Contenuto principale

Foreword: Pantaloon does not live in Frankfurt (*)

The state of confusion into which the EU and, in particular, the EMU (the 17-state monetary zone) has fallen is the confirmation that the crisis of the world capitalist system has not been overcome at all, but is ongoing and is spreading from the economic plane to the political one, violently attacking those institutions that less correspond to the needs of financial Capital.  In this respect, the crisis of the EMU is a political crisis, revealing the inadequacy of Europe, a mosaic of independent nations, to manage the contradictions in an area distinguished by divisions and inbalances, where on one hand you have the fragile links of Community agreements and on the other, a growing economic and financial integration, driven by the banking systems of the imperialist poles France and, above all, Germany, which is taking place, without being able, now and in the future, – at least in the ways wished by the petit-bourgeois pro-Europe ideology – to lead to a political integration of the entire EU area, or, at least, of the restricted area of the Euro.

The explosion of contradictions we are witnessing – which once again gives us the satisfaction of seeing the basic principles of revolutionary marxism confirmed – will make the EMU fall into pieces, too, if that sort of supergovernment (composed of the French-German axis, the ECB, the IMF and the European commission) which has formed to face the emergency does not succeed in fixing the two main flaws: the crisis of the banking system and the crisis of national debts.  Even in this case, the crisis can be delayed but not solved: firstly because the global crisis of overproduction – which obviously interests the old continent, too – cannot be solved by the intervention of central banks, the “last resort” guarantors that feed the system with unlimited liquidity (as confirmed by the failure of the two “quantitative easings” by the Fed) – at most, only the short-term effects of the crisis can be attenuated; secondly – and this is the specific nature of the European case – because Europe lacks, and will continue to lack, its Pantaloon, its “last resort” guarantor, a central bank having the power to offer guarantees for the whole sovereign debt of the area. The assignment of unlimited powers to the ECB, thus making it the true and lawful central Community bank, guarantor of sovereign debts, would be the only solution capable of saving the Euro area from the international financial speculation; but this would certainly mean a real shift toward a higher level of integration: it would be a prelude to political integration.  Faced with this prospect, Germany opposes an unconditional nein.  Europe is destined to remain a plurinational entity, within which the stronger nations, the continental imperialist poles, dictate rules and conditions.

Banking crisis and crises of the sovereign debt:  ungrateful banks, foolish States


Generally speaking, the crisis that is affecting the sovereign debts of the countries of the EMU and which has spread from the outskirts of the Union to highly important States such as Spain and Italy, eventually affecting France itself, is a result of the great financial crisis of 2007 and of the recession from which the capitalist system has never got out.  The long period of “easy money” and expansionist monetary policies put into practice by the FED in a global context of complete market deregulation, had boosted the proliferation of financial products and generated an enormous mass of derivatives devoid of any link with real economy, of purely fictitious capital which, as the first problems of the accumulation mechanism resurfaced, started to lose its apparent value. Consequently, at the origins of the European sovereign debts crisis is the banking system debt, due to financial assets having lost any market and being shouldered, for a large quota, by the States, with a consequent increase in the need to finance sovereign debts and in the yield of government bonds issued by those countries that are considered to be less “solid” from the point of view of their balance of payments and economic structure.

Countries like Greece or Portugal, which are today accused of being responsible for running up an excessive debt, are in fact paying the consequences of the financial penetration they have been experiencing for years by the banking systems of those countries that now profess to be virtuous, that is to say the imperialist poles of the continent.  In the years preceding the crisis, German and French banks were the most engaged in sustaining the growth of the so-called PIGS, providing credit for speculation in the real estate and in the financial market of those economies that are now accused of having piled up excessive debts.  But if that credit provided for speculation is now at risk of being largely wiped out by the difficulties that those countries are finding in repaying their debts (which have, in the meantime, taken the form of State bonds), it is thanks to these same outlying squanderers that the highly virtuous banks have been able for years to record abundant profits on their balance sheets.

The governments’ response to the crisis has been directed to the saving of the financial system, weighed down by illiquid derivatives.  The salvage operation has implied the growth of the debt of the States, that had to take on enormous amounts of bonds with no market, accepted as “collateral” in exchange for liquidity.  The FED continued its expansionist policy through two successive “quantitative easings”, with the objective of helping American banks to finance the recovery of the so-called “real” economy.  The action taken by the ECB, whilst not being of the same “non-conventional” nature as that of the FED, has provided an equally massive support for the European inter-banking, by directly financing the banks, which were no more lending a penny one another, in exchange for stocks of dubious value.  The hardliners of the Bundesbank school, who are now rapping the knuckles of the outlying countries and criticizing the support the ECB is giving to sovereign debts, kept conveniently quiet on those occasions, considering that it was – and it still is – the German banks themselves that have the greatest load of junk bonds and the greatest need for liquidity.  The effect of salvage operations on both sides of the Atlantic, in a context of chronic overproduction, of excess global production capacity, has been to fuel a new season of speculation, as if the financial and real-estate bubbles had never exploded.  American and European banks have intensified, rather than diminished, their activity of hunting profits in high-risk financial operations, continuing at the same time to load their balances with State bonds, considered to be “safer” than most of the private bonds in circulation.

Since 2008, we have observed the transfer of a large part of the private debt to its public counterpart.  The private debt of industrialized countries has dropped by 1 000 billion dollars, whilst the public debt has risen by 8 000 billion dollars (Crédit Suisse data).  The growth of State debts – that in advanced economies already exceeded, on average, the 100% of GNP – is thus a phenomenon that results from the financial crisis, inspired by the classical logic of privatizing profits and socializing losses.  From September 2008 to December 2010 in the EU, post-crisis State allocations for the financial sector amounted to 4 285 billion euros, of which 1 240 have already been used.

National financial systems that have made most use of State financing to EU banks (in billions of euros),


UK      295                 D         282                 F         141

IRL      117                 SP      98                  GR      58

A         40                 


The table shows that nearly a half of the total amount has been used by British and German banks.  620 billion, half of the total, went to the 10 largest banks.  The allocated figure is enormous, equal to 36% of the EU’s GNP and to 10% of total bank assets; this huge expenditure of public money has been made to close potential balance gaps of a system that over the past decade had financed itself by one third through the real economy and by two thirds through finance itself – which means that at least two thirds of bank assets are made up of fictitious capital (1).


After being saved by government interventions directed to purchase bonds and monetize the debt, banks have further re-financed themselves with short-term loans of public money at near-zero interest rates, and have used this money to buy long-term government bonds, mostly issued in order to finance the banks themselves. This way, banks can keep on making profits thanks to the interest rate differential between short-term public loans and long-term government bonds, the latter being the most hardly hit by the recent speculative attacks assets; thus banks use the income from the public debt to recover the losses experienced as a consequence of the crisis, since they cannot rely on financing themselves from the real economy, which – with the sole exception, to date, of Germany and its satellites – is in a phase of chronic stagnation.

“Speculation” here does not appear as the parodistic “greedy and unscrupulous businessmen”, but as the need of the financial system to make profits using the opportunities offered by the situation, which are, at present, limited mostly to moving around worthless securities inside the system itself.  The unchallenged dominion of international financial capital which, through the so-called “markets”, expresses absolute judgements on national governments and economies, is actually (dialectically) a display of the extreme fragility of the system as its dynamics are detatched from the crucial, but feeble at this point, production of surplus value.  Today more than ever, Capital needs the State to survive its historical crisis.  The financial system can do no more than put itself in the hands of the State, in order to seek protection from bankruptcy, and in the hands of the public debt in order to guarantee profitability to its investments.  In turn, States are asked to reduce their balance deficit in order to finance the cost of the debt, which is increasing also because of the props provided for the shaky bank balances.  The fact that the price of reducing the deficit is obtained almost exclusively by reducing incomes from salaried workers, pensions and expenditures for the so-called “social” services is the umpteenth demonstration that the capitalist system is now a parasitic organism that is more able to drain the riches of society than to generate them.

Bank investments in sovereign debts do not, however, represent a haven safer than speculative finance.  The enormous amount of public bonds in the hands of the banks also represents a totally fictitious value – as Marx demonstrates.  This apparent value is placed at risk by the movement of capital that the banks themselves are mainly responsible for.  The rush to sell off risky bonds and purchase those considered to be “safe” (American, German, Swiss…) represents the attempt to safeguard fictitious capital from the threat of depreciation, which is part of its very nature.  When the bonds of a sovereign debt are the object of massive sales, the percentage of reduction in their value corresponds to the percentage of increase in their yield.  The possibility, anything but theoretical, of a default in the public debts of one or more States depends ultimately on the fact that the issues of these bonds, which have no intrinsic value, are based on the future tax income, which is, in turn, bound up with economic trends, the production of social surplus value.  Nevertheless, in the banks’ accounting, the nominal value of bonds appears as a real value and its reduction is a source of losses. Considering that a large proportion of the 350 billion Euros Greek debt is in the hands of French and German banks, the decision of the European Community to intervene in order to guarantee the country’s solvency was taken mainly on the behalf of those same banking systems.  The 12 largest German banks are exposed for the amount of 68 billion euros in government bonds of the PIIGS, a much higher amount than the other European countries considered to be “weaker” and, despite the fact that in the last three years they have increased their equity, the figure at risk still represents over twice the amount of their capital guarantees (2).

However, the critical situation of banks is certainly not limited to the sovereign debts in their possession, which in the end amounts to only a small percentage of their exposure.  The large northern banks, particularly French and German ones, are overflowing with junk bonds.  In the banking systems of Europe all this more or less worthless paper amounts to 337 billion euros. The Deutsche Bank possesses over 46 billions in junk bonds, the Bnp Paribas almost 33.  The crash of the French-Belgian giant Dexia has nothing to do with sovereign bonds but with the fact that 1/3 of its total assets were illiquid. Behind the so-called “crisis of sovereign debts” and the crisis of the EMU lurks a financial whirpool that risks sparking off a systemic crisis.   

Über alles!

In their position as the main creditors, France and Germany have taken over the management of the sovereign debt crisis of the PIGS, with the aim of creating the right conditions for saving their own banks.  Today, a sort of “supergovernment” seems to have formed, bringing the representatives of these two national governments together with the ECB, the IMF and the European commission: but, in fact, it is the German point of view that systematically prevails in every important issue, demonstrating that one of the most significant aspects of this crisis is the reaffirmation of Germany as the leading economic and political power on the continent.  The preconditions for this supremacy, in comparison with which the equal role of France is only formal, formed themselves beginning with the German reunification.

Following the financial crisis of 2008, Germany suddenly abandoned the role of the moving spirit of the integration process culminating in the Treaty of Maastricht.  Then, as now, the German government refused the proposal of a joint European guarantee for the rescue of the financial systems, obtaining that every single State had to guarantee for its own banks. It was the demonstration that the German “pro-Europe spirit” that had led to Maastricht obeyed to the strictly national interest of making the European partners (first and foremost France) and the USA accept the undigestible fact of German reunification, the implications and prospects of which were far wider in importance than that of a treaty signed by sovereign States (3).

For two decades the historical significance of German reunification was overshadowed by the renewed progresses towards European intergration and by the adoption of the Euro, to which far more importance was assigned than it really has. Germany had to demonstrate a “European” vocation that showed continuity with the post-war political situation, in which the European Union was merely a building block of the Atlantic alliance, without any perspective of strategic independence because genetically incapable of achieving a unified political synthesis of the different national interests.

Whilst the economic giant EU paid the price of its political dwarfism, Germany was successfully engaged in the integration of the East, the considerable cost of which, however, yielded its fruits in terms of labor productivity in the East and of convergence of the two economies. (4)

In parallel to the process of reunification, Germany dealt with large scale restructuring of its production system – already marked out by a high concentration of capital in large industrial-financial groups – , resulting in a further increase in the average organic composition of capital and in labour productivity. Many German companies reduced their costs by progressively moving segments of their production processes to Eastern Europe; while major reforms of the labour market reduced unemployment benefits, increased the percentage of fixed-term contracts and reduced the weight of national contracts compared to the more flexible company contracts.  While the German proletariat paid the price of an increase in unemployment and salary restrictions, there was a corresponding strengthening of the Country’s production system, more competitive exports and the confirmation of the role played by the German productive apparatus as the engine of the continent.

In same the years when the PIGS were fed by its banks, Germany recorded high growth rates in production and exports that confirmed it as the “engine of growth” in Europe, though in a climate of uncertain recovery. Thus the gap with other European states increased, turning into high trade surplus, that was for 2/3 due to trade exchange with the other Eurozone countries (5).  In the years from 1995 to 2006, German growth, fuelled by industrial export, was far more moderate than that of countries like Greece, Spain and Portugal, who recorded large increases in GNP [(between 2.5% and 3.6%), but at the same time had a markedly negative trade deficit (with an average of 12,9% and 5% of GNP over the period) and a sharp increase in the cost of labour (yearly average: +4.5%, + 3%, + 2.8%) (P.Reichlin, cit.). This situation went on even after the 2008 crisis; in 2010, a year in which Germany had a foreign surplus of 5.1%, the PIGS recorded a large foreign deficit (in relation to GNP: Italy 4.2%, Spain 4.5%, Portugal 9.8%, Greece 11.8%).  Capitals started to abandon the latter countries, accentuating deficits in their balance of payments, which have been financed by the ECB over the past three years by issuing money for over 100 billion euros a year (6).

In the EMU zone, the single currency allows the higher productivity of German economy to turn immediately into competitivity in terms of prices, without the obstacle of competitive devaluations, which can be carried out only by countries with their own currency. Euro has represented a benefit for countries that took advantage of the force of the single currency to finance an economic growth founded on real estate and financial speculation at low interest rates; but now that they have to guarantee the payment of debts they are suffering the strength of the German giant without being able to counter with their own monetary policy.  From this point of view, Euro has amplified German supremacy on the European continent, as well as being an excellent monetary vehicle for placing German goods on markets outside the EMU at more favorable prices than those expressed in the old Deutschmarks. After the introduction of the EMU in 1998, for a decade the differentials between the yield rates on national bonds of the different countries remained low or non-existent; but after the financial crisis and the bank rescue operations carried out by the States, the trend in the yield rates of sovereign debts has started to reflect the state of high or low difficulty of the single national economies. Basically, what occurred on the bond market was a “race to quality”, that’s to say to safer yields, by all the investors, which amplified the gap among the yield of high risk bonds and those of countries considered to be more solid or “virtuous”.

The Eurozone in the midst of a political crisis: commissary States and States under commissarial administration

The European crisis has, under many aspects, taken on a political form. First of all, we can see the (probably definitive) decline of the petit-bourgeois idea that the political integration of the continent can occur through the pacific and progressive economic integration, culminating in the creation of a community of nations united under a single federal flag. In practice, what we are witnessing is the full affirmation of national interests in a context of inter-communitarian relations where the big fish dictates its conditions to the small one. The result of as many as 14 emergency summits in 20 months has been the constitution of a sort of directorate - centered on the French-German axis, the ECB management and the EU commission -, in which the political decisions are clearly taken by the two leading nations, with the clear prevalence of Germany. This aspect already goes beyond the old communitarian structure, firstly because decisions do not pass through EU institutions and secondly because the inner core of EMU is depriving the EU countries outside the Euro area of authority over crucial decisions, first and foremost the United Kingdom. We are glimpsing a preview of the possible split between EMU and non-EMU countries, which is not, however, the only possibile future split inside Europe.


The most evident fact emerging from all the summits preceding the one held at the end of October 2011 has been the reluctance of Germany to agree on rescuing countries involved in a debt crisis. In fact, as economic contribution to bailout operations given by individual countries is proprotional to their economic weight, the greatest burden would be on Germany, with a considerable transfer of resources towards the Southern European countries. Germany, like France, is interested in saving its own banks and in ensuring monetary stability, not in being involved, beyond a certain limit, in the problems of others.  The apparent indecision of the German government in the management of the sovereign debt crisis is actually the fruit of a precise strategy aiming to keep the States in crisis on the tightrope, in order to force them to pursue economic recovery policies, an attitude that has risked to worsen the crisis, but also an indication of the fact that German capitalism is also taking into account the possibility of giving up the EMU (7), despite the enormous cost that the move would have for exports and for the banking system.

In fact, the result of the summit held at the end of October does not substantially change the prospects outlined by the previous ones. The declaration of intent to save the single currency was followed by solutions that do not represent a qualitative step forward when compared to the previously decided emergency measures. Another 100 billion in aid were assigned to Greece, banks will have to accept a loss of the 50% of the nominal value of the Greek bonds they hold and, in order to strengthen their financial position, they will have to proceed to recapitalize; the “state rescue fund” had its resources increased from 450 to around 1000-1400 billion euros due to a “lever effect” (intepret: “getting into debt”); a financial tool (the Special Purpose Vehicle) was set up: it is supposed to attract foreign sovereign funds in support of the European public debts.  In fact, in order to recapitalize, banks will be allowed to resort to state aid if needed and, in the last resort, to the “state rescue fund” itself, whose real resources remain the same as before (440 billion, 140 of which already used for Portugal, Greece and Ireland), and rise only thanks to a financial trick. Finally, the prospects of interventions by foreign states in support of the fund don’t lie within the European power of decision (8).

In the end, the highly praised resolution of the summit held at the end of october has given birth to a new mouse. The problem of the financial structure of EMU, which lies in the nature of the ECB, was not tackled: in the Eurozone the ECB has the prerogative of supplying liquidity, but is not allowed to “monetize” sovereign debt, as well as being bound by statute, modelled on that of the Bundesbank, to the basic principle of safeguarding the value of money to contrast the risks of inflation. In this respect, the ECB has already stepped beyond its mandate by issuing several billion euros in order to save Greece, Portugal and Ireland, but cannot bleed itself white any further in buying up Italian and Spanish (or even French) State bonds in order to halt their falling trends, as the order of magnitude of the expenditure would soar to several hundreds billion euros, making it inconceivable to absorb percentages of debt as high as those of Greece and Ireland.

More in general, the contradiction of the ECB lies in the fact of its being the central bank of an aggregate of independent States, with conditions and interests that diverge, especially in a period of crisis; its own claimed “independence” from the pressure of individual governments prevents it from carrying out massive interventions like those of the Fed (quantitative easing), making it at the same time a tool in the hands of the strongest States.  The interventions of ECB in the crisis fully reflect the politicy of Germany of saving the Euro while refusing stable solutions, so that to keep the States in difficulty under the pressure of financial markets, forcing them to adopt restrictive economic policies. From the point of view of financial markets, the ECB embodies the political weakness of Europe: it is a central bank that cannot guarantee unlimited liquidity in situations of sovereign crises.

In fact, the ECB is not involved in the rescuing salvage operations, even indirectly - as it was proposed by France, with the idea of turning the “State rescue fund” into a bank which, as such, could have been financed by the ECB. Germany opposes solutions implying the full assumption of European sovereign debts by the ECB, just as it has always opposed the issuing of community bonds (Eurobonds) to finance the sovereign debt of individual countries, whose risk premium would be an average of the yields of national sovereign bonds, thus increasing the cost of financing the German debt. To each its own State bonds, to each its own banks! The real “solutions” have never been taken into consideration by Germany, nor will they be in the future, and this ensures a permanent economic instability in the Eurozone and the risk of its deflagration.

During the summit, the reformulation of treaties was discussed: however, this should not be seen as a turning point towards a greater integration, but as the reinforcement of the present power relations based upon the French-German predominance. The purpose of the new treaties will be to “impose economic policies on the EU member States” (9): in other words, to implement rules on sanctions against peripheral countries that do not respect the “stability agreement”. It is the pure and simple ratification of present political and economic relations within the EMU, which assign the role of the decision-maker to the French-German axis, imposing to the other countries limitations on their sovereignty. We are not, therefore, witnessing a process which is obliging Germany and France, under the pressure of emergency, to advance along the path of the political integration of the EMU zone: on the contrary, we are observing the political reinforcement of the two main imperialist poles of the area (France and, above all, Germany) in their relationships with the peripheral countries – Italy included –, a reinforcement that ratifies the economic integration carried out in the preceding decade through the financial penetration of the banking systems of these two countries in the Eurozone. According to the decisions taken in the latest European summit, the programme for acquiring sovereign funds by the “State rescue fund” is subordinate to a plan of reforms drawn up in Brussels, which has to be approved by a few Parliaments, first of all the Bundestag. It will be a plenary session of the German Members of Parliament that will decide about the pensions of Italians, Spaniards, Greeks etc..

Beyond the Euro: Eurasia

The other split that is looming, apart from that between the States inside and outside the EMU, is the one marked by the North/South demarcation line. For Germany, Euro is good as long as it represents an advantage: but from the very moment its survival implied limitations to the country’s own national sovereignty, it would go on without it. During the course of the crisis, impatience towards the Mediterranean States of Europe has grown amongst the countries that come under Germany’s direct economic and political influence. Finland has managed to wring from Greece a bilateral agreement that defends its credits; Holland has brutally suggested to establish a communitarian commission with the power of inflicting sanctions up to expulsion of countries that do not respect the stability agreement. The nationalist ferment in central Europe is particularly evident in the authoritarian drift of Hungary, where the new constitution, which is supposed to be modelled on pro-European principles, has confirmed the Florin as the national currency, putting further away the possibility of joining the EMU in the future.


The idea that Germany has no alternative but to save the Euro and thus to assume the burden of financially supporting the peripheral nations takes into account exclusively economic remarks, not considering any historical prospect alternative to the continuity of the EMU. In Germany, a clash has been going on for some time now between a trend in favour of saving the single currency and one turned toward other prospects, as the foundation of a northern economic area with a strong currency and a Mediterranean area with a devalued Euro. The material basis of the different views within the German bourgeoisie lies on the fact that the old economic and geopolitical balances are being shaken by the advance of the crisis.

Should the crisis lead to the breakup of the EMU, a smaller monetary zone might take its place, corresponding more to the area already economically integrated which gravitates around the Rhine axis and the countries of the central European area extending from Finland to Slovenia. The establishment of an economically strong and homogeneous monetary zone would provide the conditions for the recovery of the German financial system after the general crisis that would follow the failure of the Euro: it would then be possible to relaunch the financial penetration to the East, which had, in the past few years, allowed the high growth rates of the economies of the Baltic States and of the ex-Warsaw Pact countries, now threatened precisely by the banks’ exposure to PIIGS debt (10). The continuation of the financial penetration the East, towards the ex “Soviet” countries, is a vital policy for German imperialism, revived by the vacuum of power that followed the collapse of USSR and thwarted by the US political and military initiatives. Recovery and reinforcement of a process of economic integration of the area between the Russian borders and the Rhine would affect the area of the old Central Europe (Mitteleuropa); which is not just an economic area, as the EU and the EMU, but has its own historical tradition and cultural identity, thus being potentially more homogeneous on the political level. This does not mean, of course, that we are foreseeing the “renaissance” of the old Central Europe, which is now something that only exists in history books, but we are observing a series of conditions that will encourage the integration of the States in that area under the sphere of influence of the German capital, in relations of subordination that could be more or less marked.

Starting from the Republic of Moldova in 2009, it was precisely in Eastern Europe that the Chinese financial and commercial penetration began, by purchasing State bonds and winning contracts to build infrastructures (11). China’s force of gravity is moving the barycentre of the European and the world’s (geo)politic towards East, inevitably acting as a pole of attraction. China is today setting itself up as a direct competitor in an area of traditional German influence. The “trend to the East” is part of the history of Germany, of the Prussian tradition and of the “national Bolshevism” which appeared between the two world wars, and necessarily pushes Germany towards the prospect of an integration between the immense natural resources of Russia and the highly advanced German industry, which still has the vital need of those resources (12). Relations between Germany and Russia were never interrupted, not even during the Cold War (Ostpolitik), particularly as far as gas pipelines were concerned. Over the past decade, relations have been strengthened with the prospect of an alliance on energy production, whose significance is not only economic, but implies the reinforcement of bonds between Russia and Western Europe. This policy, culminating in 2003 with the joint opposition of Germany and Russia, together with France, to the war in Iraq, faced a strong hostility on part of the countries of the ex-Warsaw Pact and of the USA. The most significant result of this political guideline was the creation of the North Stream gas pipeline that, since 2011, bypasses the Eastern European countries by running across the Baltic directly to Germany.

These and other aspects (including the fact that since 2007 German investments in Russia have been higher than Chinese ones, a proof of the competition between the two powers in that area) confirm the reinforcement of a traditional bond, to the extent that “Berlin might even become, globally speaking, a strategic partner of Russia for issues not strictly linked to the area of Europe” (13). Poland itself, that in 1920 opposed both the movement of the proletarian revolution toward the west and the popular-bourgeois perspective of the “national Bolsheviks” and has always seen Ostpolitik and Russian power as threats to its own interests and its own national integrity, is today increasingly involved in the German economic area and is setting itself up as a “bridge” to Russia, with which a process of reapproaching is taking place (14).

Today the Euro and the EMU act as an economic restraint to the trend towards the East of German imperialism, which otherwise would be naturally turned in that direction. However, its exit from the Community cage and from the single currency would imply enormous costs in terms of competitiveness of German exports and banks, and, above all, would imply risks of global instability. It is the threat of a systemic world crisis generated by the collapse of Euro that is at the basis of the very strong pressures made on the German government by the USA and China in order to make it finally decide to stabilize the situation through adequate measures. Yet, Germany is doing little more than making declarations of loyalty to the Euro. The deadlock in which Europe finds itself has originated from the contrasting forces Germany is subjected to: on the one hand the onslaught of the financial crisis requires the problematic rescue of the Euro, which would impose a greater political integration, something that no national component of the EU tends towards spontaneously; on the other hand Eastern Europe offers a possible relaunch of ‘Ostpolitik’ from a geopolitical viewpoint and in the direction of Russia and China.

These prospects might well encourage Germany to support the dramatic separation between the destiny of the rich Northern Europe from that of the ragged South, and thus to assume the economic and political costs of this move. It would be a truly historical turning point, open to all sorts of solutions, not excluding the military one, if the new German policy were to short-circuit its relations with the traditional Atlantic adversaries (with or without France) or if social tensions found an outlet in nationalist and separatist outbursts on a continental stage insisting on national identities, despite half a century of communitarian rhetoric.


Perspectives: if it doesn’t blow, it will


The sovereign debt crisis in Europe confirms the subordination of governments to the interests of the international financial capital which, in turn, develops on a national basis around dominant imperialist poles. In the context of Europe, the latter can be identified first and foremost with German and French imperialisms, which affirm their own interests in the whole area through communitarian institutions. The rescue of Greece actually means the rescue of French and German banks, which otherwise would have been condemned to far higher losses by market mechanisms. In this difficult situation, the Community system and the single currency have once again proved to be functional to the interests of the imperialisms dominating the area. This aspect weighs in favour of the conservation of the Community: in this phase, Community ties represent an advanced form of the domination of Capital on a continental scale, able, within certain limits, to intervene in the contradiction between the international nature of Capital and its national dimension, and to become even more functional to the capitalist need than the direct domination of the State at a national level – a sort of working prototype of a “world government” (15).

However, this model only works as long as the crisis remains below a certain threshold, beyond which nationalism once again becomes the identity factor that opposes the claims of supranational organizations, identified as instruments in the hands of the stronger nations, or as long as the proletariat fails to hold up its head and take action to proceed once more along its independent path.

The crisis accentuates nationalism but also creates the conditions for the resumption of class struggle, both in countries that are the object of rescuing and in “saver” countries. Cohabitation in the Community implies costs that are proportional to the economic weight of the States and thus are borne mostly by the strongest nations through heavier taxation and sacrifices. It seems that the cost of saving the PIGS for Germany would be over 400 billion Euros, rising to over 500 if Italy were included. To give an idea of the scale of this, the Italian so-called “blood and tears” financial manoeuvre of 2011 amounts to 50 billion. It is thus understandable that in Germany there is extremely strong resistance to the idea of rescuing countries in crisis, both amongst the half classes, finding themselves in growing economic difficulties, and in the working class, that has already been bled white. In addition, the costs of salvage operations have a direct effect on the proletariat of the “rescued” States in terms of wages and service cuts, unemployment, etc.. According to some calculations, the costs of a split with the EMU would be far higher for Germany (up to 1200 billion) (16): however, the evaluation of pros and cons cannot be limited to an accounting record, but has to include the political prospects of an imperialist pole that, in a context of global crisis due to worsen and of changings in international power balances among imperialist spheres of influence, is obliged to seek internal and external cohesion – something that doesn’t lie in an assembly of nations more or less bound by shared rules, but basically divided. The crisis itself deepens divisions and stirs up nationalist and anti-European trends; but at the same time aggregates, around the imperialist poles, areas that share their destiny for economic, geographical and historical reasons.

The dynamic of the crisis is fuelled by the explosive contradictions of capitalist economy, that cause also deep-seated shifts in old structures and balances of power. Events put the “German question” as the barycentre of what is happening in Europe, creating the preconditions for redefining its role in the continent and, as a consequence, the role of all the other national players. Germany is the centre of gravity of an integrated area including Northern Italy (the so-called “Padania”), the Netherlands, Belgium, Denmark and, in the East, the countries of Central Europe. In this context, through the various phases of the crisis, Germany will be forced to take again its role as a continental power, having a strategy of its own and being supported by a proportionate military force and a horizon of political and military alliances that make it free from its subordinate position within the Atlantic Alliance and from the limits imposed by its being part of the European Union. For the moment, initiatives and declarations of German politicians are far from suggesting this outcome, which however can already be glimpsed in the strong nationalist connotation of the policy the government has undertaken in managing the crisis.

In order to save the Euro in a stable way, Germany should agree to structurally bind its own destiny to that of the peripheral countries in crisis, thus tying its fortune to that of the EU, that represents a model of integration subordinate to the USA for a defect at source. In this sense, saving the EMU is in contradiction with the strategic needs of a country forced by the crisis to become again a fully-fledged imperialist power – a difficult goal, only possible outside the communitarian context. If the German government, amongst the many options that are considered and then abandoned, contemplates also the reformulation of Community treaties – a long-term prospect that would leave the basic issues unsolved – this is not in order to reinforce the level of integration within the Community, but just to make even stricter the conditions that impose to States a restrictive tax regime, or, in other words, to increase the power of Germany to condition national policies in the Community area. If this were achieved, Mediterranean Europe would be even more dependent than it already is on the economic diktats of France and Germany, with destabilizing effects on the political and social plan.

The alternative is between a split of the EMU, that would spark a global financial crisis caused by the interconnections within the banking system, and a situation of chronic instability, because a European order based on German domination would be undermined by strong national tensions. Just as a “world government” is impossible, an “international government” on a continental scale, in a context of independent nations, would not be able to impose the will of the dominant power without adequate coercive instruments of political and military nature, once again displaying an imperialist power in its classical role within its own sphere of influence.




The European crisis is the manifestation on a continental scale of the global crisis that has matured with the development of the production forces and the financialization of the economy. The presence of multinational companies, the shifting of production seeking for the best conditions for the extraction of surplus value, the segmentation of production processes on different territories, the freedom of movement of capitals, would now require a world government capable of facing contradictions no longer manageable on a national scale. But since this world government is impossible in a capitalist regime, which would not exist without its national organization and its bourgeoisies, the contradiction between the now global dimension of capitalist economy and the national character of its composition takes, during the crises, the form of a tendency of whole areas to aggregate around the leading imperialist poles. If these aggregations are based on economic ties and consolidate them, they must succeed in expressing an adequate political and military strength, that is not part of the history and prospects of the European Union. Germany is thus called upon to pass beyond its present nature of “geo-economic” power (17), prospering in a context of international relations in which western Europe has positioned itself as a subject standing outside the scenarios of conflict. What is now happening in terms of economic relations will have repercussions first and foremost on the relationships within the Community. The French-German axis, which has taken on the responsibility for solving the crisis, has its material basis in the now strong integration of the respective industrial-financial systems, but is seeing cracks appearing in its solidity as divergent interests and views about how to solve the crisis are coming out: while France is more inclined to make use of Community resources, for Germany each country should put its own budget in order by using its own resources. France cannot give up an independent role nor agree to be subordinate to German power: but as the evolution of the international imperialist context limits the autonomous action of medium-sized powers, it is improbable that we shall once again witness a Europe divided along the course of the Rhine (18). In any case, the crisis imposes to both France and Germany to recover and develop a geo-political perspective aiming to strengthen their influence on a strategic area, whilst waiting for the maturation of conditions for taking a firm stand within imperialist alliances.


In this phase, Italy, the third economic power of the continent, is unable to exercise any influence on the decisions regarding it, nor to propose itself as an imperialist pole with an independent policy. Its government – just as any “alternative” executive would do in its place – is hastening to fulfil the conditions imposed by France and Germany, giving up whole chunks of sovereignty in order to remain anchored to the Sacred Euro. But this subordinate position corresponds to a central role in the crisis: the main contradictions meet here, here are being risked the perspectives of the EMU (and, even though it seems absurd to say so, of the world). The situation of instability that is taking shape in the Eurozone can do nothing but worsen the tensions that reproduce the continental division on a national scale, unless the present Italian “vaudeville” government makes room to a government of national unity capable of restoring at least a role as a co-star among the imperialist powers to the capitalist “Italietta” [i. e., “small Italy”], thus also saving her sacred borders. [Be it noted that this article was written before the fall of the Berlusconi government. Present-day Monti government – the so-called “technical government”, made up of professors and managers, and not of career politicians – is precisely pursuing this course of action].

The “attack on the Euro” uncovers all the weaknesses, both those due to the degeneration of the national bourgeois ruling classes and those due to the Community structure, in an international context where what counts is the organized strength of Capital around solid political centres. From the ashes of the present European currency and the precarious Community institutions a new, far more solid and cohesive continental aggregation, this time founded on the German power, could arise: in any case, this process, which has a real potential, would encounter considerable resistance both in Europe itself and, above all, in the USA, which would use every available mean to keep Germany, and with Germany the whole continent, bound to their own interests. The relegation of Germany to a subordinate role in the imperialistic arena would favour the creation of the conditions for the critical fault line, from which the enormous potential energy flowing beneath the surface of capitalist society will discharge itself, to pass once again through Germany (and Italy). The unification of the continent would then be entrusted to the only historical force able to achieve it: the revolutionary proletariat.




(*) - In the Italian commedia dell’arte, Pantaloon is the character of the avaricious merchant who is, eventually, always forced to pay.

1 - A. Cerretelli, “La UE delle banche pigliatutto”, il Sole 24ore, 22.10.2011.

2 - B. Romano, “Ora le banche si scoprono vulnerabili”, Il Sole 24ore, 26.08.2011.

3 - At the time when Europe and Germany were divided between the two blocks, both the USA and the USSR feared the reunification of Germany. As we wrote in 1960: “The American President told the Russian President in Camp David that he fears German unification. The former denied saying this. But the truth is: they told one another in a relaxed tone that neither wished to see Germany united and that they were afraid of it.” (“Vae victis, Germania”, Il programma comunista, n.11/1960). When the crisis of the Soviet block began, France and England were so alarmed by the prospect of an imminent German reunification, that the two governments would have preferred Russian tanks in the GDR rather than the fall of the wall, which the propaganda of the “free world” had always pointed to as a “symbol of oppression”.

4 - “The cost of labour per unit of product in the regions of former East Germany has fallen progressively since the beginning of the ‘90s, to the extent that it is now almost 50% lower than in the West […] German unification has been a costly process for the West Germans and is still incomplete. But the convergence is proceeding.  Between ’98 and 2008 the gap between East and West fell by 8 points in terms of productivity of work and by 4 points in terms of pro-capita GNP” (P. Reichlin, “Spazziamo via il ghiaccio della UE con più competitività e un mercato del lavoro più fluido”, il Sole 24 ore, 4.12.2010).

5 - M. De Cecco, “A che serve spezzare le reni alla Grecia”, Affari e finanza, 22.3.201.

6 - Hans Werner Sinn, “Una tragedia greca”,, 11.8.2011.

7 - “The speculation that has exploded on the financial markets is an attack on the European currency. Motivated, of course, by the specific weaknesses of individual countries and for Italy by the obvious ineptitude of the Government, but basically moved by the perception, well supported by the facts, that Germany is calling into question the very survival of the Euro. It is not so much a question of contagion between weak economies, but it is a virus coming from the strongest government and to which even the French state bonds market is not immune, despite the axis linking French government to Germany in the running of Europe

“It is an illusion to think we can find a way to get out of troubles by having Greece, the country where the problems began, leave the monetary Union. This would be the beginning of the end for the Euro, a rapid end, because once the first country had left, the markets would wonder if it were not better for other countries, starting with Italy, to leave, too, and would behave accordingly, exerting an unbearable speculative pressure. In that case, we shall witness again the story of the 1992 EMS crisis.” (G.Nardozzi, “Quel virus che arriva dalla Germania",, 12.8.2011).

8 - The ESFS fund had just been increased to 440 billion after passing through the laborious and complicated examinations by all the parliaments of the EMU zone; Merkel herself could not have decided to increase the fund without once again going through the Bundestag.

9- A.Cerretelli, “Per salvare l'Euro si rischia di distruggere l'Unione”, Il Sole 24ore, 29.10.2011.


10 - M. Cavallitto, “Crisi europea, adesso rischia l'Europa dell'Est”, Il fatto quotidiano, 18.5.2011.

11 - R. Bongiorno, “Offensiva partita dall'Est Europa”, Il Sole 24ore, 24.9.2011.

12- This is a perspective that recalls that of the German “national Bolsheviks” in the years between the two wars and is still today a reality for “revolutionary” groups and movements, present both in Russia and in western Europe, which hope to move beyond hoping to overcome nationalism in the name of a Eurasian continental union with an anti-mondial and anti-American function. Their openly imperialist and fascist vision of a continental block from Vladivostock to the Atlantic, allied with China and intermediary powers such as Iran, nonetheless appears to be less of a pipe dream than the petit-bourgeois idea of the pacific political integration of Europe under the Community flag. Compared to the latter, it has at least a reactionary grandeur of its own. Chinese ambitions in Eastern Europe are another reason for Germany to renew her efforts in the area, abandoning the sterile policy of integration of South-Western Europe.

13 - I. Rubanov, “La santa alleanza dell'energia”, Limes, 4/2011.

14 - B. Kerski, “Berlino-Varsavia, il secondo motore d'Europa?”, Limes, 4/2011.

15- In an article in Asia News of 10.13.2010, the content is reported of a speech by Bernanke, held in the same period in Rhode Island and published on the Fed’s website, which was totally ignored by the international press. The speech forecasts an imminent global financial disaster and is focused on the presence of a systemic crisis in the old capitalist countries due to unsustainable State balances of payments. Money for pensions and healthcare is lacking, the public debt is about to esplode, taxes cannot be raised without penalizing an economy that is already suffering, etc. The conclusion reached is that democratic régimes are not able to provide the urgent solutions required by the crisis, with particular regard to the taxation measures and economic manoeuvers needed. In this respect, Benanke proves to appreciate the mechanisms in force in the EU that oblige individual States to respect certain budgetary constrictions: “To support his thesis, Bernanke quotes many events happened in America over the past few decades. Of particular interest, however, is his reference to the European Union (very similar in this respect to a ‘Soviet’ Union). On the basis of the constituent treaties of the EU, these ‘tax rules’ are already introduced in the ‘national’ parliaments but now, says Bernanke, admiringly, European leaders are working to make these measures even more ‘coercive’. The reference is to Europe’s ‘New Stability Pact’ approved (in practice) in June 2010, that is to say only few months ago, following the crisis of Greece and of the other so-called PIGS. The Governor of the FED is thus well informed and knows that in Europe State balances are no longer in the hands of parliaments or of national governments, but of a central European ‘Soviet’ – a word that in Russian means council, a counselling body – a non-elected organism. This counselling body in fact determines the decisions on public spending regarding over three hundred million Europeans. We should do the same in America, says Greenspan’s successor.” (Maurizio d'Orlando, "Bernanke: Il disastro finanziario globale è imminente”, Asia News, 13.10.2010).

16 - W. Riolfi, “Berlino salvi Atene: la Merkel risparmierà fino a 1.200 miliardi”, Il Sole 24 ore, 20.7.2011.

17 - Hans Kundnani, “La Germania come potenza geoeconomica”, Limes, 4/2011.

18 - A key for interpreting the possible scenarios can be obtained by looking at the opposite attitude assumed by France and Germany on the occasion of intervention in Libya. France was on the front line in promoting and implementing the military attack, while Germany remained completely out of the question. This can be interpreted as a symptom of the German tendency to turn towards the East and as a signal of the French tendency to pursue a more active and aggressive policy in the traditional southern direction, towards the Mediterranean area and Northern and Western Africa. It is however true that the French military initiaitve, agreed upon together with the United Kingdom, can be interpreted as a response to the request made by the USA for a greater military involvement in the Mediterranean area by the European allies, and thus as a reinforcement of NATO bonds. It demonstrates that times for taking a definitive stand within imperialistic alliances are not mature yet.


International Communist Party

("Il programma comunista", n°6, novembre-dicembre 2011)