Academic journal article World Review of Political Economy

Where Will the Euro-Crisis Take Us To: Germany's Third Attempt?

Academic journal article World Review of Political Economy

Where Will the Euro-Crisis Take Us To: Germany's Third Attempt?

Article excerpt

Abstract: The volume of global financial transactions has grown faster than the global GDP since 1990. Imperialism leads to ever deeper crises. The financial, banking, and Euro-crisis is a crisis of state monopoly capitalism. Lower wages and deeper social cuts have been the base for higher accumulation in the FRG. German imperialism as the main power within the EU uses the EU and the Euro-crisis as a vehicle to become a world power again.

Key words: crisis development; global financial transactions; Euro; crisis of state monopoly capitalism; German reunification; German imperialism reconstructed; Germany main power in EU; US imperialism; division of the world

1918 and 1945 mark respectively the endpoints of Germany's two attempts to gain world hegemony. However, in 2012 Germany without war seems to have more power in Europe than ever before. Economically it has by far overcome France and the UK. All European countries managing their sovereign debt depend on Germany's approval. It can dictate conditions of loans; it can interfere in the budgetary sovereignty. National independence was sacrificed for the Euro and the European Union. But who is commanding? Who sets the rules for economic and then social and political development?

Not only the Greek, Spanish and Portuguese people, who suffer particularly from the consequences of Germany's dominance, ask what this will lead to, but also increasingly more Germans ask for whose sake and to what extent this nation reproduces again the image of the "ugly German" and re-awakens all the reminiscences of German barbaric fascism. And German trade unionists wonder whether the example given in Greece will finally be applied in Germany itself with deep cuts in social welfare, while also in undermining trade unions and finally democracy itself.

In this article, we will first survey the development of crisis after the so-called reunification of Germany in 1990. Then we discuss the options Germany has to escape from the crisis reflecting its conditions after World War II.

Development of the Crisis from 1991 to 2008

1991: The end of the USSR had become stylized as "the end of history" by the bourgeois media. It was intended to show the "market economy" as a "natural system" to which history would have led inevitably. However, by 1998 the hope of everlasting boom had already come to an end. The victory of counter-revolution in the former Soviet republics meant a decrease of production per capita of 50 percent. Mass poverty grew; new Russian stock companies crashed. Capitalist financial systems verged on crash caused by the collapse of the Long Term Capital Management (LCTM) Fund,1 which had bet with high-risk financial constructions (derivatives, futures) on the boom in Russia. The collapse of the world financial system was avoided by a speedy joint intervention of big private and state banks. The money capital looking for investment then turned to the high-tech industry, creating extremely high share prices through sudden and vast demand. These collapsed from March 2000 onwards because of a lack of sufficient produced material values as soon as the cyclical boom was reversed. During the stock crisis, German Allianz-Group, one of the biggest insurance companies worldwide, lost 90 percent of its share value. To avoid permanent stagnation of the capitalist world a "policy of cheap money"-very low interest rates-was introduced. The US led the way in pumping billions of dollars for armaments into the economy, under the pretext of saving the world from terrorism, hoping to gain control of its debt eventually and also by monopolizing the oil reserves in controlling the Mideast militarily. Billions of profits made by the multinational companies, benefitting worldwide by the politics of war and the cyclical recovery and boom after 2002, increasingly were not invested in new production facilities. Instead, searching for maximum profitability, this money capital was sent back into the "financial markets," creating a worldwide boom for high-risk financial instruments. …

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