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EU enlargement after the Irish referendum
EUROPEAN UNION backers breathed a sigh of relief when a
second referendum in Ireland ratified the Treaty of Nice. This treaty lays the
basis for incorporating ten additional states into the EU. It also details a
neo-liberal programme of water, post and education privatisation.
This time round, Ireland’s establishment politicians left
nothing to chance. ‘Yes’ was supported and funded by the main political
parties, as well as big-business organisations, the Irish Congress of Trade
Unions, the Irish Farmers’ Association, the mainstream press and the Catholic
church.
The mounting anger at the corruption scandals involving
Bertie Ahern’s Fianna Fail government and imminent cuts in health and
education was diverted away from this vote. The Labour Party, for example,
called for a ‘different kind of yes’: ‘Hold your fire, Fianna Fail can
wait. Europe can’t’, urged one of its posters. In the end, 63% voted Yes on
a 49% turnout. The first referendum in June 2001 had rejected the treaty with
54% against on a 34% turnout.
This vote is unlikely to hold back the growing resistance to
Ahern’s anti-working class policies. The Irish economy has taken a turn for
the worse, growing by 5.7% last year, as opposed to around 10% in the late
1990s. Inflation is 4.5%, the highest in the EU. The government has produced an
emergency budget to tackle a €570 million deficit (after last year’s €4.7bn
surplus), including tax increases and spending cuts.
The Irish referendum out of the way, there are still many
hurdles to jump before the current 15 members of the EU are joined by ten
others: Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta,
Poland, Slovakia and Slovenia. Several problematic deals have to be struck at EU
summits in Brussels in October and Copenhagen in mid-December before the formal
accession treaty is signed in Athens next April. The ten applicants could then
join in 2004.
The seemingly interminable process, the spreading economic
slowdown and rising working-class militancy are fuelling anti-EU sentiment. With
good reason, people fear that membership will result in their markets being
swamped by subsidised Western produce and that rich foreigners will buy up
property. Value added tax, imposed by the EU, has risen. Subsidies on energy,
housing, transport, hospitals and education have been scrapped.
In Poland, 7,500 Solidarity union members from Silesia threw
tear gas, bottles and homemade grenades at government offices and police on 15
October. They were protesting against pit closures and the threat to 40,000 jobs
linked to restructuring to prepare for EU entry. Silesia has an unemployment
rate of 30%, compared with the national average of 17.4%.
The new EU entrants will be treated as second-class
Europeans. The applicant states are set to receive agricultural subsidies which
are much lower than those paid to farmers in the present EU. The same is true of
financial aid to the poorer regions, although the details are still to be
finalised.
The Dutch, German, Swedish and British governments are
trying to link enlargement to reform of EU farm policy. But an agreement between
France and Germany at the Brussels summit means that the Common Agricultural
Policy will not be substantially restructured in the short term.
In the Netherlands, where the government coalition has
collapsed, opposition to applicants such as Poland, Latvia and Slovakia has been
raised. Germany, however, will not entertain enlargement without Poland – a
neighbouring country of 40 million people, a huge new market for German goods,
with cheap labour and natural resources to exploit. And the continued division
of Cyprus has to be resolved.
These issues, along with how to organise voting within the
larger EU, are deeply divisive as the representatives of each nation state try
to secure the most favourable terms. The battles are set to intensify.
Politicians in France, Spain and Italy are campaigning against EU funding being
‘diverted eastward’. In Germany and Austria the fear of rising unemployment
is being used by right-wing politicians. Countries such as Ireland, Portugal and
Spain fear that they will lose out on EU grants as poorer states join, and that
their say in decision making will be undermined. France, Germany, Britain and
Italy will maintain their dominance over the smaller states.
Behind the tensions is the poor growth of the eurozone
economy. The problems of maintaining the single currency are being increasingly
exposed, reflected in the startling comments by Romano Prodi, the European
Commission president, that the stability and growth pact was "stupid"
and should be replaced by "more intelligent", "more
flexible" mechanisms (Financial Times, 18 October).
After years of forcing austerity measures on other European
states, both Germany and France have fallen foul of the stability and growth
pact, which dictates that deficits must not exceed 3% of gross domestic product,
and locked all the eurozone countries into a one-size-fits-all interest rate.
This has further angered many current EU members as well as the applicant
states. It is a clear demonstration that there is one set of rules for the
weaker states and a completely different and preferential set for the dominant
powers.
The German economy has been hit hard by the slowdown in the
US. Chronic high unemployment – over four million (an average of 10% but with
over 18% in the East) – has resulted in an increase of €2.5bn this year in
social security payments. At the same time, tax income has declined, leaving a
€58bn deficit. The Dax index of leading shares has plunged 48% this year –
the worst performance of any of the world’s leading stock markets.
The German finance minister, Hans Eichel, admitted that
Germany would fail to keep this year’s budget deficit in line with the rules
for Europe’s common currency. Eichel paid lip service to getting back on track
in a couple of years, by raising taxes and cutting spending next year. Francis
Mer, the French finance minister, simply refused to do anything about France’s
budget deficit. French president, Jacques Chirac, has prioritised funding tax
cuts and increased spending, especially on the military – promises made in
this year’s presidential and parliamentary elections. The right-wing
government, however, is nervously eyeing the organised working class. Fresh in
the memory is the fate of the last conservative government which collapsed after
a massive strike movement by public-sector workers in 1995. The government would
like to carry out a whole series of attacks on workers’ rights, conditions and
pay, but is trying to introduce them by stealth. All the signs are that mighty
movements of working-class people are being prepared.
Meanwhile, the EU is adding fuel to the fires of opposition
to the EU bosses’ Europe: "But none of these changes to the stability
pact or economic management are imminent, and for the time being Europe must
live with the system it has. So ministers in Germany and Portugal now face the
immediate problem of explaining to hostile electorates that they are imposing
austerity measures to honour the stability pact, officially described in
Brussels as ‘stupid’." (Financial Times, 18 October)
The economic rationale behind the EU and enlargement is
clear: the development of a large European trading bloc of global significance.
But as it grows, so the economic and political strains increase. The momentum
remains in the direction of enlargement, but it is not yet a done deal. It
remains to be seen how far it will go. It is only a matter of time, however,
before the economic crisis and its attendant social and political upheavals
result in the collapse of the euro and put the EU structures under severe
pressure.
Manny Thain
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