An Autumn of Discontent

September was billed as a turning point in the eurozone crisis, but after a week of mass anti-austerity protests in Spain, Portugal and Greece, the only thing I can take from this month is that politicians are still unable to stop the continent’s unrelenting decline into social turmoil. Despite the efforts of the European Central Bank to stabilise the banking and monetary aspects of the crisis, the recession, deepened by austerity measures, threatens any stability earned by Central Bank action.

Heading into October, Europe faces three trouble spots on its southern “periphery”. As in previous years, Greece approaches confrontation both inside and outside parliament whenever the latest austerity measures are brought forward for a vote. The Greek state is in collapse, with police directing residents to the fascist militia of Golden Dawn in crime disputes involving migrants. Social services are in free fall, with the former ranks of the Greek middle class turning to charity services for food and medicine. This level of dysfunction, compounded by another round of budget cuts, is too much for the Greek public to tolerate.

When the IMF recently pushed Greece to pursue further wage and pension cuts, the finance minister pointed to a bullet hole in the window and asked the IMF representative: “Do you want to overthrow the government?” Eurocrats, again pushing for more counterproductive austerity measures, risk sending Greece into a full nervous breakdown, with unpredictable consequences. It’s not only EU and euro zone membership that’s at stake, but the viability of Greece’s post military junta democracy, and even the wider stability of the Balkans, if extreme nationalists like Golden Dawn continue to advance into Greek mainstream politics.

While Greece is further along in its painful austerity program, Portugal is quickly catching up with political dysfunction, public opposition to austerity, and an entrenched economic depression with no obvious exit. Any semblance of political stability in Portugal was lost in one speech by prime minister Passos Coelho, when he announced a 7% increase on the contributions of workers to social security. If that wasn’t politically explosive enough, he added that there would be a tax cut on the social security contributions of employers. The prime minister justified the measures in the name of economic competitiveness. A week later, around 660,000 protesters filled the streets in outrage over the government’s plans, and the following day the crucial coalition partner in the government came out against the tax measure. The measure formally died at a summit of Portuguese statesmen on September 21 2012. All of this still leaves the Portuguese government scrambling to find the billions of euros in budget cuts and tax increases needed to comply with the country’s IMF and European Union adjustment programme. In a tactic borrowed from Greece, Portugal’s creditors have threatened to withhold loans if the austerity drive stalls.

While smaller countries like Portugal and Greece have been of sufficient concern to European policymakers since the crisis erupted, the deterioration of a country the size of Spain threatens to bring the whole European project crashing down on itself. Austerity has intensified longstanding regional tensions in Spain, with Catalans in the northeast desiring more political autonomy, while the ruling Popular Party in Madrid and the European Union seek greater centralisation to eliminate regional budget deficits. The regional authorities in Catalonia threaten Madrid with a referendum on independence, but Madrid insists it has the constitution and national authority on its side to block a referendum. In October and November, Galicia, the Basque Country, and Catalonia all have regional elections, and all three regions have well-established and relevant nationalist movements. With a “bailed-out” Spain only promising additional rounds of austerity, the political centre of Spain risks losing more voters to regionalist parties, which promise a better future with stronger autonomy, or even outright independence.

This retreat of the political centre is happening across Southern Europe. It is most obvious in Greece, with once dominant parties like centre-left PASOK polling 8% as opposed to the 43% it won in the 2009 general election. Following the latest austerity announcements in Portugal, the ruling social democrats lost 12% in just a few weeks, with the Portuguese Communist Party and Left Bloc (allied to Greek Syriza) rising to take 13% and 11% of public support, respectively. In Italy and Spain, voters are similarly shunning the parties that have governed for decades. Europe’s plan to keep the monetary union together depends on national politicians complying with austerity in exchange for loans. As we are seeing this autumn, the streets of Barcelona, Madrid, Lisbon and Athens are increasingly restive and ready to sweep those politicians aside.

By David Ferreira (@Igualitarista)