The following is based on a speech delivered by Jorge Martín at a recent meeting of the international leadership of the Revolutionary Communist International. In it, he analyses the existential crisis of European capitalism, and the impact this will have on the class struggle.
[Originally published on Marxist.com]
European capitalism is facing an existential crisis. In the recent period we have spent a lot of time discussing world relations concentrated mainly on the question of the United States, Russia and China. But obviously, the relative decline of US imperialism and the rise of China and Russia leave Europe in a very particular situation.
This crisis is really not a new phenomenon. It’s been developing for a very long period of time. In fact, you could trace it back to the aftermath of World War Two with the emergence of the United States as a dominant world imperialist power and the Soviet Union as the only counterpart to that.
Now, the relative decline of US imperialism has now brought the crisis of European capitalism onto the surface. It has revealed it for everyone to see.
At the same time, the rise of Chinese imperialism, which has been a 30-year-long process, also now plays a very important role in this crisis.
The 2008 crisis was one of several turning points in the crisis of European capitalism.
Before the 2008 crisis, the combined economies of the European Union – including Britain, which at that time was a part of the European Union – were 23 percent bigger than the economy of the United States. Now the United States economy is 18 percent bigger than the combined economies of the European Union and Britain.
Both the United States and Europe were equally affected by the 2008 crisis, but they came out of it slightly differently. At that point, there was a divergence between the two.
Since 2008, GDP growth for the United States has been 123 percent. GDP growth for China has been 453 percent. But the combined growth of the European Union and Britain has been merely 53 percent. That’s less than half of the United States and less than an eighth of the economic growth in China. This is what puts European capitalism in a massively disadvantaged position.
This is at a time when there’s also been a massive change in the character of the world economy – from globalisation and free trade into a situation of the world economy breaking up into warring rival trading blocs.
European integration
What we are talking about is the process of the long-term decline of European capitalism.
Already in the 1970s, there was a worldwide crisis of capitalism, the first one after the prolonged postwar upswing. The ruling class responded by what is commonly known as neoliberalism, which basically amounts to an assault on the welfare state, the opening up of a whole series of parts of the economy that were previously in state hands for private profit.
It’s more or less after that period that there was a very strong push for European integration, which ended with the introduction of the euro as a unified currency for the European Union.
The reason for the creation of the European Union in one form or another had existed for many decades. It was a long process, but it was basically an attempt by the weak individual European capitalist powers to gang together in order to try to gain a little bit of an advantage in the competition in the world market.
Different factors came together for many decades prior to that. The US was an early promoter of European integration under the domination of the United States. But it also represented an attempt to make a deal between the bourgeoisie of France and Germany for an economic agreement that would prevent war on European soil.
But the truth is that when the euro was finally introduced, it was introduced firmly under the domination of German capital, which was the strongest in this collection of different capitalist powers.
It was also introduced on the basis of mandated permanent austerity policies. If you remember, the Maastricht treaty criteria – which no one ever really fulfilled – said that countries should not have more than a 60 percent debt-to-GDP ratio and no more than a 3 percent budget fiscal deficit.
At the time, for most countries, this didn’t seem to be a very big deal. Just to give you an indication, before the 2008 crisis, the Spanish debt-to-GDP ratio was about 30 percent. But even at that time these criteria still meant austerity policies.
As I said, all this was done under the domination of Germany. German capital benefited greatly from the introduction of the euro. This was combined in Germany with a whole number of labour counter-reforms, reforms which increased the competitiveness of German products.
There was a massive transfer of EU money to the southern European countries in infrastructure projects and so on, which in turn created a captive market for German export products.
At that time, there was a lot of very cheap money, very low interest rates. And that led to a certain growth of the economy.
Now at that time, we explained that it was impossible to unite economies that had different needs and that were going in different directions. I recommend that comrades reread the document that Alan Woods wrote in 1997, which is called ‘A Socialist Alternative to the European Union’, which analyses that process.
We have to admit that the European capitalist class went further than what we thought was possible in this process of European integration.
Nonetheless, the basic contradiction that we had pointed out remained at the heart of the European Union, that is, the impossibility of uniting the different economies of countries that were moving in different directions.
Say, for instance, the Greek economy enters into crisis. They cannot devalue their currency because they don’t have their own currency. They are therefore forced into ’internal devaluation’ through the massive destruction of workers’ living standards. It’s the only way to regain competitiveness at that point of the economic cycle.
The European ruling class also grappled with this problem ever since, in the form of attempts to achieve political unity in order to back up this economic unity. Political unity under the domination of Germany, that is.
But the truth is that all these years later, this has never been achieved. There is nothing common in the European common policy. And now, under the hammer blows of the economic crisis and the changes in world relations, it is disintegrating even more.
Rather than further unity, what they are now discussing is the abolition of the veto, the consensus system for taking decisions, because it’s not working. The veto system means that Orbán in Hungary could hold the EU to ransom on different questions that he was interested in.
Then came, as I said, the 2008 crisis, which was followed by a massive bank bailout, which in turn led to the debt crisis of 2011-2015.
This really strained the EU to the limit, and provoked mass movements against austerity in all countries, the main victim being Greece.
After that, we had the COVID-19 shock. Again, this meant the massive accumulation of debt. The total overall debt of the EU went from 58 percent before 2008, to 88 percent overall. That is well above the Maastricht limit.
That overall figure of 88 percent doesn’t reflect the real position. Germany is still at around 60 percent. This is the biggest economy in the EU.
But the economies of Britain, – no longer in the EU – Belgium, Italy, France and Spain are all over 100 percent of debt to GDP. In some cases, they are at 130 percent or 120 percent, which is completely unsustainable. That is a big cause of their political crises.
Running on empty
As if this were not enough, then we had the Ukraine War in 2022. The sanctions on Russia will go down in history as one of the best examples of shooting oneself in the foot on the part of the European capitalists. That is particularly the case for Germany.
Europe cut itself off from accessing cheap Russian oil and gas. Russian oil used to represent 27 percent of Europe’s oil imports before. It’s now gone down to 2 percent (in direct imports that is – some Russian oil is still coming via India). Russian gas, in the composition of Europe’s total imports went down from 45 to 13 percent.
This is unequal in different countries. Some countries have been much more heavily affected. Some have their own alternative or home-grown sources of supply. The country most badly affected is Germany.
This has led to a push by the United States to capture the energy market in Europe.
The struggle for the domination of world energy markets is a very important part of the worldwide inter-imperialist struggle. Obviously, China has the advantage in renewable energies: solar panels, electrical batteries, but also the installation of nuclear power plants. The United States doesn’t have an advantage in this field.
The United States, over the last few decades, has gone from being a net importer of energy to a net exporter of energy. The development of fracking is a big part of this change.
Europe’s imports of US gas have gone from 2 percent to 28 percent. For seaborne LNG, the US has gone from supplying 25 to 66 percent of all imports. US oil has gone from 8 to 15 percent of European imports.
This is one proxy measure, let’s say, of the increased domination of the United States over European capitalism as a result of the Ukraine War.
The Ukraine War was clearly not in the national interest of the German ruling class. And that explains its early reluctance to get involved.
Now the United States is attempting to take full advantage of this situation for their own benefit. This is a process that started two or three years ago, but it has accelerated over the last year and even over the last six months.
The US is attempting to develop a series of gas pipelines and gas terminals in Europe that are dominated by the United States in order to lock in a whole series of countries into supply from the United States, particularly in the Balkans and Eastern Europe.
There are three facilities that are key to this whole infrastructure. One is the terminal in Croatia on the island of Krk, which now locks Croatia into gas supply from the United States. It has not been built yet, but the agreement is to build a gas pipeline from Croatia to Bosnia and Herzegovina. This is a very shady deal which apparently violates European tendering rules. It is part of the struggle between the European Union and the United States.
There is the FSRU terminal in Greece, which is also a US-dominated terminal. And there’s a terminal in Poland called the Świnoujście terminal.
The idea is to build a series of pipelines that connect all these into a vertical pipeline that goes from Poland all the way to these terminals in the south of Europe.
Some of these exist already. Some of this is partially built. But the aim is clear: to replace on a more permanent basis the access to Russia’s supply of gas and energy.
There have been a whole series of meetings and summits. US Energy Secretary Chris Wright has been flying from Bosnia to Croatia to Greece and all these countries. There’s the Three Seas initiative to connect the Adriatic, Baltic and Black seas, which is the field of fierce struggle between the European Union and the United States.
Then there’s the Transatlantic Gas Security Summit, involving 12 countries – Greece, Bulgaria, Hungary, Poland, Romania, Slovakia, Moldova, Ukraine, Croatia, Lithuania, Serbia, Bosnia and Herzegovina – under the aegis of the United States.
What we are witnessing is a very, very sharp struggle between US imperialism and European capitalism for the control of energy markets.
But the most important impact of the loss of cheap energy supply from Russia has been in Germany.
I don’t want to give too many figures, but I think the comrades need to understand the full scope of this question.
Industrial output in Germany has gone down by 9.5 percent in volume since before the Ukraine War. There are certain industries which are more energy intensive, like the chemical industry, which is a core element of German industrial capital. In this sector, output has gone down by 20 percent. In the metal and paper industries, 8 and 9 percent of all jobs have been destroyed in this period.
We’re talking about a very sharp shock in a very short space of time.
In the last year, German industry has destroyed 15,000 jobs a month, or 180,000 in a year. There’s more to come, of course.
The loss of cheap energy is not the only factor, but it’s certainly been a massive shock that has dramatically accelerated this process.
The truth is that German industry, at the core of European industrial power, had already become, to a certain extent, obsolete. It was lagging behind other, more dynamic industrial powers, mainly China.
Hamid made a very interesting point in one of the Against the Stream podcast episodes. Germany, for many decades, built their advantage in the world economy mainly in one industry: the car industry, around which a whole series of auxiliary industries were organised. And they became very good at it.
But then they became complacent. Because of the very heavy weight of the internal combustion engine vehicle industry in the overall economy, they were less able to innovate, when the change came, from internal combustion engines to electric battery vehicles.
China, if you want, had the advantage of backwardness. There was no massive car industry in China previously. What there was was mainly foreign-owned, like German companies using cheap Chinese labour to produce oil-designed cars.
Because of this, it was relatively easier for China to make the jump towards electric vehicles. In fact, if you look at it, a few of the leading Chinese electric vehicle companies that dominate the world market today started out as battery makers for mobile phones – it’s basically the same technology.
Crushed between America…
Then, on top of all these shocks, Trump came back to power. He decided that he was no longer interested in maintaining the transatlantic alliance in its previous form. This was another big shock for European capitalists.
It was exemplified in two meetings.
First was when JD Vance went to the Munich Security Conference at the beginning of last year. He basically launched an attack on Europe on the following lines: ’The United States has been underwriting the security of Europe for decades. You’ve been leeching off on us. It’s now time for you to pay up.’
This is not just Trump’s idea. There were already trade conflicts between Europe and the United States under the Biden administration and, before that, the first Trump administration over a whole number of things: steel, tariffs, technology companies, French wine, Scottish whisky. But this was certainly a qualitative leap in this conflict.
Then there was the meeting in July last year while Donald Trump was playing golf in Scotland. The European leaders, led by von der Leyen, went there to show their respects. They reached an agreement that was humiliating for Europe, in which they committed themselves to buy massive amounts of energy from the United States.
The total was something like €750 billion of US energy. It’s not clear that it is actually taking place, but it’s the general direction of things. This was a general commitment to please Trump.
More and more, the European capitalists have realised that the United States can no longer be considered an ally.
Still, the European-US trade relationship is still the largest trade relationship in the world. But it is no longer one that is conducted in more or less good faith. Now there is a cut-throat competition between the two. Or rather, a cut-throat attack, an assault by the United States on Europe and its markets.
We’ve seen this in all sorts of things: regulations for technology companies, the question of energy, the question of Greenland.
Not only this, but the United States has openly said that they are in an all-out war against the political establishment of Europe. Their intention is to install friendly governments in different countries, and they are openly backing right-wing populist parties in different places.
It’s a very – this is the word of the day – transactional relationship. That basically means that the United States will use any means at its disposal to achieve their aims. If they don’t achieve their full aim at the beginning, they will achieve part of that aim, and then will continue pushing in the direction that they want.
This is all written down in the famous National Security Strategy document.
The aim is also to pick on countries one by one, to see which countries they can exert more influence over.
This has obviously not always worked out as they intended. The United States did support very openly and very heavily the re-election of Orbán in Hungary. And they lost.
But the general intention and the general direction of this relationship is very clear.
This does not necessarily mean that it is the intention of the United States to destroy NATO, for instance. But what they basically want, whether this involves destroying NATO or not, is a relationship from which they benefit more.
They want European countries to spend more on defence – which of course means spending on US-manufactured weapons. They think that European countries must help the United States whenever the United States so requires Europe, without having any say or being consulted about the decisions that the United States takes – for instance, in Iran.
On this question, the United States is very serious and determined.
Last Friday, they started a general review of NATO’s posture in Europe, which means the withdrawal of troops from Germany, which has already started. Now, some of these troops have moved to Poland or elsewhere. But there’s a general direction of travel.
Incidentally, the United States is not militarily withdrawing from Germany. They still want control of the very important US military bases in Germany, which have played a decisive role in the wars in Ukraine and Iran.
But we have now seen things that were unthinkable even 24 months ago. For instance, the Spanish government denying the US the use of its military bases in Spain for its operation in Iran. There have been similar, lower-level conflicts in France and Italy over the use of US air bases, about whether permissions were asked for or not, and about transportation of weapons to Israel.
Some of these countries’ governments have partially denied access to the United States for public consumption purposes, for propaganda. But it’s not just that. There is a serious conflict between the European capitalist powers and the United States, which is reflected in these questions as well.
…and China
The assault of the United States is just one aspect of the problem facing European capitalism. The other is the rise of China.
China has now been partially cut off from the US market by sanctions and the trade war. It has a massive overcapacity of almost everything and needs a market to sell these products.
This is the logic of imperialism in its pure essence. And it is having a negative impact on the European economy, which is unable to compete with the Chinese economy.
This is no longer just because production costs are cheaper in China, but now also because China is more technologically developed than Europe.
There have been two or three European car companies – in France, mainly – where Chinese car manufacturers have come in and contracted spare capacity in existing European plants to build their own cars without any transfer of technology.
We saw Macron stand up at the World Economic Forum in January and say, ’yes, we would like the Chinese to invest in Europe. But it needs to be done fairly. They should be transferring some of their technology to us.’
This was unthinkable 15 years ago. The relationship was the opposite.
This question, particularly the question of electric battery and electric car makers, is creating massive divisions inside the European Union. Some countries say, ‘No, we must introduce protectionist tariffs to defend our industries!’
Others are racing ahead to welcome Chinese investment in their own countries before other countries take it. There is a big struggle between Spain, Turkey, and Hungary to offer the best conditions for Chinese companies to invest.
This Chinese company, CATL, is building an electric battery factory in Zaragoza in Spain, which is next to a car plant owned by Stellantis. This battery factory is built in a small town where only 1,300 people live. They have brought over 2,200 Chinese workers to set up the factory because: one, they don’t want to transfer any technology or know-how about how the factory was set up; and two, because there aren’t 2,200 skilled engineers in Spain who could set up that kind of factory.
Once the factory is fully functioning, there’ll be 4,000 Spanish workers, compared to 1,000 Chinese workers, but they will be just doing the basic, low-skill stuff.
At Christmas, I was on holiday in Spain, and I saw these Ebro cars in the street. I asked my sister, who makes these cars? What is this? Ebro used to be an old Spanish brand that was making Land Rover-type vehicles and trucks.
So then I asked AI, and it just so happens that this is a Chinese car maker that has installed a car-making factory in what used to be the Nissan factory in Barcelona, which was closed down a few years ago. And they’re now making cars in Spain under the Spanish brand they bought from this company which was basically defunct.
There are actually several European car brands that are no longer owned by European companies, and that have been bought by Chinese companies.
This is quite important. It affects a whole number of sectors of the economy.
Meanwhile, China is attacking the soft underbelly of Europe, Eastern Europe, where it’s in direct competition with German capital. In Hungary, they’ve already built an electric battery factory.
But the most important part of this question – the Chinese assault on European capital – is Germany. The relationship between China and Germany has been completely flipped over.
In 2022, for the first time, Germany had a trade deficit with China rather than a trade surplus. And in 2025, for the first time, China was exporting more capital goods to Germany than Germany was exporting to China.
Germany used to have a €1.5 billion trade surplus with China. And it now has a deficit of half a billion. In three or four years, there’s been a €2 billion reversal of this trade relationship.
German capital is extremely worried. It’s a bit like the proverbial deer in the headlights. It is completely shocked and doesn’t really know what to do.
There are some German capitalists that say, ‘No, no, we must impose tariffs.’ Others say, ‘No, no, these tariffs won’t work. We need to get the technology!’ They’re completely divided.
On this question of Eastern Europe, there was a very interesting article in the Wall Street Journal that said the following about China’s export – not of goods, but of factories. It said:
“When a manufacturer in Eastern Europe or South America sets up a new plant, they can now buy the entire ecosystem: the injection machines, robotic arms, dryers and cloud management software directly from a single unified Chinese vendor.
“’China has already eaten much of German industry’s lunch and is preparing to start on dinner,’ said the Centre for European Reform, a London-based think tank, in a recent report.”
This is the dynamic of the process that is taking place.
I’ll just give you another example. There is a major white goods maker in China called Midea. It exports all over the world, and is very big in Brazil, Malaysia, Japan and other countries.
Its factory needs industrial robots. So what did they do? They bought a German company, which is the third most important maker of industrial robots in the world, called Kuka.
This company is still headquartered in Augsburg. But it’s now, to all intents and purposes, a Chinese company. This is the export of capital which gives the Chinese a massive advantage. And it’s certainly eating up Germany’s industrial lunch.
As if this were not enough, as I mentioned before, the world economy is now much more fractured. The trade relations between countries are much more confrontational, and the European capitalists cannot really compete in this situation.
The main reason was underlined in the famous Draghi report from a few years ago. He said basically that the problem that Europe faces in competing in the world economy in this particular environment is that Europe is not a single country with a single set of regulations with large enough capital markets for the necessary investment in these new technologies, like building data centres, microchip factories and so on.
And whatever Europe has, like ASML (a Dutch company producing photolithography systems for the semiconductor industry), is under the clear political domination of the United States.
There was another telling incident earlier this year. There’s a Chinese factory in Holland, Nexperia, that makes semiconductors, mainly for the car industry – electronic braking systems, powertrains, and vehicle sensors.
As part of an attempt by the European Union to stand up to China, the Dutch government took over this company. They were also under pressure from the United States in this policy of denying technology to China.
This is unprecedented. They basically took over the administration of this Chinese company that doesn’t belong to them.
So then the Chinese decided that they would stop production of these microchips. Within the space of a week or ten days, most European car factories and manufacturers were being forced to stop their production because they didn’t have the necessary chips. Finally, the Dutch were forced to withdraw their intervention and return this factory to the rightful owners in China.
And this really reveals the real nature of the relationship between the two.
The limit of European capitalism is the fact that there’s still national competition between all these different countries.
Race to rearm
This is very clearly revealed in the drive towards militarism.
The European capitalists now realise that they have to stand on their own two feet. The United States is, firstly, no longer prepared to supply them with a defence security umbrella. Secondly, it is no longer a reliable ally to do that.
Trump’s been talking about delivering F-35 fighters to Europe, but capped in their features so that Europe can never actually fight the United States.
This whole situation is not one of friendly relations.
There was an incident during the Iran war where the Swiss had ordered some Patriot air defence batteries and F-35 fighter jets from the United States. The Patriot batteries were not being delivered – or were being delivered very late – as the US needed them in the Middle East. And then the Swiss said, ‘okay, we didn’t receive our goods. We’re not paying for them anymore.’
And then the United States said, ‘okay, we’re going to take this money – $126 million – that you already paid for the F-35, and we’re going to put it into the Patriot missile account, which we are still not delivering.’
So it is not a friendly relationship.
The key question is that the Europeans realise that they no longer have this security umbrella from the United States at a time when Russia is emerging as a very powerful industrial war machine next to Europe.
If they want to defend their interests, that is the capitalist imperialist interest of each one of the European capitalist powers, they need to arm themselves as quickly as possible.
But they’re facing serious barriers to doing that.
The first one is money. Most of these countries – with the exception of Germany, so far – are heavily indebted. Where are they going to get the money to pay for rearmament?
They’re also very, very much behind. The European armies are dilapidated. Particularly the British, but not only. This is the first obstacle.
The second obstacle is the fact that they are competing individual, national capitalist classes, all trying to do all the same thing.
In the past, they used to get together for some projects: a European fighter jet, a European satellite system, a European tank. The military industries of Italy, France and Germany would share joint projects.
But now this is no longer the case. All of these agreements are breaking down.
The Germans want production to be in Germany by German factories, and the French want production to be in France by French companies. And the Italians want the same thing for themselves. There have been a whole series of these agreements breaking down.
Trimming the welfare state to build a warfare state
This obviously leads us to the next question – this drive towards military spending inevitably means a massive assault on the European welfare system.
We have quoted this article before by one of the editors in the Financial Times, Janan Ganesh, under the headline: ‘Europe must trim its welfare state to build a warfare state’.
“There is no way of defending the continent without cuts to social spending,” it says. “Anyone, anyone under 80,” that’s everyone here, “who has spent their life in Europe can be excused for regarding a giant welfare state as the natural way of things.”
In fact, the European welfare state is not giant. It’s already been trimmed quite a lot over the last 30 or 40 years. But it’s still too big for the ruling class in the present conditions of crisis. He says:
“In truth, it was the product of strange historical circumstances which prevailed in the second half of the 20th century and no longer do. One was the implicit American subsidy through NATO, which allowed European governments to spend a certain amount on butter that might otherwise have gone on guns. Another was the fact that, during the welfarist golden age, Europe had little competition from China or even India.”
He argues that this has come to an end, that this is no longer possible, and it must be destroyed. Then comes the crux of this article. He says:
“This isn’t tenable. The question is whether the public agrees. I have come to doubt whether rich, democratic societies can make difficult reforms…”
It’s basically saying it’s much better if we have a dictatorship, as we don’t have to bother to go through elections to get the government that can carry out these cuts!
This is really the basis of the crisis in France over the last one or two years or even longer. They cannot get a parliamentary majority that will sustain the application of the necessary cuts that the ruling class needs.
In the case of France, it’s €40 billion worth of cuts or more. They cannot get a parliamentary majority for this. This is why governments are formed and governments fall.
All these members of parliament, they also have their own jobs to protect. They know that if they vote for certain things like cuts in pensions, cuts to the welfare state, they’re not going to be elected at the next election.
In the case of Germany, they used another trick to avoid this problem. Since they didn’t have a majority in the new parliament – which had already been elected by the will of the people – for the measures that they wanted to introduce, they called one last meeting of the old parliament to pass those measures. Incidentally, this had the support of Die Linke. It wouldn’t have passed otherwise.
In Germany, they’re also now launching a €30 billion review of the welfare system. But this is true in every single country.
And then Ganesh says:
“An element of real fear has to come in, as perhaps it has now. There is another reason to believe that spending cuts are easier to sell on behalf of defence”
So he is almost admitting that the European ruling classes are hyping up the danger that Russia is going to invade Europe tomorrow morning, in order to justify cuts.
They will not be able to carry out what they need, which is to build a modern army strong enough to defend their imperialist interests effectively.
I have explained the different reasons which limit Europe’s rearmament program, but the main one is that this is going to provoke a massive political and social backlash. Because this happens at a time when the legitimacy of all bourgeois institutions, political parties and bourgeois media is at a historical low as a result of all the years since 2008 of capitalist crisis, corruption scandals, austerity measures, bank bailouts and disparity in income and wealth.
Some people say that Trump’s popularity has sharply declined. That’s true. But, by comparison with European leaders, Trump is extremely popular. Starmer’s net popularity – he’s now gone – was at -51, Macron’s is at -60, and Merz’s is at -64! Merz has only been in power for a year or so.
These are the most unpopular governments in Europe for a very long time. And they’re now attempting to carry out the most unpopular measures for a long time. And then people wonder why there is a rise of right-wing populism everywhere, in Britain, in Austria, in France, in Germany.
In Germany, which is the most important capitalist country in Europe, just one year since the election, the AfD is at 29 percent, the CDU has collapsed to 22 percent, and the SPD is at 12, below the Greens. In some opinion polls, the Greens are polling at 13 and Die Linke is now at 11, just one point from the SPD.
There’s a similar situation in Austria. How many months did they spend trying to find a coalition to prevent the FPO from coming to power? Well, they finally assembled a Frankenstein coalition of the Social Democrats, the Conservatives and the Liberals. This has now led to the FPO polling at 38 percent, which is 12 points clear of the next party.
This shouldn’t surprise anyone. The more the bourgeois liberals set up cordon sanitaire, – firewalls – the more these parties can present themselves as anti-establishment parties and gain more support.
European disunion
So in summary, this situation leaves European capitalism in an extremely weak position and under pressure from all sides: the rise of China as a technologically advanced power; the assault by the United States; and the rise of Russia as a strong military power next door.
As a result, all the centrifugal tendencies within the European Union are massively increased. The European countries are pulled in all sorts of different directions, trying to find a solution to the crisis, an accommodation that suits each one of them.
Here we see things like, for instance, Spain entering into conflict with the United States and pivoting towards China. To be clear, the trade and finance relationship between Spain and the US is still much more important than that with China. But Spain is trying to gain some advantage by building a relationship with China and courting Chinese investment.
Several countries in Eastern and Central Europe are being pulled in the direction of either the United States or Russia.
And then there’s Britain. In the past, Britain’s role was to act more or less as a bridge for US interests inside Europe. But now, Britain is outside the European Union and can no longer play that role in the same way.
A section of the British ruling class will want to realign with the EU. They realise Brexit was a big mistake from an economic point of view. At the same time, they are under strong pressure from the United States.
The idea that they were going to come out of the euro and then make independent trade deals with everyone – China, India, the United States – has completely failed. Instead, with Europe and the United States pulling further apart, Britain is falling through the cracks.
In the case of Germany – which, again, is the most important country in Europe from the point of view of capital and the class struggle – this crisis means the beginning of a deep split between sections of the ruling class. You could see the beginnings of that with the presence of some German businessmen at the Saint Petersburg Economic Forum and the presence of high-profile AfD politicians at the same meeting.
This is quite serious. These two countries are supposed to be at war with each other. But there are still some German businesses that have interests in Russia. And there are others who, for different reasons – access to energy and so on – want to restore that relationship.
So in many countries, the rise of right-wing populists also reflects, to a certain extent, divisions and splits within the ruling class itself. Different sections, maybe different industries, different interests are looking in different directions, putting their own particular interests above what may be considered the overall interest of the ruling class.
European revolution
Now, this is all very interesting. We need to discuss it in detail. But at the same time, we shouldn’t forget another angle to this discussion. If you look at all these different factors, what you can see is that a massive explosion of class struggle is being prepared
Already on the European continent we have seen anticipations of that. The massive ‘block everything’ strikes in France in September last year. The general political strikes in Italy in October last year over Gaza. The massive sustained strikes in Belgium against austerity measures.
In Portugal, there were two general strikes which managed to roll back a reactionary labour counter-reform that was being proposed. Not so much because the second general strike was very, very strong – it wasn’t really; it was a bit halfway – but because Chega, the right-wing populist party, was not prepared to vote for it in Parliament when it came down to it.
These right-wing populist parties are very unstable formations because they respond to different interests. They need to maintain the social base by pretending to be anti-establishment. But in every country, the closer they come to government, the more they moderate their policies and therefore lose their social base. They are in this contradiction.
In Catalonia, there was a teacher strike about two months ago. It was called by the main unions apart from the Workers’ Commissions, which is the largest union in Spain, traditionally linked to the Communist Party. The Workers’ Commissions did not join the strike until the very last minute, when the strike had already been going on for some time. They joined the strike, and the day after, they signed a bad deal. They joined the strike to deliberately betray the strike.
The teachers voted overwhelmingly against this deal, and the strike continued. So then the main union running the strike was USTEC, which was formerly a left rank-and-file trade union which is now the majority union amongst teachers in Catalonia.
After this strike had been going on for several weeks, USTEC said, ‘everyone’s tired. There’s nothing else we can get. The school year is coming to an end. And so we propose this agreement’, which was very similar to the bad settlement that had already been rejected.
This is the majority trade union in this sector. They put this agreement to the vote. And the teachers voted against it! So they were left with one small union, representing maybe 10 percent of the teachers, running the whole movement!
More or less at the same time, there was an all-out strike of the teachers in Valencia. The conditions there were slightly different politically, but nevertheless it was a massive movement of the teachers. An all-out teachers’ strike has been called for the Madrid region when the school year starts again in September on the basis again of mass assemblies and rank-and-file committees.
Ok. You could say that these are civil servants, teachers, who have particular conditions. But then a few weeks ago, a very interesting strike started at Airbus, an aerospace maker with heavy investments in defence, that has 14,000 workers in Spain.
The strike started because the company was assaulting workers’ rights in a whole number of different ways. Office workers, some of whom are engineers who work in design, had two work-from-home days a week, and this was reduced to one. They had been able to take the holidays whenever they wanted, but they were then forced to take them in particular periods of time – small things like this that were building up.
A strike started. It was mainly called by a very peculiar union, a kind of professional union which mainly organises office workers. But the strike gained widespread support amongst the industrial factory workers, the office workers, everyone. There were mass assemblies with thousands of workers, mass pickets.
Then Workers’ Commissions joined the strike. The day after they signed a bad deal… which was then rejected by 80 percent of the workforce. Airbus workers from France came over to discuss with their Spanish counterparts to see what was going on. The strike lasted for another week or ten days.
Finally, this union, which was the original union that had called the strike, said, ‘there’s not much else we can get. We should sign this deal.’ They put the deal to the vote. And the workers voted against this second deal, 49 percent against, 44 percent in favour!
They were being offered a 12 percent wage increase. They said this was not enough because it basically just covered inflation for this year and the next. What they want is to recover the purchasing power lost over the last few years, which is 18 percent.
It’s not clear what’s going to happen next. Now it’s the holidays, and workers are coming back in August. But these things are very symptomatic of the type of class struggle that we will see in the next period.
If the existing unions put themselves at the head of the movement, the workers will follow the unions. But there will also be conditions in which, if the unions are not prepared to lead the struggle, the workers will use any instruments that they have at their disposal to push forward.
It is precisely at this time of the deepest crisis of European capitalism that the official left is at its weakest and most pathetic. Everywhere.
There is a massive vacuum, which is sometimes filled by all sorts of random phenomena.
Your Party for about two weeks in Britain, alongside the rise of the Green Party. The partial rise of Die Linke in the elections in some areas in Germany, and so on.
Finally, what is perhaps the most important thing for us is the process of political radicalisation of the youth on questions like Palestine and militarism. Many of them are looking towards communist ideas.
We have seen, for instance, the rise of the Socialist Movement in Spain. They called for a demonstration on May Day under the slogan of ‘We need to build a revolutionary alternative’. They got thousands of young people out in the Basque Country, in Catalonia, in Madrid and in Valencia under this slogan.
In France, there’s been a whole number of splits from the Communist Youth, some of them in a Maoist direction. Local communist groups are springing up in Germany, organised by very young people.
We need to have a sense of proportion. Our forces everywhere in Europe are still very, very small. But the conditions are tailor-made for us.
There is a layer of very radicalised youth that we can reach directly with our ideas, recruit them, and train and educate them in our ranks.
This is the necessary preparatory work if we want to be able to intervene in the big events that will certainly open up in the next period.
