By John W. Warnock
Act Up in Sask
Sunday, 05 June 2011
Perhaps working to support the NDP is all that we can expect from activists as long as the Canadian economy is not in recession and the Harperites are successful in propping up the bubble in the housing market. But that may not hold. When we are shocked by the budget cuts that are coming from the Harper government, we should remember that the federal NDP pledged in its platform to do the same thing – balance the budget over four years without raising taxes.
In this present period of quiet and reflection, it seems prudent for Canadians to take a look at Europe, where proportional representation has allowed social democratic parties to lead governing coalitions for many years. How have these political allies of the NDP dealt with the Great Recession? What are political activists on the left doing across the Atlantic?
Thanks to the Internet and the new media we know that social democratic (and Green) parties originally helped create the crisis in Europe by supporting and implementing the deregulation of financial markets and most of the basic policies of the neoliberal agenda. They now form the governments in those countries with the most severe debt problems: Iceland and what are referred to by the business community as the PIIGS. What are they doing? Imposing severe austerity programs which hit hardest at the working class and the poor.
But the people are organizing and fighting back, utilizing all kinds of political resistance. New political movements are emerging demanding the expansion of democracy and the creation of a new society. Canadians should be inspired by these examples. What follows is a short summary of developments in these countries.
Iceland: “We will not bail out the banks!”
A bankrupt country! It began in 2000-1 when the conservative coalition government, egged on by mainstream economists, privatized the state-owned banks and deregulated the financial sector. The now private banks launched a massive expansion abroad, soaking up the savings of people around the world by promising them higher-than-market returns. The supposed assets of the banks rose to eight times the size of Iceland’s GDP. When the Ponzi schemes collapsed, and the banks became insolvent, the UK and Dutch governments insisted that the people of Iceland provide compensation to the greedy investors.
Following the 2007 election, a coalition government was formed between the conservative Independence Party and the Social Democratic Alliance. In 2008 the top three banks were nationalized to prevent their bankruptcy. The coalition government put forth proposals to bail out the banks and impose a severe austerity regime.
Protests began on a regular basis, demanding the resignation of the government and an early election. The protests were sustained over time and grew in size. Large demonstration were held at the Parliament every Saturday, pelting the legislative building and officials in cars with paint bombs, eggs, and anything else around. As thousands of protesters banged spoons on pans, the resistance became known as the “Kitchenware Revolution.” At the same time the protesters created the Citizens’ Movement to sustain the protests and defend families from foreclosures. The coalition government resigned in 2009 and called an early election. The Citizens Movement ran a few candidates, took 7% of the vote, and elected four members to the parliament.
The 2009 election resulted in a new coalition government, headed by the Social Democratic Alliance and supported by the Left-Green Movement. But they drafted new austerity programs and bailout plans for the investors in the banks. The peoples’ movement demanded and got a referendum on the legislation in March 2010, which was defeated by a vote of 93%. A second more moderate bail out plan was then brought to referendum in April 2011, and it failed by 60%. The Citizens’ Movement is determined that the general population should not have to pay to bailout the banks. They have the solid support of the majority.
Greece: Corruption, shock treatment, and the revival of the left resistance.
The crisis in Greece dominates the news today, as the Troika of the IMF, the European Union and the European Bank have demanded that the government impose a radical program of privatization of state assets and a fifth austerity program. The Greek financial disaster involved illegal collusion with banking interests, hiding the size of the government debt from the public, cronyism, and the refusal of the well off to pay their taxes. It covers both the governments of the right wing New Democracy Party (ND) and the Panhellenic Socialist Movement (PASOK).
In the October 2009 election the Socialist party won a majority of the seats and formed the government. It is trying to prevent the collapse of the financial system by applying an austerity package which includes pay cuts for workers, cuts in pensions, public sector layoffs, and a range of increases in consumption taxes. The Socialist government has now begun to privatize all state-owned assets.
The people have responded with mass demonstrations and strikes. During the demonstrations and the general strike, unions affiliated with the Greek Communist Party (KKE) occupied government buildings. Most recently they occupied and shut down the Ministry of Finance. They have been joined by supporters from the ecosocialist Coalition of the Radical Left (SYRIZA). The two left opposition parties have given support to the growing “Can’t Pay, Won’t Pay” movement. This is grass roots civil disobedience. A second general strike will be held in June.
On the way back from the G-8 meeting in France at the end of May, Canadian Prime Minister Stephen Harper paid a visit to Greece so that he could show his support for George Papendreou and the Socialist government and its privatization and austerity programs.
Ireland: The collapse of the “Celtic Tiger.”
Ireland is now in the fourth year of recession, with unemployment at 14.6% and workers again fleeing to other countries. The cause was the “Celtic Tiger” free market and deregulation policies of the mainstream parties, supported as well by the Labour Party and the Irish Congress of Trade Unions. Praised by mainstream economists, the policies included very low corporate taxes, low interest rates, and subsidies to transnational corporations to locate in Ireland. One result was an enormous bubble in the housing market, which is still deflating, and the collapse of the banks, with the government invoking some nationalization and very large subsidies from the taxpayers.
There have been demonstrations and strikes, but they have been relatively limited due to the support of the Labour Party and the trade union federation for the Troika-imposed austerity programs. The ICTU is a partner to the Croak Park Agreement, where they pledged that there would be no strikes for four years. The 2007 coalition government of Fianna Fail and the Green Party collapsed, and the February 2011 election produced a coalition government of Fine Gael and Labour. There has been no change in policy, however, as the new government is also imposing an austerity program, including budget cuts of sixteen billion Euros over four years.
The opposition to the financial packages imposed on the Irish government was first led by Sinn Fein. There have been demonstration and protest marches. The crisis spurred the formation of the Peoples Movement, a grass roots organization which has demanded Irish independence from the European Union, peace and non-violence, and a new democratic society. In the 2011 parliamentary election they formed the United Left Alliance and won 7% of the vote. They elected five members, from the People Before Profits Alliance and the Unemployed Workers Action Group. The new movement is demanding no taxpayer bailouts for the banks. A general strike is in the planning stage.
Portugal: The revolt of the Desperate Generation
On May 16, 2011 Portugal became the third country to be bailed out by the Troika, receiving seventy-eight billion Euros in return for imposing a comprehensive austerity program. As elsewhere the debt and deficit problem was caused by deregulation, financial speculation, government debt reaching 9.4% of GDP, and investor speculation against Portuguese government bonds. Since the onset of the Carnation Revolution in 1974, the Socialist Party (PS) and the conservative Social Democratic Party (PSD) have alternated as government.
Currently the Socialist Party forms a minority government and is trying to impose a severe austerity program. The parliament recently refused to pass the legislation, and Prime Minister Jose Zapatero resigned. A parliamentary election is scheduled for June 5. The Troika and investors have called on the PSD to support the Socialist government’s austerity program.
The opposition has been led by the Democratic Union Coalition, the alliance of the Communist Party and the Greens, and the Left Bloc, a Marxist and Ecosocialist alliance. There have been many demonstrations and strikes, including a general strike in November 2010.
The media has given extensive coverage to the occupation of the central plazas of 45 cities by young people, which began on March 12, 2011. Organized on Facebook, they have been called “The Desperate Generation” They refer to themselves as “the unpaid generation” and “the generation on the scrapheap.” They are “the poorly paid, the slaves in disguise, the subcontracted, the temps, the fake self-employed, the intermittent workers, the trainees, the bursairs and the student workers.” They pledge their solidarity with popular movements for democracy in Egypt, Wisconsin and Spain.
Spain: “Real Democracy, Now!”
Most worrisome for investors and the financial community is the economic crisis in Spain. The consensus is that the EU cannot afford to bail out another country. The government and the finance industry subsidized a massive house and apartment building program, hoping that rich foreigners would move to Spain and buy holiday residences. The housing bubble burst, and the government now faces an enormous budget deficit and debt. Unemployment is now 21% and 45% for youth.
The 2008 elections resulted in a majority for the Spanish Socialist Workers Party (PSOE), which is imposing a draconian austerity program while bailing out the banks. The right wing opposition, the Peoples’ Party (PP), advances similar policies. In the local elections in May 2011, voters showed their opposition to the government by handing the Socialists a major defeat. Aside from the regional parties, the only organized political opposition is the United Left, a coalition of the Communist Party and ecosocialists.
The new political development is the formation of Real Democracy, Now!, a federation of 500 organizations, without representation of any political parties or trade unions. They are calling on citizens not to vote for either of the two major parties in elections. Using Facebook and the internet, they organized street protests beginning on May 15 (the M-15 Movement). They set up tents and occupied the central plazas in 65 cities across Spain. “We will not pay for the banker/politician crisis,” they proclaim.
Following the example of the Paris Commune, they make decisions by consensus at open air meetings where all are invited to attend. They reject the politics of liberal democracy, which stresses the personality of the political leader and his policies. Elections are just plebiscites, they argue, which produce the same old men and the same old policies.
“We are here because we desire a new society that puts lives above political and economic interests. We demand a change in society and an increase in social awareness. We are here to make it known that the people have not fallen asleep, and we will continue fighting ... peacefully.”
At the present time, Canadians are in a quiet lull. The Harperites are confidently biding their time, preparing to use their majority in Parliament to strike. Supporters of the New Democratic Party were jubilant after the election but are now nervously wondering what will develop. The rest of us are waiting for the anvil to fall. If North America drifts back into a recession, and there is a good possibility that this could happen, we will start to feel the real pain. Hunkering down in our homes will not work. It will be time again to start organizing. Canada is not different.
John W. Warnock is a Regina political economist, author, and long time political and social justice activist. This is the third part of his essay on ways to confront the Harper government.