It’s dangerous to look for ‘key moments’ or ‘turning points’ in the Euro crisis. It has gone on for too long, and there have been too many false dawns. In a year or two’s time, however, it is possible that November 14th 2012 may turn out to have been pretty significant, and not just because of co-ordinated strike action in 23 EU countries against the orthodoxy of austerity. Today has also produced economic figures that may start to convince people at the top that austerity as dictated by Berlin is self-defeating.
To the figures first. Far from turning the corner, the countries where the cuts are deepest continue to get worse. In Greece economic growth in the third quarter of 2012 is -7.2%, even worse than the shocking -6.4% in the second quarter. In Portugal the recession is also accelerating, -3.4% in Q3 after -3.2% in Q2.
Industrial production across the Eurozone fell by 2.5% in September, with double-digit falls in both Ireland and Portugal. A contraction on this scale is not just a set-back, it is catastrophic and unsustainable. The IMF is beginning to realise this and is breaking ranks with the EU on the wisdom of endless austerity. Once the two bodies worked hand in hand to organise and supervise the bailouts for southern Europe. Increasingly it is beginning to look as if the IMF are losing faith in a discredited policy.
The strikes themselves will change little, except to prove the depth of hostility to what is happening, and not just in countries bailout countries like Portugal and Greece, but also in Spain which has yet to ask for help. Here in Madrid the strike seems pretty much complete: trains and busses are barely running, schools are shut and many hospitals are treating emergencies only. There are police everywhere, and there have been some minor clashes, but the big test comes this evening with a huge demonstration through the centre of the city shortly after dusk.
There have been warnings before that what is at risk here - apart from swathes of once profitable industry - is the social fabric and democratic stability. People who are already suffering are being offered the prospect of five, maybe 10, more years of the same, and they are not accepting it quietly.