Could be raining: the European crisis after the Great Recession

This paper presents a general overview of the structural transformations marking the “new capitalism” and analyzes the contradictions of European neomercantilism within the Great Recession. In the past two decades, neoliberalism turned into a paradoxical sort of privatized financial Keynesianism based on the triad of traumatized workers, manic-depressive savers, and indebted consumers. It argues that the present European economic and political situation is deeply rooted in linking capitalist accumulation to the attainment of export surpluses, a situation in which, as is the case in Germany, most of the net external balances, are realized within Europe itself. It shows that such a process has led to the rise of strong neomercantilism (in Germany) and to weak neomercantism (in Italy). The recent crises, including those in Greece, Ireland, Portugal, and Spain, are discussed in this framework. It concludes by observing that in light of the ongoing contradictions, the challenge for the Left is the question of the socialization of the banking system, of investment, and of employment.