East and Central European Social Forum in Wroclaw

4 April by Pierre Gottiniaux

Europe is about to implode. This was the first point made at the East and Central European Social Forum which was held in Wroclaw from 11th to 13th March 2016. Since the banking crisis broke out in 2008, rapidly becoming a worldwide crisis of sovereign debt Sovereign debt Government debts or debts guaranteed by the government. , things in seem to be going from bad to worse for Europe. Eastern and Central European countries have been particularly badly hit by the way that the crisis has been managed by the European Union and their own governments, imposing a web of antisocial measures with no regard for their populations. The imperial wars drag on in Ukraine and Syria with their waves of refugees, like cluster bombs that the US, Russian, EU and Turkish governments and their cronies fire at each other while populations suffer the consequences; all this in the name of so-called geo-strategic interests, a subtle combination of political ideology and the desire to seize control of natural resources and the routes required to transport them. Meanwhile, the European Union with its 500 million inhabitants seems incapable of collectively organizing the reception of one million refugees, and parties of the far right are winning support throughout all this and imposing their views. Given this context, the very possibility of a Brexit is already seen by some as the end of the European Union. |1|

One foot in the past…

Between the 1950s and the 1980s, “real socialism” brought rapid industrialization to many East European countries, along with full employment (for men!) , improved lifestyle, better education, health cover and more. On the downside was a heavy price to pay: bureaucracy with corruption at the top and an economic system which proved far from efficient. Then there was Soviet interventionism, sending its tanks to places like Budapest, Prague, Gdansk and Poznań. Even though movements like Solidarnosc did emerge and accomplish great things in terms of raising workers’ awareness and creating alternatives, at the beginning of the 1980s the outcome was hardly glowing. Then came the “transition”, when the State model, characterized by bureaucratic public ownership, shifted to a liberal capitalist model. Privatized companies, opened-up markets and deregulation brought joy, happiness and prosperity, some claimed. But what was the price to be paid? It was the acceptance of a model based on indebtedness and exploitation of people and nature.

Not surprisingly, the honeymoon did not last. In Slovenia in the 1980s, one in two workers worked in industry, and there were fewer than10 000 unemployed. Today there are 200 000 in a population of 2 million inhabitants, with one in four people close to the breadline, while public debt continues to increase relentlessly. It has gone from 5 billion euros in 2005 to 45 billion today… thanks to the euro. In Poland, which underwent the shock therapy mainly from 1989 to 1991, the proportion of the population living below the minimum threshold necessary to participate in society |2| has gone from 15% before 1989 to 37% in 1996 and over 40% today. Two million people have lost their jobs, salaries have fallen by an average of 25% - and by 50% for farmers – and the country’s production has plummeted by 38%.

Naturally, all this comes with the most flagrant social injustice. To start with, the privatization of means of production and housing was by no means transparent. It was not carried out under the auspices of independent institutions, citizens and trade unions. Although privatization mainly benefited the most privileged class locally, many companies were bought up for a fraction of their true value by foreign companies, often from Western Europe, but also from the United States and Japan. In East Germany, the federal government went as far as paying foreign investors who agreed not to reduce the workforce when they bought over East German companies! In 1989, the assets of the German Democratic Republic were estimated at 600 billion deutschemarks. That was the amount they should have got from selling them. But in the end, once all the assets had been sold off at bargain prices, the result of the operation for the German government was a debt of 260 billion deutschemarks. Not long after the shift to capitalism, there were waves of mass redundancies, despite the buyers’ promises. As for housing, homes were sold off in a similar way, to the detriment of the people living in them. Tens of thousands of families were simply evicted from homes they had occupied for years, without any alternative housing proposed.

The application of the capitalist “remedy” for East and Central European economies has resulted in bringing those economies to their knees. The West, in the spirit of collaboration we know so well, invested over 120 billion euros in the economies of the former Eastern Bloc, ostensibly to aid and support their reconstruction and development. In reality, it was much more a question of helping oneself, to maintain privileges which, in a capitalist system, can only come from exploiting the periphery. With the South subjected to maximum pressure, the transition of East European economies was just what was needed. Debts were soon accumulated and the means to repay them disappeared in the pockets of the predator classes. Insolvency was just around the corner. Then the IMF IMF
International Monetary Fund
Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.

turned up with its loans conditioned upon the application of structural adjustment Structural Adjustment Economic policies imposed by the IMF in exchange of new loans or the rescheduling of old loans.

Structural Adjustments policies were enforced in the early 1980 to qualify countries for new loans or for debt rescheduling by the IMF and the World Bank. The requested kind of adjustment aims at ensuring that the country can again service its external debt. Structural adjustment usually combines the following elements : devaluation of the national currency (in order to bring down the prices of exported goods and attract strong currencies), rise in interest rates (in order to attract international capital), reduction of public expenditure (’streamlining’ of public services staff, reduction of budgets devoted to education and the health sector, etc.), massive privatisations, reduction of public subsidies to some companies or products, freezing of salaries (to avoid inflation as a consequence of deflation). These SAPs have not only substantially contributed to higher and higher levels of indebtedness in the affected countries ; they have simultaneously led to higher prices (because of a high VAT rate and of the free market prices) and to a dramatic fall in the income of local populations (as a consequence of rising unemployment and of the dismantling of public services, among other factors).

IMF : http://www.worldbank.org/
programmes. For those who may not be familiar with the system, this means redundancies, reduced salaries, increased VAT, selling public assets, pension cuts and so forth… with ever more hardship and inequality.

...and one foot in the struggle, very much in the present!

Once we understand what is going on – and the same applies to all the countries of the former Eastern Bloc and the Balkans— what can we do? It was to talk about this very matter that we gathered on that weekend in Wroclaw, with about a hundred activists from Hungary, Bosnia-Herzegovina, Ukraine, Serbia, Slovakia, Croatia, Montenegro, Slovenia, Romania, the Czech Republic, Greece, Bulgaria, Poland, Austria, Russia, Belorussia, as well as Tunisia, Cameroon, Germany, Belgium, China, the United States, Switzerland, Palestine, Colombia (I hope I have not forgotten any...), representing a broad panorama of regional situations and ongoing struggles. And there are many struggles. Yet very quickly, another problem becomes clear: at first glance, the state of leftwing movements in Eastern Europe, by which I mean organized progressive movements fighting for a fairer, more egalitarian society – leaves a lot to be desired. The governments in power in Hungary, Poland and Croatia (not to mention Bosnia!) make the picture even grimmer.

Greece is a focal point of the overall situation in Europe. The financial crisis revealed the chasm that exists between Northern and Southern Europe, and now the refugee crisis reveals the chasm between the East and the West. Greece is a concentration of all these crises and is paying the price of the European Union’s inability to come up with any proper solutions. Today, resistance is mounting among the people around Europe, solidarity with migrants is being organized by citizens locally and solutions to the Greek crisis are emerging in the form of self-organized health centres and social centres. We are all duty-bound to give them our active support and solidarity.

In Poland the resistance movement against evictions and, more broadly, against mortgage Mortgage A loan made against property collateral. There are two sorts of mortgages:
1) the most common form where the property that the loan is used to purchase is used as the collateral;
2) a broader use of property to guarantee any loan: it is sufficient that the borrower possesses and engages the property as collateral.
debts that are illegitimate and illegal on several counts, |3| is gaining strength and managing to win some battles while at the same time bringing this emblematic topic to the forefront. In Hungary activists are succeeding in drawing in more and more people to take part in meetings and citizens’ actions. They have created a movement which was able to influence local elections, and this is just the beginning.

The year 2011 saw the start of the Arab uprisings in Tunisia and Egypt, as well as the emergence of the “Indignados” in Spain and “Occupy Wall Street” in the United States. In 2012 we saw enormous demonstrations in Slovenia. In 2013, all eyes were on Turkey and Brazil. In 2014, there were popular uprisings in Bosnia, where students and workers joined forces, voicing the same demands and creating “Plenums” (huge popular assemblies). As for the political arena, there seem to be clear signs of change in the air, with the rise of Syriza in Greece, Podemos in Spain, the IRA in Ireland, as well as the emergence of Corbyn in the United Kingdom and Sanders in the United States. All these promising developments call into question the way government institutions are run and reflect the material possibilities of a social revolution.

Those taking part in the Social Forum collectively reasserted the importance of an anti-capitalist struggle and unanimously called for the dissolution of NATO NATO
North Atlantic Treaty Organization
NATO ensures US military protection for the Europeans in case of aggression, but above all it gives the USA supremacy over the Western Bloc. Western European countries agreed to place their armed forces within a defence system under US command, and thus recognize the preponderance of the USA. NATO was founded in 1949 in Washington, but became less prominent after the end of the Cold War. In 2002, it had 19 members: Belgium, Canada, Denmark, France, Iceland, Italy, Luxembourg, the Netherlands, Norway, Portugal, the UK, the USA, to which were added Greece and Turkey in 1952, the Federal Republic of Germany in 1955 (replaced by Unified Germany in 1990), Spain in 1982, Hungary, Poland and the Czech Republic in 1999.
and an end to militarization. The crisis of neoliberal policies has triggered the resurgence of far right political forces and fascist-like ideologies. Capitalism prefers fascism to the power of the people. The participants have therefore decided to organize a meeting on the issue of refugees in Southern Europe, in either Greece or Italy, this year; to hold the next East and Central European Social Forum in Spring 2017 in either Bulgaria or Hungary; to broaden and reinforce cooperation between movements in these countries and in North Africa and Latin America as well as with social movements in China.

Another world is not only possible but necessary, and it is on its way.


|1| Wolfgang Munchau, Europe enters the age of disintegration, Financial Times, 29 February 2016 (accessible at: http://gulfnews.com/opinion/thinker)

|2| This is according to the main Polish trade union, “August 89”. Their minimum threshold required to participate in society includes access to decent housing, enough money for food and clothing, access to one cultural event per month, amongst other things.

|3| See http://cadtm.org/Alerte-au-franc-suisse-pour-les and http://cadtm.org/Le-scandale-du-credit-en-franc (in French only).

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