Southern Europe erupts as protests and strikes spread across the Mediteranean. James Meadway looks at the new frontline against austerity

Huge protests in Madrid, brutally repressed, now matched by another Greek general strike. Three years of the European debt crisis are producing a social and political crisis on an immense scale, with the threat of the break-up of the Spanish state.

Just as those in the global South – the great arc of less developed countries across the southern hemisphere, from South America to the Far East – have suffered years of debt crises and IMF-led structural adjustment programmes, so now too is southern Europe. A new south is being created, but this time on the backs of workers and their allies in the developed world. Spain is the fourth-largest economy in the eurozone; Greece the eighth. Both are, by GDP, presently amongst the richest countries in the world.

The process is, arguably, more brutal than the earlier austerity. Approaching heavily-indebted poor countries, the IMF would demand the same package of slashing spending, raising taxes on workers on the poor and privatising anything that moved. But they would also insist on allowing exchange rate depreciation, which would at least create the possibility (whether realised or not) of export growth sustaining the economy and easing pressure on real wages. For the eurozone members, that cannot happen – they’re locked into the iron vice of the euro. Instead, they must suffer an ‘internal devaluation’: massive declines in real wages in a desperate attempt to reduce labour costs to the barest minimum. For Greece, this has meant both record unemployment, with some 50 % of under-25s now out of work, and real wages that have fallen 25 % over the last year.

There is no plausible point, above bare subsistence, at which either Greece or Spain – or Portugal or Ireland afterwards – can keep wages low enough to remain internationally competitive inside the euro. And since austerity is self-defeating, there is no plausible point on the horizon at which their successive debt burdens will become sustainable. Austerity shrinks economies, increasing, rather than reducing, the relative debt burden. Greece’s public debt, for example, has risen from about 130% of GDP back in October 2009, when the debt crisis broke, to a forecast of around 160% of GDP by the end of the year. The most plausible long-term prospect, then, for southern Europe under austerity is deindustrialisation and decline.

From protest movement to mass movement

The protests today are the political expression of opposition to that prospect. In both Greece and, more dramatically, Spain, they have shifted in the last three years from the protests of a radicalised minority, centring on the occupation of squares, into a mass movement. The indignados occupations, beginning on 15 May 2011, attracted perhaps 50,000 in Madrid, drawn mainly from the ranks of the young unemployed.

Further occupations earlier this year, saw immense crowds descend on Spanish cities, while the decisive intervention of the Asturian miners, striking and occupying their pits against austerity measures, further radicalised the movement and introduced the strategically vital element, the organised working class. 1.5m marched in Barcelona for the independence of Catalunya on 11 September this year, the biggest demonstration in Spain’s history, threatening the break up of the Spanish state.

In Greece, protests stretching as far back as late 2008, when there were huge protests against the police shooting of a teenage in Athens have merged with those called against austerity measures. Occupations of major city squares have taken place in parallel to a series of strikes and general strikes, while the movement has taken on an organised political expression in the rise of Syriza.

Breaking austerity will not be easy. The moment for a purely ‘Keynesian’ solution to the crisis, if it ever existed, has long since passed. Increasing spending alone will not now reverse the economic death-spiral that southern Europe is being pushed into, since this is now a profound crisis of institutions. A Spanish bank run is underway, its system teetering on the brink of bankruptcy; the authority of the central state is crumbling; and the private economy is being pushed into deep recession.

In Greece, the national debt is ballooning, the banking system is insolvent, and the economy has shrunk by some 20% in the last four years. Enforcing all this is a European Union that increasingly takes on the appearance and attitude of a colonial overlord. The euro itself, supposedly a mechanism to bring the people’s of Europe closer together, is reproducing a core and periphery relationship, well familiar to the global south, within Europe’s borders, with its central states choosing to design and enforce policy for its peripheral members.

The movement in Britain

The UK is, at least, outside of the eurozone, helping lessen the weight of austerity. Exceptional measures by the Bank of England over the last 18 months, pumping £375bn of fresh liquidity into its banking system, have probably helped stem further collapse. But the economy continues to, at best, stagnate, while the Coalition government’s ‘export-led recovery’ is exposed as the fantasy it always was. Austerity here is ruining lives, and steadily undermining the prospect of a return to stability. Yet the political system, as the Lib Dem conference made clear this week, remains committed to it. We are in deadlock: unable to reverse from austerity, and trapped by the weight of institutions that privilege the demands of finance above even real economic activity.

The first step in breaking this deadlock is in ending austerity. This means the construction of a mass movement, like those in southern Europe, with the organised working class at its heart. Many thousands of protests have taken place against cuts over the last two years; many have achieved local successes, halting the closure of services and the loss of jobs. But to end the whole programme requires a national movement, able to confront a national government. The TUC march on October 20 is a vital step along the way to creating that movement, drawing in the separate strands of protest that already existed and turning them into a political force.