the really dramatic consequences of the capitalist crisis for the lives of the working class and popular strata has another dimension. It aims to intimidate the workers by saying that things could get worse and that the destitution could sharpen even further. In this way they will accept the predatory alliance as the only way, that the only solution is for them to submit even more and thus in reality facilitate the work of their executioner and not the protection of their lives.

Yet another compromise

The outcome of the Summit Meeting was yet another compromise. The capitalist crisis is deepening in the Eurozone and the EU as a whole. According to the EU’s prediction the Italian economy will shrink by 2.4% in 2012 (1.6% was the original prediction). Spain sought to join the Support Mechanism, Cyprus followed and there will be others.

The confrontation particularly between the bourgeois classes of France and Germany, the major difficulties which bourgeois management faces in Italy and Spain (the 3rd and 4th largest capitalist economies in Europe respectively) seem to have broken the so-called “Franco-German” axis (which in any case had a temporary character in the previous period, as the contradictions between them never ceased). It creates new and again temporary axes and anti-axes of Germany and France, with Spain and Italy, as well as Great Britain, which is the strongest capitalist economy outside the euro and seeks its own discrete role.

1. The notorious “Growth Pact” which was promoted over the entire previous period by social-democrats and opportunists is a large-scale attempt to con the peoples. The first thing which must be stressed is that this pact fanatically insists on the observation of all the previous reactionary agreements and regulations of the EU: “the Fiscal Pact”, the “The Euro Plus Pact”, the regulations for “Strengthened Economic Governance” and the “European Semester”. With at its core the smashing of the salaries, labour and social-security rights of the workers.

It is not at all accidental that one of the most important decisions of the Summit was the adoption of recommendations proposed by the Commission for every EU member-state within the framework of the European Semester. The basic content of these recommendations is an even more intense offensive against the working class and popular rights in every member-state. From Germany, France, Spain, Italy, Belgium to Slovenia, Cyprus and Greece.

The content itself of the “Growth Pact” seriously exposes the forces of the “EU one-way street”, ND, SYRIZA, PASOK, Democratic Left, Independent Greeks etc who had made a great show in the previous period of promoting the changes in the EU, with Hollande’s election as their pretext. What then does the “Growth Pact” provide for?

a) The further integration of the Single Capitalist Market of the EU, the better implementation of the Bolkenstein directive, for the liberalization of services which drives the price of labour power to the lowest possible level, the completion of the liberalised market- the privatization of the energy, transport , telecommunications sectors etc.

b) The greatest con-trick of the Pact is the announcement of 130 billion euros for the realization of targeted major projects, which had already been agreed on the week before in the Rome meeting between Hollande, Merkel, Monti and Rajoy. Indeed some bourgeois propagandists whose speciality is their devotion to the EU, with various cunning sleights of hand are trying to present it as being worth 180 billion euros. This is a travesty.

This is the reality which was revealed by the President of the European Council Van Rompuy in an interview on the 28th of June: The 10 billion euros which will be provided to the European Investment Bank (EIB) in order to increase its capital which has already reached 60 billion. Some money will be made available from this capital for loans to the member-states for investments.

The rest of the 60 billion euros come from on the one hand the 55 billion from the already available funding of the cohesion funds of the EU which had not been absorbed by the member-states and should return to the national treasuries, while on the other hand the 5 billion euros which will be made available in the form of the pilot “project bonds”, that is to say a loan guaranteed by the EU, for targeted projects which ensure a high rate of profitability for the monopoly businesses. Consequently, we are talking about 120 billion euros, maybe less, which is not additional money, but money which has already been scheduled to be invested through the existing EU budget and specifically by the EU’s Fund for Cohesion and Regional Development.

The most important question is where will this money be directed, for what development and for whom? This hot and free money will be provided to the monopoly groups for construction projects, for investments in sectors of high profitability for capital, such as energy networks, transport, green technology and digital technology which will create very few jobs and these will have a temporary character and will end with completion of the projects. And indeed a large section of the money will be in the form of loans (either from the EIB or from the project bonds) which must be paid back not by the businesses which have received the money but by the national state treasuries, i.e. by the people!

This is the fraud of EU capitalist development. Development with austerity. Development for the few, that is to say profits for the monopolies with free money from the taxation of the workers of the EU as a whole, austerity, unemployment, and poverty for the overwhelming majority, the working class and the popular strata.

This agreement-travesty is the pretext of the French bourgeois class which President Hollande is attempting to “sell” domestically and to his “allies in order to achieve the full agreement, adoption and implementation of the anti-people “fiscal pact” and the entire framework of the “strengthened Financial Governance”, leaving his admirers in Greece, ND-SYRIZA, PASOK-Democratic Left and the Independent Greeks in the lurch.

2. The EU’s apologists and opportunists of every shade are attempting to present the compromise achieved at the Eurozone Summit on the 29th of June as a step forward and a success for Spain and Italy and a defeat for Germany.

a) That the banks borrow for the recapitalization directly from the European Support Mechanism, so that this borrowing does not burden the member-states and b) the EFSF can under certain conditions buy debt bonds of the member-states which face high interest rates on their borrowing.

Various absurdities are being promoted by SYRIZA regarding the so-called “strong bargaining ability” of Spain and Italy, in contrast to the “managerial incompetence of the Greek governments”. Rajoy and Monti already had in their briefcases rafts of anti-people measures before they departed for Brussels.

Why are the supporters of the EU predatory alliance celebrating? Because the banks which have already received 5 trillion euros from the EU up to this point are borrowing directly from the EFSF! Because the EFSF will buy the state debt bonds from the member-states instead of the European central Bank which had done this up to now. What are they careful to conceal?

• that the EFSF is a mechanism for controlled bankruptcy which was created on the basis of interstate agreements, in which Germany and France have a dominant position as regards the control of the financial system.

• that the ability of the banks to borrow from the EFSF depends on the creation of an EU mechanism for the supervision of banks, which will control and supervise the banks in place of the national state authorities. This EU supervisory mechanism must be created “urgently” by the end of the year 2012.

• that the member-states must also sign “Memoranda” in order to borrow for the recapitalization of the banks.

• that Spain will also sign a memorandum since the respective statement makes the following reference: “we urge the rapid conclusion of the Memorandum of Understanding attached to the financial support to Spain for recapitalisation of its banking sector.”

• that in order for the EFSF to take state bonds –which so far have been bought by the ECB without conditions- the respective member-states must “ respect their Country Specific Recommendations and their other commitments including their respective timelines, under the European Semester, the Stability and Growth Pact and the Macroeconomic Imbalances Procedure. These conditions should be reflected in a Memorandum of Understanding.”

So this is the reason why the supporters of the “EU one-way street” and the opportunists are celebrating , because the “memoranda” that bring poverty and destitution to the working people are being generalized in all the EU member-states; because more and more rights of the member-stated are ceded not only to EU bodies but also to structures like the EFSF.

And this compromise -which does not at all weaken the position of the German monopolies but satisfies the position of the German bourgeois class for a deeper economic integration of the EU- will not tackle the capitalist crisis in the EU and the Eurozone. On the contrary, it will continue to place the burden of the crisis’ consequences on the shoulders of the working class and the popular strata in all the EU member-states, reinforcing the position of the strongest monopoly groups.

3. The report “Towards a Genuine Economic and Monetary Union” which was presented by the President of the EU and drafted by him, the president of the European Commission M. Barrozo, the President of the Eurozone J.C. Junker and the President of the ECB M. Draghi deepens the reactionary character of the EU and intensifies its aggressiveness against the peoples. It follows the line of an even greater economic and political integration of the Eurozone and the EU over the next decade.

In fact it provides for the concession of even more sovereign rights of the EU member-states to EU bodies, in exchange for the consolidation of their power against the people. It provides for a “new architecture for the euro” on the basis of three pillars for this integration.

a. Financial sector: it proposes a central control of the banking system of the member-states by an EU body so that the EU itself makes decisions regarding the bankruptcy, the merging and the take-overs of the banks, in other words regarding the concentration and centralization of capital in the financial sector. This will enter into force immediately (by the end of 2012) with the abovementioned decision of the Eurozone. On this basis a structure for the reconstruction of banks and a European Deposit Insurance System can be formed.

b. Public finances: it proposes the “issuance of common debt” namely the issuance of bonds by the EU and the creation of a “fund for debt repurchasing” of the member- states. Nevertheless, these require the EU member-states to cede the right to draft national budgets to the EU bodies, that will impose the compliance with their proposals and the formation of a EU mechanism for public finances.

c. In the field of policy: it foresees an even greater coordination and control of economic policies of the member-states in the framework of the “European Semester” and the “Euro plus pact” as well as measures for the intervention in the political and administrative bodies of the member-states in order to impose the capitalist restructuring which is considered necessary for each member-state.

It is obvious that we are dealing with the reinforcement of the most reactionary and anti-people characteristics of the EU, of the dictatorship of monopolies. In addition, it is characteristic that most of the measures have been proposed and propagated in the previous period by different sections of capital and have also been adopted and propagated by the opportunists of SYRIZA and the ELP (European Left Party). Indeed the Press Release of SYRIZA, which was issued in light of the Summit , uses the same expressions as this reactionary plan, suggesting as a solution for the EU a “new architecture” and focusing on the “issuance of common debt”; in other words, the shameless management of capitalism which is rooted in the programme of SYRIZA.

4. The Summit adopted new measures against Syria and Iran, escalating the blatant imperialist intervention of the EU-USA-NATO in the light of the sharpening competition with the dynamically developing countries Russia, China, India etc for the control of the natural resources of the region and the exploitation of the peoples. The Summit decided to enter into force the embargo on the supply of the EU member-states with Iranian oil on 1st July 2012 as well as other measures against Iran, a fact that will have a negative impact on Greece and other countries which are in the eye of the storm of the capitalist crisis.

The analyses and the warnings of the KKE before the elections are being tragically borne out for the people. The KKE continues unwaveringly to swim against the tide with all its forces in the factories, in the sectors, in the workers’ neighborhoods, with the poor farmers and the self-employed. The realistic character of the political proposal of the KKE is based in the objective reality of capitalist barbarity and the need for its overthrow , for the satisfaction of the contemporary needs of the people.

The capitalist crisis is sharpening in the Eurozone and the EU and the impasses of the bourgeois management are growing. This development makes monopoly capital even more aggressive and increases the intensity of the attack of its political personnel against the working class and the popular strata.

Unemployment, poverty and destitution are spreading exponentially and they cause even more suffering for the Greek people. In Greece the capitalist management even places the lives of the people at risk with the cessation of payments in the health sector , and for medicine. It dismantles the basic living conditions such as food and accommodation.

Our people must rise up against the blackmails, against the intimidation and the illusions that there can be a good management of capitalism. Against the rationale of the EU “ one-way street” which is fostered by all political forces that support the Euro and the EU, namely ND, SYRIZA, PASOK, DIMAR, Independent Greeks and the fascist “Golden Dawn”, which is the iron fist of capitalism.

The only solution for our people is the political proposal and the framework of the immediate demands and struggle that the KKE proposes . No sacrifice for plutocracy. Regroupment of the labour and people’s movement. No worker must be in the crisis. Organisation, counterattack and struggle in the workplaces and neighborhoods. Disengagement from the EU with unilateral cancellation of the debt. People’s Power and Economy.

The Delegation of the KKE at the European Parliament