Towards one Europe? (1993)

From the February 1993 issue of the Socialist Standard

If, as socialists contend, “unity is strength”, then the capitalist class would appear to be making a bid to strengthen their position in Europe. The Maastricht Treaty, signed by the twelve heads of state of the member countries of the European Community and currently undergoing the process of examination and ratification by the British House of Commons, is without doubt intended to be a declaration of European capitalist unity. Indeed, it grandly proclaims itself to be “A Treaty on European Union”.

You may not actually have read it, and if so, you are fortunate. 61,351 words of legalistically-precise, diplomatic-speak is not everyone’s idea of bedtime reading, insomniacs excepted. However, because of its clearly-stated objectives and the various claims made on its behalf by its supporters in all the main political parties, it is a document worthy of examination. This is not least because its supporters on the left of capitalism's political spectrum in particular claim that Maastricht represents a great leap forward for the European working class and provides the opportunity for a sustained European-wide peace.

Maastricht
The Treaty itself largely takes the form of a scries of amendments to the original Treaty of Rome which established the basis for the EEC in 1957. Its goals, set out in the Common Provisions in a preamble to the main text, notably include the following:

  The creation of an area without internal frontiers, through the strengthening of economic and social cohesion and through the establishment of economic and monetary union, ultimately including a single currency . . . [and] . . . the implementation of a common foreign and security policy including the eventual framing of a common defence policy, which might in time lead to a common defence.

About half of the Maastricht Treaty is taken up by the steps deemed necessary to achieve the level of economic and social cohesion vital for the achievement of these, and other goals. The economic harmonization provisions call for an “irrevocable fixing of exchange rates leading to a single currency, the ecu, and the definition and conduct of a single monetary policy and exchange rate policy".

The task of implementing such policies lies in large measure with a European System of Central Banks (ESCB), whose governors shall form a council presiding over a European Central Bank with “the exclusive right to authorize the issue of bank notes within the Community”.

The initial step towards the "irrevocable fixing of exchange rates” has, of course, been the already tarnished European Exchange Rate Mechanism (ERM). According to the Treaty, a European Monetary Institute will be set up in 1994 to oversee the general moves towards monetary union and sometime in 1996 a meeting of European heads of state will decide whether a majority of the member states fulfil the necessary conditions for it. The British government, though committed to the rest of the Treaty, has secured an opt-out clause on the final stage of monetary union and also on the agreement on social policy (the Social Chapter)—which simply means that the government will have less to renege on when it continues the time-honoured practice of governments everywhere of trampling on the working class whenever the capitalists deem it imperative.

There are sound reasons why some capitalists and politicians in Europe wish to proceed along the lines of political and economic union. The failure of governments across the world to successfully tackle the many problems which have beset the capitalist economy since its inception have led many to the conclusion that action to reform and mould capitalism cannot be successfully undertaken within the borders of any one single nation state. The growing inter-connectedness of the capitalist economy has been seen—with a degree of justification—as a force which no longer gives automatic recognition to the individual nation.This was recognized by Marx in the nineteenth century and is a process which has accelerated rapidly in the latter half of the twentieth:

  The bourgeoisie has through its exploitation of the world market given a cosmopolitan character to production and consumption in every country. To the great chagrin of reactionists, it has drawn from under the feet of industry the national ground on which it stood. (Manifesto of the Communist Party).

Black Wednesday
Capital is now a truly world force, and its rapid movements make the nation state seem like an economically powerless institution. It is here that occurs one of capitalism’s many contradictions—one which is in no small part responsible for the recent difficulties encountered by the European nation states set on Union. This is the contradiction between the inter-connectedness of capital on the one hand, and the firmly national and imperialist basis on which the capitalist class organizes itself on the other.

The competitive drive to accumulate capital which pervades capitalist production and exchange ensures that sections of the capitalist class with divergent economic and strategic interests are forever in antagonism with one another over trading arrangements. sources of raw materials and spheres of influence.

At one level such antagonisms were clearly demonstrated last September with the departure of Britain from the ERM on “Black Wednesday" and the devaluations of the Italian and Spanish currencies. Though the ERM ensured relatively cheap and stable import prices it was opposed by a significant section of the British capitalists who contended that an exchange rate pegged at around £1:2.95DM made British exports uncompetitive and necessitated high interest rates to support the pound at what was an otherwise unsustainable level.They considered that the ERM produced unfavourable trading conditions and are now lobbying the government never to return to it in its old form.

European unity among the capitalist class is made even more unlikely because national antagonisms over trading conditions and the like are exacerbated by divergent economic performances between nation states. This is part of the explanation for the slide of the pound against the deutschmark. Britain’s economy was weaker and entered into slump much earlier than Germany’s, and the monetary conditions required in Britain were rather different from those appertaining in Germany, producing further antagonisms.

If by some miracle a single currency, with one central bank and one minimum lending rate, was established in Europe, it could not end these antagonisms. A single interest rate, for instance, would have to reflect the market conditions affecting money capital throughout Europe. In order for it to work effectively all of Europe would have to be at the same stage of the trade cycle at more or less the same time. Interest rates tend to be highest at the end of a boom and then at the onset of economic crisis and slump. If one country entered recession before the others—as is normally the case—it would even more quickly than normally drag the other countries down with it by pushing interest rates up in those countries where rates would otherwise still be falling.

It is highly unlikely, however, that it will come to this. For it is not only at the purely economic level that nation states tend to march to a different tune. The more longterm political, military and strategic concerns of Europe's nation states invariably lead them to pull in different directions. The interests of Britain and Germany are, for example, hugely at odds. Britain's position is largely determined by its relatively privileged status with regard to the world’s largest capitalist power, the United States.

While the US initially used its considerable influence in Western Europe to try and bind the various nation states closer together as a strong buffer to the former state capitalist Eastern bloc, its main priority since the collapse of the USSR has been to prevent Germany emerging at the head of a strong new imperialist bloc. In this it is being ably assisted by Britain. Germany, determined to challenge US hegemony, has been able to rely on support against the US from France, but future French support will only be forthcoming to the extent that France itself can ensure German military and strategic containment across the European continent.

In the light of the collapse of the Eastern bloc and with German re-unification, the inherent imperialistic tensions between the European nation states are, if anything, intensifying. This was recently acknowledged by Iain Vallance, chairman of British Telecom:

  In Western Europe the Community is less stable than it has been for more than 40 years. There is a risk that we could return to . . . the pointless struggle for political dominance by individual states or rival groups. (Sunday Times 11 October)

The sharp disagreements over the latest GATT "settlement” are just one example of why Mr Vallance’s worries are well-founded. The history of capitalist Europe has periodically been one of imperialist adventurism, invasion and annexation.

So far, capitalism has shown itself to be incapable of overcoming the national divisions that it has engendered over two centuries and more. Maastricht will not change this. It is a capitalist utopia, already—and not surprisingly—coming apart at the seams.

Dave Perrin