As the global economic crisis worsens, a February 17 Counterpunch.org opinion piece by Mike Whitney argued that as much as 40% of global wealth has been destroyed by the current global economic crisis. Governments in Eastern Europe have faced mass riots and demonstrations in the face of their attempts to foist the costs of the crisis onto the poor.
Whitney argued that Eastern Europe "is about to blow". He pointed out that the International Monetary Fund (IMF) does not have the resources for a bailout of the size Eastern European economies need to stave off total collapse.
What is more, "the recession is spreading faster than relief efforts can be organized. Finance ministers and central bankers are running in circles trying to put out one fire after another.
"It's only a matter of time before they are overtaken by events. If one country is allowed to default, the dominoes could begin to tumble through the whole region."
Mass unrest
The level of mass unrest in Eastern Europe has not been seen since the upsurge that brought down Stalinist bureaucratic dictatorships nearly two decades ago.
Aljazeera.net reported on February 21 that "Latvia's four-party ruling coalition has collapsed after weeks of political squabbling and economic turmoil".
Latvia, previously one of the fastest-growing economies in Europe, "is expected to contract by 5% this year", according to a report by the International Relations and Security Network (ISN) on January 23.
"Unemployment rose a full percentage point in December, to 7%. The government sought a 7.5 billion euro bailout from the International Monetary Fund and the EU."
Inflation had worsened and now wages are no longer keeping pace. On January 13, 10,000 people attended a trade union protest against public sector pay cuts, reduced social security payments, an increase in the consumption tax and an end to tax breaks on medicine and home heating.
The demonstration also demanded new elections, while the government's approval rating dropped to 10%. Protesters threw cobblestones and tried to storm the parliament. Riot police were called and arrested 86 people.
The government has since agreed to hold new elections.
The ISN also reported anti-government riots in Bulgaria and Lithuania.
"We are here today because this government is mocking us", Liucija Mukiene, a 63-year-old Lithuanian protester in Vilnius told the Associated Press on January 13.
"They are taking away our last money and providing nothing. I am fed up with the lies, corruption and those grinning, fat faces behind the windows of Parliament."
In Lithuania, harsh new taxes and massive cuts in government spending were adopted to raise the necessary funds. In Latvia, IMF loans came with a harsh set of economic policies that will dramatically reduce social spending on health and education.
Other Baltic states are in a similar situation. Bulgaria has seen massive riots against political corruption. Estonia's economy has dropped by 3.5% and government support is plummeting further. Romania's national currency has lost 17% in one year.
Crisis
A key cause of the crisis in Eastern Europe is the driving of production by going into debt via institutions such as the IMF; loans are accompanied with requirements to implement harsh neoliberal prescriptions.
The former communist nations are especially exposed, often having financial institutions whose wealth is greater than the country's. These institutions are now crashing at a time when demand for their exports is declining rapidly as other countries feel the pinch.
Much of the debt owed by these nations is owed to Western European creditors. If Eastern European economies collapse, this risks taking down large portions of Western Europe's economies as well.
Unlike wealthier countries, Eastern European economies cannot, as others have attempted, use a stimulus package to attempt to pay their way out of the crisis in the immediate term. Rather, Eastern European governments have sought to pay for the crisis with more extreme policies to place the burden directly onto the poor.
However, even wealthier nations have sought to shift the burden as much as possible onto the shoulders of working people and poor. This generalised attempt to make the working class pay for a crisis it didn't cause is resulting in varying degrees of unrest.
On January 18 the British Guardian raised the spectre of pro-corporate European governments facing a "spring of discontent".
There have, for example, been ongoing protests and riots led by radicalised youth in Greece. The spark was the killing of 15-year-old Alexandros Grigoropoulos by police on December 6. However, it was also an expression of protest against the general condition of poverty faced by Greek youth.
Unemployment among Greeks aged 15 to 24 has reached 21.2%; for people aged 25 to 34 it is 10.5%. Most jobs for university leavers only pay, on average, 700 euros a month, with the poverty line at 450 euros a month.
The protests have generalised into an attack on what Greek youth see as the failure of the system to provide them with a future worth having.
Xenophobia
Even in the traditionally stable nation of Iceland, where billions of kronur have been lost, the economic collapse resulted in protests that took down the conservative Independence Party government on January 26.
The responses from ordinary people hurting from the crisis has not automatically swung to the left. There is the risk of the growth of support for racist, right-wing solutions if the left is disorganised.
In Spain, workers have launched a series of strikes aimed at stopping foreign workers from taking seasonal fruit-picking work.
In the Baltic states, there has been an increase in anti-immigrant sentiment, with Russian minorities suffering discrimination. Legislation in Latvia has banned Russian speakers (who make up a third of the population) from getting government work.
In Britain, 6000 workers launched strike action this year against the use of foreign guest workers who have been brought in to work in the construction industry. The guest workers are living on a former prison ship in harrowing conditions.
While some of the workers have raised racist slogans in the course of the protests, such as "British jobs for British workers", many in the union movement are pushing, with some success, to both counter this trend and to unionise the guest workers. They call for guest workers to have the same conditions as British workers.
The use of low-paid guest workers reveals the deep levels of exploitation that employers are moving towards in this time of crisis.
Other parts of the world are also facing a severe crisis.
The slowing of China's economy has left about 20 million Chinese rural migrant workers according to the February 29 Xinhua.net.
Australia and Japan are both highly dependent on exports to China.
Japan's finance minister, Shoichi Nakagawa, resigned on February 17, amid a colossal 12.7% contraction in the Japanese economy in the last quarter of 2008. Exports for January have dropped 46% in comparison to last year, making it the worst loss for 10 years.
In particular, demand for Japanese cars has dropped 69%.
Poverty
Because housing in Japan is often directly linked to employment, the resulting job losses have led to a massive spike in homelessness, with former businesspeople now living in cardboard boxes on the street.
Japan's economy is second only to the US in size and the flow-on effects could be devastating.
Consider also the fate of the tiny Caribbean islands of Antigua and Barbuda, whose biggest employer was the Texas capitalist Sir Allen Stanford, now under investigation in a US$8 billion fraud case.
Stanford has fled, his millions now in question, and the islands of Antigua and Barbuda are facing total economic collapse because of the greed of one man and the economic and political system that let him get away with it for so long.
Representatives of the World Bank at the G7 meeting in Davos stated that the world economic crisis will push the incomes of an extra 53 million people in the Third World below $2 a day, and that rising food and fuel costs have driven 130-150 million more into poverty, according to BBC News on January 29. The World Bank predicted a "lost decade", where growth rates the world over would remain static or drop substantially.
As the crisis deepens, the battle will increasingly be over whether the corporate elite — who are to blame for the crisis — force the rest of us to pay for it, or whether alternative systems can be built that place human need ahead of private profit.