Colossi with Feet of Clay: The G8 Global Bosses Meet in Deauville

The leaders of the world’s greatest powers who meet in Deauville today appear to be rather vulnerable and divided after administering treatments against the crisis that turn out to have led nowhere.

Translated Friday 27 May 2011, by Isabelle Métral and reviewed by Henry Crapo
L'Humanite in English
From our special correspondent in Deauville (May 26th)

Far from being on the brink of full recovery, the superpowers represented in Deauville today and to-morrow rather look like lame ducks, as recovery in the G8 countries after the 2007-8 crash is at best merely puffing. Social anger is everywhere rising, and warning lights have come out in each and every pole of the capitalist planet. Even before the start of the summit it is clear that the costume of world governor that Nicolas Sarkozy boasts of having put on since he became president of the G8 and G20 “hangs loose upon him” [1].

It is difficult to imagine that the eight leaders can once more gloss over the bleak facts by issuing a mollifying communiqué to the effect that everything is for the best when citizens and workers are still overburdened with difficulties. In the US where early this year a prominent member of the White House‘s staff of economic experts hailed what he called “the promise of strong recovery”, ominous clouds are once more gathering. More and more warning lights point to a slowdown in economic activity. The OECD has just lowered its prediction for growth in 2011 (from over 3 % a few months ago down to 2,6 %). Above all the upturn has not reduced the dizzy jobless rate which official figures put at nearly 9 %. Tens of thousands of people still see their property seized.

After taking a bashing in the mid-term election, Barak Obama now finds himself in a fix due to the explosion of the public debt, which amounts to no less than 14 300 billion dollars. Under the pressure of the banks and financial markets (themselves bouyed up at a dear price by tax-payers three years ago) the US president has committed himself to a ten-year program of drastic reduction of public expenses, the effects of which are already felt by the poorest citizens, by public services and States. As to the health reform, the prospect of its ever becoming operative is receding further and further by the day. The money must be contributed by the poor and the middle classes….

The leaders of the euro zone, which is labouring under the deepening “sovereign-debt” crisis (as it is called), are even more zealously slashing away at public expenses. Subjected to the ECB’s iron rule and the Euro Plus Pact, they see no other way out of the crisis but new turns of the screw. Even though Greece, to which that kind of remedy was prescribed over a year ago, has eventually been pushed near the brink of ruin and talk of bankruptcy is getting louder and louder on the eve of the summit (see article on next page).

Japan itself, the capitalist planet’s third biggest juggernaut, has entered a new phase of recession, due no doubt in great part to the earthquake and ongoing nuclear catastrophe. Naoto Kan, Japan’s prime minister, is expected to give his peers an overview of the situation in the archipelago and in Fukushima during a session about “the future of nuclear energy after the catastrophe” this afternoon.

Japan was hit by deflation even before the seism

But Japan already registered a negative growth in the last term of 2010, even before it was struck by those terrible events. It sank all the deeper into deflation (i.e. a fall in wages and prices) because or notably because of a policy aimed at making jobs more precarious.

That kind of policy is recommended by financial markets with the sole aim of quickly reviving management policies that can bring back financial profitability within a short time. This kind of management fuels divisions, with some countries trying to shift the hardest effects of the crisis on to others, as does the US thanks to the dollar’s privileges.

When all’s been told, these policies exacerbate the suffering imposed on the population. But they now come up against an increasing loss of credibility and so the growth in popular resistance which calls for a complete change of direction.

The need for radical reform to be put on the agenda has never been so insistently knocking at the door. This is true of the EU and its member States as it is true of the international financial institutions.