Of Luigi Tedeschi
A new crisis is coming to Europe, but the crisis of 2008 has not yet been overcome. Recurring crises are the clear symptom of the incipient decadence of the global neoliberal model.
The shadow of recession has returned to the Italian and European economies. The effects of the slowdown in the global economy are clearly being felt. Italian GDP decreased by 0,1% in the third quarter 2018 compared to the previous one. It is expected for 2018 an Italian growth of 0,8%, decreasing compared to previous estimates, which predicted growth of 1.2%. This is the first setback in growth since 2014.
This trend reversal is to be attributed not so much to the decrease in domestic demand, especially as regards the marked decline in investments. There was also an increase in unemployment, which is al 10,6%, the European average is 8.1%.
Even if in Italy the economic situation highlights more worrying uncertainties, the European economy does not record better results, given that in France growth in the third quarter was 0,4% and in Germany there is even a decline in the 0,2%. The US is expected to grow in 2018 of the 3%, compared to 1.2% in Germany and 1.5% in France. The decline in investments is due to the uncertainty of the outlook for the 2019.
There is a fear of the advent of a new crisis in the immediate future. In reality, the expansionary phase that followed the crisis of 2008 it is running out. According to the OECD, the world economy will continue to grow for the next two years, but with a slower pace. In the USA the expansion phase lasted 10 years, the longest in American history. On the contrary, in the last two years the American economy has continued to grow at high rates beyond all expectations.
The recovery in Europe, however, began only ago 5 years. Furthermore, European growth occurred at a much slower pace than in the United States. What is certain is that a new recession would have dramatic effects in a Europe where the recovery manifested itself later and to a much smaller extent. In Europe the effects of the crisis 2008 they are still visible. In Italy, GDP per capita is lower than in the 1990s, while unemployment in Italy, France and Spain is still higher than pre-crisis levels.
Europe and the after-effects of a crisis that has never been overcome
It must therefore be concluded that the new oncoming recession would have a dramatic impact on countries where the crisis 2008 it cannot yet be said to have been overcome. In reality, the recovery in Europe coincided with the monetary expansion policy implemented by the ECB through QE, in order to cope with the deflationary wave resulting from the crisis. But the ECB's objectives have not been fully achieved, as average European inflation is today 1.5%, therefore lower than the set target of 2%. What is certain is that the scheduled end of the ECB's extraordinary monetary expansion policy set for 31/12/2018, occurring in a phase of economic recession, it could generate a new deflationary wave in Europe. An increase in interest rates would cause credit restrictions for businesses and families, as well as affecting the increase in the spread regarding public debt, particularly pernicious effect for Italy.
The monetary stimulus, while representing a valid tool to combat speculative maneuvers on sovereign debts, proved insufficient for the purposes of production recovery, given that the liquidity created by the ECB was only minimally transmitted to the production system. It should also be noted that the European authorities have not adopted any measures requiring banks to allocate ECB liquidity to investments in the productive economy. Indeed the EU, persevering in the policy of strict observance of budget constraints, it prevented any expansionary policy of the states, aimed at relaunching investments and domestic demand.
Growth has never coincided in Europe with the recovery of employment levels, That, with the exception of Germany, in other countries they are at levels lower than those before the crisis 2008. This situation of employment deficit is due to the structural deficiencies of the neoliberal system imposed in the West. To growth in fact, a corresponding increase in wages was not followed. Then add it, that the advent of technological progress and the increased competition for labor resulting from the migratory waves of recent years, have led to further wage compression in large sectors of the economy.
New crises and the decline of globalism
The horizon of a new crisis will exacerbate the contradictions already existing in an elitist EU, that is, dominated by the Franco-German axis which is opposed by other subordinate countries, moreover weakened by the crisis and the EU's austerity policy. Contradictions and contrasts that could become accentuated in the near future to the point of determining the implosion of Europe itself. To cope with a new recession believed to be imminent, in fact, expansionary policies should be launched to support domestic demand and investments.
In this context, the Italian expansionary maneuver, already rejected by the European Commission, appears to be quite consistent (even if lacking in terms of investments), with the necessary countercyclical measures that should be adopted to counteract the effects of a recessionary phase of the economy.
However, precisely the weakest countries, which would require more significant budgetary stimuli, given the budget constraints imposed by the European treaties, today they would have very little margin to implement counter-cyclical policies.
Current Europe will be able to achieve a similar reversal of systemic trend? Never. Because Europe has established monetary unification and imposed, in order to achieve convergence between very diversified economies, a policy of financial rigidity that has destroyed the economies of the states.
Europe, to counter a new recession that could prove devastating, it should deconstruct itself, that is, it should be refounded. But such a perspective, at least in the near future, seems unlikely.
In this context, given the increasingly accentuated social inequalities, the progressive disappearance of the middle classes in the process of mass proletarianization, advanced social disruption, long-latent social tensions in European society explode. The populist wave is spreading everywhere, and the yellow vest revolt in France is clear proof of this. This is a revolt that has not yet found adequate political representation, but it has deep roots in civil society, in the marginalized subaltern classes.
The dominant media culture describes it as the revolt of those excluded from the process of globalization and the consequent transformations of the economy and political institutions. Globalization therefore, it would be a phenomenon of immanent transformation, which would entail an inexorable selection among individuals and peoples based on their ability to adapt and their functionality with respect to a new global market society that, beyond state borders, it cancels out the identities and cultures of peoples. Economic globalization is a process of objectification of man in economic functionality, it does not require political consensus or democratic decision-making processes.
It was precisely globalization that generated the populist reaction. Indeed, at the basis of the widespread populist protest is the claim for the primacy of politics over an economy dominated by globalist oligarchies. The global neoliberal system does not envisage new horizons of progress and emancipation, if anything it generates new progressive crises, as symptoms of its incipient decline. In the era of globalization, progress is no longer identified with the emancipation of peoples, but with their economic regression, civil and political.
The populist revolt must not be considered a rearguard struggle of those excluded from Luddite-style modernity as defined by liberal ideological dogmatism. Instead, we are witnessing a reversal of the progressive horizon typical of liberal culture. They are in fact the dominant oligarchies of the liberal economy and culture, alien and opposed to the peoples to constitute the front of the conservative reaction of a now anti-historical and progressively disintegrating global order.
People want to return to being protagonists of their own destiny. He states, regarding the recent populist uprisings Alexander Dugin: “These are not abstract masses or an impersonal proletariat – they are the last living people who have risen up against the world might of the globalist offspring, the rebels (as Lasch believes) of culture and civilization, as well as on man as such, on people, his God. Today there is no longer left and right: only the people are against the elite. The “yellow vests” are creating a new political history, a new ideology. Macron is not a personal name, It's a Matrix label. To achieve freedom, he needs to be destroyed".
source: http://www.centroitalicum.com/