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Holland, next euro-crisis victim?
This WSJ commentator predicts the Netherlands will cause the collapse of the eurozone.
http://www.marketwatch.com/story/sto...sj_share_tweet
LONDON (MarketWatch) — Which euro-zone country is most deeply in debt? The profligate Greeks, with their generous state-funded pensions? The Cypriots and their banks stuffed with dodgy Russian money? The recession-hit Spaniards or the boom-and-bust Irish?
None of the above. Actually, it is the sober, responsible Dutch.
Consumer debt in the Netherlands has hit 250% of available income, one of the highest levels in the world. In Spain, by comparison, it has never gone above 125%.
The Netherlands has turned into one of the most heavily indebted countries in the world. It has slumped into recession and shows very little sign of coming out of it. The euro crisis has been dragging on for three years now but so far has only infected the peripheral nations within the single currency. But the Netherlands is a core member of both the euro and the European Union. If it can’t survive in the euro zone, then the game really will be up.
Holland has always been one of the most prosperous and stable nations with Europe — and one of the most pro-EU. It was a founding member of the union, and it was among the most enthusiastic supporters of the launch of the single currency. With a rich, export-oriented economy, and plenty of successful multinational companies, it had much to gain, one would suppose, from the creation of the single economy that was meant to come into being once the euro was successfully launched.
But instead it has started to play out a depressingly familiar script. It is blowing up in exactly the same way that Ireland, Greece and Portugal did — except on a slightly longer fuse.
Low interest rates, set mainly to benefit the German economy, and lots of cheap capital led to a property boom and an explosion of debt. From the launch of the single currency to the peak of the market, Dutch house prices doubled, making it one of the most overheated markets in the world.
Now that has crashed spectacularly. House prices are falling as fast as they did in Florida when the American housing boom turned sour. Prices are now 16.6% lower than they were at the peak of the bubble in 2008. The National Association of Estate Agents predicts another 7% drop this year. Unless you bought your home back in the last century, it will now be worth less than you paid for it — and even worse, probably less than you borrowed on it as well.
As a result, the Dutch are now sinking under a tide of debt. At more than 250%, household debt is even higher than in Ireland and 2 ½ times the level in Greece. Already one bank was rescued by the government [two actually], and with house prices still collapsing there may well be more to come. The Dutch banks have 650 billion euros outstanding on real estate that is rapidly falling in value — and if there is one thing we know for sure about the financial markets it is that when the property markets collapse, the financial system is not far behind.
The credit-rating agencies — not usually the first organizations to catch up with events — have started to take notice. In February, Fitch cut the stable rating it had on the Netherlands’ debt. The country is still triple-A rated but only by the skin of its teeth. The agency pinned the blame on falling house prices, rising government debt and doubts about the stability of the banking system — the same toxic mix familiar from other crisis-hit euro-zone nations.
The economy has now sunk into recession.
Unemployment is rising and hitting two-decade highs. The jobless total has doubled in just two years, and in March alone it went from 7.7% to 8.1% — a faster rate of increase than even in Cyprus. The IMF predicts that the economy will shrink by 0.5% in 2013, but those projections have a nasty habit of being too optimistic.
The government is missing its deficit targets, despite imposing deep austerity measures as recently as last October. Just like other euro-zone countries, Holland now seems locked into a vicious cycle of rising unemployment and declining tax revenues, leading to yet more austerity — and even more cuts and unemployment. Once a country gets set on that track, it is very hard to get out of it again — and certainly not within the confines of the euro.
Up until now, the Netherlands has been Germany’s key ally in imposing austerity across the continent as the answer to the currency’s problems. But as the slump worsens, Dutch support for an endless diet of cuts and recession — and perhaps the euro itself — will start to evaporate.
The other collapses in the euro zone have been on the periphery of the currency. They have been marginal nations, and their problems could be presented as an accident, rather than as exposing systemic flaws in the way the currency was put together.
The Greeks spent too much money. The Irish allowed their property market to run out of control. The Italians always had too much debt in the first place. But there can’t be any excuses for the Netherlands: It obeyed all the rules.
It has always been clear that the euro crisis would reach its terminal phase when it reached the core. Many analysts assumed that would mean France. And yet, while France is hardly short of problems (unemployment is rising relentlessly, and the government is doing everything it can possibly think of to make the economy less competitive), it is still a wealthy country. Its debts may be high, but they have not yet spun out of control or started to threaten the stability of the banking system.
The Netherlands is starting to reach that point. It may take another year, perhaps two. But the slump is gathering in pace, and the financial system looks less stable by the day. In fact, Holland will be the core country that goes bust first — and that will be a crisis too far for the euro.
pew pew pew
A rather pessimistic, but overall accurate view on things I think. The solution is to either go forward and move to political unification or move backward and dissolve the Eurozone. Time is running out for the former scenario and the latter scenario would likely bring all kinds of political issues with it, such as nationalism/racism/fascism, that would undermine any grounds for a much needed working class unity on a continental scale.
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We have discussed this before, here.
At the time, most people were rather skeptical that the Dutch situation could be that bad.
Luís Henrique
While that's true, the skepticism (mine, at least) was directed towards reading something political in the Dutch situation. The Netherlands is still part of the 'stable core' insofar as the massive debt explosion and imploding housing bubble have yet to wreak their havoc on the 'real economy' (which'll happen, I don't doubt that). As of yet, we're mainly seeing rising unemployment and a massive slashing of the reproductive sphere (social security, subsidies, dismantling of the welfare state, etc.) so there's sort of a delay in terms of 'hitting people in the face' which allows for a discourse of "nothing to see here, everything's fine" to remain dominant.
What I mainly objected to in that thread is seeing Dutch politics (parliamentary or otherwise) as 'chaotic' and full of strife while we probably have one of the most unitary political castes in the West, to the point that its just different flavors of (would be) technocrats. Similarly, the dutch proletariat (though that largely consists of white collar workers in the FIRE and high-tech sectors supplemented by some blue collar workers mainly in the sphere of circulation) reacts (and has almost for decades) like a deer frozen in the headlights of the oncoming truck. I think the Netherlands might actually feel the heat of this mess sooner and harder than anyone (me included) expected but i'm skeptical to what degree that will translate to open social war.
What is most likely (going on intuition, no fancy analysis here or whatever) imo is that we will see an increase in tokenistic manifestations, actions and strikes from the main trade union and a 'radicalisation' (along the typical snoozefest workerist lines) of part of its base which the bureaucracy will struggle to control. This will go hand in hand with all the dead-end hot air coming from the Socialist Party and its activist cadres, ie. an increase in static manifestations against austerity on the Malieveld in The Hague, a harsher political tone in parliament, etc., etc.
Given that the unions don't represent a major part of the dutch proletariat and the fact that there are huge management and petit-bourgeois strata, who are being proletarianized through various measures and the effects of the crisis, it won't be unlikely that a typical 'indignant citizens' movement unaligned with the various leftist/socdem initiatives or unions will rear its head around a semi-social democrat, semi-chauvenist platform of "don't throw our grandmas out with the garbage, create more jobs, lower taxes, invest in startups, enact protectionist policies, tighten the borders and/or don't give financial aid to the 'garlic countries' (southern europe)" and the whole contradiction riddled blabla.
Just my 2 cents but I'd forecast that's the most likely stuff to happen in the next year or 2 or so.
"Of Man's first disobedience, and the fruit
Of that forbidden tree..."
- John Milton -
"The place of the worst barbarism is that modern forest that makes use of us, this forest of chimneys and bayonets, machines and weapons, of strange inanimate beasts that feed on human flesh"
- Amadeo Bordiga
I'm still at a loss how you believe the EU and Eurozone are a step forward, or indeed some kind of antidote to racism, nationalism and fascism.
"I want to say sweet, silly things." - V.I Lenin
The answer is kind of in the post you quoted, isn't it?
Is this resistance or a costume party?
Either way I think black with bandanas is a boring theme.
fka Creep
If we're being optimistic, I think there's something to be said for burying fascists under the sheer physical mass of immigrants that EU freedom-of-movement laws allow.
Let me rephrase then: how is the EU moving towards a political unification "going forward"? The democratic institutions of the EU are even less democratic than their national counterparts, realistically a further political consolidation of an EU state would mean less democracy and stronger control for the European big capital. Not to mention that all EU states aren't equal, so naturally this kind of consolidation would also favour the bourgeoisie in the more powerful EU countries. These competeing interests also makes the idea of an actual unified EU state seem very improbably.
And of course none of this is for the benfit of the european working class nor can I see how it would in anyway help european worker's unite in struggle. Quite the opposite in fact.
"I want to say sweet, silly things." - V.I Lenin
Why are we even discussing something as ridiculous as the notion that the eurozone (whether in its economical incarnation or through its political institutions) is anything else than a framework for the management and streamlining adjustment of continental capital, let alone trying to divine some kind of relation (apart from one of either indifference or antagonism) of it to communism?
Trying to look for signs of a 'political strategy' (zzzzz) or whatever the fuck within that framework makes about as much sense as doing so with the board of directors of unilever.
"Of Man's first disobedience, and the fruit
Of that forbidden tree..."
- John Milton -
"The place of the worst barbarism is that modern forest that makes use of us, this forest of chimneys and bayonets, machines and weapons, of strange inanimate beasts that feed on human flesh"
- Amadeo Bordiga
I was hoping you were talking about the French President. Sadly, it is the population a fairly successful "liberal" state that is going to feel the consequences instead of pantomime villains in the farcical European political scene.
We can only sort this eurozone problem out if we sort out the political scene by removing the ambition-fuelled careerists. They are the symbol of the decline of liberal democracy in the West. Perhaps their incompetence is a good thing for our cause, although I can't help but go back to your statistics on how the dutch are about to feel the full force of austerity.
Only good thing about this is that the PVV still look like numpties for claiming that the Netherlands shouldn't subsidise indebted countries with bailout funds.
And as for the question on the EU coming up again, its always been my firm belief that we should support the idea of the European Union since it is a political one that has as its origin two brutal wars. What we should not support is the rampant nationalist dick-waving in the European Council, the new definition of political impotence that is the European Parliament, and the willingness to create a new Washington DC by inviting lobbyists and corporate interest into a cesspool of corruption. Oh, and the Commission...just...no. It even sounds Orwellian.
Like most things, the EU is in need of revolution instead of destruction.
Prepare to lose your rights like we did here.
The portuguese people are very jelous of you guys. If someone says something bad about the people of the crisis countries, ask them if their salary is 400€.
Supporting a European Union and the European Union are two very different things. I would argue that the EU is indeed the expression of the political idea of the EU, it always was intended as a tool for the european big bussines. That doesn't mean we can fight for things within the framework of the EU, but understanding what it is is pretty important, lest one ends up buying into the propaganda.
"I want to say sweet, silly things." - V.I Lenin
Yes, the European Union is capitalist, but nation-states aren't? You prefer nation-states over an economically tied together continent. You fail to see that not only would a continent like that expand a revolution over an entire continent, for the economies are close together, but also that such a revolution would make the blow to international capital so much more destructive.
Of course, we need not uncritically support it, criticize it for what it is, a capitalist union, but then don't give the reactionary proposal of going back to the old ways, but of a new Europe. A socialist Europe. We, as communist, should work together Europe-wide. We should provide an alternative, a socialist union.
Our starting point shouldn't therefore be anti-Europe, but towards a democratic Europe, as a common political basis for common working class struggle across the continent. Divided along national lines we stand no change against global capital, but united on a continental scale, capital stands no chance against us.
Is this resistance or a costume party?
Either way I think black with bandanas is a boring theme.
fka Creep
Are you seriously supporting the EU?
You do know that in order for a country to remain in the EU they must obbey the troika? You should also know that the troika are the ones enforcing the austerity measures.
In order to stop the austerity measures a country must leave the EU.
Socialism in one continent?
if we believe that socialism is meant to occur in the most advanced capitalist country (or supranational state) then wouldn't the EU be the most logical place for that change to occur?
I'm in no way defending the EU in it's current form but i do think a "capitalist international" definitely has more potential than an isolated capitalist state to maintain a form of socialism post revolution.
That said the task of dismantling the supra-state apparatus is also going to present serious problems, but the effects of simultaneous revolutions in, say, Greece, Spain, Portugal and Netherlands could completely alter the way in which the EU frames debate (admittedly probably not in our favour) and could provide inspiration to workers in other countries to turn away from capitalism and use the existing means of co-operation that have previously been used for exploitation for liberation and progress
I'm not sure that any European country is close to any sort of true 'revolutionary' situation at the moment, but I do take your point that a situation in which Greece, Spain, Portugal, Italy, Holland etc. fell as one would have better medium-/longer-term prospects than a revolution in an isolated developing country, for example.
"political unification"? This is now absolutely impossible on political grounds, seeing as the global crisis of 2008 as well as the expanding liberal-EU-system crisis have given a major boost to the right wing of so many European countries (Golden Dawn in Greece the Third Largest Party after the Conservatives and Syriza. The rise of the new nationalist, reactionary Alternative fuer Deutschland Party. UKIP anyone?). Not only is the formation of a political EU impossible on public political grounds, the despised EU "bureaucracy" is real, with the EU insitutions virtually being a monopoly capitalist football court, which allows hardly any petty-bourgeois democratism as far as I can tell; and finally, maintenance of the European Economy within the capitalist framework is absolutely impossible, now already since at least a year. The damage has been done. The amount of work that has gone into destroying workers' living standards of the surplus-deficit countries of Europe, the amount of privatization of public assets in all EU countries( even Germany, with teh "public-private partnerships" scarily expanding) has molded a Europe which sets out to build an Export Continent.
This is, needless to say, a dead-end. The Bourgeoisie will continue on its path of austerity, and this will not improve anything. If you see the Oil and Fracking projects being driven on in the United States to be exported to its NATO partners, if you observe that the US State Department has succeeded since the Iraq War to turn the United States from producing 60% of its oil needs to a surplus, you see that the dynamics are gearing towards War. War is what the Bourgeoisie will bring us, in this decade most likely still.
Anyway, after that War the Ruling Class will have to seek to build a new global frame. Something tells me it will not be Capitalism. Capitalism doesn't work anymore, Capitalist production is at an end. It will take something new: the full commodification of everything, Slavery, to keep in power.
However, this is just speculation. Until now all we can do is try to fight within the radical left for the right theory: and that, this time around, will absolutely have to require the independence of the Proletarian Party and its militant organizations from any bourgeois unions or "pro-capitalist" parties. No "Peoples Front" this time.
"It is necessary for Communists to enter into contradiction with the consciousness of the masses. . . The problem with these Transitional programs and transitional demands, which don't enter into any contradiction with the consciousness of the masses, or try to trick the masses into entering into the class struggle, create soviets - [is that] it winds up as common-or-garden reformism or economism." - Mike Macnair, on the necessity of the Minimum and Maximum communist party Program.
"You're lucky. You have a faith. Even if it's only Karl Marx" - Richard Burton
Our starting point should not be that opposition to the EU is the same as being "anti-europe", unless we want to blind ourselves to how the EU actually works. It is a complete folly to believe that, for instance, Switzerland by not being in the EU is somehow economically independent from it's neighbouring countries. So don't give me that strawman about "oh so you prefer capitalist nation-states?". And yes, I fail to see how the Eurozone and inner market in any way shape or form aids working class internationalism. I don't suppose you think NAFTA helped bring american, Canadian and Mexican worker's together?
Indeed what you seem to forget is that the EU is, by design, an instution set up *only* to help european big bussines. And furthermore the idea that the EU could achieve a geunienely politically and economically united europe, even on the basis of purely unity between the ruling classes, seems very very unlikely. Why? Because the competing interests between different sectors of european ruling class can't do it, even if they wanted to. The bourgeoisie ceased to be a revolutionary force quite some time ago. I do not think the way to a united socialist europe is in any way tied to the EU project, I don't see how any sober look at how the EU actually functions as an institution can lead you to that conclusion.
Does this mean I think breaking away from the EU is necessarily a solution in itself? No I don't, because I don't have any illusions in the european bourgeoisie or their institutions. But if opposing the anti-democratic and capitalist core of the EU project would lead to it's break-up I won't shed any tears over that, indeed the way things are going it's not impossible that it might in time implode on it's own. Is it then our place to "critically" prop up the EU project from the left? Well, you have yet to give me a single convincing argument why we should. In any case, no matter the fate of the EU and the Eurozone, a socialist europe will have to built on their ruins.
"I want to say sweet, silly things." - V.I Lenin
Actually, on the basis of a class analysis, we should be roundly *indifferent* to the bourgeoisie's political schemes.
Whatever material (infrastructural) progress is seen resulting -- as a mere *byproduct* of the profit motive -- is only *incidental* to our purposes for revolution.
Why stop at Europe? What is the relevance, apart from deluding yourself into thinking you're "realistic" (protip: you're not), of taking Europe as a point of reference?
What? All 20 of us?
Europe is a democracy and you damn well know that. Trying to avoid using the 'c-word' and seeking 'mass-appeal' by smuggeling in socialism under the banner of 'democracy' won't make it arrive any sooner. If anything, the rhetoric of democracy has become just as hollow as anything else and bores the crap out of people (and rightfully so).
And what exactly does this have to do with the 'European union' (supposedly 'socialist' or otherwise)?
"Of Man's first disobedience, and the fruit
Of that forbidden tree..."
- John Milton -
"The place of the worst barbarism is that modern forest that makes use of us, this forest of chimneys and bayonets, machines and weapons, of strange inanimate beasts that feed on human flesh"
- Amadeo Bordiga
