In the Middle East, events that are tragic, old, new, and strange are unfolding. The tragedy is the systematic annihilation of Gaza City, where the exodus of hundreds of thousands of refugees amid hunger, thirst, and disease adds to the 65,000 Palestinian victims. This mounting death toll increasingly dwarfs the tragedy of the 1,200 people slaughtered in kibbutzim during the terrorist attack on October 7th, two years ago.
The attack on Hamas leaders in Doha, Qatar, lies somewhere between the old and the new. Israel has committed to an eighth front in its war, following those in Lebanon, Iran, Syria, Yemen, Iraq, the West Bank, and Gaza. The Israeli State is counting on the divisions among the Arab bourgeoisie and their cynicism towards the Palestinians, who are used and abandoned with every shift in the wind of Middle Eastern rivalries and alliances, and this is nothing new. However, by involving the petro-monarchies, Israel has most likely crossed a red line, triggering truly disruptive developments. Saudi Arabia has concluded a crucial agreement with Pakistan, extending the protection of Pakistan’s nuclear umbrella to the Saudis. This changes the nuclear balance around the Gulf’s energy artery; Turkey, Egypt and, once again, Iran will not stand idly by. The situation also has implications for the whole of Asia, and in particular China, which receives the bulk of the crude oil that transits through the Gulf. Beijing, after all, is the shadow protecting the generals in Islamabad – and their bomb.
The powers in the region are on the move, as are the powerhouses of imperialism. India is uneasy, given its historic dispute with Pakistan over Kashmir, and the Saudis are doing their utmost to reassure it. An international campaign to discredit Israel is mounting, similar to that directed against apartheid South Africa. It is unclear whether Washington still wants – or is able – to control the situation. Paris and London are attempting to get involved, and here the situation is old, new, and strange all at once. In November 1917, with the Balfour Declaration, Great Britain opened the door to Zionism and a Jewish national home in Palestine; France and Great Britain had jointly divided up the region a year earlier with the Sykes-Picot Agreements, signed over the ruins of the Ottoman Empire. They were marginalised by the Suez crisis in 1956, to the advantage of the United States. Today, they are playing their hand by formally recognising the Palestinian State – almost certainly a symbolic or rigged move, which Israel does not accept under penalty of civil war, and which once again uses tragedy as a pretext in the struggle for influence. In fact, the American press is alarmed, and denounces Paris for seeking to take advantage of the American vacuum. In the French press, meanwhile, there are those who excitedly see Paris leading London and perhaps all of Europe to a comeback. Here, then, are the strange leaders of the march claiming the Palestinian cause as their own, amid old divisions and new ambitions: Emmanuel Macron, Keir Starmer, and Bin Salman, with his new Pakistani umbrella made in China.
A century for nothing, it has been written. This is the Hundred Years’ War over Palestine. The truth is that we can and must fight, but with our eyes wide open. In the feuds of the Middle Eastern bourgeoisie, in the power games of imperialism, and in the myths of nationalism, there is no solution to the Palestinian tragedy. They can only reproduce hatred from generation to generation, for another hundred years.
What is to be done, then? Everywhere there is now a bourgeoisie and a proletariat: revolutionary unity of the Arab, Palestinian, Israeli, Turkish, Iranian, European, Russian, Ukrainian, Chinese, American, and worldwide proletariat against all bourgeoisies and all imperialisms. Workers of all countries, unite – this is how communism was born.
In her August 23rd speech at the annual symposium of central bankers in Jackson Hole, Wyoming, Christine Lagarde, president of the European Central Bank (ECB), took stock of how Europe has dealt with the economic tensions of recent years. In particular, she asked how it has been possible to drastically reduce inflation without paying equally heavy costs in terms of production and employment.
First, Lagarde points out that the fall in energy prices after the 2022 peak played a role, a global factor that affected business costs. But, especially in Europe, other elements had a greater impact.
The ECB’s diagnosis: lower wages, higher profits
The most significant of these concerns wages. The first distinctive feature
of this cycle, setting it apart from others, is that real wages fell by nearly 2% between late 2021 and early 2023
, while the recovery was delayed and only partial.
Lagarde goes on to wonder at the cause of this anomaly compared to previous cycles: Most notably
, she says, formal automatic indexation of wages to inflation has all but disappeared
. While in the 1970s it covered around half of all private sector employees
– in Italy it was the scala mobile (sliding scale
) – today it applies to only about 3%
.
That is not all. The contractual structure itself is considered one of the reasons for the failure of wages to keep pace: contracts adjust only gradually – a nominal rigidity that created a lag in wage adjustment relative to prices
. It is not difficult to recognise in this observation the trend, which has worsened in recent years, towards extending the duration of contracts. This phenomenon has also affected Germany, where traditional annual contracts are becoming increasingly rare, and those with a longer duration of two or more years are on the rise. In Italy, the norm is now about four years. In periods of high inflation, the damage caused by the failure to adjust is evident.
However, the gains for businesses are equally evident, as Lagarde notes: This delayed real wage response acted as a shock absorber [...] it eased unit labour cost pressures and supported firms’ profitability
.
If we want to understand the moral of the story, it is that if the employment rate has held up better, it is because workers have once again paid the price, with a reduction in real wages.
Another factor considered in Lagarde’s analysis is that the increase in employment has been accompanied by a decline in average working hours, comparable in Europe to 1.3 million full-time jobs.
The type of approach to the pandemic, which Lagarde defines as labour hoarding
, also played a role here: many European employers chose to keep workers on staff, first in the face of the pandemic crisis and then during the energy price crisis, considering hoarding as less costly and less risky than rehiring later in an even more competitive market
.
The “crucial role” of immigrants
The labour shortage is the strategic issue identified by Lagarde, who puts it this way: On demographics alone, Europe’s capacity to expand its labour supply is already constrained
. Since 2002, the number of people over the age of 60 has increased by 28 million, while those aged between 15 and 60 has decreased by 2.4 million, and those younger than 15 by 2.8 million. The next generation of workers will have large gaps to fill; women and the elderly are the categories targeted for increased employment. But even more important
– Lagarde warns – is the rise in both the number and participation rate of foreign workers
. This is already the case: immigrants, who make up only about 9% of the European labour force, have accounted for half of its growth over the past three years
. It’s had an immediate economic effect: without their contribution, for example, Germany’s GDP would be around 6% lower than in 2019
.
However, this emphasis on the crucial role
of migration is accompanied by concern that political pressures may increasingly limit inflows
. Days after Lagarde’s speech, Germany marked the tenth anniversary of Wir schaffen das
(We can handle this
), the phrase Angela Merkel used on August 31st, 2015, to define her government’s policy in response to the wave of migrants arriving in the country.
“Wir schaffen das” ten years on
At the time, the situation involved welcoming Syrian refugees fleeing the war, but migration had and continues to have a strategic dimension and must be addressed from this perspective. The Institute for Employment Research of the German Federal Employment Agency has produced an analysis of migrants who arrived ten years ago [Handelsblatt, August 26th]: 64% of them are now in paid employment, a level not far below the 70% general average in Germany. However, a refugee from that time who is now employed full-time receives a salary equal to 70% of the median: wage regulation also has a European dimension.
These differences lead some economists to say that yes, overall we have succeeded
, but with a still insufficient level of integration. For example, Lars Feld, now director of the Walter Eucken Institute and formerly one of the five wise men
of the German economy, laments the increase in the length of asylum procedures, which slows down integration into the labour market
: from the seven months required in 2016, the figure rose to thirteen in the first half of 2025 [Handelsblatt, September 2nd].
However, the conclusion drawn from this is not that we need to turn back, leaving room for racist and xenophobic campaigns, but rather to look ahead to future trends. Marcel Fratzscher, director of the German Institute for Economic Research (DIW), says that overall, we have succeeded
, pointing out that last year foreigners generated €300 billion in value, with those who arrived since 2015 alone contributing around €240 billion. Therefore, cutting back on subsidies for refugees would be shooting ourselves in the foot by slowing down integration
: It would be honest for politicians to say that, due to demographics, we will need much more immigration in the next 10-20 years
[Handelsblatt, August 29th].
Economic education and political battle
It is this lesson that economists are suggesting to governments to counter the anti-immigrant narrative
, the economic damage
of which is enormous
. This is as true in Germany as it is everywhere else, including Italy, where Unioncamere predicts that a fifth of new hires over the next five years will be immigrant workers, more than half of whom will be skilled [Il Sole-24 Ore, September 4th].
The stratification of wage earners is set to grow. Such a diverse class requires a trade union action that is up to the task, but at the same time needs the internationalist political struggle of Leninists.