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The Eurozone’s ‘New Austerity Model’
"The Eurozone economy has never really recovered from the 2008-09 financial crash and recession. Austerity policies—that played a major role in preventing a sustained Eurozone economic recovery for the past five years—are now evolving into still newer forms. Events in the recent past in Spain, measures approved in just the past week by the newly formed Renzi government in Italy, and proposals being debated at this very moment by the Holland government in France all point the way to the new forms of austerity now taking shape in the Eurozone.”
“No longer just cuts in government social programs and elimination of subsidies for the working poor, as before, the ‘New Model’ for Austerity emerging in the Eurozone consists of direct attacks on workers’ wages and incomes. The plan is to hold down wages in order to lower business costs and price of exports. Boosting exports in turn, it is hoped, will lead to more investment which has been steadily declining for years in the Eurozone. This scenario takes place under the cover of what is being called ‘structural economic reforms’ in general and, specifically, ‘labor market reform’ as the central element of general structural reforms.”
“In Italy, 70% of all new hires have been temp workers. Temp means lower wages, fewer benefits, far less job security, and employer ‘rights’ to layoff and fire at will. The chronic high unemployment and the large number of low wage temp jobs translates into wage compression in general, with few exceptions, for the rest of the Eurozone working class.”
“In addition to high unemployment and temp hiring, which will continue as a dual force already depressing wages, the new 3rd force of ‘labor market reform’ will extend wage cutting further, targeting the non-temp, permanent Eurozone working class in Italy, France, and elsewhere in particular.”
“Another way must therefore be found in France, Italy, and the core northern economies now slipping into recession in order to generate an export-driven recovery. ‘Internal devaluation’ to reduce labor costs will have to take another form. That ‘other way’ is ‘labor market reform’—i.e. wage reduction by another name targeting the non-temp permanent employed workforce.”
“With Italy well on its way to implementing ‘labor market reform’ as a new form of Austerity, France is close behind but has not yet launched a similar labor policy. Pressure by Eurozone capitalists and elites across the region—especially central bankers—is now growing and demanding that France speed up the process. Indicative of this pressure are recent public statements by Jyrki Katainen, who will assume the role of vice president for jobs, growth, investment and competitiveness on November 1 for the European Commission. Katainen last week praised Italy’s new labor market reforms, declaring 'it is a very good thing they are dong'. On the other hand, he criticized France, saying 'France should do more'. The IMF, Germany’s government, and central bankers throughout the Eurozone have all added their voice, in a growing drumbeat of demands that France more quickly introduce serious labor market reforms and other structural reforms.”
“At the same time, as in Italy and Spain, other prior forms of austerity apparently will continue, as France has indicated it will proceed with previously committed spending cuts of 50 billion Euros.”
“But boosting exports by labor market reform and wage compression raises the still deeper question of ‘who will they increase exports to? If the global economy—from China to Japan to Latin America, and even the USA in 2015 should it raise interest rates—continues to slow, as it clearly is now doing, who will buy the Eurozone’s exports?”
Full article : http://www.counterpunch.org/2014/10/21/the-eurozones-new-austerity-model/
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The European neoliberal economic empire sent a message, to Berlin this time, and is ready to accelerate processes for a catholic implementation of the destructive policies tested in Greece, to secure big capital's interests.
With the biggest economy of the eurozone adopting such austerity measures, there will be no "good examples" for anyone to turn to, no excuses. The anti-austerity front will collapse and the European plutocracy will declare final victory.
http://failedevolution.blogspot.gr/2014/10/plutocrats-tighten-siege-around-europe.html
Federalism means however, that the same policies will be applied totally, definately and very soon, also against German citizens and workers.
http://failedevolution.blogspot.gr/2013/04/a-scenario-nightmare-for-future-of.html
... we should expect a new attack quite soon against the spreads of Spain and Italy, forcing these countries to turn to ECB permanently as the exclusive source of funding, which means that they will adopt new austerity measures and further dismantling of the social state and labor rights, as required by the banks and multinational cartels and as it happens again and again in Greece.
http://failedevolution.blogspot.gr/2012/09/lea-jacta-est-by-emperor-draghi.html
We will start with Italy and Spain. We will order rating agencies to attack, exclude them from markets and throw them to the ECB trap. They will be forced to take similar measures, as Greece did, in order to receive liquidity. Then, we will attack France and Germany.
http://failedevolution.blogspot.gr/2013/12/an-imaginary-dialogue-between-bosses.html
It is characteristic that, according to many articles, which were forgotten quite fast so that the public opinion to focus on Hollande's "extramarital" affair, the biggest amount of these cuts reaching 30 billion euros, concerns cuts in levies paid by firms on labor, which actually means new cuts against labor and for the benefit of the big corporations.
http://failedevolution.blogspot.gr/2014/02/france-next-target.html
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