May 2015        

Three countries: same failed strategies

Paul Doran

At the end of April two communist parties issued significant statements in relation to the situation in Portugal and Greece. They are of interest to us here in Ireland because of the similarity of conditions: the imposition of massive debt on the people, which is the main weapon for imposing savage austerity.
     The two statement describe various aspects of the euro and imperialism. In Portugal, since the country became a member of the EEC in 1986 and the European Monetary Union in 1999 there has been a constant strategy of concentration and centralisation of capital, social regression, and—with particular impact since the creation of the euro—attacks on the social functions of the state, the withdrawal of rights, depreciation of the value of work, weakening of the productive apparatus, and attacks on democracy and sovereignty.
     This finding regarding Portugal is easily illustrated with some figures. In regard to employment, about 630,000 jobs were destroyed since the entry into circulation of the euro; the number of unemployed increased by 145 per cent.
     With regard to the evolution of GDP, from 1996 to 2014 the Portuguese economy grew by a meagre 1.2 per cent. If we consider the period since adopting the euro we find that this anaemic growth becomes purely and simply stagnation, the reality of the last seventeen years, a period in which the fall in public and private investment was steady and sharp.
     Looking at the rate of gross fixed capital formation as a percentage of GDP, an indicator that tells if the country is acquiring goods and equipment for developing productive capacity, we find that in 2000 it stood at 28 per cent; today it is 15 per cent—little more than half!
     At the same time our Greek comrades issued a statement headed “Imperialism and the Imperialist Pyramid.” In it the Communist Party of Greece comments on the role of the EU in retarding the economic development of Greece. Greece is one of the characteristic examples, which of course has a universal value because the phenomenon is not merely Greek.
     Our country has significant productive potential, which was selectively developed in the course of capitalist development while the assimilation of the country in the EU and generally its relation with the global capitalist market led to an even bigger restriction of the utilisation of its resources. We note briefly that Greece has significant energy resources, considerable mineral resources, industrial and agricultural production, crafts, that can ​ cover a large part of the people’s needs.
     Nevertheless, as a result of the crisis and the whole course of the assimilation in the imperialist pyramid, Greece has been downgraded even further. It is dependent on imports, while Greek products remain unsold and are buried.
     In Ireland the government continues its strategy of attracting foreign direct investment, as shown in the latest CSO figures. This will expose Irish workers to an even greater extent to the inherent boom-and-bust trajectory of capital and an Irish economy over-dependent on foreign direct investment.
     FDI is highly mobile and can move at a moment’s notice. The results will be catastrophic for tens of thousands of people. In the Republic, half of FDI is centred on Dublin, mainly in the docks area around our tax haven at the IFSC. There is hardly any state involvement in FDI which clearly suits all vested interests. The bulk of the investments are in financial services, which adds value to our economy and shows a false growth, endearing Ireland to the parasites who lends us money.
     The huge growth in the docklands shows clearly that FDI works for some, but another negative effect is in the price of housing for local people in the docklands and surrounding areas.
     With the rise of the Scottish National Party and the clamour by Sinn Féin in the six counties for a reduction in corporation tax to the levels applicable in the 26-county state we will soon see more competition in this area. The result is plain for all to see: a reduction in people’s wages, another crisis in the Republic, the victory of the EU and its venture and its stated aim of creating a reserve army of labour, and our increasing dependence on imports.
     What is really needed is an alternative economy based on people’s needs—an economy for the common good, along the lines outlined in the CPI pamphlet published as far back as 2009, which stated:
The central economic strategy of all parties that have made up the various governments since the 1950s has been to allow the economy to be turned into a banking and service economy, with an over-reliance on transnational corporations. All the inherent weaknesses in this strategy are now clearly exposed.
     Cuba has shown that the proper use of resources and the planned development of society across the board—including health, education, and culture, its cutting edge the bio-technology industry—points a way forward and shows that small nations can have development outside the sphere of global capitalism.

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