From the International Report delivered to the CPGB-ML’s central committee on 3 December
There is a real threat that the euro is going to collapse as a currency. This is because everybody is trying to get rid of their euro holdings. The reason this is happening is that it has become clear that Greece is not going to avoid defaulting on its debt, with the general consensus being that its lenders are going to have to take a 50 percent ‘haircut’.
At the same time, Portugal’s debt has been reduced to junk status by credit rating agencies, and borrowing costs for Italy and Spain have soared above the affordability mark, with even German bonds suffering increased borrowing costs. Now France is under threat as it is likely to need to bail out its banks as a result of their losses on their Greek debts, etc.
Attempts to put together a firewall that will enable European countries to continue to borrow at affordable rates of interest are floundering, and the Germans are resisting attempts to have the European Central Bank step in to perform this service, because they make the largest contribution to this bank and don’t want to throw good money after bad and then find themselves in financial trouble.
There is some suggestion that Germany would be willing to be more accommodating if the European countries would agree to greater fiscal integration, which of course implies a surrender of sovereignty to the EU which in turn is very much dominated by Germany and France. They of course can be expected to use that control for their national benefit at the expense of other EU countries.
In the meantime, the elected leaders of Greece and Italy have both been forced to resign, to be replaced by unelected ‘technocrats’ with close links to Goldman Sachs (which in turn was intimately involved with the repackaging of subprime debts as high quality by camouflaging them in complex ‘derivatives’). The new head of the ECB is also a former Goldman Sachs man.
The UK and the US are said to be making contingency plans for the chaos that will certainly ensue if the euro does in fact collapse. More detail in this month’s issue of Proletarian.