In a document released at the end of May, the American banking and
investment giant JP Morgan Chase calls for the overturning of the
bourgeois democratic constitutions established in a series of European
countries after the Second World War and the installation of
authoritarian regimes.
The 16-page document was produced by the
Europe Economic Research group of JP Morgan and titled “The Euro Area
Adjustment—About Half-Way There.” The document begins by noting that the
crisis in the euro zone has two dimensions.
First,
the paper argues, financial measures are necessary to ensure that major
investment houses such as JP Morgan can continue to reap huge profits
from their speculative activities in Europe. Second, the authors
maintain, it is necessary to impose “political reforms” aimed at
suppressing opposition to the massively unpopular austerity measures
being carried out at the behest of the banks.
The report expresses
satisfaction with the implementation of a number of financial
mechanisms by the European Union to secure banking interests. In this
respect, the study maintains, reform of the euro area is about halfway
there. The report does, however, call for more action by the European
Central Bank (ECB).
Since the eruption of the global financial
crisis in 2008, the ECB has made trillions of euros available to the
banks to enable them to wipe out their bad debts and commence a new
round of speculation. In the face of mounting pressure from the
financial markets, ECB chief Mario Draghi declared last summer that he
would do whatever was necessary to shore up the banks.
This,
however, is not sufficient as far as the analysts at JPMorgan are
concerned. They demand a “more dramatic response” to the crisis from the
ECB.
The harshest criticisms in the document, however, are
reserved for national governments that have been much too tardy in
implementing the type of authoritarian measures necessary to impose
austerity. The process of such “political reform,” the study notes, has
“hardly even begun.”
Towards the end of the document, the authors
explain what they mean by “political reform.” They write: “In the early
days of the crisis it was thought that these national legacy problems
were largely economic,” but “it has become apparent that there are
deep-seated political problems in the periphery, which, in our view,
need to change if EMU (the European Monetary Union) is to function in
the long run.”
The paper then details problems in the political
systems of the peripheral countries of the European Union—Greece, Spain,
Portugal and Italy—that have been at the center of the European debt
crisis.
The authors write: “The political systems in the periphery
were established in the aftermath of dictatorship, and were defined by
that experience. Constitutions tend to show a strong socialist
influence, reflecting the political strength that left-wing parties
gained after the defeat of fascism.
“Political systems around the
periphery typically display several of the following features: weak
executives; weak central states relative to regions; constitutional
protection of labour rights; consensus-building systems which foster
political clientalism; and the right to protest if unwelcome changes are
made to the political status quo. The shortcomings of this political
legacy have been revealed by the crisis. “ Whatever the historical
inaccuracies in their analysis, there can not be the slightest doubt
that the authors of the JPMorgan report are arguing for governments to
adopt dictatorial-type powers to complete the process of social
counterrevolution that is already well underway across Europe.
In
reality, there was nothing genuinely socialist about the constitutions
established across Europe in the postwar period. Such constitutions were
aimed at securing bourgeois rule under conditions where the capitalist
system and its political agents had been thoroughly compromised by the
crimes of Fascist and dictatorial regimes.
The constitutions of
European states, including those of Italy, Spain, Greece and Portugal,
were elaborated and implemented in collaboration with the country’s
respective Socialist and Communist parties, which played the key role in
demobilising the working class and permitting the bourgeoisie to
maintain its rule.
At the same time, however, Europe’s discredited
ruling classes were well aware that the Russian Revolution remained a
political beacon for many workers. They felt compelled to make a series
of concessions to the working class to prevent revolution—in the form of
precisely the social and constitutional protections, including the
right to protest, that JPMorgan would now like to see abolished.
To
some extent, the bank’s criticism of European governments for their
lack of authoritarianism rings hollow. Across Europe, governments have
repeatedly resorted in recent years to police state measures to suppress
opposition to their policies.
In France, Spain and Greece,
emergency decrees and the military have been used to break strikes. The
constitution adopted in Greece in 1975, following the fall of the
colonels’ dictatorship, has not prevented the Greek government from
sacking public workers en masse. And in a number of European countries,
ruling parties are encouraging the growth of neofascist parties such as
the Golden Dawn movement in Greece.
For JPMorgan, however, this is
not enough. In order to avoid social revolution in the coming period,
its analysts warn, it is necessary for capitalist governments across
Europe to move as quickly as possible to set up dictatorial forms of
rule.
At the end of the document, the authors put forward a series
of scenarios that they claim could result from the failure of European
governments to erect authoritarian systems. These variants include: “1)
the collapse of several reform-minded governments in the European south,
2) a collapse in support for the euro or the EU, 3) an outright
electoral victory for radical anti-European parties somewhere in the
region, or 4) the effective ungovernability of some Member States once
social costs (particularly unemployment) pass a particular level.”
This
is the unadulterated voice of finance capital speaking. It should be
recalled that JPMorgan is deeply implicated in the speculative
operations that have devastated the lives of hundreds of millions of
workers around the world. In March of this year, a US Senate committee
released a 300-page report documenting the criminal practices and fraud
carried out by JPMorgan, the largest bank in the US and the world’s
biggest dealer in derivatives. Despite the detailed revelations in the
report, no action will be taken against the bank’s CEO, Jamie Dimon, who
enjoys the personal confidence of the US president.
The same bank
now presumes to lecture governments. Seventy years after the assumption
of power by Hitler and the Nazis in Germany, with catastrophic
consequences for Europe and the world, JPMorgan is leading the call for
authoritarian measures to suppress the working class and wipe out its
social gains.
