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This article is extracted from a new CWI publication,
Europe in turmoil – a socialist analysis, available, for £1, from: CWI
Publications, PO Box 3688, London, E11 1YE or the CWI website:
www.socialistworld.net
Europe in turmoil
THE CRUSHING rejection of the proposed EU constitution in
France and the Netherlands represents the biggest defeat for the EU ‘project’
since the establishment of the European Union (EU). The referenda results were
also a clear rejection of neo-liberal policies and the political establishment.
Reflecting on the consequences, the Financial Times began
its longer than usual editorial, ‘Crunch Time for Europe’, gloomily stating,
"Two weeks after the French rejected the European Union’s new constitution,
Europe’s leaders are in disarray". (13 June) It is a far cry from the dizzy
optimism with which Europe’s rulers launched the proposed constitution. One of
its main authors, former French president, Valéry Giscard d’Estaing, told his
fellow drafters: "This is what you have to do if you want the people to build
statues of you on horseback in the villages you all come from".
As the referenda dates neared, most capitalist commentators
and politicians had resigned themselves to a No vote. Yet the ruling classes and
their representatives have been shaken by the size of the No majorities and the
class polarisation reflected in them.
In both, the No vote was overwhelmingly comprised of the
‘have nots’. The Yes vote was overwhelmingly made up of the ‘haves’. One French
teacher quoted in The Guardian summed up the attitude of the French workers:
"We’re voting no. It is a constitution for the bourgeoisie, for multinationals,
for bosses. It is only about the economy, competition, profits, the market and
capitalism, we are against all that; we are communists. There isn’t any progress
for workers. Most workers want to say ‘merde’, to stick two fingers up at them.
We are fed up with saying yes to the politicians". (28 May)
The class divide reflected in the referendum was most
clearly seen in France where on a 70% turnout a decisive 56% voted No. An
estimated 80% of blue-collar workers voted No. Amongst young voters, 59% of
18-24- and 25-34-year olds voted No.
The same class polarisation took place in the Netherlands.
In the poor districts of Amsterdam the No vote was crushing. In Amsterdam Noord,
73% voted No. In Volewijck and Buiksloterham, the No vote scored a massive 79%.
The turnout in the Netherlands was higher than that for the European elections.
This crushed the argument that a high turnout would secure a Yes victory.
The overwhelming rejection was despite the fact that the
ruling class and its institutions tried to mobilise everything to win a Yes
vote. In France, the three largest political parties, the media, and
international political leaders, were all mobilised for the Yes campaign but to
no avail. In the Netherlands, all the main political parties, including the
Dutch Labour Party, the trade unions, the media, and all the institutions of
capitalism, argued for a Yes vote: only to be defeated by a massive 62% to 38%,
an even bigger majority than in France. The radical Dutch Socialist Party was
the only substantial party to argue for a No vote.
It was a massive miscalculation by the French and Dutch
governments. Both failed to understand that the referendum would be seen as a
plebiscite on neo-liberalism, the market and the anti-working class policies
that they have implemented. The ruling elite underestimated the massive
opposition that exists to privatisation, budget cuts and labour flexibility,
which were introduced during the 1990s.
Following this defeat, however, the ruling class is still
determined to push ahead with carrying out further neo-liberal policies. The new
government in France has made this clear. Jacques Chirac has attempted to
distinguish his ‘social model’ from the programme of ‘Blairism’ (strident
support for the Anglo-Saxon neo-liberal economic model) but the only difference
is that Chirac favours Tony Blair’s neo-liberalism, but in slow motion – death
by a thousand cuts. The Financial Times made clear that neo-liberal policies
must continue. Its editorial urged EU leaders to "commit themselves to making
progress on economic reform". This policy, however, will bring the capitalists
into greater collision with the working class and is a recipe for greater social
explosions. It also poses the need for a clear socialist alternative as the only
way to resist neo-liberal capitalist policies.
In both countries, an upturn in struggle is now likely to
follow. In the Netherlands, following the referendum, 15,000 local government
workers attended a demonstration on the day they took strike action, as part of
their campaign for higher wages. Even the police are considering strike action
over wages and conditions.
In France, the revolt against the EU constitution has
exposed the depth of the crisis facing the ruling class. One analyst, Dominique
de Montvallon, correctly concluded: "The country is now in such a state of
paralysis, worry and anger that one thinks straightaway of May 1968".
Following the referendum defeat, Jean-Pierre Raffarin was
replaced as the French prime minister by the aristocratic Dominique de Villepin.
But the very appointment of Villepin, who has never been elected to anything,
reinforced the wide perception of the French people of a ‘democratic deficit’ in
the country, with a massive erosion in the credibility of all the bourgeois
institutions and all the major political parties.
Villepin’s new government has initially attempted to present
a ‘softer image’, promising to defend the ‘social model’. Yet this will not
prevent further attempts to introduce more ‘flexibility’ in the labour market.
The government has also pledged that it will continue with its privatisation
plans and that public spending will remain frozen. This is a recipe for a
massive collision between the classes in France.
Despite his efforts to project an alternative image, 60% of
voters think Villepin’s government will mean more of the same. The No victory
has boosted the confidence of the working class which now confronts a
fundamentally weakened government. The strikes and protests of the metal
workers, within days of the referendum result, indicate that strikes and mass
protests are likely to now escalate: 70% in one poll indicated that they thought
social struggles and conflict was likely to increase in the coming months.
The euro in question
ON A European-wide scale, the events which have followed the
rejection of the proposed constitution are not episodic. They indicate the
qualitative change which has taken place in the situation facing the ruling
classes of Europe, vindicating the analysis of the Committee for a Workers’
International (CWI) that they are unable to unify Europe to construct a
capitalist ‘United States of Europe’, as even some Marxists outside the ranks of
the CWI believed.
The EU ‘project’ for greater economic and political
integration was rooted in the pressure on the European capitalists from
competition from US imperialism and, more recently, China. This drove them
towards increased collaboration and led to illusions that this would result in a
politically unified Europe. This trend, along with the process of the
globalisation of the economy and the growth of multi-national and trans-national
corporations, illustrated how the productive forces have outgrown the
limitations of the national state and, to a certain extent, have even outgrown
continents. The big companies increasingly look towards the world market rather
than simply their national or regional base. At the same time, this process has
its limits and comes up against the insurmountable barriers of the separate
nation states and the national interests of the capitalists. In the aftermath of
the referenda these factors have reasserted themselves, exposing clearly a clash
of interests. This process of unravelling will worsen in the event of a serious
economic crisis, recession or slump, including its impact on the common
currency, the euro.
The introduction of the euro was a political and economic
gamble by the capitalists, pushed through in the teeth of some opposition from
their own side, during the triumphalist wave which followed the collapse of the
Berlin wall. The Bundesbank, for example, opposed its introduction but was
compelled to accept under political pressure. The stability pact was introduced
as a ‘safety net’, which was intended to prevent governments resorting to
‘profligate spending’.
Yet, the whole idea of the euro was tailored to a situation
of continued growth of the European economies, with no real account taken of
what would happen in the event of a slow down, stagnation or recession. The mood
expressed in the referenda and recent workers’ struggles also reflects
dissatisfaction that the economic growth, jobs and higher living standards
promised with the introduction of the euro have not materialised.
The ruling classes attempted to impose an economic union in
the absence of an existing political union. As we explained at the time, this
has never succeeded in the past. Without a political union, moving towards the
establishment of a unified nation state, an economic union or currency could not
survive indefinitely. Now the Financial Times belatedly warns that "all
large-country monetary unions that did not turn into political unions eventually
collapsed" (8 June).
There is a vast difference between the EU and a federal
state, such as the US, which can distribute funds to local state governments in
a relatively easy fashion on the basis of an agreement. The distribution of
resources or funds cannot be done in the same way, in a Europe composed of
different nation states, as the current struggle over the EU budget shows.
While an immediate collapse of the euro or the EU is not the
most likely short-term perspective, the sharp increase in political and economic
tensions between the representatives of the various ruling classes will
intensify. However, the onset of a deep economic recession, slump or world
financial crisis will sharpen these conflicts further and could then provoke a
relatively rapid collapse of the euro. The withdrawal of Britain from the ERM in
1992, on ‘Black Wednesday’, shows how diverging national economic conditions can
drive the capitalist class of a country to break from a currency or monetary
agreement. Although there are differences, and it will not be repeated in
exactly the same way, the euro can break up, with one or more country
withdrawing or even being expelled from it.
Even before the French and Dutch referenda, the question of
the sustainability of the euro in the face of divergent growth and inflation
rates was beginning to be discussed amongst capitalist strategists. At one
private meeting, on 25 May, involving German finance minister, Hans Eichel, and
Axel Weber, president of the Bundesbank, a representative from the Morgan
Stanley investment bank, Joachim Fels, expressed concern about the
sustainability of the euro. According to the Financial Times, even the extreme
pro-EU lobby group, the Centre for European Policy Studies, published a report
in early June that raised the prospect of the collapse of the euro.
Following the Franco-Dutch referenda, three Italian
ministers, members of the Northern League party, called for the reintroduction
of the lira. Although partly an attempt to embarrass Romano Prodi, former chair
of the European Commission and de-facto leader of the centre-left opposition
alliance, l’Union, who took Italy into the euro, the very fact this has been
discussed by a ruling coalition party, reveals the constrictions the euro is
placing on the ruling class in Italy and other countries. It is no accident that
the strongest opposition to the euro is in the Netherlands, France, Italy and
Germany – countries either in economic stagnation (recession in the case of
Italy) or suffering from high levels of unemployment. The euro, with a fixed
uniform interest rate and state budget rules, has added to the deflationary
pressures in these countries.
However, it is not necessarily Italy, or one of the weaker
eurozone economies, that could torpedo the euro. Commentators like Wolfgang
Munchau, writing in The Financial Times, recently pointed out that France or
Germany, in the event of a watered down stability pact and increased
inflationary pressures, may eventually conclude they would be better off outside
the eurozone, with their preference for price stability. One analyst from
Deutsche Bank warned: "The pressure to leave the eurozone will not come from its
weak members but from its strong members". Indeed, it is from the strongest of
the eurozone economies, Germany, that the pressure to leave could become
greatest because of the dramatic social, economic and political crisis which has
developed in that country.
A turning point in Europe
ALTHOUGH THE Red-Green coalition government of chancellor
Gerhard Schröder did not face a referendum on the EU constitution, the regional
elections in North Rhine-Westphalia were the equivalent of Chirac’s referendum
defeat for Schröder. For the first time in 39 years, the Social Democratic Party
(SPD) was voted out of office in this state.
The Red-Green coalition has carried out a vicious
neo-liberal policy. With privatisations, cuts in social services, and official
unemployment standing at over 11% – higher than in France – the ‘social
consensus’ that was established during the upswing of capitalism after the
second world war has been shattered. Yet even this has not been enough for the
German ruling class.
Fearful that pressure from the working class would
strengthen the resolve of the ‘left-wing’ of the SPD in parliament, making
Schröder’s pro-capitalist government unreliable, the ruling class has apparently
opted for Angela Merkel, leader of the Christian Democratic Union (CDU), and
backed early elections. As the Financial Times Deutschland put it: "We tried to
reform through the left and now we need to go back to classical right-wing
reform. This will provoke social resistance which we have not seen for decades
but we now need to prepare for".
This could prove to be a major miscalculation by the German
ruling class. A further round of attacks by a CDU-led government is certain to
provoke massive resistance by the working class. To date the ruling class has
relied on the ability of the trade unions to hold back a powerful movement of
the German working class against Schröder’s SPD-led coalition. But union leaders
will not be able to exert the same control over the working class under a CDU
government. Even during the last weeks of the Schröder government, groups of
workers, such as those at Bosch-Siemens in Berlin, supported strike action to
fight redundancies, emboldened by the evident weakness of the government.
In some countries, the working class through struggle has
been able to slow down the neo-liberal offensive. In 1995 the French workers
were able to stop the Juppé plan. In Italy, Berlusconi was unable to implement
his proposed pension ‘reform’. In countries like France and Germany it has not
yet been possible to carry through neo-liberal policies to the extent that the
ruling class would like to. They have not gone as far as Thatcher was able to do
in Britain. Yet, the failure of the trade union leaders to organise mass
resistance and offer a socialist alternative has enabled the capitalists to
continue their offensive, and attempt to drive ahead with further attacks.
Capitalism cannot unify Europe. The working class must unite
across national borders to combat the threat of neo-liberalism and capitalism.
The alternative to the crisis of the EU, and capitalist national conflict, is to
fight for a democratic socialist federation of Europe. This is the only
alternative to the turmoil and national antagonisms that are now breaking out in
the EU.
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