Greece, Ireland: the domino effect looms. Portuguese workers go on biggest general strike in 22 years. Is the Euro a dead duck?

Things are looking really bleak for the Euro. The currency continues to slide and it seems there is a real possibility that there could be a break up of the Euro countries as some may choose to opt out of the currency.

What is happening is a continuation of the debt crisis only this time it is European sovereign debt, the debt of governments. The moneylenders are concerned that Greece and now Ireland, are part of an unstoppable contagion and that Spain, Belgium and Portugal will follow suit. One indication of the level of concern in these circles is the cost of insuring debt and that is creeping higher; they refer to it as “risk premium” in the world of finance. What appears to be happening is that investors are not confident that the stimulus packages are working and countries like Spain, and Portugal, and others will not be able to pay their debts.

Portuguese workers strike against cuts

To make matters worse, for the capitalist class I mean, hundreds of thousands of Portuguese workers went on strike Wednesday shutting down factories, rail transport and Lisbon airport. Schools were also closed. This was the biggest general strike in Portugal in 22 years. Portuguese workers, like their Greek counterparts are responding to the government’s austerity measures aimed at reducing the deficit. Like the Greeks, the Portuguese believe the increased taxes, frozen pensions and slashing of public sector salaries is the capitalist class shifting the burden of their economic crisis and plundering of the economy on to the backs of workers and the poor.

So we have had major battles in Greece, the student uprisings in Britain, demos in Ireland, general strikes in France and Portugal and there seems no end to it as Belgium and especially Spain are about to follow suit. The more this goes on, the more likely will develop some United European action against the capitalist offensive. Up to now, the only unity the capitalist class have wanted in Europe has been the unity of the bourgeois and their system. More coordinated direct action by European workers and youth would be a welcome development.

The situation in the US economy is very similar in that the crisis has not been overcome. Unemployment is still high and will likely remain so for some time. Foreclosures are continuing and the housing Market is in the doldrums as they say. Michael Hudson points out in Counterpunch that one third of US housing is in negative equity. Hudson suggests, as an op ed piece in the WSJ did last week, that the feds real motive with the “Quantative Easing” is to “re-inflate the real estate bubble” but dare not openly say so. The US Federal Reserve’s printing of money will tend to increase inflationary tendencies and undermine the dollar’s strength; it is not a popular measure and will probably be followed by more bail-outs and stimulus.

As usual, the Portuguese general strike hasn’t received much coverage in the US mass media. The hope is that US workers don’t get any ideas and stick to the tactics the heads of organized labor in the US know won’t work, terrified as they are of a victory of any sort. A victory would certainly introduce some contagion in to our midst. Oh, what tactics am I talking about? Well, wearing pink on a Friday after work in order to protest layoffs and e mailing our Congressman to tell them to be nice.

One issue that keeps coming to my mind through all of this is the need to take in to public ownership capital itself. Banks in many countries have been nationalized. In the US, the auto industry was taken over by the government supposedly on behalf of the taxpayer but this is not the case. The same people are left in charge. It is not simply the dominant productive forces that must be taken under democratic workers control and management, but the ownership and allocation of capital.

We have said many times before that this economic crisis and the discrediting of the Anglo Saxon model has ushered in a new period. The age of severe austerity is upon us and, as one representative of capital said last week, there is a class war and their class is winning.

It would appear that resistance is beginning to grow and a movement against the offensive of capitalism is developing that might, if we are lucky, spread across the pond.