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Down with the 21st century Troika!

Whoever coined the term ‘Troika’ for the combined staff of the International Monetary Fund, the European Central Bank and the European Commission has a grim sense of recent history.

During the 1930s, Troikas – commissions of three appointees – were instruments of Stalinist repression operating at every level of administration. They were introduced to circumvent the legal system with a means for quick execution or imprisonment following a conviction without trial.

Troikas were responsible for sentences of death or exile for more than 600,000 Soviet citizens. They had other punishments available too. They and other parts of the Stalinist machine were used to consign upwards of 20 million people to forced labour camps.

And forced labour camps using and consuming 15 million workers from close to 20 European countries were also the basis of the economy in Nazi Germany before and during World War Two.

What have all these terrible episodes of 20th century European history got to do with today, you may ask? Surely the EU-ECB-IMF version of the Troika has nothing like labour camps in mind?

Well, let’s give them the benefit of the doubt on that one. But the logic and the consequences of the actions they are pursuing in Greece (soon to be visited on other countries) – unless they are halted – are just as terrifying.

Greek workers are to be reduced to pauperism to deliver the terms of the €130 billion bail-out agreed in principle this week. For the Greek economy to approach anything like competitiveness, its workers would have to be driven to work for lower levels of pay than anywhere else. That is equally certain to stoke up the revolt.

Germany’s stronger economy, is already dependent on ultra-low rates of pay. Its low wage sector grew three times as fast as other employment in the five years to 2010. Pay in Germany, which has no nationwide minimum wage, can go well below one euro an hour, especially in the former East German region. Greek workers will have to labour for less.

Having done its work in Greece, the Troika must now turn its attention back to the rest of Europe where conditions are deteriorating fast. But their efforts won’t be enough to keep a lid on the volatility and growing social resistance around Europe.

Back in December, Pedro Nuno Santos, vice-president of the Socialist Party in Portugal’s parliament, transmitted something of the feeling of the protests in the streets against the new right-wing government’s plans to raise the working week to 42 hours and cut wages by 16% for the higher paid, and 8% for lower paid public workers.

"We have an atomic bomb that we can use in the face of the Germans and the French: this atomic bomb is simply that we won't pay," he said. "Debt is our only weapon and we must use it to impose better conditions, because recession itself is what is stopping us complying with the (Troika) accord. We should make the legs of the German bankers tremble," he said.

Santos’ call for southern European states to join forces to resist the austerity dictates of the stronger northern economies was quickly replaced by the 17 eurozone countries agreement on a stricter fiscal discipline which will loom large in the Troika’s armoury over the coming period.

The scale of today’s global crisis, prepared by decades of ballooning fantasy finance, overshadows the 1930s. We cannot begin to imagine the consequences of allowing capital to continue its reign. Strikes and street protests have to become part of a wider revolutionary struggle for power over capital and crony political state systems. We cannot defeat the modern Troika without that perspective. And to succeed, we need a global network of organisations that are committed to seeing this struggle through to the end.

Gerry Gold
Economics editor
22 February 2012

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