Spain, Greece, Europe: capitalist crisis and revolt

July 10, 2012

by Franklin Dmitryev

When the bailout of banks in Spain, the Eurozone’s fourth largest economy, was announced on June 9, the immediate reactions revealed the two worlds that exist in every country. The Spanish masses intensified their protests, marching directly on both banks and government, while Greek and Spanish workers exchanged messages of solidarity against the austerity strangling both nations. On the same day, labor unions held huge anti-austerity rallies in Portugal and Italy.

More than 8,000 coal miners in the province of Asturias began an indefinite strike May 31, protesting subsidy cuts that threaten 40,000 jobs.

They blockaded roads and railroads, occupied mines and the plaza in front of the regional Parliament, and engaged in battles with police, fighting back with slingshots and homemade rocket launchers against rubber bullets, batons and tear gas. On June 18 a general strike shut down large parts of the mining regions in several provinces.

An earlier general strike on March 29 brought out nearly 80% of workers in the country against the labor law “reform.” On May 22 students and teachers went on a nationwide strike, at all levels from elementary school to college.

In the other world, that of the rulers, the markets–that is, finance capital–celebrated for two hours before turning to attack Italy, economy number three.

After six months of denying the need for a bailout, Spain’s Prime Minister Mariano Rajoy bowed to intense pressure from the leaders of the U.S., Germany and European financial institutions. The deal, to be overseen by the “troika” of the European Union, European Central Bank and International Monetary Fund, is nothing but a nationalization of bank debt. It takes the form of a loan to the Spanish government, adding to its already high debt and driving up the rate Spain must pay on bonds. This increases the risk of a government default.

Women in the square in Spain

March 12 demonstration in Valencia, Spain, marking first anniversary of M15, or indignados, movement. Photo by Bru Anglés,

The loan’s purpose is to stave off a financial crash sparked by bank runs; 100 billion euros have already been pulled from Spanish banks just this year. Spain’s taxpayers will bail out the Northern European banks that lent to Spanish banks and helped inflate the housing bubble. That bubble’s crash triggered the fiscal crisis of Spain’s financial sector and government.

Only three days later, a New York Times reporter declared that the bailout “has failed” and “could make things in Spain worse.”

The VAT (a sales tax, which hits the poor and unemployed the hardest) is 18% and sure to rise, at a time when Spaniards are suffering a veritable depression. Unemployment is near 25%, with youth unemployment over 50%. Labor laws have been “reformed” to make it easier to fire workers. Pensions, health and education have been slashed.


Over 400,000 families have lost homes, and in Spain they have to keep paying mortgages even after being tossed out of their houses–at a rate of 159 evictions per day. With over one million homes empty, more and more of them are being occupied by homeless families, with the help of the indignados, or M15 movement, whose occupation of Madrid’s Puerta del Sol plaza drew from Tahrir Square in Egypt and helped inspire Occupy Wall Street.

Direct actions have become a daily feature of life in Spain, from eviction blockades to occupations to assemblies in public spaces, from caceroladas (demonstrations featuring banging on pots and pans) to strikes.

Spain and Italy are only the latest dominos to tip. Before them, Ireland, Portugal and Greece received bailouts coupled with austerity programs that have sent them into depression. Greece in particular, after two bailouts and repeated rounds of austerity, has plunged its people into terrible poverty and misery–and has been shaken by deep revolt.

Amid that ongoing revolt, Greek parliamentary elections of May 6 shocked the troika when the self-declared “radical left” party Syriza came in a close second with 17% of the vote. With no party able to form a government, new elections were called for June 17. Big banks from Germany to Japan announced their readiness to intervene should Greeks vote the wrong way.

Syntagma Square

Popular assembly in Syntagma Square, Athens, Greece, May 5, 2012. Photo by Adolfo Indignado Cuartero,

Media and politicians embarked on a propaganda campaign to bully Greeks into voting for the parties that had voted for austerity. Buried in the business pages of The New York Times was an explanation:

“Greece continues to receive billions of euros in emergency assistance….But almost none of the money is going to the Greek government to pay for vital public services. Instead, it is flowing directly back into the troika’s pockets.” [1]

The Greek vote and the Socialist Party victory in France’s presidential and parliamentary elections did deal a blow to the Eurozone’s reigning policy of austerity. German Chancellor Angela Merkel and others signaled their willingness to renegotiate Greece’s austerity program. Even the conservative New Democracy party made an about face and campaigned on demanding an easing of austerity–and narrowly bested Syriza in the June rematch.

That is not the only reason to beware the euphoria among many left parties over May’s elections in Greece and France.


First, not only the electoral left, but the far right, got a big increase of votes. In Greece, the outright neo-Nazi Golden Dawn got 7%, and, worse, 13% of the youth vote. They also got 50% of the police vote. Some members of this group–known for violence against immigrants, minorities, and, in coordination with the police, against demonstrators and union members–have called for “a new Holocaust” aimed at immigrants. But the centrist parties created an opening for the far right not only by implementing finance capital’s draconian austerity package but by scapegoating immigrants and drumming up nationalism.

Excuses were given that Greeks did not know what Golden Dawn represented, but it again got 7% in June, after one of its top politicians assaulted two women leftist legislators on live television and the video went viral. The vote followed a series of anti-fascist demonstrations calling attention to the true nature of Golden Dawn.

Across Europe, the far right is surging, from Hungary, where they control the government, to France, where the National Front gained 18% of the presidential vote and won seats in parliament for the first time in 15 years. Serbia elected as its president Tomislav Nikolic, who was once an associate of Vojislav Seselj and Slobodan Milosevic, and has been linked to a 1991 massacre of Croatians by a Serb nationalist militia.

Second, Syriza, the Greek coalition of the so-called “radical left,” is not so radical. Like the Greek Communist Party, this coalition of Eurocommunists, Stalinists, Trotskyists, Maoists, Greens, and social democrats has worked to contain the militancy of strikes and demonstrations in the crisis of the past four years and is closely linked to the union bureaucracy.

Syriza’s program is social-democratic, calling for bank nationalizations, redistribution of wealth through taxes, renegotiating the austerity package, and staying in the euro. As a Greek anti-authoritarian group bitingly stated, Syriza’s goal is “…an alternative path for the reproduction of capitalist relations in Greece that will be implemented by a different government in which the leftists will have assumed the role they deserve….” [2]

As Syriza’s leader, Alexis Tsipras, told The New York Times: “…we have to press [German Chancellor] Merkel to follow the example of America, where the debt crisis wasn’t tackled with austerity measures but with an expansionist approach.” [3]


The desperation, even opportunism, of the international Marxist and post-Marxist Left is revealed by the widespread illusions about Syriza. A June 4 appeal signed by such luminaries as Etienne Balibar, Alain Badiou and Antonio Negri uncritically declares its unity with “Syriza’s activists and leaders” and equates “the Greek Left” with Syriza.

What Tsipras and Syriza do not urge is that the masses translate the reaction against austerity from votes for them into deepening the actions in the streets, the general strikes and popular assemblies. Instead, they channel all that energy into electoral politics.


A totally different attitude was expressed in the May 27 manifesto of Occupy Athens:

“Not long ago, during the economic bubble years, we were experiencing inequality and social fragmentation, violence or apathy, depression, systemic corruption and lack of justice, low education and low aesthetics. We do not wish to return to the situation preceding the economic crisis….Society has started to discuss the real issues. Everything is expressed and everything is open. Now is our chance.” [4]

The vision of Syriza and similar tendencies revolves around substituting Keynesianism and the welfare state for neoliberal austerity. While it is true that the policy of austerity can undermine whatever weak economic recovery was going to take place, a Keynesian pro-growth policy cannot solve capitalism’s structural crisis. It adds to the ever-increasing debt burdens of states, putting downward pressure on the rate of profit, whose decline is the cause of the structural crisis.

As disastrous as austerity has been–keeping the working classes of Greece, Spain, Ireland, and other countries in depression conditions–the European Union’s dictates are not just a matter of neoliberal ideology. They reflect the dominance of Germany over the Eurozone, the dominance of finance capital over political and economic institutions, and above all the class war capital is waging against labor, driven by the low rate of profit.


Since the structural crisis of the 1970s, the usual solution has not been sufficient, that is, recession’s destruction of capital, with decreases in capital investment and in production, layoffs and bankruptcies. That has been supplemented with an all-out attack on the wages and conditions of workers, destruction of unions, and the neoliberal form of capitalist globalization, pitting the world’s workers against the poorest paid and most oppressed, whether in China, Honduras, or Bangladesh. Even so, the U.S. and many European countries are still mired in a fifth year of massive unemployment, high debt, and continuing housing crises. State intervention may ameliorate these problems but has been stunted by politics, not because the money could not be found, but precisely because of the desperation of the capitalist class to push down the working class.

Fortune 500 companies are making record profits, [5] but the decline in the rate of profit remains an overriding determinant, and is manifested in corporations hoarding piles of cash instead of investing it, or putting it in speculative financial instruments. This has resulted in slow or negative growth, growing debt, unemployment and foreclosures.

Since the rate of profit is the ratio of surplus value to total capital, its decline is a manifestation of the dialectical inversion at the heart of capitalism, the domination of dead over living labor: living labor is the only source of value, but at the same time capital needs to keep growing and squeeze labor hours to a minimum.

European institutions have tried one half-measure after another to try to paper over the debt crisis and to build what they call a firewall around Greece, but the storm clouds keep gathering. About $91 billion in euros has been pulled out of Greek banks in three years, and the pace quickened after the May election. The risk of Greece leaving the Eurozone is high.

That threatens to knock over more dominos, with unpredictable repercussions for financial markets. The more that international capitalists fear that certain countries may be forced out of the Eurozone and/or default on debt, the higher the risk of bank runs and the higher the interest rates they have to pay for government bonds, in turn increasing the risk of default.

Even French banks may be in trouble, and the European Union as a whole is living in fear of what is being called its own “Lehman moment”–or even a “Lehman moment” for the global economy–at a time when economies are already weakening in Europe, the U.S., China, India and Brazil. The strength of the disintegrative forces in Europe increases the chances of both revolution and fascist counter-revolution.

Eurozone leaders are struggling to save their monetary union by turning it into a fiscal and political union. Some resist because nations would have to yield sovereignty to institutions dominated by German capital. But it was left to a Wall Street executive to express the brutal capitalist truth: the point is to impose German-style “discipline” on all Europe–that is, “reformed pensions…wage restraint and greater labor-market flexibility.” [6] In other words, the point of greater European integration is to drive down wages, working conditions, job security and social services.

The choice offered to the working class is depression through market chaos, or planned depression through the intensification of continental-scale state-capitalism. The history of the last century shows that state-capitalism is unable to undo the rate of profit’s fall, and that the last Great Depression led to world war. We cannot afford another.

It is crucial to raise a banner of the masses abolishing capitalism by creating their own organs of power, as they have begun to do, and developing them in such a way as to begin to take control of production and the labor process right within the workplace.

At the same time today’s movements need to be cognizant of the worldwide strength of the counter-revolution. Solidarity and revolutionary cooperation must be every bit as international as the capitalists’ class war against labor, and every bit as multidimensional as the resistance to reaction on all fronts.

Furthermore, each movement needs to recognize both that self-emancipation is the task of the masses alone, and that their self-development demands the release of what movements are already implicitly reaching for: so new a relationship of practice to theory as to forge a unity of philosophy and revolution.



1. “Most Aid to Greece Circles Back,” May 30, 2012, New York Times.

2. “Preliminary notes towards an account of the ‘movement of popular assemblies,'” July 13, 2011, by Ta Paidia Tis Galarias, a self-described “anti-authoritarian communist group from Athens,”

3. “Rising Greek Political Star, Foe of Austerity, Puts Europe on Edge,” May 19, 2012, New York Times.

4. “We – Occupy Athens Manifesto,” Spain’s indignados express a similar attitude: “It is not the crisis. It is the system.”

5. “Fortune 500 Companies Made Record $824 Billion Profit In 2011,” May 7, 2012 Huffington Post.

6. Steven Rattner, “The Euro’s 11th Hour,” June 9, 2012, New York Times.

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