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The Debt Crisis : From Europe to Where?
26 February 2013

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Via internet, CADTM is very pleased to make this book, “Debt crisis from Europe to Where ?” published by VAK in Mumbai (India), available to a wide public. It may be freely copied by other sites and reproduced for non profit uses provided that a link to the CADTM website is clearly visible ( Feel free to send your comments and information on the personal or collective use you make of this book to info at Your messages will be forwarded to the authors.

Authors: Damien Millet,Daniel Munevar, Eric Toussaint, Renaud Vivien

Editors: Sushovan Dhar, Sundara Babu Nagappan

Produced by Vikas Adhyayan Kendra
D-1, Shivdham, 62 Link Road
Malad West, Mumbai 400 064, INDIA
Ph: + 91 - 22 - 2882 2850 / 2889 8662
Fax: + 91 - 22 - 2889 8941
Email: vak at

Printed by Sudhir Joglekar for Omega Publications

Preface by Eric Toussaint

The editors have chosen an excellent title for this book “The Debt Crisis: From Europe to Where?” which incorporates a series of analyses written mainly in 2011 - 2012. The epicentre of the crisis that began in the United States in 2007 shifted to Europe in 2010 and it is necessary to ask the questions: where is this crisis leading to? How will the rest of the world be affected?

The combined effect of a crisis of overproduction in the real estate sector in the U.S., as well as the banking and financial crisis of great magnitude produced the economic and social disaster. The banking and financial crisis was itself caused by the deregulation of the financial sector launched by the successive governments in the U.S. and Europe starting from the widespread introduction of neo-liberal policies in the 1980s. This deregulation allowed large banks and major insurance companies to develop derivatives and structured products that are powerful weapons of mass destruction. These bombs began to explode in 2007 and the explosions are not yet over. The current crisis is clearly a major crisis of the capitalist system. The current governments benefit from it, since they can apply shock therapy. The policies they are developing will prolong and aggravate the crisis.

The European Union (EU) stands at the centre of the crisis because when it was formed with 27 countries, the interests of big capital had dominated their integration. In any case, large companies are not interested in reducing the differences among the various European economies: the gap between the legal minimum wage in Bulgaria and that in France is 12. This gap is 3 or 4 in the interiors of South Asia and the same goes for Latin America. Aided and abetted by European leaders, large private companies operating in the EU derive maximum benefits: no taxes for the flow of their goods and services and the possibility to exploit the huge differences in wages among workers within the single European market (500 million residents). To sum up, how European integration is accomplished determine the Centre/Periphery relations in Europe. This is great for the employers but at the same time it makes economically weaker countries vulnerable vis-à-vis the international crisis. Particularly, Greece, Ireland, Portugal, Spain, Italy, Latvia, Romania, Bulgaria, Cyprus and Hungary are affected by the EU’s menacing crisis and the list will extend in the months and years to come.

The history of the last two centuries has taught us that a debt crisis erupting in the economies of the capitalist Centre have sooner or later a negative impact on the economies of the Periphery, because the ebb and flow of capital caused by the Centre’s economies stir up the international economy. Since 2004, high prices of raw materials and low international interest rates combined with China’s impressive growth have protected the emerging markets from the most destructive effects of the banking and financial crisis of the countries of the Centre. The emerging economies have accumulated large foreign reserves that may play the role of shock absorbers in the case of capital outflow from the Periphery to the Centre. Countries like India and China are also partially protected by the fact that their banking system is not under the control of the Centre’s major international private banks. Still it would be wrong to assume that this time the disasters caused by large private companies in the countries of the Centre and also by the North American and European political leaders will have no consequence for the economies of the peripheries. Similarly, it is clear that the global capitalist system is also causing the climate and food crises gravely affecting the planet’s poorest people. We must therefore respond by breaking away with the system. To return to the European debt crisis - the focus of this book published by Vikas Adhyayan Kendra - there are several key lessons learned: - the need for a clear break with the capitalist system and the need to shift most of the economic activities to the domain of common goods; a deep collaboration of existing interests between the peoples of the planet’s North and South (Centre and the Periphery) that have been subjected to the dramatic consequences of the debt system and international institutions (such as the IMF and World Bank, who have specialised in the management of financial crises); the need to jointly oppose all the offensives of Capital against Labour and for that purpose, to build a powerful front of the oppressed men and women, a collective of the 99% against the 1% dominating the planet.

The Debt Crisis : From Europe to where?


1. Editors’ note

2. Prologue The CADTM: 20 years of struggle for the oppressed - Eric Toussaint

3. Introduction by Eric Toussaint

European Capitalism in Crisis

4. Greece: The very symbol of illegitimate debt - Eric Toussaint

5. Europe Gets Shock Therapy like Latin America in the 1980s and 1990s - Eric Toussaint interviewed by Carlos Alonso Bedoya

6. Greece, Ireland and Portugal: why agreements with the Troika are odious - Renaud Vivien & Eric Toussaint

7. Greece: The IMF and Lagarde get it wrong - Eric Toussaint & Damien Millet

8. All the loans accorded by the Troika are illegitimate - Eric Toussaint interviewed by Ana Benačić

9. In the eye of the storm: the debt crisis in the European Union - Eric Toussaint interviewed by the CADTM

10. Now approaching Spain, the bank hurricane continues along its path of destruction - Eric Toussaint

The Global Context

11. G20: The Symbol of a System Failure - Eric Toussaint

12. Barack Obama: The change that didn’t happened - Eric Toussaint & Daniel Munevar

Resistance & Alternatives

13. The International Context of the Global Outrage- Eric Toussaint

14. Seismic election results in Greece - Eric Toussaint

15. Do we need a public debt? - Damien Millet & Eric Toussaint

16. Our AAA : Audit, Action, Abolition - Damien Millet & Eric Toussaint

17. Eight key proposals for another Europe - Eric Toussaint

End Notes

The Debt Crisis : From Europe to Where?