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Hungary has a general election tomorrow. Hungary is a relatively small country with less than 10m in population and with a GDP of just $220bn and with just 8.2m registered to vote. This election is pivotal, not just for Hungarians, but also for the EU Commission and the core European governments. The incumbent Fidesz government led by PM Victor Orban has been a thorn in the side of the EU for years. Orban has opposed EU sanctions on Russia and recently blocked the implementation of the latest round of agreed E96bn EU funding for Ukraine on the grounds that Ukraine has been stopping imports of Russian gas. The EU has responded by holding back Hungary’s share of structural and support funds.
Domestically, Orban’s party has been in power for 16 years, including a landslide victory in the 2022 election. It is claimed that over its period of rule, the government has gradually reduced democratic institutions like an independent media and courts; and adopted cronyist procurement policies for government spending and for foreign investors, with a high level of corruption. According to the EU, Hungary is an autocracy, not a democracy.
Not surprisingly,, Orban’s policies have attracted strong support from US President Trump and the MAGA movement. In the election campaign, US Vice-President Vance visited Hungary to give Orban the full backing. President Trump posted in his usual style: “GET OUT AND VOTE FOR VIKTOR ORBÁN. He is a true friend, fighter, and WINNER, and has my Complete and Total Endorsement. I AM WITH HIM ALL THE WAY!”
The EU leaders are desperate to defeat Orban and break the logjam that he is causing over the funding of the Ukraine war and on EU policies in general. They are backing to the hilt the main opposition party Tisza, led by Peter Magyar. Magyar was a former Fidesz loyalist with family and friends still in the government. He broke from Orban two years ago, accusing it of corruption and cronyism. Magyar recently added in a social media post: “The ongoing election fraud carried out for months by Fidesz, along with criminal acts, intelligence operations, disinformation and fake news cannot change the fact that Tisza is going to win this election.”
Magyar’s message on corruption resonated with people. After an estimated 35,000 people turned up to a protest organised by Magyar in March 2024, he launched his movement. Currently, independent polls suggest that Tisza is leading in the vote. In 2025, Hungary was again ranked at the bottom of the European Union, according to the annual Corruption Perceptions Index (CPI) compiled by the Secretariat of Transparency International in Berlin. The poor result reflects “the continued failure to remedy rule of law deficiencies and to curb systemic corruption, manifested in the organized theft of public funds”
EU economists and Magyar claim that corruption is the main reason behind the country’s now persistent economic decline. But is it? As always, it is the structural economic issues that are more important. Since 2019, Hungary‘s real GDP growth has been highly volatile, marked by a sharp pandemic-induced contraction followed by strong but short-lived rebounds. Since mid-2022, the economy has largely fluctuated in a “no-growth zone,” characterized by stagnation or very limited expansion.
Capital investment and productivity has stagnated and unemployment has reached its highest level since 2016.
After the end of Soviet control in the early 1990s, foreign investment into Hungary by European and US multi-nationals flooded in to use cheap Hungarian labour in new factories (autos and electronics). This led to a sharp rise in the profitability of capital. But that investment petered off by the beginning of the 21st century as ‘globalisation’ slowed. Profitability fell back, particularly after the Great Recession of the 2008-9 and in the Long Depression of the 2010s.
Source: Penn World Tables 11.0
The Hungarian economy remains very reliant on foreign investment and so is vulnerable to international crises, like the Global Financial Crash of 2008 or the COVID pandemic slump of 2020. And any global inflationary spike affects the Hungarian economy more than most, as it did in the post-pandemic inflation spike – and will also from the Iran conflict.
And it’s the main reason that Hungary lags towards the bottom of the East European “convergence” club, if still higher than Bulgaria and Slovakia.
Wages are low, on average just half that of the EU average, worse than Slovakia and only slightly better than Bulgaria and Greece.
Pay for key sectors like education and health is among the lowest in the EU and life expectancy is poor compared to other EU countries. On most measures of social deprivation, Hungary performs badly compared to other Visegrad countries (Czech, Poland and Slovakia). And its gini ratio for inequality of incomes is higher.
Would an election victory by Magyar make any difference to Hungary’s weak economy? Probably not. Despite more than two years of campaigning and a 240-page election manifesto, the details of what exactly Magyar will do if he gains power remain vague. He concentrates on removing ‘corruption’ and undemocratic parts of Hungary’s institutions. Above all, he wants closer relations with the EU. He would end the veto Hungary has been applying on EU funds for Ukraine.
Ending that would release E20bn in frozen EU support funds for Hungary (that’s about 10% of the country’s GDP). Hungary had been allocated a total of €10.4 billion under the EU Recovery and Resilience Facility (RRF), consisting of €6.5 billion in grants and €3.9 billion in loans. However, almost all of these funds have remained frozen or not yet fully accessible due to disputes over rule-of-law, corruption, and judicial independence issues.
But in many areas, Magyar would change little. He wants a harder line on immigration than Orban by scrapping the country’s ‘guest worker’ scheme. And while he would end ‘dependence’ on Russian energy imports, he wants to preserve ‘pragmatic’ relations with Russia. Orban is relying for support on the government’s generous handouts to pensioners and low-paid. So Magyar, in a ‘New Deal’, is promising a $1.5bn boost for health, railways and energy. But at the same time, he aims to cut the government budget deficit to under 3% of GDP to speed up euro entry by 2030. And he also wants to cut taxes for most Hungarians. So there are a few contradictions there. Above all, the structure of the Hungarian economy as a foreign investor vassal will not be touched by either party – indeed more incentives for the multi-nationals will flow.
The 2022 election saw a turnout of just under 70%, where it has been for several elections. The turnout could be higher in this crucial election. But even if Magyar wins, ending corruption and autocracy won’t be easy. His government is very unlikely to have enough seats in the new parliament for the two-thirds majority necessary to reverse the many measures that Orban incorporated into the constitution over the decades. And if changes are not made to comply with EU rules by end-August, Hungary will lose all this EU funding. But at least the EU leaders will get a more cooperative Hungarian government after 16 years.
I was watching one of the news channels that come on when you press the wrong button after trying to get Al Jazeera and it was a European channel and the first thing I saw was an EU sponsored interview with the president of Montenegro, a very young very posh man who had studied in Japan and he was a quiet, class act advocating all manner of liberal stuff whilst trying to get his country into the EU.
So far so dull but then there was a genuinely interesting programme after that, which reminded me of how different debate is in the UK and in the EU, in which German MEP David McAllister, the disconcertingly named CDU spokesperson and prominent European People's Party member, debated Marc Botenga of the European Left Party and Workers Party of Belgium.
The subject of the debate was European enlargement and whilst McAllister predictably promoted it energetically, Botenga was neither for it nor against it because he insisted that they focus on the social content of the enlargement.
This continued until they got to the question of Ukraine. Botenga argued it would outrageous to admit them to the European union given the very obvious violation of the social conditions for EU membership by the Ukrainian government including repression of straight unions, banning strikes, martial law and postponement of elections.
McAllister retained an even voice as he replied saying that no one should overlook the terrible difficulties that the Ukrainian government is facing, they are under attack, they are being invaded, they want to be in the EU. Botenga replied simply: how does attacking their own trade unions and their own social provision help them defend themselves?
And then he countered: what's more, Russia is not the only power interfering in the region. Finland's Prime Minister (or was it Lithuania, I can't recall) had recently been visiting Georgia joining opposition demonstrations. Imagine if a Russian politician did that in Western Europe. But above all, Russia was not the only country threatening Ukraine's right of self-determination because in the peace discussions right now, Trump and Zelensky are discussing selling off Donbass to the Americans, clear violation of the right of the nation to self-determination and its social protections at the same time.
Now and only now McAllister lost his temper, now we saw what lay beneath the cultivated "social" veneer of German Christian Democracy.
He exploded into rage, spitting out hatred of Russia, denouncing Russian and only Russian online propaganda, insisting that Europe needed to protect itself against Russia, demanding that the socialists and the left should fall in line and defend Europe. Here we saw the man himself, a bilingual German and UK citizen who grew up in West Berlin and who for his 17th birthday present in January 1990 asked his parents to allow him to join the CDU.
And through his genuine rage, the only honest moment in his entire performance, we saw the real class essence of the international alignment here, with German and French and British imperialism really seriously determined on war, and spokesperson for a working class party doing something that the representatives of the publicly recognised British left more often than not fail to do and making a *class* argument in response and looking all the stronger and more stable and more reasoned and more enlightened as a result .
On July 15, during his speech soberly called “the moment of truth“, François Bayrou, French Prime Minister, presented his plan to restore public finances. It is nothing less than a set of measures, each more reactionary than the last: a blank year in 2026, i.e. a freeze on social benefits, pensions, unemployment benefits, a freeze on civil servants’ salaries, the elimination of two public holidays, one in three retirements not replaced in the civil service with the aim of eliminating 3000 jobs, reduction in funding for local authorities and reduction in the coverage of drugs for long-term illnesses. Bayrou hopes to save nearly €44bn through these budget cuts.
The first effect of these measures will be to considerably degrade public services. Working conditions for hospital staff will be even worse, with fewer and fewer staff and, consequently, a decrease in the quality of care. The same will be true in schools.
The vast majority of these measures are a frontal attack on the workers and youth who benefit from these public services. To give the illusion that “the effort is shared”, Bayrou will ask for a “solidarity contribution” from the “wealthiest” households. He also mentioned savings to be made on high incomes, tax evaders, tax loopholes for billionaires and tax optimisation for the wealthy, but all this without announcing anything concrete, whereas for the rest of the plan, the measures are well detailed and quantified. These last words are only a consolation prize that masks emptiness.
Bayrou responds to the imperative of capitalism
And for good reason: Bayrou responds to an imperative, that of capitalist interests. In his speech, he placed a strong priority on the competitiveness of French companies. French capitalism has been in decline for many years, outpaced and overtaken by its economic competitors in Europe and the world.
The objective of making French companies more competitive is a vital necessity in order to, on the one hand, avoid being crushed by the competition and, on the other hand, so that billionaires such as Bernard Arnaud and his ilk continue to amass ever more profits.
If Bayrou wanted to make savings, he could very well have done so in terms of government aid to companies, which amounts to €210bn a year, whereas shortly before Bayrou’s speech, INSEE (the French National Institute of Statistics and Economic Studies) published a report that shows in detail an increase in the number of people living below the poverty line. This is a demonstration that Bayrou is only a lackey of capital, a servant of the capitalist class.
In his speech, Bayrou devoted long minutes to raising the spectre of debt: “For 50 years, all governments combined, the budget has been in deficit“, “there is more expenditure than revenue”, etc. In lecturing, he presented himself as the one who manages his budget as a good father.
It is true that the debt has never stopped growing and now stands at €345.8bn, or 114% of GDP. The argument often put forward is that if the state does not control its finances and lets its debt slide, interest rates could soar and consequently considerably increase the cost of borrowing.
This is what happened at the end of 2024 with political instability and the downgrading of France’s rating by the rating agency Moody’s (see our article on the subject here). However, it should be noted that France’s borrowing is done on the financial markets and is subject to speculation (up and down). In other words, the borrowing rate of the debt is suspended by the law of the market and the actions of speculators who brandish the threat of soaring rates, or even the refusal to lend.
Tsipras in Greece was forced by international capital to retreat
On this point, we can only agree with Bayrou, when he re-explains how, in Greece, Alexis Tsipras “had to” capitulate only a few days after his election in the face of the threat of the troika (ECB, European Commission and IMF) and the heads of government of the time, François Hollande of France and Angela Merkel of Germany in the first place, as well as the speculative capitalists brandishing the same threat.
Tsipras’s social reform programme turned into a draconian austerity plan: a 15% cut in civil servants’ salaries, a 30% cut in retirement pensions, to name but a few examples (see our article here). Such are the mechanics of the capitalist system, which obeys its own laws.
This is an important lesson that we must keep in mind. The capitalist class will put up a fierce resistance against any attempt at reforms of social progress. As long as it retains economic and political power, it will have the means to defeat reformist governments. It is no coincidence that Bayrou cited this example. It should be taken as a warning.
Of these cuts and restrictions of Bayrou, only the military budget is increased. From the outset, he announced an increase of €3.5bn in 2026 and 2027, which is in addition to the military programming law. To justify this increase, Bayrou brandished the threat of war that weighs on France. With these words, “we will not sell out our security imperative“, he is trying to instil fear and prepare us for war against an unknown enemy.
If France wages a war, it will be above all with the aim of defending French capitalist interests. By this means, political leaders worked to strengthen power and economic dominance for the benefit of French capitalists against their rivals. The appeal to patriotism and national unity by evoking a foreign enemy is a classic of the representatives of the capitalist class. They will try by all means to put the workers behind the banner of capitalist interests while at the same time they will suffer austerity and deprivation and thereby to make austerity accepted as a necessary evil.
The arms industry is rubbing its hands together because the increase in military budgets will result in additional orders. Shareholders will see dividends and stock yields increase when they are already at record levels. We will have to endure austerity, the degradation of our public services with fewer resources for hospitals and schools so that a handful of capitalists will enrich themselves and take us to the horrors of war.
Two obstacles are likely to stand in the way of the austerity “program” of the capitalist class. Barely unveiled by Bayrou, it is already unpopular. It is possible that, in the face of hostile public opinion, the 2026 budget will not be adopted. Bayrou would then be forced to resort to the constitutionarl clause 49.3, which would offer the possibility for deputies to bring down this government by a motion of censure in the National Assembly.
Most opposition parties would support a censure motion
The whole of the left and the Rassemblement Nationale (RN), the party of far right Marine Le Pen, would support such a motion, as was the case in 2024. Although it is easy to predict the position of the French Communist Party (PCF), and the left party, La France Insourmise (LFI) which will probably take the initiative, it is less clear predicting the stand of the Socialist Party, (PS).
The latter let themselves be fooled, consciously or unconsciously, by Bayrou during the last motion of censure in the Assembly, in exchange for restarting the pension reform, which ended in total failure. Bayrou will try the same maneuvre by opening discussions and reaching out to the PS, among others.
The second possible obstacle, and perhaps the most decisive, is the reaction of workers and youth. Thse social counter-reforms, considered as such in the eyes of all, despite all the sleight of hand to make people swallow the pill (threat of war, debt crisis), could be the starting point of a massive mobilization.
But this will depend on the attitude of the union leaderships, first and foremost the General Confederation of Labour (CGT), which will have the task of preparing the unions and the workers by giving concrete objectives and directives for the struggle.
The fight against this government must take the form of an extra-parliamentary movement to inflict a stinging defeat on this government and thus restore workers’ confidence in their ability to fight and in the possibility of victories. This would be a first step towards the revolutionary overthrow of reactionary governments and the capitalist edifice of which they are the political representatives.
This is a long but very important contribution to the contentious debates around the cause and possible outcomes of the Ukraine Russia war. In particular it counters the argument that it is simply a proxy war and that Putin was provoked in to war by NATO and the US in particular. It stresses the importance of the consciousness of those workers that lived under Stalinist totalitarianism and their desire for the freedoms and standard of living of workers in the western democracies. RM
There are differences of opinion on the left of the British labour movement on the attitude that socialists should adopt towards the war in Ukraine. Unfortunately, many of those differences arise from some comrades forgetting the basic classnature of war. In war as in peace, the ruling class and their political representatives – in this case Trump, Starmer, Macron, Putin and Zelenskyy – follow policies that are in their own best interests and nothing else. What we always need to remember is that the working class of the USA, Britain, France, Russia or Ukraine have their own interests, opposed to their own ruling class, even in wartime.
One of the most common mistakes is to view the war in Ukraine only as a proxy war between Russia and NATO. It is a proxy war, but the question does not end there. When the full-scale invasion began three years ago, it was only after the first stages of the fighting (when it was clear that the outnumbered Ukrainians had far higher morale than the Russian troops) that it became a proxy war between two great power blocs.
Socialists in Britain oppose the NATO alliance. But because they oppose ‘their own’ ruling class, while forgetting to see the war from a class standpoint, some comrades, as it were by ‘accident’, imply support for Russia and Putin. This whole issue has evolved somewhat, because of the divisions within NATO and Trump’s ban on further US military support for Ukraine, which has been up to now about half of the total. Moreover, Trump has become an open cheerleader for Putin, a “Russian asset”, as some US commentators describe him.
Clear implication in the proxy-war argument
Nonetheless, there is a clear implication in the proxy-war argument that NATO and/or Ukraine ‘provoked’ the war. We hear this much more explicitly from Trump himself. The idea is rooted in the understandingbetween Russia and the USA, when the USSR collapsed in 1991, that there would be no eastern expansion of NATO, but it was an understanding broken by NATO.
The logic of this argument is that Boris Yeltsin and George Bush were empowered to prevent Bulgaria, Romania, Hungary, Poland, Georgia, Latvia, Lithuania, Estonia and, Ukraine – all former components or satellites of the USSR – from joining NATO. It is an acceptance, in other words, that the great powers should not interfere in each other’s spheres of influence.
The first thing that has to be noted here, is that no socialist should accept that these leaders should be able to decide what these countries can and cannot do. Socialists do not accept the idea of “spheres of influence” whereby big, powerful state are allowed to determine the economic, trading and political decisions of smaller states, usually (but not always) their neighbours.
It has never been Russia’s or Putin’s prerogative to decide the political fortunes of the newly-independent, former USSR member states, or any other states in eastern Europe that were once “satellites” in the sphere of influence of the USSR. We need to understand from the point of view of the working class of Eastern Europe how the NATO expansion came about, because there are those who see this, not in class terms, but only in terms of geopolitical machinations and CIA plots.
What social forces put their stamp the politics of Eastern Europe in the in the post-USSR decades? It was not the CIA or other agencies of the west, as some modern-day British activists imply. It was domestic factors. The two determining motivations in shaping the politics of the working class in eastern Europe were the higher living standards in the west, and greater political liberties, both of which were ‘on offer’ for the first time in many people’s living memory.
Political thinking shifted in eastern Europe
These two factors shifted political thinking in eastern Europe, within a large proportion of its population, towards the principles, methods, and outlook of western politics in general, ie, based on the market economy, on capitalism and on defence in NATO. That may not have been in the best long-term interests of workers, and something much to the regret of socialists in the west, but we have to face facts. Although western politicians and NATO generals would indeed have been trying to extend the reach of western powers, it was the shift in mass consciousness in the eastern European states that was decisive.
Whatever George Bush or Boris Yeltsin may have expected in 1991, the collapse of Stalinism came like a massive release of political pressure in eastern Europe, not least within the working class. Workers are not stupid, and they saw what it was like over the western borders. What they saw was what they wanted.
Workers in the east inevitably envied the higher living standards and the ready availability of high-quality consumer goods, far superior to the endless austerity they had suffered under the old regimes. And who can blame them? Who can argue with workers in the former East Germany, looking enviously at their fellow Germans a few miles away, enjoying far higher living standards and political freedoms?
Bureaucrats stealing state assets
The old Stalinist states of Eastern Europe had retained state planning to a degree, but long before 1989, bureaucrats were openly stealing state resources, giving away or planning to give away large swathes of industry to themselves and their friends. The rottenness and corruption of these governments weighed like a monstrous weight on the living standards of workers, so when the Berlin Wall fell and the USSR disappeared, it opened the floodgates to a surge of longing for the living standards and liberties of the west.
In the early stages of the war, it was not NATO arms, but the higher morale of the Ukrainian forces that blunted the advance of the much large Russian forces.
For a period after the Yelstin presidency, the Russian economy went through a deep slump, as the economy was almost completely privatised in a very short time. The living standards of Russian workers, already low, plummeted further. This became another reason why Russia was not a pole of attraction to workers elsewhere in Eastern Europe. As soon as they were able, east European governments joined the EU, and workers migrated west for work, and capitalist investments flowed in the other direction.
But there was another important reason why workers in the east faced towards the west. Their own experiences of the USSR and their status as satellite states was based on an absence of personal rights and liberties. The secret police, state police, censorship, restrictions on rights: these were the norm in eastern Europe. Workers understood that despite some restrictions placed on rights – such as Thatcher’s anti-union laws – workers in the west were immeasurably more free to express their political ideas, campaign for them and decide their futures. Western German parliamentary democracy was far more attractive than Stasi-style repression in the east.
Eastern European states were not ‘socialist’
The question of political freedom is not incidental or secondary. It is central to the shift in consciousness of workers in the former Soviet states and satellites. What is astonishing is that there are still labour movement activists today who refer to eastern Europe as having been made up of ‘socialist’ states, when they were nothing of the sort.
Once the dam burst, in terms of new political freedoms and relatively free elections, there was a groundswell of support among workers in the east in favour of trade with, then membership of, the EU. The same sentiments affected millions of workers in Ukraine, by 2013, although it had not by that time joined the EU. Indeed, that was the key point of contention at the time of the Maidan protests and the beginning of civil war in the eastern provinces.
There is no doubt that western politicians, diplomats and agencies were active in eastern Europe, agitating for EU and NATO membership, but In the final analysis, what was decisive were not their machinations, but a shift in the sentiments of the working class. This process cannot be glossed over, and if it is, then it leads comrades into the logical implication that EU and NATO expansion were the results of a conspiracy by western diplomats and the CIA; but such things are not the real motive forces of history.
A socialist alternative was not on offer to eastern workers
Of course, if there had been political movements with a genuine socialist programme, it may have been possible to lead workers in these states not in the direction of capitalism, but the opposite way. Not towards a ‘marketised’ economy, but towards retaining and extending public-ownership in industry, transport and utilities, but purging them of corrupt and parasitic bureaucrats and providing the oxygen of workers’ control and democratic management.
A genuine socialist movement would have been a far better alternative, and rather than east European workers looking west for their futures, it would have been western workers looking east for inspiration. Unfortunately, however, this option was not there, and so history followed a different path.
What would have been the attitude of socialists towards joining the EU, the ‘capitalist club’? Socialists would have warned about the iniquities of capitalism and the inevitability of eastern workers being exploited by western corporations. They would have warned against the end of state housing, health and welfare. But one cannot argue against concrete facts: after an initial economic recession, workers were far better off materially in the EU, than they had been before 1989, and they enjoyed greater political freedoms. It is not for socialists in the west to say ‘no’, you cannot have these things.
Therefore in discussions with those who argue that NATO ‘provoked’ Putin by expanding to the east, we would agree that he may have felt provoked, but that still did not give him the right to trample on Ukrainian sovereignty. More to the point, the ‘provocation’ is a story half told. What needs telling is why were the EU, and then NATO, strong poles of attraction to voters, including workers, in eastern Europe.
2022 invasion was not in Russian or Ukrainian workers’ interests
Putin’s full-scale invasion in 2022 was not a ‘denazification’ operation; it was an attempt by force of arms to assert Russian hegemony – in part of what it regarded as itssphere of influence. The invasion was not in any way in the interests of Russian, much less Ukrainian, workers, but in the interests of Putin’s personal power, prestige and influence and those of the Russian oligarchs he represents.
As socialists in the west, we are opposed to NATO; it is the armed expression of imperialism, especially US imperialism, and although Trump’s new turn in international relations threatens the integrity of the alliance, the principle remains the same. So, what should a socialist have said to workers in eastern Europe?
We would have warned workers in the east about what NATO really represents and advised that such alliances work, in the last analysis, against the interests of the working class. We would have counselled against states joining NATO. But what we could not do was tell workers in Ukraine or anywhere else that they had no right to decidefor themselves. NATO expansion for the most part rode on the coat-tails of EU expansion, and both happened because it was a reflection of the sentiments of the majority of workers in the east at that period in time.
Seeing the Ukraine war as a proxy war between NATO and Russia, has led some comrades to the view that because we oppose our own ruling class, which is in NATO, we should, therefore, support no side in the Ukraine war, and in some places in the labour movement even to support Putin.
Ukrainian workers have the right to conduct a defensive war
But if we view the war from a workers’ viewpoint, and particularly those on the ‘sharp end’ of the conflict, we have to say that Ukrainians workers have the right to make war in defence of their communities, their families and their national rights. Just because some in the west blame all these events on western ‘provocation’, does not mean that Ukrainian workers should surrender.
Part of the narrative around NATO provocations refers to the Maidan protests of 2013-14 and the change of government. This is characterised as a ‘coup’ orchestrated by the west. But, again, this is only a quarter of the truth. When the Maidan protests started in November 2013, the rallies in the central square of Kyiv were dominated mostly by youth and students, with a smattering of workers, and many who we might describe as ‘middle class’. The protests were described as the ‘Euromaidan’ because they opposed the then government switching its direction of policy from the west, which would mean facing towards the EU, to the east, towards greater trade and ties with Russia.
Incidentally, it should be noted that the main political parties in Ukraine at that time (as today) were representative of different factions of oligarchs, some grouped around industries in the eastern Russian-speaking provinces, based on coal and steel (like the party then in power in Kyiv), and others based on different industries around Kyiv and elsewhere (the opposition).
Euromaidan became a permanent protest movement
The youthful rallies of the Euromaidan became a semi-permanent manifestation of opposition to the government and were initially, by and large, peaceful. It was when the Ukrainian police tried to forcibly remove them that street battles began. The protesters organised self-defence groups and as the weeks progressed, there were regular running battles with the police, which culminated in serious clashes in late February 2014, when over a hundred protesters and more than a dozen police were killed.
It was this clash that finally led to the fall of Yanukovych, the pro-Moscow president, and the establishment of an interim government. There is no doubt that diplomats, politicians and agencies of western governments, including the CIA, would have participated in the Euromaidan movement to promote a change of government.
This is what rival governments have always done to each other – in much the same way that Putin actively intervenes in western politics: to promote people like Trump, Farage, Le Pen and parties like the AfD, or anyone else who can be a ‘distruptive’ force in western politics. But, in analysing these right-wing movements, we would not overlook domestic social and economic factors and simply attribute the rise of Trump or Farage to Russian social media bots.
Likewise, to suggest that the turmoil and change of government in Ukraine in 2014 was entirely due to outsiders ‘stirring things up’ is utterly false and is an un-Marxist reading of the situation. The Euromaidan was essentially a domestic movement, and at least when it started, before it degenerated into constant street battles, it reflected the hopes and aspirations of Ukrainian workers and youth for the higher living standards and political freedoms of the EU.
Appalling fascist outrages, like in Odessa
It was in the escalating violence over the Euromaidan that fascist gangs began to participate in the street battles, on the side of the anti-government demonstrators and against the police. There were some appalling outrages committed by the fascists, the worst being the torching of the Odessa trade union building in May 2014. Pro-Maidan and anti-Maidan gangs battled each other in the streets that day in Odessa, and those killed in the trade union building – nearly 50 – were anti-Maidan activists.
The presence of fascist gangs in 2014 and later has led some comrades in the British movement to implicit agreement with Putin over the need for denazification. But as significant as these militias were in 2014, they were not an enduring movement, although their actions in the eastern provinces drove Russian speakers into the arms of the pro-Russian fascist gangs as fighting erupted on a large scale. Nonetheless, by 2022 they were no longer a serious political force, and Zelenskyy, elected in 2019, is no fascist, even if some liberties have been restricted during the past three years of war.
From around 2014 onwards there was open civil war between Ukrainian fascist groups and similar pro-Russian groups, the latter assisted by regular Russian army units coming over what was still, more or less, an open border. There were many atrocities and tens of thousands of deaths, long before the invasion of 2022. Parts of Donetsk and Luhansk, in the hands of pro-Russian militias, declared their ‘independence’ by the time the Russia army crossed the border in what was officially a “special military operation” to ‘denazify’ Ukraine.
We need to repeat that we view the war from a class point of view. In Russia, socialists would argue for the withdrawal of Russian troops and the ending of a war not in the interests of Russian workers.
Fundamental socialist view
In Ukraine, from the very beginning we argued, “socialists, where they can put forward slogans and demands, would support the principle of defending Ukrainian independence against Russian occupation – how could they not, when it is the overwhelming instinct of ordinary workers to protect their homes and livelihoods? But they would challenge the means employed by the Kyiv government and the still dominant influence, even in wartime, of the oligarchs and vested interests of capitalism and the rich” (Left Horizons, Feb 28, 2022).
That should remain our view today. We should reiterate the fundamental socialist view that Ukraine has a right to self-determination and independence. Since the war started, Putin has suggested that Ukraine should not even exist, but should be no more than a ‘province’ of Russia. That idea runs against the entire history of Ukraine, with its language, traditions, and bitter memories of economic and national oppression. Putin’s arrogant denial of Ukrainian nationhood is, in any case, rejected overwhelmingly by Ukrainians, including Russian speakers who are not confined to the eastern provinces.
In a socialist Ukraine, we would argue for full equality in terms of language rights, and for autonomy for the eastern provinces, according to their wishes. But unfortunately, the exigencies of civil war and war have all but wiped out the possibility for the foreseeable future of any democratic determination of the population’s wishes.
What would a socialist MP argue in parliament?
There is another issue that has been raised in the movement, albeit a secondary one. The question goes something like this: “What would you do, if you were the government? Would you send arms to Ukraine?” The short answer that is that socialists should have no confidence in, or give any support to, a government of capitalism.
The western states announce their ‘aid’ to Ukraine, but that is only for headlines and public relations. In reality, they sell arms on credit and offer financial loans. What is not publicised are the secret clauses in all of these agreements that bind Ukrainian workers to being exploited by western corporations and governments for generations.
NATO states do not care about Ukrainian freedoms. They care about profits – and Trump’s blatant pitch for half of Ukraine’s mineral rights is only a bare-faced expression of what the USA and the other western states have been thinking all along. We put no trust in capitalist governments, and neither should Ukrainian workers.
“So”, our questioner continues, “Would you or would you not vote for arms to go to Ukraine?” We have said we support the right of Ukrainian workers to conduct a defensive war, with whatever weapons they can find, wherever they find them. But we need to answer the question about what an individual Marxist MP should say or do in parliament. There used to be three Labour MPs who stood on the ideas of the Marxist newspaper Militant. What would they say if they were there today? How would they vote?
First of all, we should make the point that we need to avoid falling into the trap of what Marx and Engels called “parliamentary cretinism”, imagining that parliament is where real power lies: it does not. It lies in the cabinet office, the Foreign Office, in the civil service and in the forces of the state, and behind all of these in the boardrooms of big business. No matter which way a vote in parliament happens to go, a capitalist government will simply do what it has already decided to do in its own best interests.
All secret clauses in international agreements should be published
A Marxist MP understands that, and when he or she speaks, they do not address the serried ranks of MPs around them, but speak over their heads to the labour movement outside. In the best traditions of the movement, they might circulate their speech on social media or as a pamphlet. They would express their support for the rights of Ukrainian workers, their utter distrust of any capitalist government, demand that all the secret clauses of agreements be published, and call for the nationalisation of the UK arms industry.
They would appeal for solidarity action and support from the rank and file of the trade union movement for Ukrainian workers, including a call for Ukrainian trade unions to be fully free, and independent, and for the Ukrainian workers to have control and management of their local arms industry to avoid profiteering. Arms should be for workers defending their communities, not for oligarchs’ profiteering.
Whether at the end of this speech our MP would vote for arms or abstain in the vote would depend entirely on tactical issues like the wording of the motion. Having addressed the question of the war from the workers’ standpoint, our MP might say, “On this occasion, despite my support for Ukrainian workers, I am led by my utter distrust of this government to abstain…”. Or, alternatively, they might say, “Despite my utter distrust of anything this government does, I am minded to support the export of arms to Ukraine, because…” in reality, it matters little how one Marxist MP (or a small group of Marxist MPs) votes, because the government will have already decided what it is going to do.
In an article in the Guardian last week, Andrey Kurkov, who is a Ukrainian novelist, commented on Trump’s humiliation of Zelenskyy in the White House. “…some Ukrainians are convinced”, he wrote, “that the extraction of rare earth metals on Trump’s terms would turn our country into a “colony” of the US. Still, many Ukrainians would prefer to live in a US colony than in a Russian one, if that’s the choice”. (Emphasis added)
It is in no sense to support Donald Trump that Kurkov wrote this. But given the bitter history between Russia and Ukraine, unfortunately, however much it might stick in the craw of those out-and-out Stalinists who still exist in the British labour movement, what Kurkov writes is probably true.
Speaking to the US Congress yesterday after 100 days in office, President Donald Trump claimed that the new tariffs on imports from the US’s biggest trading partners would cause “a little disturbance”. But soon that would be over and “tariffs are about making America rich again and making America great again,” he said. “It’s happening, and it will happen rather quickly.”
Indeed, very quickly. Yesterday, Trump imposed 25% tariffs on goods imported from Canada and Mexico into the US and an additional 10% tariff on Chinese imports, leaving all of America’s top three trade partners facing significantly higher barriers. The moves drew an immediate response from Beijing, which said it would levy a 10-15% tariff on US agricultural goods, ranging from soya beans and beef to corn and wheat from 10 March. Canada also unveiled tariffs on $107bn of US imports, starting with $21bn of imports immediately. “Canada will not let this unjustified decision go unanswered,” Prime Minister Justin Trudeau said. The levies against Ottawa are set at 25% except for Canadian oil and energy products, which face a 10% tariff. Canada accounts for about 60% of US crude imports.
China also targeted US companies, placing ten companies on a national security blacklist and slapping export controls on 15 others. It also banned US biotech company Illumina from exporting its gene-sequencing equipment to China. Beijing had added Illumina to its “unreliable entities” list last month in response to Trump’s initial barrage of tariffs.
All the planned tariffs would take the US tariff rate to above 20% in just a few weeks, the highest since pre-WWI. As Joseph Politano points out, the costs of these actions are enormous, covering $1.3trn in US imports or roughly 42% of all goods brought into the United States, or the single-largest tariff hike since the infamous Smoot-Hawley Act of nearly a century ago.
The tariffs will drive up US prices for key raw materials like gasoline, fertilizers, steel, aluminum, wood, plastic, and more. Groceries, especially fresh fruits and vegetables from Mexico, will become harder to find. Manufacturing industries reliant on complex integrated North American supply chains—vehicles, computers, chemicals, airplanes, and more—could grind to a halt if those links are forcibly severed. Costs could spike for phones, laptops, and appliances where production is particularly concentrated in China and Mexico. Exporters will be hurt by increased costs for raw materials, currency appreciation, and upcoming retaliatory tariffs—all of which will cut into US economic activity.
The total costs of these tariffs would raise $160bn from US consumers and businesses paying more for their purchases of imported goods, with more to come. Trump’s Tuesday measures are only 40% of his proposed measures. If the next batch is implemented, it would raise the cost of imports to over $600bn, or 1.6% of GDP.
One economic argument for imposing tariffs on imported goods is to protect domestic firms from foreign competition. By taxing imports, domestic prices become relatively cheaper and citizens switch expenditure from foreign goods to domestic goods, thereby expanding the domestic industry. But this argument has little empirical support. The New York Fed recently analysed the impact of increased tariffs on domestic firms. It concluded that “extracting gains from imposing tariffs is difficult because global supply chains are complex and foreign countries retaliate. Using stock-market returns on trade war announcement days, our results show that firms experienced large losses in expected cash flows and real outcomes. These losses were broad-based, with firms exposed to China experiencing the largest losses.”
Moreover, as the Danish economist, Jesper Rangvid shows, Trump only looks only at bilateral trade in goods, ignoring trade in services and earnings from capital and labour. It so happens that the income the US derives from its exports of services at least to the Eurozone and the returns on capital and the wages of labour it has exported there offset its bilateral deficits in goods. The overall Eurozone bilateral current account balance with the US is close to zero.
Far from Trump’s tariff barrage ‘making America great again’, it has every prospect of driving the US economy into a recession and the other major economies with it. The Kiel Institute reckons that EU exports to the US would drop by 15-17%, leading to “a significant” 0.4% contraction in the size of the EU economy, while US GDP would shrink by 0.17%. If there are tit-for-tat tariffs by the EU, that would double the economic damage and push inflation up by 1.5 percentage points. German manufacturing exports to the US would be the worst hit, dropping by almost 20%. While the exact magnitude of lost exports over time is unclear (given it will take time for supply chains to reset), if these levies persist it is likely to create a substantial drag on the GDPs of the major economies trading with the US.
The overall impact on US manufacturing could total nearly 1% of GDP in exports lost.
That’s one estimate. Yale University economists go further. They modelled the effect of the planned 25% Canada and Mexico tariffs and the 10% China tariffs, as well as the 10% China tariffs already in effect. They reckoned these tariffs would take the effective average tariff rate to its highest since 1943. Domestic prices would rise by over 1% pt from the current inflation rate, the equivalent of an average per household consumer loss of $1,600–2,000 in 2024$. They would lower US real GDP growth by 0.6% pt this year and take 03-0.4% pt off future annual growth rates, wiping out expected gains in productivity from AI infusion.
So worried is the International Chamber of Commerce in the US, that it reckoned that the world economy could face a crash similar to the Great Depression of the 1930s unless Trump rows back on his plans. “Our deep concern is that this could be the start of a downward spiral that puts us in 1930s trade-war territory,” said Andrew Wilson, deputy secretary-general of the ICC. So Trump’s measures may go well beyond “a little disturbance”.
Even before the announcement of the new tariffs, there were significant signs that the US economy was slowing at some pace. The impact of increased import tariffs could be a tipping point for a recession. Wall Street thought so. When Trump announced the tariff measures, all the gains in the US stock market made since Trump’s election victory were wiped out.
The closely followed Atlanta Fed’s GDP NOW tracker forecasts an outright contraction.
US manufacturing has been in recession for a year or more, but what is also worrying in the latest indicators of manufacturing activity was a significant rise in costs: “demand eased, production stabilized, and destaffing continued as companies experience the first operational shock of the new administration’s tariff policy. Prices growth accelerated due to tariffs, causing new order placement backlogs, supplier delivery stoppages and manufacturing inventory impacts”, Timothy Fiore, Chair of the ISM said. New orders fell the most since March 2022 into contraction territory and production slowed sharply. In addition, price pressures accelerated to the highest since June 2022.
But then the so-called exceptionalism of the US economy since the end of the pandemic was always a statistical illusion. One study reveals the real story for many American households on employment, wages and inflation. First, there is the near-record low unemployment on official figures, just 4.2%. But this figure includes as employed, homeless people doing occasional work. If the unemployed included those who can’t find anything but part-time work or who make a poverty wage (roughly $25,000), the percentage is actually 23.7%. In other words, nearly one of every four workers is functionally unemployed in America today. The official median wage is $61,900. But if you track everyone in the workforce — that is, if you include part-time workers and unemployed job seekers, the median wage is actually little more than $52,300 per year. “American workers on the median are making 16% less than the prevailing statistics would indicate.” In 2023, the official inflation rate was 4.1%. But the true cost of living rose more than twice as much — a full 9.4%. That means purchasing power fell at the median by 4.3% in 2023.
The European leaders’ answer to Trump’s tariff moves and his apparent withdrawal from supporting Ukraine in its war against Russia now appears to be preparations for more war. Global defence spending hit a record $2.2tn last year and in Europe it rose to $388bn, levels not seen since the ‘cold war,’ according to the International Institute for Strategic Studies. Martin Wolf, the liberal Keynesian economic guru of the Financial Times says “spending on defence will need to rise substantially. Note that it was 5 per cent of UK GDP, or more, in the 1970s and 1980s. It may not need to be at those levels in the long term: modern Russia is not the Soviet Union. Yet it may need to be as high as that during the build-up, especially if the US does withdraw.”
How to pay for this? “If defence spending is to be permanently higher, taxes must rise, unless the government can find sufficient spending cuts, which is doubtful.” But don’t worry, spending on tanks, troops and missiles is actually beneficial to an economy, says Wolf. “The UK can also realistically expect economic returns on its defence investments. Historically, wars have been the mother of innovation.” He then cites the wonderful examples of the gains that Israel and Ukraine have made from war: “Israel’s “start up economy” began in its army. The Ukrainians now have revolutionised drone warfare.” He does not mention the human cost involved in getting innovation by war. Wolf :“The crucial point, however, is that the need to spend significantly more on defence should be viewed as more than just a necessity and also more than just a cost, though both are true. If done in the right way, it is also an economic opportunity.” So war is the way out of economic stagnation.
Germany’s Chancellor-to-be Friedrich Merz (after winning the recent election) has adopted the same story. In a complete about-face from his election campaign, when he opposed any extra fiscal spending in order to ‘balance’ the government books, he is now promoting a plan to inject hundreds of billions in extra funding into Germany’s military and infrastructure, designed to revive and re-arm Europe’s largest economy. A new provision would exempt defence spending above 1 per cent of GDP from the “debt brake” that caps government borrowing, allowing Germany to raise an unlimited amount of debt to fund its armed forces and to provide military assistance to Ukraine. And he plans to introduce a constitutional amendment to set up a €500bn fund for infrastructure, which would run over ten years. Suddenly, there is plenty of cash and borrowing to be made available for arms and military ventures.
The UK’s plan is to double its ‘defence’ spending by cutting its aid programme to the poor countries of the world. Trump also has frozen US foreign aid. Global debt has hit $318trn with a rise of $7trn in 2024. Global debt to global GDP rose for the first time in four years – so debt rose faster than nominal GDP to reach 328% of GDP. The Institute of International Finance (IIF) warned that poor countries are under immense pressure as their debt loads continue to grow. Total debt in these economies jumped by $4.5 trillion in 2024, pushing total emerging market debt to an all-time high of 245% of GDP. Many of these poor economies now have to roll over a record $8.2 trillion in debt this year, with about 10% of it denominated in foreign currencies—a situation that could quickly turn dangerous if funding dries up. So more war and more poverty ahead.
