In order to safeguard the system liberals and social-democrats, from Sarcozy and Obama to Braun and Lothar Bisky are promising a “humane, healthy capitalism”.
International social-democracy is exhibiting significant activity. It focuses on the effort to put the blame for the crisis solely on “neo-liberalism”, on the allegedly ineffective proportions between market and regulation at state, regional and international level.
International social democracy is expending a lot of time in order to convince the working and popular masses that it has elaborated a new recipe. It argues that it has found the correct proportion between those policies (subsidies, tax cuts, etc) that promote the concentration and centralization of capital, the support of monopolies and the policies that control the irregularities of the market through one or several state-owned banks or through the nationalization of certain enterprises in industry and transportation that find themselves in financial strains. The notions of “green economy” and “better distribution” constitute the essential complements to this effort.
Within the field of social-democracy, that is within that current that labels as “democratic socialism” the domination of monopolies alongside with the co-existence of state-owned enterprises, new political formations, such as the European Left Party (ELP), have emerged. They argue that they have discovered –more effectively than previous parties- the right balance between “market” and “regulation”, between “private” and “state” capital. In addition, they argue that in order for this recipe to be more effective the contradictions within the EU should be eliminated through the strengthening of its structures and the formation of an EU-wide administration.
In fact, they are adjusting the old social democratic line of reforms to the current reality in the EU. In the position of the state monopoly – servant of the private monopolies – they place a European-wide interstate monopoly; above the nation-state governmental administration they place a strong interstate administration, allegedly capable of expressing the general interests in the EU, solving the contradictions between its member-states.
They present themselves as “more catholic than the Pope”, providing a “left” socialist alibi to the strengthening of the existing repressive mechanisms and the emergence of new ones.
Their special role consists in the refurbishment of social-democracy in order to serve the system more effectively. They serve the ideological manipulation as they spread the illusion of a EU in favour of the people, of a pro-people administration on the ground of the economic domination of the monopolies.
Unevenness and contradictions within EU are inevitable
The current economic crisis in the Euro-zone has admittedly sharpened the contradictions between the member-states, even within its hard core. This was predictable according to KKE’s assessments and projections.
Despite the interweaving of capitals, despite the common strategy against the working class, the nation-state remains the organ that guarantees the economic dominance of monopolies and serves the concentration and centralization of capital in competition with similar processes in other member-states of the EU.
Capitalist unevenness exists both during the phase of expanded reproduction, as well as during the recession phase. It is manifested at the general level of production, at the labour productivity levels, at the proportions between sectors, at salaries and wages, at the exports and imports of commodities as percentages in the GDP, at the outflow and inflow of capital.
This unevenness is reflected in the fiscal situation of each state, in the different sizes of public debt and deficits, in the differential lending rates of the states, as established by the international market according to the position of every state in the Euro-zone, as well as in the international imperialist system.
It is this unevenness that makes the formation of a common fiscal policy impossible, even under the conditions of a recession. It has been illustrated in the different proposals (for example, between Germany and Great Britain) regarding the measures and policy packages required for the management of the crisis. It has also been expressed in the formation of interest rates above those of the European Central Bank.
The different views regarding the Stability Pact, whether it will lean more towards fiscal flexibility or towards monetary stability, express the different needs of the member-states, not a lack of bodies for an EU-wide administration or the excessive powers of the European Central Bank, as is claimed by the ELP and SYN/SYRIZA.
Under current conditions of recession the unevenness has been manifested in the Greek economy more sharply than in previous phases. Long-lasting problems, such as the public debt, trade deficit and the long-term stagnation of manufacturing industry, are intensifying.
The tendency towards a change in the correlation of forces in the international market
The intensification of uneven development is of course a generalized phenomenon within the EU and in the international imperialist system.
The general characteristic of capital depreciation during the crisis does not manifest itself proportionally in all states, sectors and enterprises (private or share capital).
Thus, both recession and the subsequent phases of stabilization and recovery bring about reshufflings in the correlation of forces between the various enterprises, sectors and national economies.
However, important changes and shuffles are often being prepared over a longer time period that encompasses more than one cycle of economic crisis.
The current crisis crystallizes the changes in the correlation of forces that have been brewing-up during the last 30 years, through approximately 3 crisis cycles affecting most of the advanced capitalist economies. These changes have been accelerated during the last decade.
In the period 1980-2008, the tendency for a reduction of the US, Euro-zone and Japan’s shares in the Gross World Product (GWP) has become dominant. In contrast, China’s share has increased (440% increase in the period 1980-2007) and China reached the third position after the Euro-zone as a whole. In addition, India’s and Russia’s shares in the GWP have also increased (110% in the period 1980-2007 for India and 19,3 % in the period 2000-2007 for Russia).
The Euro-zone share has been steadily declining in the period 2000-2007 (by 12,8 %), as has Greece’s share (by 24%, approximately double the percentage loss relative to the Euro-zone average). The tendency towards the worsening of their shares continues in 2008 and 2009 for the USA, Euro-zone (including Greece) and Japan.
The same tendencies are reflected in the percentage shares in the world capital inflows/outflows for direct investments, though with some diversifications; namely, in the period 1980-2006, China, Russia, and India saw their shares in inflows and outflows growing (with fluctuations), while the USA saw its shares decreasing. Japan maintains its share in outflows while the Euro-zone increases its share both in inflows and outflows, holding the first position internationally. In the period 1980-2006, the Greek share in inflows decreased (from 1,22 to 0,41%) while its share in outflows increased (from 0% in 1990 to 0,34% in 2006). During this period Greece becomes, therefore, a net exporter of capital.
The shares in the world imports and exports constitute another important index. In the period 1980-2007 the following tendencies are noted:
The USA had a loss in its share of exports (from 11,1% in 1980 to 8,41% in 2007), as did Japan (from 6,42% to 5,13%). The Euro-zone almost maintained its share, with fluctuations, retaining its first position (1980: 30,75%, 1990: 35,05%, 2007: 29,19%). Nevertheless, the 6% reduction in its share during the period 1990-2007 should not be underestimated. Greece saw a loss in its share (1980: 0,25%, 2007: 0,17%).
China’s shares have exhibited a spectacular increase by 890% (1980: 0,89%, 2007: 8,81%), taking the second position, ahead of the USA.
Russia and India also have rising shares in exports, but these are still quite small (in 2007 Russia : 2,57% and India :1,05%).
The following tendencies are observed in the shares of world imports:
The Euro-zone holds first position in the imports’ share with a downward tendency (1980: 34,28%, 2007: 28%). Greece remains at the same level with certain fluctuations (1980: 0,51%, 2007: 0,53%). Japan’s share has declined (1980: 6,81, 2007: 4, 41%), while that of the US has grown, with the USA holding the second position in imports. Likewise, China’s share has increased and it now occupies the third position internationally. Furthermore, Russia and India record a limited increase in their shares.
Reshufflings are also taking place among private or enterprise capitals. According to the list of the 1000 richest individuals in Britain, published in the weekly edition of the “Sunday Times”, half of the top ten in the list have increased their wealth in the midst of the crisis by 1,054 billion euros (by 43%), while the other half have faced a shrinkage of their wealth by 33, 738 billion euros (-242%).
Under conditions of a recession, while the number of loss-making companies is increasing, there still exist enterprises that are accumulating profits, either at reduced or even at increasing rates. In the later category we can include, for example, the German enterprise Siemens which, in the first trimester of 2009, showed profits of 1,01 billion euros, compared to its first trimester of 2008 profits of 412 million euros (a 145% increase), with a 5% sales increase on an annual basis.
Similar phenomena also apply to the Greek economy. The profits of the 8 major banks (National, Alpha, Eurobank, Pireaus, Cyprus, Marfin, Agricultural Bank of Greece, Emporiki) during the first trimester of 2009 are estimated at 610 million euros, compared to 1,195.9 million euros during the first trimester of 2008, that is a 50% decrease.
Reshuffling of shares is also taking place within subsectors of the economy, such as in air transport, among the Olympic Airways and the Aegean Airlines. These reshufflings are also being promoted through acquisitions, such as those made, for example, by the Marfin Group (Vivartia and Olympic Airways) and through new mergers of financial enterprises that are being prepared in Greece.
This trend is obvious in the international market, particularly in those sectors where the crisis of overproduction was initially manifested, such as the automotive industry.
It is thus that a new cycle of centralisation of capital, that has depreciated during the recession phase, is being prepared, in order for it to enter a phase of self-increase through the production process, the process of exploitation of labour power.
The exit from the recession is being made with the goal of attaining additional profit through the conquest of new markets. Competition increases, old regulations are being put into question and new ones are being established, even by taking advantage of conditions created by imperialist wars.
These tendencies can be codified as follows:
- The USA remain the primary force in the Gross World Product, but with a deterioration in all other indices.
- The rise of China is impressive, although it is stll lagging behind in overall (per capita) productivity.
- The competitive position of the commodities of the Euro-zone has improved (instead the position of Greece has deteriorated). The position of China has improved dramatically, while, on the contrary, the deterioration of the competitive position of the USA and Japan has become apparent.
- The competitive position of India and Russia remains low though with a tendency towards improvement.
- The position of Greece is exhibiting a more contradictory outlook. On the one hand, its share in the GWP is decreasing and its position with regards to exports is deteriorating, characterized mainly by a relatively lower share than its share in the GWP, while, on the other hand, the position it holds in the outflow of capital has improved.
The index “net international investment position” (sum of Direct Investments, Portfolio Investments, Derivatives, other investments, Exchange Reserves) remains negative for Greece, at 183,944 million euros in 2008, though it declines as percentage of the GDP (2006: -83,6%, 2007: -94%, 2008: -75,7%).
In combination with the progress of other economic indices already mentioned, we can conclude that during the period of its incorporation into the EEC –and particularly within the Euro-zone- the Greek economy has sustained losses with regards to the competitive position of domestic industrial production (mainly of Manufacturing), but, at the same time, it has exhibited an increase of capital accumulation and its export in the form of direct investments.
We must note at this point that among the thousand magnates with economic activity in Great Britain are included 10 Greeks, 4 of whom are among the first 100 (D.Leventis, M. Laimos, F.Niarchos, St. Hatziioannou).
These data confirm the assessment of the 18th Congress of KKE that the Greek economy holds an intermediate position in the international imperialist system, maintaining the same –penultimate position- in the Euro-zone, though with an enhanced position in the Balkan market.