The student protests in France are set to reach a new height on October 17. That date will see not only students in the streets, but other social sectors as well, alongside a possible return of the “yellow vests”. It is not only France that is stirred by protests, but Belgium, Spain, Germany, Italy, and Greece as well. These protests are a result of what we analyzed a year ago: the social contract in Europe is breaking down.
In France, high school and university students, backed by teachers and major unions, have mounted massive nationwide walkouts, school blockades, and street marches. Protesters are denouncing crumbling school infrastructure, teacher shortages, and budget austerity, with severe clashes and tear gas deployments reported across Paris and other major cities. The initial protests will probably raise the stakes as others join to protest the cost-of-living crisis.
Belgium has also witnessed intense demonstrations centered on education and austerity reforms. Protests erupted over proposed spending cuts to French-speaking education, alongside steep tuition fee increases and broader social-welfare austerity measures, resulting in confrontations with riot police outside parliamentary buildings.
In Spain, the mobilizations are heavily focused on runaway housing costs, rent inflation, and touristification. Protests coordinated by housing syndicates and youth collectives demand strict rent caps, an end to speculative evictions, and structural solutions to wage stagnation and unaffordable shelter.
In Italy and Greece, student unions have launched assemblies, strikes, and campus occupations over university underfunding, rising living costs, and the precarious labor conditions awaiting graduates.
In Germany, demonstrations—led prominently by school pupils and left-wing youth groups—have challenged proposals regarding the reintroduction or restructuring of mandatory military service, alongside growing dissatisfaction with diverted social spending.
In all of these protests there is a common thread: the sociopolitical paradigm that has been characteristic of Western Europe over the last 70-odd years is no longer tenable. Today’s working generation no longer sees a brighter future for themselves, let alone their children. Today’s youth do not see a brighter future than their parents had.
That is why they are protesting further cuts in education or the healthcare system. That’s why they are protesting for higher wages. That’s why they are protesting for access to housing. That’s why they are protesting against conscription. Because, as it stands, they do not see that working to maintain the current social system—not the political or financial system in isolation, but the intertwining of both and the consequent social paradigm—is worth it.
Through these protests, we are witnessing the consequences of the breakdown of the social contract that has underpinned the organization of society in Western Europe for well over a century. The current form of social welfare that is—or was—characteristic of Western Europe emerged after the end of World War II. However, some of its elements date to the end of the 19th century and beginning of the 20th, such as the old-age pension system, or even further back, as some commentators noted in the article referenced at the beginning.
The conceptualization of the state as a guarantor of well-being, at least as a last resort, has to be linked to the rise of the state as the expression of popular sovereignty. If the state represents the “will of the people,” then the purpose of the state is not only to protect, but also to provide for the people. This is perhaps the basic logic that justifies the emergence of the welfare state from the nation-state, a paradigmatic European creation, and the which regulates the relationship between power and the individual.
The emergence of this conceptualization of the social contract is inextricably linked to the secularization of the state and social life in general: a philosophical and political process that spans from the Renaissance to the Enlightenment, the Industrial Revolution, and the modern, postmodern—some would even say metamodern—epochs.
Together with this process, which leads on the one hand to philosophical and scientific materialism and on the other to secularized politics (the separation of church and state), there is the emergence of a financial system that propels central banking, commercial banking, and fiat currency. This financial system did not emerge fully formed; it evolved, as did political systems, toward its current form.
Despite more orthodox readings that locate the beginning of the nation-state at the Peace of Westphalia in 1648 and its crystallization in the French Revolution in 1789, I believe that there is an equally important event in the foundation of the Bank of England in 1694.
Similar to how the French Revolution became the fusion of the concept of nation and state—meaning citizens owe allegiance to the state because it represents the will of the nation, and not merely the crown—the foundation of the Bank of England merged the bank and the state by establishing a system of state borrowing, standardized national debt, and fractional-reserve banking. This occurred during the reign of William III, himself of Dutch origin, who integrated Dutch-style public credit instruments into England while authorizing a fractional-reserve lending model.
This perspective draws on the work of Peter Dickson (The Financial Revolution in England), alongside historians like Fernand Braudel, who trace the English financial revolution back to institutional roots in the city-republics of Venice, Genoa, and Florence—a financial machinery that ultimately propelled Britain to empire status.
What I am proposing is that the current sociopolitical paradigm in Western Europe is the result of an interlinked philosophical, political, scientific, and economic matrix that has evolved in tandem, becoming untenable and impossible to understand when separated. I, of course, understand that this is nothing new and should be the standard view, but that does not always seem to be the case.
All the protests happening across different parts of Europe seek to force the government to act. It is reasonable to do so when the government claims to be the ultimate sovereign, and, theoretically, it is. However, the structural changes causing the worsening of living conditions and the questioning of the nature of the social contract are not merely political; in many cases, they lie outside of what is considered the political sphere today.
There are many causes for the current situation in Europe. For example, the introduction of the euro, which, if we are to believe its ideological father, Robert Mundell, is performing as expected (thank you to Dunkey2830 for sharing this link in a comment over a year ago).
I am not going to debate whether the single currency is beneficial or harmful, or if it is both, but rather how it has functioned to strip power from national governments and force them to enact certain policies—usually austerity measures. Citing the article linked above, written by Greg Palast:
“The euro would really do its work when crises hit, Mundell explained. Removing a government’s control over currency would prevent nasty little elected officials from using Keynesian monetary and fiscal juice to pull a nation out of recession.
“It puts monetary policy out of the reach of politicians,” he said. “[And] without fiscal policy, the only way nations can keep jobs is by the competitive reduction of rules on business.”
He cited labor laws, environmental regulations and, of course, taxes. All would be flushed away by the euro. Democracy would not be allowed to interfere with the marketplace – or the plumbing.”
If we take this into account, alongside other geopolitical factors—such as the proxy war that NATO is waging against Russia at the behest of the U.S., or the financial system’s inertia toward central bank digital currencies—it is hard to see what national governments can really do in order to respond to the demands of their citizens. It is the financial and geopolitical components of the system that are jeopardizing the meaning of the social contract, but they are, for the moment, outside the reach of Western European governments.