For millions of workers and youth, the newly adopted measures mean unemployment and grinding poverty. In particular, old-age poverty will again become a mass phenomenon in Europe. Nothing will remain of the post-war welfare state. A study by the Carnegie Endowment for International Peace think tank in the US concludes that “the welfare states set up across Europe from the 1940s onwards with the aim of suppressing popular unrest and paying off tensions that could lead to another continental war” are “unaffordable”.
But there is no shortage of money. The budget shortfalls that are being used to justify the dismantling of the welfare state are the result of the systematic redistribution of income and wealth from those at the bottom of society to those at the top. At least since the 1980s, both right-wing and supposedly “left” governments have reduced income and property taxes for the rich, depressed wages and created new forms of low-wage work. This is one of the main causes of the increase in public debt.
The trillions that governments pumped into the banks in 2008 and 2009 to prevent their collapse meant the public debt rose sharply. Recently published figures from the German Bundesbank prove this. In 2008 and 2009, some 53 percent of Germany’s new debt was a result of measures taken to rescue various financial institutions. The total new debt rose in these two years by €183 billion; the costs involved in supporting the financial institutions amounted to €98 billion.
Now the banks are exploiting the crisis they created to escalate their plundering of the working class. The governments and the EU act as their accomplices. This became clear last Friday, when in expedited proceedings the German parliament issued a blank cheque worth €148 billion. While parliamentary committees usually haggle for months over smaller amounts, the Bundestag approved the fast-track loan guarantees amounting to half the federal budget, without even being clear to whom and under what conditions the money would flow.
via www.wsws.org
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