Racked by debt and riven by internal differences, the European “project” is sinking fast. Even as they fail to agree on how to bail out Greece, the countries of the eurozone (17 members of the EU) cannot even provide the most basic need of work to their own people.
Unemployment in the eurozone stood at 10 per cent of the workforce in July/August, according to official figures. This means that 15.757 million people are out of work in these countries. A further 5 million-plus people are unemployed in the other 10 EU states.
In France, 2.15 million or 9.7 per cent of workers are unemployed, with 4 million on short-time working. Over 8 million people in France (out of a population of 62 million) are now officially living below the poverty line. One of the French government’s responses has been to increase the tax on medicines this month.
For capitalism unemployment is good news, however much governments may wring their hands. They love the downward pressure on wages. Indeed, as unemployment rises, so do bonuses for directors.
But the failings of the eurozone don’t stop there. Eurozone countries have given up their monetary sovereignty by adopting the euro. By divorcing fiscal and monetary authorities, they have ceded their capacity to provide high levels of jobs and services through the public sector.
Greece is being ordered to cut its budget deficit in a slump by cutting public sector wages, pensions and jobs, which will only worsen its situation, and the eurozone’s. This will not reduce the deficit, since slower growth will reduce tax revenue.
Greece would be better off leaving the union, regaining monetary sovereignty. Then it could default on the euro-denominated debt, and run budget deficits that are large enough to achieve full employment. This would relieve the newly sovereign government from being at the mercy of markets, rating agencies and other countries.
Here in Britain, 20 per cent of young workers are unemployed and overall official unemployment has now gone past 2.5 million. Capitalism is creating a lost generation – and, even worse, we are permitting it. Thank goodness the obstinacy and resilience of British workers prevented past governments from taking us into the eurozone – just imagine how bad things would be if that had happened.
Britain needs to invest in growth and invest in industry, for example by taking the railways contract away from Siemens and giving the work to Derby’s Bombardier workers. We could begin by stopping the loans to Ireland and Irish banks, and by pulling out of IMF “support” for Greece. That should free up a few billion! ■