Slovenia: The Government Falls. Mass Protests Continue

The former model country among the successor states of the former Yugoslavia now finds itself in a deep social crisis. For months the country has been shaken by a protest movement, which has oriented itself “against the system”. The following article by Goran Musić and Emanuel Tomaselli gives an insight into the background and perspectives of this movement.

The idea of a prosperous small capitalist state between the Alps and the Adriatic has withered away in less than a generation. Today, the spectre of revolution is back with a vengeance. The daily paper “Dnevnik” describes the situation as follows: “It could be said without exaggeration that, after five years of crisis, Slovenia is on the verge of being ’clinically dead’. The recession, acompanied by the human and ethical excesses of the political and economic elites, has lead to disillusionment among the population, who have lost all hope. Cash for gold stores are mushrooming across a state where earlier it was possible to obtain credit within five minutes. They are becoming the symbol of creeping poverty. The major regional employers are closing their gates one after the other, while hospitals no longer have money for medical supplies. Young people are leaving the country, the old are finding it ever more difficult to get by until the end of the month, the middle class is all but vanishing.”

Economic Decline

Until five years ago, everything was different. The change from the Yugoslav (“market socialist”) planned economy to a private-property-based, services-oriented economy seemed to be working in Slovenia. The rates of growth were above average and the slogan, “Do it like the Slovenes”, was common in all the other successor states.

Anti-austerity demonstration - picture: PirancafeThe reasons for such a success were diverse: On the one hand, the neo-Slovenian elite gave up on introducing an economic shock therapy after 1991. Although industrial and social safety nets were reduced, they remained largely intact. This was not the result of the supposed progressive character of the emerging Slovenian bourgeoisie, which has most recently shown itself to be just as reactionary as the rest of the central/eastern European neo-bourgeoisie. The difference in the Slovenian development was due to the Slovenian labor movement surviving relatively intact and with well organised unions.

This was the root cause of strong democratic elements being written into the Constitution (which during the Crisis is now being “corrected”) and the initial refusal to use neoliberal shock therapy. Since exporting had become a problem after the EU- and euro-integration, and there had been an oversupply of finance capital, the Slovenian bourgeoisie has come to rely more and more in the last decade on the finance and real estate sectors. Slovenian banks, which are mostly state-owned, got into debt abroad and invested primarily in real estate (shopping centres and luxury housing). That way a high level of indebtedness and growth was achieved – at least as long as the speculation-driven prices kept on rising.

The effects of this speculation have now turned into their opposite and are driving the Slovenian economy over a cliff. The Slovenian economy contracted by 8% in 2009, and after the following two years of stagnation it shrank by a further 2,3%. Material goods investment has almost been halved since the crisis began. Slovenia is now basically living off its fat reserves. Unemployment has risen from 7 to 12%, with every fourth youth now unemployed. 20% of the population is now regarded as poor.

Since the outbreak of the crisis, the yearly budget deficit has been over 6% GDP. The IMF expects that national debt will triple from the very low 22% GDP in 2008 to 70%. The Slovenian credit market has been frozen ever since the collapse of the Lehmann Brothers bank in 2008. The large Slovenian banks are now regarded as clinically dead. Their records reveal that up to 20% of all credits are unrecoverable. An estimated fifth of national economic output (7 bn Euros) is needed to shore up the banks – something easier to calculate than to implement in society.

Cuts in Social Spending

Under instructions from the Troika (the EU, IMF and ECB), all neoliberal shock therapy elements are to be put into place: wage cuts in the public sector (it is a matter of argument between the unions and the Government, whether the coming programme includes wage cuts by 5% or by 7,75%); pension and social service reforms, cuts in education and public health which go into double digits; liberalisation of the labour market; privatisations (energy sector, insurance, railway, shopping centres,…), tax cuts for the rich and enterprises. At the same time, many employees and workers in the private sector have to put up with month long delays in the payment of their wages and salaries. As the conservative Janša government had failed at implementing this policy, the centre left prime minister,, Alenka Bratušek now gets the poisoned chalice of simultaneously stabilising public finance and facilitating growth. She too will fail. It is where she will fail that is of importance for the labor movement.

The Maribor Revolt

Maribor is the country’s second largest city, and while Ljubljana, the capital, still basked in the rays of speculation, the industrial city in upper Slovenia was already suffering from the deindustrialization of the region. At the same time, the city council implemented very aggressive privatization policy – all public utilities, from district heating and water supply to the funerary institute, were privatized. As a consequence, utility prices in Maribor are now twice as high as those in the capital. In October, the then mayor Franc Kangler privatized the radar speed checks as well. This led to a surge in the number and costs of penalty charges being issued, as 92% of the resulting income was to end in the hands of the private investors. Soon enough though, the first protests erupted in the form of people setting newly installed radar boxes on fire. At the same time, Kangler, not unlike the other top Slovenian politicians in power, started getting connected with scandals involving corruption and machinations. This was the prelude to a one-thousand-strong blockade of the city hall in November 2012. Kangler organized a gang of masked thugs, led by a kick boxing practicing colleague of his in the council, to terrorize the peaceful demonstrators. This move backfired, as the protests spread further into dozens of other cities and towns.

“Down with Corruption and the System”

The flood gates have been opened, and not only did the increased police brutality fail to suppress the movement, it also fired it up even further. Demonstrations and street actions were in December an everyday occurrence. ZSSS, the largest trade union confederation, postponed the planned general strike for a month until January, so as not to break with its devotion to “social dialogue” and give the movement additional momentum. Individual unions were less timid. When it was announced by the management of the home appliance manufacturer Gorenje that the Christmas bonus was to be reduced to 150 Euros, the main plant’s morning shift broke into a spontaneous strike on December 12th, which after 4 hours led to a victory for the strikers and a 300 Euro Christmas bonus.

The facts regarding illegal enrichment by the political elite have been simultaneously consolidating. Prime minister Janša, who was already faced with accusations of such enrichment, has now found himself between an impatient ECB and the pressure of the protest movement. His five-party coalition faltered more and more until it was forced to step down on February 28th in the face of strong protests. Janša’s central failed projects were the creation of a Bad-Bank – basically the nationalisation of all banks’ unrecoverable debt – on the one hand, and the setting up of a privatisation agency on the other. Slovenia’s economic policy is now dictated by the Troika, which wishes to avoid setting up a rescue package for yet another country. Instead of calling for new elections, a new government under Bratušek was formed. It is now up to the parliamentary regrouping to face the anger on the streets and to finally calm down the financial markets.

A Program for the Markets

For years now there have been postponements and changing ruling coalitions due to the persistent social resistance. Democratic elements within the Constitution, above all the right for a referendum whenever there are 40.000 signatures in favor of one, have developed in recent years as important fetters to the neoliberal transformation. The ZSSS for instance called for a referendum regarding the pension reform. On June 5th 2011, there has been a 72% vote against the raising of the age of retirement to 65 years. “The Financial Times” commented: “In essence, many people wish a return of the paternalistic Yugoslav era social security, without realizing that the resulting costs could not be sustained without a highly productive economy.”

Also, the question of setting up the privatization agency, as well as making wage cuts (as planed in the future budget balancing law 2012/2014) has been singled out for voting via referendum by unions and different groups (Bratušek’s party “Positive Slovenia” included). However, the Slovenian Supreme Court concluded on December 12th 2012 that "The delay or rejection of the laws ... would have consequences that would be against the Constitution."

In the midst of it all, the anger of the Slovenian population becomes more and more understandable: impoverishment, police brutality, corrupt politicians in all parties and the abolition of democratic rights in the interest of share holders.

What Next?

Alenka Bratušek, the new centre left prime minister, rules by a majority of just 2 MPs and is now forced to implement a policy which only a couple of weeks ago she was trying to stop via a referendum. The first main project is the refinancing of Slovenian banks through 4 bn Euros of public money. According to the major banks themselves, this financial injection is needed if they are to avoid their bankruptcies within the first half of 2013. Considering the parallels with the crisis in Cyprus, there is a great deal of nervousness in Ljubljana and Brussels.

Bratušek’s declared goal of the simultaneous rescue of the banks, recovery of the State and the safekeeping of social rights is wishful thinking totally out of touch with capitalist reality. Economics professor Igor Masten comments on the government’s programme: “While the new Cabinet wants to recapitalize banks and consolidate public finances, it’s unclear just how they will do that.” Bratušek positioned herself by stating that this government is to last for only a year. Not only did she agree with surveys predicting a short life for the Government, but also with the practices of other social democratic parties on the European economic periphery: self-sacrifice for the survival of capitalism. Papandreu, Zapatero & co. send their regards from the southern Mediterranean shores.

Resistance

The protest movement during the winter of 2012/2013 represents a turning point in the short history of Slovenian statehood. Illusions in bourgeois democracy and capitalist prosperity have burst like a bubble. The new always steps on the historical stage as a negation of existing relations, something which was also the case in Slovenia. The protest movement’s scope and depth is here of crucial importance: the large demonstrations consisted of groups of youth jointly with union blocks, veteran organizations from the Independence war of 1991, the organized Left and masses of people who, lacking formal organization, joined the protest in droves through social network coordination. The movement’s weakness was its de facto division into two separate mobilizations, which were only partly joining forces on the streets. On one side we had the mentioned spontaneous street protests against the “System” and union mobilizations, politically oriented toward the preservation of the social partnership, on the other. Notably, red and old Yugoslav flags were waved and worker songs were sung at the demos. At the largest Ljubljana demos the police started acting very defensively and accepted carnations from the protestors.

The slogans were directed against the politicians and the political system as such: “Parliament is a criminal nest”, “Today is the new day”, “You are flexibly fired”, “You should walk among the people not over them”, “Thieves”, “Our city is not for sale”, “Fuck you, loan rates”, “Direct democracy!”, etc.

The immediate objective of the movement was accomplished. Janša was overthrown, but his policy was still standing. The new elections in Maribor brought a movement representative into office. His political program consists of getting investments into the city through the rule of law and the active participation of the employer associations. The union confederation ZSSS has given support to the new Bratušek government and expects it to break with the IMF. However, neither the parliamentary regrouping, the mayor of Maribor, nor the hopes in the Bratušek government will bring about a turnaround in the social situation. The failure of these political hopes is programmed in advance. We are entering a period of political instability. The task of the Left is to seize the moment and approach the masses with a programme which connects with their social and democratic aspirations and offers a perspective for the overcoming of capitalism.

The Slovenian Left

Slovenia’s political landscape in recent years had always been more dynamic than in any other country in the region. On the one hand, international political movements like Occupy found a visible echo here, and on the other, the Slovenian labour movement received a lot of international attention with its mass campaigns. Also, there is a lively left discourse present, which, at least in the abstract plane, has turned to class issues. This came after years of following the postmodern trend where the Left defined itself mainly in cultural and sociological terms.

The turning point in the protest winter of 2012/2013 sets for the Left a challenge of coming out of the periphery and straight into the centre of society. Cultural-leftist debates of the last couple of years will not suffice, as they lack any relevance to society. Also, one should not entrench him- or herself into nostalgic yugo-patriotism. The left forces should always point to the advantages of life in a socialist state in comparison to today’s post-Yugoslav capitalist societies stuck on the EU periphery.

Nevertheless, they should also be capable of explaining the reasons for the failure of the Yugoslav system from a Marxist perspective. The Partisan movement is something the Left in the region should be proud of, but it must also connect this heritage to concrete political questions the people are facing today. The rise of the Left’s relevance in society will depend on its ability to bridge the gap between itself and the dynamic Slovenian labour movement.

When demonstrators point to the “System” as responsible for their situation, the task of the Left is to call things by their real name: capitalism. Corrupt politicians are not responsible for the crisis, but only one more symptom of a mode of production that has reached its historical limit. Therefore its overcoming should be the focus of a left anti-capitalist program.

This of course will not happen through simple proclamations. The Left must link its programme to the actual occurring clashes in society. The redistribution of society’s wealth from the working class to the owners of capital is the hallmark of this conflict, which in turn represents the base for all the forms of conflict in society: bail-out for the banks, balancing of the budget, labour market reform, cuts in social spending, non-payment of wages…

An anti-capitalist Left, which is up to the historical task, must agitate, put forth arguments and campaign against any fall of living standards for the working and middle class. Let the capitalists pay for the crisis. In the case of the Slovenian banks, we are openly against bail-outs at the taxpayers’ expense and for the using the wealth of capital owners to cover for their bankrupt businesses. It is likely that the deficits will lead to the bankruptcy of the banks. We are only arguing for the taking over the banks’ necessary day-to-day operations by the labor movement. A left government would then annul all foreign debt of the country and nationalise manufacturing and trading companies.

When it comes to labour disputes, the anti-capitalist Left argues against wage cuts and lock-out threats. We demand an opening of account books. The entrepreneurs must prove that there is no money to pay the wags of the workers. Regarding conflicts about the closure of a company, we argue for a struggle to nationalise it under the control of its workforce.

These programmatic suggestions are only vague sketches and therefore must be bound to the concrete conditions of struggle and conform to the traditions of the labour movement, something that can only be accomplished by the efforts of the Slovenian Left itself.