poverty and pandemic for everywhere else

European economy collapses as EU bails out the super-rich
Anthony Torres, Alex Lantier, WSWS, Aug 3 2020

Eurostat economic figures for the second quarter of 2020 show that Europe saw its deepest and most sudden economic collapse in history. Already before the COVID-19 pandemic, Europe was sinking into recession. In Q4 2019, Germany was stagnant, while France (-0.1%) and Italy (-0.4%) were falling. The collapse in business confidence due to the pandemic and the effects of lock-down measures have now triggered an unprecedented economic disintegration. Workers, the self-employed and small businesses are seeing a historic collapse in living standards. Eurostat indicated on Jul 31 that the GDP fell by 12.1% in the euro zone and 11.9% in the EU. In the first quarter, the contraction was 3.6% and 3.2%, respectively. In Germany, Europe’s leading economic power, GDP fell by 10.1%; the contraction from Apr-Jul 2020 was 10.7% in Austria and 12.2% in Belgium. Italy, which was severely hit by the pandemic, saw its economy fall 12.4%. Jack Allen-Reynolds of Capital Economics said:

Italian GDP has in fact fallen to its level from the beginning of the 1990s.

Elsewhere, the collapse was even steeper. France, Portugal and Spain saw falls of 13.8%, 14.1% and 18.5% respectively. According to currently available projections, the British economy likely contracted approximately 15% in the second quarter. If European economic activity remains at similar levels for the rest of 2020, Europe will see an economic crash more severe than any year in the Great Depression of the 1930s. Leading European corporations have suffered record losses in virtually every branch of industry and are now dependent on multi-billion-euro, state-funded bailouts. Among Europe’s major automakers, Volkswagen reported having lost €1.4b as its revenues collapsed by 23%, while the Renault-Nissan alliance suffered a devastating €7.3b loss. European aerospace firm Airbus saw a net loss of €1.9b. Major European oil firms were devastated by the collapse of oil prices driven by the halt in travel and industrial activity during the lock-downs. Total and Royal Dutch Shell reported net losses of €7b and $18.1b respectively. The net profits of French luxury conglomerate Hermès collapsed by 55% in the first half of the year. Major airlines also face disaster. Air France-KLM published its profit report on Thursday, reporting an 83% collapse in its overall revenues. Lufthansa, for its part, had already reported a €2.1b loss in the first trimester. IAG Group, which owns British Airways, as well as Aer Lingus and Iberia, reported a net loss of €4.2b in the first half of the year. Millions of workers have no longer been employed during the pandemic, and companies relied massively on state funding to pay their part-time wages. As of last month, 9.3m workers depended on such programs in Britain, 4.5m in France (down from 8.8m in April), 6.9m in Germany, and 3.7m in Spain. Italy, for its part, spent approximately €5b monthly on such part-time work arrangements.

An explosive class confrontation is brewing between the working class and the financial aristocracy in Europe and internationally. Having advocated a politically criminal policy of “herd immunity” on COVID-19, calling to end lock-downs and let workers catch the deadly virus to try to acquire immunity, the ruling elite is now proceeding with as much contempt for workers’ jobs as for their health and lives. While grabbing trillions of euros in public funds for the banks and corporations, they are moving to slash wages and jobs. While the ECB has agreed to a €1.25t bailout of European banks, the EU has agreed to a €750b bailout package for European states and corporations. These vast sums of public money are being plunged into stocks and the financial markets to bail out the super-rich. However, state authorities and the trade union bureaucracies are not demanding that billionaire investors and major corporations that receive these massive sums in state aid give any guarantees that they will not sack workers or cut their pay. Instead, dozens of bailed-out corporations are announcing mass layoffs, while governments across Europe and worldwide move to slash social spending and living standards. Already in Britain, plans have gone into effect to cut furlough programs by October, and payments in Spain are to be cut from 70% to 35% of workers’ wages by the fall. Yesterday, the IG Metall union announced that it expected 300k jobs to be destroyed in Germany. This social onslaught is proceeding with the complicity of the European trade unions, which are actively helping to design these policies with state officials and corporate management. The German and French unions, in fact, signed a joint statement hailing the EU bailout designed by Merkel and Macron.

The ruling elite is pursuing the most parasitic, selfish and reckless policy since the French feudal aristocracy refused to pay any taxes to resolve the fiscal crisis before the 1789 revolution. What is being prepared is a new, international eruption of the class struggle outside the corrupt framework of the unions. The most explosive situation is emerging in Pindostan, where support payments for workers are being suspended this month, threatening tens of millions with hunger and eviction. In Europe, the EU Commission has estimated that unemployment will reach 9.5% in the euro zone, with southern European countries the hardest-hit. They foresee unemployment rising to over 20% in Greece and Spain, 11.8% in Italy, and 10.1% in France. These horrific figures mean the loss of millions of jobs and the bankruptcy of thousands of small businesses, in order to bail out a corrupt financial elite that is plundering massive amounts of public money. It must be added, however, that these estimates are likely over-optimistic. They depend on employers agreeing to rehire tens of millions of workers currently paid by the state, due to a quick recovery in economic output. Thus, ING economist Bert Colijn told Le Monde:

This recession is like no other. We have never seen such figures, such a dizzying collapse linked to the pandemic and the lock-down, which will be followed inevitably by a rapid upswing which we will see in the statistics for the third quarter.

Such a scenario seems increasingly unlikely in the longer term, however. The ending of lock-downs has led to a collapse of social distancing measures and now a rapid resurgence of the virus across Europe. The number of daily new cases has risen to 1k in France and soon in Germany, over 600 in Belgium, and 3k in Spain. Thus, since late June, when the daily number of new cases was at its lowest, just after the lock-down, this number has gone up by a factor of two in France and Germany, 7 in Belgium, and 10 in Spain. While EU states insist they will not impose further lock-downs or only impose regional lock-downs, a policy that in fact accelerates the spread of the disease, their dithering may ultimately leave them no choice but to take drastic measures if the virus explodes out of control. Given the failure of EU governments to implement proper test-and-trace facilities and boost health-care spending, such a scenario, entailing a new, drastic contraction in economic activity, is a growing possibility. Already, the Spanish government reimposed a “voluntary” lock-down in Barcelona, affecting over 4m people in an economically vital region of Spain. Workers cannot stop the plundering of society by the financial aristocracy through nationally-oriented protests organized by the trade unions, which are at the same time negotiating austerity with EU banks and governments. As the pandemic exposes the bankruptcy of the capitalist system, it is essential for workers across Europe to take up a political struggle for state power against the EU. Their best allies are workers around the world fighting against austerity and reactionary back-to-work orders. The trillions of euros spent to bail out the wealthy must go to fighting COVID-19, safeguarding the salaries of workers and the self-employed, while major corporations relying on public bail-out funds are nationalized across Europe and beyond, to be run under workers control as public utilities. This is essential to ensure the health and safety of workers despite the horrific impact of the COVID-19 pandemic and the resulting blow to the economy.

COVID-19 “state of disaster” imposed across Australian state of Victoria
Patrick O’Connor, WSWS, Aug 3 2020

The state Labor Party government in Victoria announced yesterday that in response to spiralling coronavirus infections, it was imposing a “state of disaster” for at least six weeks across the state, including a curfew between 8 pm and 5 am for Melbourne, Victoria’s capital. Sweeping “Stage 4” measures in Melbourne include a 5 km limit on people’s movements, additional restrictions on leaving one’s residence, a shift to online learning for school students, restrictions on access to kindergartens and child-care centres, a ban on weddings and maximum participation of five people in religious services, and a ban on all sporting and recreational activities. Restaurants and pubs are takeaway only, and some other services have been restricted, with food courts, beauty salons, and saunas among the venues closed. Further restrictions were due to be announced today, including the possible closure of some workplaces and new restrictions on selected industries. Victoria’s Chief Health Officer Brett Sutton characterised the measures as “shock and awe.” Regional Victoria has been placed under the somewhat less restrictive “Stage 3,” which does not involve a curfew or travel limits, but restricts the permissible reasons for leaving residences. Throughout the state, wearing masks or face coverings in public is mandatory.

The unprecedented measures imposed represent an indictment of the federal Liberal-National government of Prime Minister Scott Morrison and the Victorian Labor government of Premier Daniel Andrews. The Australian ruling class failed to take the necessary preventive measures from the beginning of the pandemic, did not invest the public health resources required for mass testing and contact tracing, and throughout the emergency prioritised the demands of business over the safety of the population. In April, Morrison and every state premier, Labor and Liberal, rejected epidemiological advice on how coronavirus infections could be eliminated. They instead insisted that a safe level of infection could be managed, and in May began to lift the limited restrictions that had been put in place. The outcome has been a public health disaster. Yesterday Andrews effectively acknowledged that authorities had lost control over coronavirus community transmission. On Sunday, the state recorded its second-highest daily total of 671 new cases, together with seven deaths, taking Victoria’s COVID-19 death toll to 153. Today another 429 cases were reported. In neighbouring New South Wales, infections are much lower but appear to trending upward. Today 13 new infections were reported, and Premier Gladys Berejiklian called for residents to be on “extra high alert.”

There are 760 active COVID-19 cases in Victoria that Andrews described as “mystery” infections. Health authorities are investigating the cases, but still have no idea where and how people caught the virus. An unknown number of other cases remain undetected. Only around 20k to 35k daily tests have been done in Victoria over the past two months, though the state has a population of 6.4m. At no point in the pandemic have preparations been made to test every resident of Melbourne, as has been done in other cities internationally, for example in Wuhan, China and Danang, Vietnam. Medical scientists have demanded greater transparency with testing and infection data in Victoria. University of Melbourne epidemiologist John Mathews told the Age:

The first question is what data do the government actually have? Because they haven’t really told us.

Many tests are being sent interstate due to inadequate infrastructure in Victoria. Mathews added that he believed delays in processing tests are a significant factor in the coronavirus spread. Mary-Louise McLaws, professor of epidemiology at the University of New South Wales and adviser to the World Health Organisation, called for public investment in screening clinics and laboratories, including hiring more trained staff, so that people with COVID-19 symptoms did not have to wait days for test results. A “state of disaster” has been declared only once before, at the beginning of this year during the bushfire crisis. That only applied, however, for several days, and to affected parts of regional Victoria. The latest declaration gives the government and the police powers far beyond those of the existing “state of emergency,” though that remains in place. Under the Emergency Management Act, in a “state of disaster” the government can suspend any act of parliament or regulation deemed to “inhibit response to or recovery from the disaster” and issue directions that prevail over any legislation or law. All government agencies are subject to directives from the emergency services minister. Police and emergency services personnel have the authority to order evacuations and seize property. No explanation was provided for the need for the virtually unlimited powers handed to the police and other authorised officers. Police Minister Lisa Neville yesterday declared that police would prohibit all protests.

The state Labor government, like its counterparts throughout Australia, has sought to avoid placing any restrictions on the activities of corporations amid the pandemic. This is despite the fact that 80% of all coronavirus infections in Melbourne have occurred within workplaces. Low-wage and highly-casualised industries are among the worst affected. This includes the aged care sector, the meatworks industry and warehouses, where workers have been kept on the job by governments with the assistance of the trade unions. The working class is beginning to take action in response. Around 45 meat workers at the JBS abattoir in Brooklyn, a western suburb of Melbourne, organised a stopwork meeting last Tuesday to discuss safety provisions in the plant. The following day, 35 workers at the Spotless commercial laundry in South Dandenong, another suburb, refused to turn up for their shifts, following an outbreak of COVID-19 at the facility. Earlier today, about 240 warehouse workers at the Woolworths Liquor Distribution Centre in Laverton, western Melbourne, took strike action. A worker tested positive on Friday, but the grocery corporate giant refused to close the warehouse and instead attempted to maintain normal operations. Such initiatives need to be taken forward by other sections of workers, with the organisation of rank-and-file action and safety committees, completely independent of the pro-corporate unions, now a life and death question. These committees, democratically controlled by workers themselves should formulate, oversee and enforce safety and workplace standards. Where conditions are violated, there must be a stoppage of work.

Scottish government prepares to reopen schools as new COVID-19 spikes emerge
Steve James, WSWS, Aug 3 2020

The Scottish government led by Scottish National Party (SNP) leader and First Minister Nicola Sturgeon announced its intention to reopen all schools in Scotland on Aug 11. The decision, announced by Sturgeon on Jul 30, once again underscores the point that, presentational differences notwithstanding, SNP policy on the coronavirus pandemic is indistinguishable from that of Boris Johnson’s hated Conservative government in Westminster. From Aug 11, primary and secondary schools will begin to reopen. All schools are expected to be fully operational by Aug 18. Only the most minimal measures will be taken to prevent coronavirus infection rapidly taking hold in schools, endangering the health and lives of large numbers of children, and placing their families, particularly elderly and vulnerable relatives, in danger. Government advice does not require physical distancing between children and young people of any age, although adults are expected to maintain 2m distancing. PPE will not be required unless specified by a risk assessment. Pupils will not be required to wear face masks, nor will they be required to physically distance on school buses. “Enhanced hygiene” measures are required, meaning only more time for hand washing and sanitiser use. Windows and doors are to be left open. Sturgeon sanctimoniously claimed she was acting on the “moral and educational imperative that we get children back to school as soon as is safely possible.” Her deputy, Education Secretary John Swinney, claimed he was responding to concerns from teachers. He said:

That’s why we’ve taken such care to gather the evidence, we established a specific expert group to look at all of these questions and to provide us with clinical advice.

A measure of the Scottish government’s “care to gather evidence” was the rebuke issued to Sturgeon by director of the UK’s Office for Statistical Regulation, Ed Humpherson. Writing to the Scottish government’s chief statistician, Roger Halliday, Humpherson noted Sturgeon’s Jul 3 claim, repeated on several occasions:

The prevalence of the virus in Scotland right now is five times lower than it is in England.

Humpherson complained:

Sources used to underpin this claim have been difficult to identify. It is important to recognise that a comparison of COVID-19 prevalence rates is not straightforward. If it is to be undertaken, the results and the uncertainties should be communicated transparently.

Humpherson noted the comparison was based on groups of statistics that were not directly comparable and with unclear timeframes. He concluded:

We do not think that the sources above allow for a quantified and uncaveated comparison of the kind that was made.

In other words, the Scottish government chose its statistics to justify the impression that its response to the pandemic was qualitatively better than in England. Comparing similar statistics, however, the UK’s Office for National Statistics reported that Scotland suffered the third worse rate of excess deaths in Europe over the first half of 2020. Only Spain and England fared worse. Of the 25 major European cities with the highest rates of excess deaths, Edinburgh and Glasgow were both in the top 10, along with London, Birmingham, Amsterdam and Madrid. The ONS conceded that the fact that Scotland retained its lockdown a few weeks beyond May 10 meant that death rates continued to fall in Scotland. On the week beginning May 23, for example, Scotland had an age-standardised mortality rate 5.11% above average for the last 5 years. England’s rate was 7.55%, against Spain’s 6.65%. The downward trend has continued. In the week to Jul 26, COVID-19 accounted for less than 1% of all deaths in Scotland, compared with 36% at the pandemic peak. But whatever gains may have been made by extending the lockdown in Scotland, they are rapidly being squandered in the rush to make up lost time.

Many workplaces are already working normally, but fully returning the schools Aug 11 is the key to restoring the generation of profit. This will inevitably be accompanied by tragedies reminiscent of the pandemic’s early days. New infection spikes have already emerged in advance of schools re-opening. Among the most concerning was that reported in Inverclyde, which includes the former industrial towns of Greenock and Port Glasgow. Inverclyde, which has some of the poorest areas in Scotland, has consistently recorded by far the highest infection and death rates. In May, the region reported a COVID-19 death rate of 12.7 deaths per 10k people, more than double Scotland’s rate at the time of 5.1 deaths. A June report from NHS Greater Glasgow and Clyde suggested that the coronavirus was circulating extensively in the area long before the lockdown. Talking to Scottish Television of her experiences early during the pandemic, Dr Abby Gunn, a consultant to the Inverclyde Royal Hospital in Greenock, made the same point. She explained:

Every ward and every room that you went to had Covid-19 in the hospital. We saw this coming months in advance, yet we were still doing some of the real-time planning after we had the first positive case.

Last week, NHS Greater Glasgow and Clyde confirmed a cluster of cases had again emerged in Inverclyde. Eleven new cases have been reported including a worker at Amazon’s 300k-sq-ft Faulds Park distribution centre outside Gourock, which employs 400. Although some workers were sent home, the entire facility remains operational. An Amazon worker told the Greenock Telegraph:

The problem is that the person who tested roamed about putting items onto steel shelving, so workers feel the whole plant should have been closed down for a deep clean. Who knows where this person or others who are now isolating touched? People are concerned that management haven’t gone far enough to make sure the whole site is safe.

Distribution played a role in other cases associated with the Inverclyde cluster. Deliveries by an infected driver to a Port Glasgow pharmacy appear to have resulted in several cases linked to the pharmacy. Another spike associated with an outbreak at a privately contracted NHS contact-tracing centre, run by Sitel near Motherwell, has now been linked to 27 COVID-19 cases. These include workers at the site and cases associated with reopened pubs and cafes across central Scotland. Five people tested positive last week at the Fullarton Care Home in Irvine, where 22 elderly people died during the peak of the infection crisis. Run by HC-One, which operates 300 care homes across the UK, the Irvine care home was criticised by the Care Inspectorate for poor hygiene and infection control, with staff untrained in the safe use of PPE. Of a total of 4.2k COVID-19 deaths in Scotland, 46%, 1,932, have been in care homes. Many were caused by hasty releases of 1.3k untested elderly hospital patients, some of whom later showed COVID-19 symptoms. Most died in extremely difficult circumstances, isolated, frightened, written off by an over-stressed hospital system, and left in care homes suffering extreme staff shortages because of the pandemic. No confidence should be placed in the Scottish government or its allies and apologists in the trade union bureaucracy and the pseudo-left groups, to do anything but defend the interests of capitalism. To combat the pandemic, and the attacks on living standards being pushed through, workers in Scotland, as in England and internationally, must mobilise independently through the formation of rank-and-file organisations in every workplace, school and neighbourhood. They must take up the struggle for the socialist reorganisation of society.

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