Die Linke’s Congress last weekend was an important one. It is election year, with Federal polls due in the autumn. And it has been facing pressure over its position on Europe, with a minority challenging the party’s strong support for the Single Currency.
A six-year old fusion of eastern and western German radicals, Die Linke, or The Left, has been in the doldrums for some time. Initially highly successful at channelling dissent with the former red-green government, it has since struggled under right-wing Chancellor Merkel.
That might make sense on a superficial reading of Germany’s relative prosperity in a region reduced by recession, record unemployment and rising poverty.
But Germany’s overall success story hides many losers. If after years of restraint, manufacturing workers in the booming export sector are now starting to claw back some of the wealth they have created in higher wage claims, there are millions on poverty pay packets in the services sector, which was the focus of labour reforms under a former Social Democrat government in the early 2000s.
Inequality has risen to a rate not even seen in the east in the aftermath of the fall of the Berlin Wall, with the top 20% 149 times wealthier than the bottom 20%, a larger gap than anywhere else in Europe. Indeed, Germany now counts 58 dollar billionaires, a rather large number for the size and wealth of the nation (Britain, a third less wealthy as a nation, has 35), and an even more disproportionately large number of millionaires – just over a million of them – compared to the UK’s 465,000. Most Germans are not impressed. A poll by Stern magazine earlier this year found that three out of four Germans said large company bosses pay cheques were far too large. Fifty-eight percent said they believed legal limits should be imposed on what high ranking managers were paid.
There is also real unease among some sectors in society at Germany’s role in western overseas imperialist adventures like Afghanistan. Some 6,000 troops are now deployed internationally on spurious ‘humanitarian’ grounds, and disturbingly, since 2011, deployment of troops at home in certain circumstances was given the OK by the constitutional court. Meanwhile, in another echo of Hitler’s regime, the military-industrial nexus is again exceptionally powerful. The country is now the world’s third largest arms exporter sending weapons of death to NATO and increasingly nasty non-western regimes like Saudi Arabia.
This should represent fertile ground for Die Linke. Yet, if the opposition Social Democrats (SPD) and Greens have swung behind a resurgent global military role for Germany, both have veered left on domestic policies. The Greens want the top rate of tax to increase to 49% from the current 42%, and to introduce a 1.5% wealth tax on assets above a million euros. The SPD, with whom the Greens governed between 1998 and 2005, also wants that top rate tax rise. Furthermore, the SPD says, if elected it will introduce an 8.50 euros/hour minimum wage in the many sectors of the economy where there is no wage floor, and would increase spending, particularly on education. Dropping much of the modernizing zeal of its most prominent former leader and one time Chancellor, Gerhardt Schroder, the SPD’s general rhetoric is critical of capitalism.
At the congress last weekend, Die Linke did its best to outdo the Greens and SPD. It is to present to voters tax and other reforms that aim to radically redistribute wealth from the rich to the lower paid and from corporations to workers. It would also like to see the reinstatement of a lower retirement age, a reversal of regressive labour and welfare reforms, and bank nationalisations too.
With just three months to go to the elections, will this be enough to turn things round? Die Linke, or its one of its main and longer established constituent components, the eastern PDS, has never had a serious chance of national power, except in coalition. And that prospect looks as remote as ever.
From a peak of 12% of the vote in 2009, it is now down to 6-8% in opinion polls, putting it fourth after the Merkel’s CDU/CSU – in the lead by a long way – followed by the SPD and the Greens.
And since the last election the Left party has faced new competitors. First it was up against the a-political, internet-based Pirate Party, which, in part because of chaotic, deliberately scruffy image and in part for failing to come up with any serious policies, has now flopped. Today, the pro-market, Euro-skeptic Alternative for Germany (AfD), is potentially a much more serious challenger for the protest vote. Launched in April, it is polling around 3%, two points off the minimum needed to win seats in the Bundestag.
The AfG calls for an “orderly dissolution” of the euro, with a return to national currencies or to new, smaller and more homogenous currency blocks. On this platform it has been successfully galvanising popular opinion against Europe, with the help of hyped up media reporting of the cost to taxpayers of bail outs of Europe’s south.
Germany – Europe’s paymaster?
The reality is somewhat different. Although the loans have large implied liabilities, the country has actually only shelled out about 50 billion euros, less proportionately than other EU countries, and compared to a gross domestic product (GDP) of around 2.5 trillion euros. In fact, the crisis has cemented advantages to Europe’s biggest economy, at the expense of its neighbours, since the Euro was introduced in 1999.
Gains from the currency bloc are estimated to amount to around 100 billion euros a year, from cheaper priced exports due to a lower valued currency (compared to the Deutschemark) to a dramatic fall, since the financial meltdown of 2008, in interest paid on German debt, compared to the rocketing costs to the Italian and Spanish treasury of financing Italian and Spanish debt.
The Left party’s position on the Euro, since it was formed in 2007 by disgruntled SPD left-wingers and post-communist easterners, has been strongly supportive, even if today its idea of saving the single currency and the ongoing bank-sovereign debt crisis is different than other political parties.
In line with sister parties in France, Italy and Spain and reflecting in part the policies of trade unions affiliated to the European TUC, it wants to see an end to austerity policies, by deploying the European Central Bank as a lender to governments rather than to private banks – which only fuels speculation and their own profits – and increased public spending. It also calls for Germany to lead the way, through large wage hikes and generally reversing its beggar-thy-neighbour pay policies pursued since the early noughties. Finally, Die Linke believes there must be partial cancellation of rocketing public debt in Europe and state control over some financial institutions, although some of those who are struggling today would be left to go to the wall, while protecting individuals with relatively modest savings.
Yet, for a minority in the party, led by co-founder Oskar Lafontaine, a former German finance minister when the Single Currency was launched, this is not nearly radical enough. He’s harboured hopes that the Euro could have been used as a means to raise living standards and boost social gains across the board. But this May he concluded it had instead done the precise opposite. The Euro, Lafontaine argued, was ‘leading to disaster’. He stated on the party’s website: ‘The economic situation is worsening from month to month, and unemployment has reached a level that puts democratic structures ever more in doubt.’
Recognising that the Euro had been used by Germany, Europe’s austerity champion, to exercise hegemonic control over the Continent, he warned this would come back to haunt the nation. ‘The Germans have not yet realised that southern Europe, including France, will be forced by their current misery to fight back against German hegemony sooner or later.’
Die Linke, dominated by what mainstream media pundits call the more ‘pragmatic’ easterners, managed in Dresden last weekend to keep a lid on what would have been a divisive debate on the Euro.
Nevertheless, Lafontaine’s call have been echoed elsewhere in Europe’s radical, mostly communist-led Left. In Greece the KKE has always been opposed to the European project but in April there was a split from Syriza to found a new anti-Euro party. Former Syriza leader Alekos Alavanos advocates Greece returning to the drachma, arguing that the party’s goal of rejecting the terms of the EU-IMF bailout but remaining in the single currency was not credible.
In Italy, the communist Il Manifesto newspaper (now more liberal than Marxist) recently declared that Italians would have to chose between the salvation of the country or the Euro. This, as elsewhere reflects a shift in national mood, where leading figures on the Right like Silvio Berlusconi are questioning the value to Italy of Eurozone membership and upstart ‘populist’ Beppe Grillo is talking about launching a referendum campaign on the matter.
However, in the Eurozone’s third largest economy, Left euroskeptics appear to be leaning towards a Euro-Mediterranean currency that would see countries with more similar social and economic structures clubbing together, rather than a return to the Lira. In short, a bid, collectively to reshape Europe’s economic order.
This is a variation of a long held view, informed by the horrors of war and occupation, that any change in Europe must be agreed collectively, across borders, for fear that unilateral actions threatening integration would create more problems that it would solve.
This, however, does not imply that Lafontaine is a nationalist. Fourteen years ago when the currency was launched, the Left was dominant in Europe. There were even the discussions between the SPD, led by Lafontaine, and the French Socialist government, which under PM Lionel Jospin had implemented bold measures like the 35 hour week, of creating some kind of progressive European ‘Republic’.
But this quickly fizzled out. It was soon shown that despite their unprecedented political power, Social Democratic-led governments had no appetite to challenge the neo-liberal status quo, nor the Europe’s biggest deficit of all – the democratic deficit. And we see the results today.