How business friendly is Spain

Lebenshaus Schwäbische Alb - Community for Social Justice, Peace and Ecology e.V.

by Andrea Noll - ZNet comment 06.06.2003

Rome, 503 BC. The majority of the underprivileged plebeians initiate a general strike. The men go to the so-called ‘holy mountain’. Rome's elites (patricians) send their senator Menenius Agrippa to negotiate. Menenius tells the strikers a story: “Once the hands of the human body were raised against its belly”: “We do all the work, and this lazy man is consuming the profit”. The hands decided to go on strike and stop feeding the stomach. Result: the body starved to death, the hands also starved ”. The plebeians understood Menenius' message; they ended the strike and returned to Rome.

What was the message? It is the same message that we Germans currently hear in our ears from morning to evening - via television, radio, and the press. It reads: Make sure that the bellies of the big bosses are full, then your state organism will flourish too. We're all in the same boat. Give corporate Europe the biggest piece of the pie, and you plebs will still do well with the crumbs from the rich man's table. Or do you want to become unemployed? With almost 5 million unemployed in Germany, the cardinal threat par excellence. But the starved belly metaphor has a crucial catch. The belly of our corporations is not empty but filled to the point of puke. Do you want to see a real ‘(gangster’s) paradise’ for corporations? Then welcome to Germany: fat subsidies for fat companies - low taxes or none at all! As DGB Vice President Ursula Engelen-Kefer says aptly: “It is absurd that a nurse pays more taxes than BMW”. You have to know: BMW is one of the largest car companies in Germany.

In Germany, ruled by social democrats and green, the workers and employees are the ‘plebeians’, i.e. the hands ’- or the wallet. It is this group that basically finances our state - via wage tax, VAT, social security contributions. The employers gradually contribute less and less. Taxes for large companies and businesses as well as for the rich are peanuts for us - wealth tax is not an issue. But the more gigantic our unemployment, the more unfinanced this system of one-sided burden sharing. And again, the German plebeians are supposed to foot the bill.

Germany at a crossroads.

Our flat rate system is hotly contested, Macjobs and temporary work are on the rise, and our social security system is at risk. Schröder's ‘Agenda 2010’ has all the ingredients to cheer up conservatives. Nothing less than the smashing of the welfare state is on the program - which would be a catastrophe of historic proportions. Our social security dates back to 1883; At that time, Chancellor Otto von Bismarck felt compelled to act because the socialists had become too active. It is bitter irony that the Social Democrats of all people are now crushing this achievement! Schröder and his coalition of Social Democrats and Greens argue: The German economy is doing badly. Not correct. Our exports are flourishing, the euro is stable. However, the internal market is causing difficulties. The prices are too high in relation to the falling real wages (plus high VAT!), Plus massive unemployment. The result: purchasing power is on the decline. This is a classic situation for an intervention à la Keynes: ‘deficit spending’. Stimulation of the market by means of government investment programs and financial relief for ordinary people - then the market economy flourishes and the unemployment rate falls. But our government bridles the horse by the tail. A completely strange situation, reminiscent of New Zealand 20 years ago, when a social democratic government of all people let loose the dogs of neoliberalism on the citizens. Or let's just think of Blair's Great Britain under Lab New Labor ’(in some ways Blair himself caught’ Ms. Thatcher).

Germany in 2003 - still a rich country, member of the EU and the OECD - nevertheless creeps the feeling that you are living in Asia or Latin America - in an economy in the clutches of the IMF and its dreaded structural adjustment programs: strict budgetary controls, drastic cuts of social standards. The situation in West Germany is bad - that in East Germany (former GDR) is dramatic. There they now have an unemployment rate of over 20 percent. If cuts continue, the people in this region will despair - or migrate. An economic analyst: “Hands will go, heads will stay”. There we have it again - Senator Menenius' body metaphor. But: If the hands migrate from East Germany, who will feed the greedy stomachs?

Who feeds the state?

Why the whole thing? Why should a comparatively rich country like Germany risk the decline of its eastern regions? And why risk the social consensus that has served Germany and the Federal Republic well for 50 years - or not? One reason is corporate globalization and the growing influence of corporations on our politics. It is not for nothing that the government policy of our social democracy now coincides almost one-to-one with the employer agenda of the BDI. In my opinion, the enlargement of the EU - from currently 15 to possibly 25 Member States - plays an equally important role. In a recent TV discussion, the BDI representative slipped out the following unmasking remark: "Yes, do you think the EU will extend German social standards to Lithuania!" Is he suggesting that we should "extend" the social standards of the Baltic States to us? What is certain is that the EU expansion is a perfect pretext to cut off the “antiquated welfare state braids” in the ‘old’ member states - when post-socialist countries such as Poland, the Czech Republic or the Baltic States join.

In countries like France, Italy, Spain, Germany, Sweden and Austria, citizens and trade unions are faced with a struggle to maintain social standards that they had to fight hard for decades. Many citizens and trade unions believe that these standards are not only worth defending in ‘old’ Europe, but also want them to be transferred to the new member states. In this way, the European Union is to be developed into a model of real democracy and real participation. A democratic EU - would be a good thing - instead the flag of corporate Europe flutters on the horizon. The plebeians of ‘old’ Europe have their backs to the wall. They fight to save what can still be saved from their welfare states. Let's just take Austria. This country saw its first general strike in 50 years in May after the center-right government planned to “reform” its pension systems. General strikes in France too. In Germany we are facing the same kind of “reforms”. But what does “reforms” mean here? You don't call a gravedigger a ‘reformer’. Because, these reforms are the end - the end of social security, the end of the social democratic idea, the end of East Germany, the end of the hopes of the people in this country.

And what about the new ’Europe? Take Poland * as an example. The no longer socialist country of Poland is in great economic difficulties; Unemployment is high, many people live and survive on their little clod (60 percent of Poland's area is used for agriculture). Of course, the EU would immediately restructure Polish agriculture fundamentally and in a market economy. I shudder when I think of the consequences for the small subsistence farmers. In addition: the rate of the Polish zloty is low (4.25 zloty = 1 euro). This currency differential helps people survive economically. The border trade is flourishing. But what if Poland one day enters the eurozone? Almost all new ’EU members are poorer countries - countries whose situation could get much, much worse.

Let us return to the German sadness. Our government argues as follows: First, our high performance standards in social security make German work more expensive. Relieved / lower wages would ensure that the country flourishes and unemployment falls. According to this logic, Mexico and Afghanistan should be the richest countries in the world because they have the lowest wages. Second argument in favor of lowering German social standards: We Germans are too lazy, too old, too sick and the social security system is overwhelmed. Right, the system is overwhelmed - but the reason lies elsewhere. Too few people have to pay in too much (namely, the common people, the employees). The problem of our social security systems is not the expenditure side but rather the lack of or one-sided influx. The system would have to be placed on a broader basis. Third argument: by cutting social benefits, the government deficit can be remedied, and we are finally meeting the Maastricht criteria. But what does social cutback regularly mean for us? The poor plebeians' benefits are cut and the money is instead shifted into the ‘bellies’ - in other words, on the accounts of our modern, tax-exempt patricians: Corporate welfare ’will hardly solve our national deficit problem. Next argument: If one day our entrepreneurs are really full and satisfied, they will thank us for many (and better) jobs. Wrong - new jobs, at least decently paid full-time positions, are not on the employers' agenda. These people basically love our unemployment situation. It makes it possible for them to force more and more plebeians into Macjobs, to lower wages and to attack the collective bargaining system - and with it the unions. Because: once the collective bargaining agreement and protection against dismissal are abolished (of course only in the interest of new jobs!), The backbone of the German unions is broken. That is also the reason why the German trade unions (otherwise rather sluggish) are currently fighting so hard and messing with social democracy, their traditional ally. The situation is reminiscent of the 1980s when Britain's Margaret Thatcher crushed the British unions. The German unions are still fighting. But their organization at European level leaves a lot to be desired. Whether they can win the battle at the national level - unlikely. The German left, the PDS for example, fights with passion against Schröder's ‘Agenda 2010’. The PDS is relatively strong at the municipal and regional level (in the east). At the national level, however, the party is in crisis; she is grappling with the consequences of her catastrophic performance in the 2002 federal election.

Schröder and Fischer also encounter unexpectedly strong resistance within their own parties. A well-known critic within the SPD is Oskar Lafontaine - once described by Tony Blair as "the most dangerous man in Europe". In 1999, at the height of his political career (SPD chairman and finance minister in Schröder's cabinet), Lafontaine made a decision of conscience and resigned from all offices. The trigger was Gerhard Schröder's anti-social democratic tax policy. Lafontaine is a brilliant Keynesian economics analyst and an eloquent speaker. At the moment, Lafontaine (whose political career is on hold) has something Schröder lacks: a lot of time. Lafontaine uses it to write books like The heart beats on the left ’(a body metaphor that is undeniable!). He appears in the media and explains Keynesian economic alternatives. The German mainstream media - entirely on Schröder's line - make fun of the defenders of the welfare state, calling them traditionalists, dreamers, people who want to turn back the wheel of time. Wrong, says Lafontaine, Schröder is the one who is turning the wheel back - to the year 1850, to the time of the Industrial Revolution, when our social security systems did not yet exist. The media call the welfare state “old hat”. Well possible, but on a rainy day at the latest, you can appreciate an old hat.

Why is Menenius Agrippa's state body metaphor so completely wrong? Every organism is characterized by the fact that its individual organs are closely linked. They work in close coordination with one another. Man lives only because his organs act harmoniously and cooperatively; no organ lives at the expense of the other, no part of the body tries to rule over the other: a good example of a functioning participatory democracy, isn't it? Our elites (and certainly those in ancient Rome) are more like parasites - parasites on the body of the state and its economy. The fatter the ‘blackheads’, the emaciated the state organism. And a parasite doesn't mind if its host dies. A flea, for example, quickly leaps over to the next host organism. Something like this is called corporate globalization.

Germany has something to lose. Germany is at a crossroads.

* On 7/8 June will vote in Poland on joining the EU.

Source: ZNet Germany from June 9th, 2003. Original article: “Germany At The Crossroads: Too lazy, too old, too sick? No, too business-friendly. "