Elections were held recently in Greece and France amid worldwide sluggish performance in the stock market and lingering sovereign crises. All nations in the world are intricately connected closely. Under these circumstances struggles are being waged on the focus to put 'burdens' of neo-liberal policies; which side of the classes should owe the load? What do the European elections suggest us, we voters in Japan, who face controversies of higher consumption tax rate and reduced public workers?


EUROPEAN VOTERS WAGED OFFENSIVE TO REJECT SACRIFICES


The Asahi Shimbun newspaper reported on May 10 after the election results were finalized, as quoted by a correspondent, that Greek people 'had anticipated that they would be obliged to endure sacrifices' but 'I (the correspondent) probably miscalculated history and pride of the small country'. Japanese media were surprised to have seen the outcome of Greek elections, which is beyond the assumption of newspapers as they are accustomed to see an electoral trend in Japan where voters are passive and obedient.


Greek people fought a liberation war against the Nazi Germany and after WWII they struggled against the domestic dictatorship. But since the so-called Lehman Shock the nation has been trapped by 'an austerity policy package' imposed by EU (=European Union) led, in particular, by Germany. A proposed referendum on the EU measures was broken down, economic growth has been hindered by the tight financial policies and the number of the unemployed has surged to 1.1 million people, which represents 21.5% of the total workforce, which in turn constitutes 54% among the youth under 25 years old. The austerity plan was imposed to guarantee huge profits of the global financial institutions and defend the status quo of EU in which wealth is flown to Germany.


It was estimated, at the onset when the integrated currency Euro was employed, that less competitive, weaker nations will incur disadvantages due to deprivation of national currency and lack of a coordination scheme to cope with currency fluctuations. Furthermore, international financial enterprises make profits through speculative transactions, the vernacular rich transfer properties abroad, evading tax payment and the two big political parties, which have taken charge of governments by turns, have indulged in graft and corruption. The negative account was easily put on people. Naturally, they get indignant.


The Biggest Factor - Political Retreat


Japanese media try to insist that 'the world economy may go bankruptcy' because of Greek people. The Yomiuri threatened readers here by suggesting a possibility of 'military coup d'etat'. The Asahi preaches that 'a political model has collapsed in which social welfare is guaranteed by accumulated debts' under the title of 'Collapse of Debt-ridden Democracy'. It continues to say that 'Japan should learn from the failure'.


Let's look into these claims. Under the Keynesian economic policy financial debts are supposed as a prerequisite to be paid back later by increased tax revenue resulted from good economic performance, and thus the debts are to be cancelled. However, the economic slump has prolonged and a series of neo-liberal policies have reduced corporate taxes and promoted global reign of speculative behaviors of financial capitals, which, eventually, has led to sovereign crises. Reasons do not lie in the policies to guarantee welfare and support public workforce, but in a retreat of democratic politics capable to regulate profiteering of the capitals and redistribute wealth.


Greece's 'bankruptcy' can be prevented; a half of the nation's debts have been cancelled. Another half of the rest, which amounts approximately 6.5 trillion Yen, could be cancelled, too. Seventy percent of the balance is credited by the public institutions like EU and IMF. Bigger nations in the EU, which are responsible for having driven Greece to the monetary deadlock, could make a little bit of saving efforts.


Needed International Mechanism to Regulate Capital


A final goal cannot be reached by these measures. When the international capitalist circle gives up collecting money from Greece, it will find another, more vulnerable, weaker nations to be robbed of. An international framework is necessary to regulate competitions for exploitation and plunder of the capital and enhance a scheme to redistribute incomes in order to stop worldwide chain-reactions to destroy livelihood and labor.


Newly elected French President Hollande has made pledges, incorporating the said ideas:
(1) separation of investment bank business from ordinary banks
(2) introduction of tax to levy on financial transactions
(3) prohibition to use external tax havens
(4) surge of wealth tax up to maximum 75%


The administrations of Obama and Hatoyama lost the intended course and changed objectives, but in Europe we see gigantic waves going in favor of labor and social movements. The two elections in Greece and France show us a chance of counteroffensive.


May 29, 2012