Public ECONOMY

Introduction: the situation

We are in a new recessionary phase of the systemic crisis of state-monopoly capitalism and imperialism — a crisis of overaccumulation. The unprecedented swelling of capital, weak domestic and foreign demand, widespread inflation, the sharp rise in energy prices, and the Ukraine–Russia war are major common factors within the EU in this downturn.

Five years after the COVID-linked economic crisis began, the massive intervention of states, the EU and the ECB has supported profits and swollen capital to such an extent that financial inflation and the squeezing of human capacities are putting profitability under pressure. The capitalist forces that dominate EU policy are shifting these burdens onto populations and Member States, deepening suffering, inequality and insecurity of living.

In 2021, 21% of the EU population — around 93 million people — were at risk of poverty or social exclusion. Women, young adults and people with lower levels of education are more likely to be affected, with major disparities across the EU. Inequality and poverty generate exclusion and weaken democratic participation. Inequality is high in the European Union due to uneven integration into the EU’s economic space.

Regional policies in Central and Eastern Europe have contributed to the “dualisation” of economies within Member States, fuelling political instability and the rise of the far right. Inequality is also rising sharply within long-standing Member States — including Italy, Belgium, Germany, the Netherlands and France — generating hardship, anger and despair, and feeding far-right voting.

This crisis of overaccumulation is deepening in its ecological, social, societal and civilisational dimensions. It is now being used to justify a “war economy” and the idea that war is inevitable — narratives promoted by dominant ideology.

Big capital and the dominant political forces are seeking new economic, political and institutional configurations to respond to this stage of crisis.

With Donald Trump, dominant imperialism is intensifying tariff-based economic warfare, while BRICS assert themselves as a major global pole. Meanwhile, much of the Global South remains in severe economic difficulty, generating social movements led by youth and workers in many countries seeking, sometimes implicitly, original emancipating perspectives.

The US reaction is an additional factor of crisis for EU countries — and for the EU itself. Restoring and maintaining ecosystems and conserving biodiversity have been side-lined in the climate response and treated as if they were a separate crisis. Biodiversity loss and the climate crisis are interdependent: ecosystem degradation removes or reduces carbon sinks, keeping more greenhouse gases in the atmosphere. Climate change reduces biodiversity.

These crises share a common root: capitalism’s drive for profit and capital domination  

Faced with this ultra-selfish reaction of US big capital, EU leaders — from Ursula von der Leyen to Christine Lagarde — are pursuing a path of capitulation. They double down on “free-trade-ism”, even though the urgent task is to regain democratic control over trade and build social and ecological protections — in other words, fair international economic cooperation. This goes hand in hand with the intensified drive towards anti-social austerity across EU countries.

At the same time, there is a dangerous retreat in two decisive areas: ecology (including climate action) and democratic control over the information revolution (data, AI, strategic components, and alternatives to GAFAM).

Yet the situation is more contradictory than it appears — and openings exist.

On austerity, militarisation spending is pushing states — above all Germany — to loosen budget balance rules, but in ways that strengthen financial markets and reinforce the war economy. Likewise, competitiveness pressures and threats to European industry have led the Draghi report to recommend more public spending — but primarily in favour of capital.

Meanwhile, collapsing public services, ecological danger, and widespread poverty and precarity are leading even some “moderate” sectors to recognise that capital is acting against society as a whole — or at least to question some pillars of the current policy     .

This reveals both intensifying class conflict and a need for clarity — and for alliances built on firm positions — to avert catastrophe. Conciliation with the logic of capital is no longer viable. Simply limiting damage with “safeguards” is no longer viable either. We must build struggles that combine resistance and an alternative — in unity.

i. SOCIAL NEEDS

The first challenge is social: poverty, purchasing power, exploitation, unemployment and precarious work — but also demands for emancipation, culture, education and training, health, free time, and democratic power to intervene in one’s own life and in society.

Neo-liberal austerity must be abandoned. We must change how companies and banks operate so that production serves social needs. That means tackling the levies capital imposes and redirecting spending towards employment, training, wages, research and social protection (including pensions) — rather than continuously reducing the so-called “cost of labour”.

We must strengthen public services and challenge “free and undistorted competition” as the central EU principle shaping all rules.

We must aim for good jobs, training and income security for all — instead of neo-liberal “flexi-security”. Workers must have stronger rights to intervene in enterprise decisions on investment, production, research and management, alongside civil society.

We need democratic institutions enabling strategic, democratic planning — socially, ecologically and economically efficient — based on people’s needs and freed from the domination of profit. A central objective is a new kind of full employment across Europe to strengthen social cohesion and reduce territorial inequality.

EU-level planning must connect with national popular sovereignty. Productive capacity should be developed where it is most needed — where unemployment is highest and where production can cut unnecessary transport and energy waste. A circular economy must be advanced. At European level, this planning must be connected to national popular sovereignty.

Because the EU is not uniform, global pressures affect regions and Member States differently. We must address these asymmetric effects through clear social and ecological criteria applied to multinational decisions — not only to state compensation. This is necessary to expand domestic demands, rebalance productive capacity, and build a united Europe based on social sustainability, not failed “structural policies”.

This requires new forms of nationalisation and social appropriation of key companies and sectors.

ii. Ecological needs

The second challenge is ecological: climate emergency, pollution, biodiversity loss, ecosystem destruction and resource depletion. We need a new relationship between humanity and nature.

We must take effective European-scale measures with a clear objective: carbon neutrality by the end of this decade, alongside a broader overhaul of production and consumption. This requires changing companies and banks behaviour — for breaking with their profit-driven activity, overconsumption and destructive competition.

The ecological challenge strengthens our social struggles. Workers and communities build ecological solutions through their labour, knowledge and needs. Social policy is not a “compensation” after economic decisions — priority to human capacities and public services is a a decisive factor for transition to succeed. “Social” must not be used to subsidise profits or justify high prices.

We oppose market-based shortcuts such as the ETS; they fail to deliver real emissions reductions. A general carbon tax is also an illusion for it mainly raises prices while firms do not decarbonise — and shift the main part of costs onto workers through lower wages or reduced social spending.

iii. Need for peace and co-development

The third challenge is peace and co-development. We oppose the march towards a “war economy” reshaping Europe to NATO and US strategic options.

We may need a defence industry — but not one oriented towards external aggression or dependent on exports and global arms markets.

We support a deep reorientation of production towards peace and co-development. The EU must build international economic relations based on cooperation, sharing and common goods development — especially with the East and the Global South.

This requires questioning free trade and investment treaties that drive economic warfare and resource predation.

Extractivism — exploiting resources, cheap labour, and monopolised technologies — fuels inequality, ecological destruction and geopolitical tension. Peace requires overcoming dependency and building genuine partnership with the South: financing shared development, sharing technologies, and democratic control over resources — without new neo-colonial regimes, especially around critical raw materials.

We support treaties that control trade and investment to serve shared development and employment. Hence, international trade and investment becomes a means, not an end.

This includes sharing technologies and patents, rejecting the patenting of living organisms, and advancing a genuine common world currency as an alternative to the dollar — alongside democratising international financial institutions.