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Towards a new set of Moncloa Pacts?

2020-04-07 | Spain

The Spanish government is proposing "new Moncloa Pacts" because the coming recession is, they claim, a "challenge just as important as that of 1977". Is this another misplaced metaphor or does it precede something real? A look at the ongoing recession and its comparison with the situation in 1977 may give us some clues.

What was the purpose of the original "Moncloa Pacts"?

class struggle

Furthermore, the "oil crisis" of 1973 had accelerated the trend towards recession. Being a price shock, it had multiplied inflation and given new impetus to the struggles. National capital, in the midst of redefining its political apparatus, was devaluing without remission and was no longer even capable of maintaining full employment.

The urgent objective to stop the devaluation of capital was to reduce inflation by lowering wages. A litmus test for a political apparatus so young that it had not yet even approved the Constitution that would legally establish it.

But the most important and promising challenge to the bourgeoisie in those years came from the proletariat and manifested itself in open class confrontations and mass strikes (Vitoria 76, Roca 77). That is why the real key moment of the Transition was the so-called "Moncloa Pact", the moment in which the Spanish bourgeoisie, for the first time since the civil war, unveiled its own multiparty and trade union apparatus. With the PCE and CCOO in the first line, the "national reconciliation" of the Spanish bourgeoisie was embodied and faced the reconstituted wave of workers struggles. Although the UGT was late in signing and the CNT finally did not, the Transition tested for the first time the former rival of Franco's apparatus to the counterrevolutionary front of 1937 together and united. If the main weapon then to lead the workers' struggle had been the fascism-antifascism opposition, the common flag of democracy was now expected to do so.

"What was the Transition and what did the 1978 Constitution mean?", 6/12/2017

1977, the parliamentary political parties sign the "Moncloa Pacts".

Wage share in Spanish GDP since 1978 (including profit shares disguised as wages) The labor share only grows when capital crashes and has not yet had time to attack wages, spending on labor power maintenance and working conditions even more.

The pacts had two outcomes. The main one was structural and political: trade unions became responsible for organizing and calling strikes. The strike assemblies would gradually relinquish sovereignty to what would later become the "company committees" of union representatives. The second, guaranteed by the latter, was a direct attack on the living conditions and wages of the workers: putting what had been agreed into practice, the first agreements of the Transition, already signed by the democratic trade unions, would accept the "balancing of wages", i.e. to guarantee that wage increases would remain slower than inflation.

In the name of the "national economy" the government (representing the employers), the bourgeois democratic opposition parties and the trade unions have already prepared the outline of the next agreements: wage increases lower than the increase in the cost of living, disguised under a cloak of "wage balancing"; increase in the pace of work; introduction of new bonuses and piecework; tightening of labor discipline (laws, regulations, unionization...); introduction of labor pacts; prohibition of strikes; advance notice for legal strikes which must necessarily be made within the union framework so that the unions can boycott them, etc. etc.

"¿Convenios pactados o convenios impuestos?" FOR communiqué on the Moncloa Pacts, 1978

Wage share in Spanish GDP since 1978 (including profit shares disguised as wages) The labor share only grows when capital crashes and has not yet had time to attack wages, spending on labor power maintenance and working conditions even more.


What is the danger for Spanish capital today?

Spanish capital, like global capital, was suffering from an industrial recession that was the prologue to a general recession expected this year . When confinement ends, the reasons for the devaluation that capital is suffering these weeks will have ceased, but neither the urgency to "recover what has been lost" nor the underlying causes that had brought the industrial recession at the end of 2019 will have ceased.

Moreover, it is more than possible that these causes have worsened, generalizing the closing of markets at a global level. Covid is not a hiatus, but an accelerator of these trends . Everything indicates, for instance, that the end of confinement will aggravate and accelerate the trade war between China and the US . That is, Spanish capital does not count on being able to recover by entering new markets to place its products. On the contrary, markets and foreign demand will become increasingly inaccessible.

What's more, the support of companies based on guarantees that the Spanish and Italian governments opted for has a ceiling... from there, if the coverage is not extended and mutualized with states that are fiscally more solid and that have suffered from lower cessation of activity, what is coming is a perfect financial storm: banks that have taken more risks than desired facing an increase in default and a sovereign debt crisis while the assets of their industrial portfolio are devalued at full speed. As the New York Times said today, European banks are prepared for a crisis, just not this one. That is why the battle is being waged in Europe.

What does this have to do with the 1977 crisis?

Assembly of Roca workers during a "wildcat strike" - rejected by the unions - in 1977.

So far, the economic aspect couldn't be more different. Inflation in 1977, deflation now; the share of capital in national income running behind that of labor then, sustained decades-long decline in the share of labor now; competitive devaluations of the peseta then, a stable euro now. And from the point of view of the class struggle, although on a global level a great wave of strikes is emerging, in Spain the strikes were cut short with the closure of non-essential production.