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Clare Solomon Perhaps they thought they would get away with it. If they did Cameron, Osbourne and Clegg must now know they are in for a real fight. On 30 November 1 million workers are set to strike in defence of their pensions in a day of coordinated action by trade unions. It will be the largest strike for a generation. It will not just be the size which makes the strike exceptional. It happens in the context of global revolt against the crisis that is finding an ever stronger echo here. global movement Public support for the global movement of occupations (even from some City workers!) shows that millions want a radical change of direction in our society. Everywhere they happen they become a focus for discussion and a laboratory for new ideas. The strike also comes as the wheels visibly come off Osbourne’s economic
global revolt strategy. We are now all staring into the economic abyss as austerity and financial crisis push us into a second recession. Even some in the City are calling for a change of course.
day of proteSt It is this that makes N30 so much more than just a strike. It can become a focus for all those who hate the government and the bankers. It can bring together public sector workers and unemployed, pensioners and students, unionised and non-unionised in a massive day of protest. Union members should build in their workplace or college for the biggest possible
vote for action. On the day there will be demonstrations and marches in nearly every town and city in the country. Activists must ensure that these are massive. Everyone who can should try and be on one and to bring as many people as possible with them. We should start building for the demonstrations now in our workplaces and in our communities. We must all come together on the streets in the greatest show of unity against the cuts yet seen. Clare Solomon is co-editor of Springtime: the new Student rebellions published by verso.
Send news, reports, events, photos or videos to content@counterfire.org Phone: 07872 481769
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31/10/2011 14:25
what is the Soverign Debt Crisis?
James meadway The economies of Europe continue to stagnate. Market euphoria over the deal struck by EU leaders to end the debt crisis has been short-lived. For over a year, Europe’s political classes have appeared powerless to end the cycle of high debts and low growth. They have been incapable of acting decisively because the current crisis is so deep. Sovereign, or national, debt is the money owed by a government. Governments regularly borrow money to pay for their operations. They raise these funds principally by issuing bonds – promises to pay cash over time, with interest. These bonds are largely bought by banks and other financial institutions, who can also trade them amongs themselves. The great fear today is that some governments now have debts so large that they will default – fail to repay the debt. This is particularly the case for some euro countries – Greece most dramatically, but also, possibly, Spain and Italy. Because those sovereign debts are held by other financial institutions, a failure to repay the money threatens them also with bankruptcy. Debt they thought would provide steady income can suddenly become worthless. The sovereign debt crisis in Europe has been blamed on excessive spending by governments. But this is nonsense. Greece, for example, spends less on its public services, as a percentage of GDP, than the EU average. Bailouts The crisis today in reality is a continuation of the economic crisis that erupted in late 2008. The collapse of Lehman Brothers made banks uncertain of how much – if anything - the debt they and other banks held was worth. They stopped lending to each other and then to everyone else too. Governments had to use their ability to borrow backed by taxpayers’ money to bail out the banks and get money flowing around the system again. In the UK, the Bank of England estimates this amounted to £1.3 trillion, or over 10 times the NHS budget. The bailouts didn’t stop the world economy from tipping into recession. As businesses went bust, unemployment shot up and tax revenues collapsed. Governments were paying out more in unemployment benefits just as they were receiving less in taxes. This is the reason sovereign debt rose across the world. The debt crisis today has nothing to do with “excessive” public spending in the past. It is entirely the product of the financial crisis, and the bailouts and sharp recession it produced. But the debt problem was merely passed
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from banks to states. Governments borrowed from large banks and other financial institutions. Now these banks are worried that states will not be able pay back their debts as economies stagnate and unemployment remains high. The epicentre of the crisis in Europe is Greece. Greek sovereign debt is approaching 190 per cent of GDP. It cannot repay this debt and will default. But this places the holders of Greek debt, particularly French and German banks, at risk. Fear is rippling through the financial system the same way is it did in 2008. viCious CirCle The response of governments across the developed world to increased debt has been austerity – cutting spending to cut the deficit. They think that by trying to repay the debt as quickly as possible, they will reduce the possibility of fresh crisis. This is utter folly. Cutting public spending reduces demand in the economy. As demand falls, firms sell less and make their own cutbacks – reducing wages and laying off workers. Demand then falls still further. A vicious circle is set in motion. Austerity has been sharpest in Greece. The result has been economic collapse. The country has been stuck in recession since 2008 and GDP has dropped a staggering 14% since its peak. We’ve also had a taste of this medicine here as Osborne’s public spending cuts choked off an already weak economic recovery. By imposing austerity, governments are choosing banking over real economic activity – the kind that produces jobs. They cannot break the cycle without also taking on the financial system. That would mean cancelling much of the national debts of southern Europe, and imposing strict controls on the operations of major financial institutions. The deal struck by European leaders at the end of October does none of these things. It ‘voluntarily’ writes off some Greek debt, but – on confidential internal IMF/EU/ECB forecasts – not by enough to break the vicious circle. And rather than meaningfully controlling finance, it balloons the existing European Financial Stability Fund into a trillion-euro mopping up operation in case banks fail. But the Fund is based on the same dodgy, off-balance sheet accounting that helped produce the initial financial crisis. It carries the high risk of simply worsening any future financial crash. None of the European leaders are prepared to really write off debt, or tackle finance. The system is in deadlock – trapped in a downward spiral of austerity and recession. Breaking it will require two things. First, a movement against austerity must be built in every country, demanding an end to public spending cuts. Not one pound or dollar or cent should be cut from public services. Second, that movement must be prepared also to insist that financial institutions are placed under democratic control.
we resist their crisis s r e k Ban
X S L y p u O cc
Cuts
O 3 N
ion s s e r P re e C i l o P
n o i t c A t c e Dir s n o i t u l o v A r ab r e f o n o i t i l Coa tance Resis
white Paper: Blue Print for Free market
sean rillo raczka, vice president of ULU (PC)
Last year’s revolt against student fees was just the beginning of a larger battle for the future of higher education. At stake is the whole p u r p o s e of H i g h e r Education. Can the government turn it into a just another business? The imposition of full fees wasn’t just about squeezing more money out of students or making them more indebted (though it will do this). It was about the government getting out of the funding
ar w t s i l imPeria
da n a g a P o r P e t a r CorPo
of university education and passing the burden on to the students. By this method they turned students in search of knowledge and skills into customers searching for the best deal they can afford. The Higher Education White Paper published this summer writes the other half of this equation. It lays out a blue print for a free market in education “providers”. It aims to create a “level playing field”, promising legislation to take down “barriers” to the entry of new (i.e. private) providers into the market. Means to do this include widening the right to award degrees (and the use of the name “university”) to smaller colleges and institutions, and decoupling the right
to award degrees from teaching. If these changes go through the conditions will be in place for the birth of a two-tier system like the US: mass education factories and exclusive Ivy league colleges for the elite. That is why the battle for education is far from over. Students and all those who want to defend our education system should join the national student demonstration on 9 November and the support our staff’s fight for their pensions on November 30. Never before have students and staff had so many reasons to unite. read more at: http:// tinyurl .com/ 6jo428g
1 years of
fighting war
lindsey german is the National Convenor of the Stop the War Coalition. Elly Badcock spoke to her on the coalition’s 10th anniversary. A Twitter wall buzzes on a giant screen as Julian Assange, Brian Eno and Jemima Khan take to the stage. Young men wear fancy dress and young women shout into microphones to roars of approval. A general assembly takes place between the lions of Trafalgar Square, before a 106-year-old woman leads a crowd of students, ex-soldiers, activists and workers to Downing Street. It’s October the 8th, and this is the modern anti-war movement. Ten days later I meet Lindsey German, convener of the Stop the War Coalition, to discuss it. Landing in the middle of the Arab Spring and the Occupy movement, the Anti-War Assembly drew on the rhetoric of both. “We had this type of protest,” says Lindsey, “because we wanted to do something different. It was a day which really showed the breadth of the anti-war movement.” “It was clear that a significant proportion of attendees had never been involved in the movement before. Many in Trafalgar Square would have only been in primary school when the Afghan war began, and certainly didn’t attend the two-million strong protest against the Iraq war in 2003.” Listening to her smiling description of militant teenagers in V for Vendetta masks, I’m interested to know how this compares to the political movements she grewup with. For someone who became involved in revolutionary politics nearly forty years ago, Lindsey is remarkably honest about her formative political experiences. Upon arriving at the London School of Economics in 1972, she was “absolutely bemused at how many socialist groups there were, dozens, and they all sold different papers!” After joining the International Socialists
in the same year, Lindsey has remained in politics ever since. “One of my proudest achievements is still being politically involved and active despite having a Senior railcard!” As we talk Lindsey charts a political history that spans 1968, the Civil Rights Movement, and the Campaign for Nuclear Disarmament – as well as the rise and fall of the Labour Party. Growing up in ‘boomtime’, she describes her generation as “always getting better off. We were going into education – I was the first in my family to go to university. We had things our parents never had. Now there’s terrible insecurity amongst young people.”
Even the biggest demonstrations of my generation didn’t reach those heights. “Despite this, I’m convinced that the supposedly apolitical generation are actually better informed and more likely to go on a demonstration.” “Even the biggest demonstrations of my generation didn’t reach the heights of those since the turn of the century,” she argues, “on March 26th there were half a million people out on the streets, and I don’t remember anything like that on a trade union march in the 70s.” The conviction that young people are engaged and enthusiastic is one that inspires Lindsey in the work she does today. She is adamant that a central task of Stop the War is to convince people that protest works; that demonstrations on the street can affect government policy – “and the key to that is going to be the young people. I am absolutely certain of that.” to read the full version of this interview go to: http://tinyurl .com/6z5lopc
31/10/11 08:08:26
e r e h I’m se… becau
oCCUpylSX you’ve been here a week, how’s it’s going?
Josh virasami is one of the organisers of Occupy LSX and a member of Counterfire. Peter Stäuber spoke to him.
It’s been inspirational. People have been very radical. At first, the Church was supportive, but then they issued a letter asking us to move. We held an emergency assembly and decided to stay. When I came back the next morning, there were 15 more tents. What impact do you think you’ve had? There has been massive support for the global movement. We are in the Square Mile, which is one of the most important
fiancial centres in the world, so us being here definitely has made a difference – we are a real challenge to the City of London.
What connections have you built up since being here? We’ve been working with other campaigns and movements. Firstly we’ve been linking up with other occuptions around the country and internationally. We are part of a global movement. We’ve also been working with the student movement. They want to march here for
Join
the demonstration on 9 November. We’re also building links with anticuts groups such as the Coalition of Resistance and I have spoken at their meetings.
then marching back here again for a rally. We want to show solidarity with workers in struggle and are looking forward to 30 November pensions strike.
Can you tell us about occupylSX’s involvment with the construction workers dispute?
What was your favourite moment? One day a school came here, and we talked to the children – they were about 9 or 10 years old. They said they wanted free education, and when I asked them what was wrong with the banks, they said: “They have too much money.”
They have been having demonstrations at various large construction sites against an attemp by employers to cut their pay. We have joined them marching to Blackfriars to support their protest and
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31/10/11 08:04:42