The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

The Disunited States of Europe

Mar 4, 2019

The following article is a translation of one that first appeared in Lutte de Classe (#198, March-April 2019), the political journal of Lutte Ouvrière, the French Trotskyist organization.

Although it has been hailed as the guardian of peace and economic prosperity on the continent for public opinion since its creation, the European Union (E.U.), which today comprises 28 states (including the United Kingdom) and over 510 million inhabitants, seems to be in its death throes. Three months away from the elections to renew its parliament, and the outcome of Brexit still unknown, multiple centrifugal forces are threatening a Europe whose construction increasingly resembles an enterprise of deconstruction.

A Long Struggle towards Hegemony

The emergence of the main nation-states in Europe was both the condition and the product of capitalist development. But that arena soon proved too narrow to guarantee sufficient profits for industrialists and financiers. The era of imperialism, which began in the 19th century, was marked by the colonial sharing out of the world and, in the words of Marx, the “naked, shameless, direct, brutal exploitation” of the world. This also meant the systematic bleeding of the old continent by its three main powers, Great Britain, France and Germany, on behalf of their trusts and of the capital concentrated in each of these countries.

During a whole historic period, the struggle between these bourgeoisies for hegemony and a certain unification of Europe for their own account raged on the markets as well as the battlefields. In the 20th century, that struggle resulted in two world wars which put an end to the domination of European powers. The issue of supremacy on the continent, at least on its western part, had found a new solution: the United States had become not only the arbiter but the master of the situation.

The Yalta agreements between U.S. imperialism and the Soviet bureaucracy transcribed this relationship of forces in the language of diplomacy by dividing Europe into two areas of influence. From 1947, the Cold War further strengthened the U.S. hold, and it is under the aegis of the U.S. that the groundwork for a kind of European construction was laid. The Marshall plan was one of its instruments. It comprised an economic side – a reconstruction program providing outlets for American goods, of which the Organization for European Economic Cooperation (OEEC) was in charge – and a political aim: curtailing Soviet influence. It was to be completed, on the military side, with the creation of NATO in 1949.

From the European Coal and Steel Community (ECSC) to the Common Market

For the different bourgeoisies, it was necessary to create a framework to facilitate the recovery of their productive apparatuses, and a market to sell their products. Due to its multiple links with the U.S. and its former colonies in the Commonwealth, Great Britain was less committed. France and Federal Germany were the first mainstay, with the creation of the European Coal and Steel Community (ECSC) in 1951. This was an acknowledgment of sorts that those borders inherited from the past, which divided even the underground and its iron and coal deposits, were an obstacle for their capitalists. The other signatories were Italy, Belgium, Luxemburg and the Netherlands.

A High Authority, without any power of its own, was created to supervise it. The “Fathers of Europe” evoked the promulgation of a lasting peace. But the big industrialists were concerned first and foremost with modernizing vital sectors, optimizing their production, and cutting costs, while benefiting from public funds. Robert Schuman also pointed out that the ECSC would enable France to “carry on one of its essential missions: developing the African continent,” in other words plundering it. National ambitions and the thirst for power had only partly been put aside.

The relative success of that experience was prolonged in 1957 with the signing of the Treaty of Rome, whereby the same countries gave birth to the European Economic Community (EEC). Coal and steel were followed by a plan for the nuclear sector, which required investments that big capital would not assume itself, but above all the prospect of a vast customs union: a continent-wide market, without the taxes and tariffs which hindered the development of capitalist groups and their thirst for profits. This was made all the more compelling as decolonization was about to open up the preserves of the European imperialisms in Asia and Africa. Finally, the EEC was to provide the crucible which might enable European capital to compete with U.S. trusts.

A Fig Leaf for Rivalries between Great Powers

That common market could benefit only the most powerful capitalists. The same was true of agriculture, with the Common Agricultural Policy, which represented over half the meager European budget, acting as a drain of subsidies for the sector of agribusiness and large exploitations, accelerating concentration, including in the form of cooperatives, and the modernization of production. Thereby, new prospects were opened up to the multinationals in the sector of agricultural machinery and chemistry.

The “common home,” with its institutions and bureaucracy, became so appealing that a growing number of states joined it, including the United Kingdom in 1973. Its adhesion had been put off for several years due to the opposition of De Gaulle, but the British bourgeoisie could no longer stay away, especially as the period of growth that had started after the war was coming to an end.

That market, however, did not give birth to a supranational capitalism, that is to say to the unification of European imperialisms. Over a century ago, after forsaking proletarian internationalism when the First World War broke out, Karl Kautsky, the main theoretician of German social democracy and the Second International, had suggested that “the transfer of trust methods to international politics, a sort of superimperialism” would be possible at the end of the conflict. Expressing the fact that the bourgeoisies knew no borders and were extending their capital’s domination to the whole planet, he concluded that they could eventually come together against the exploited. But Kautsky’s betrayal led him, like all reformists, to deny that this drive towards the socialization of production and unification under the rule of profit and exploitation, was in contradiction with the competition between trusts and the very framework of the states thanks to which the bourgeoisie maintains its class domination. From that point of view, there still isn’t a superimperialism today.

In the space and aeronautical sectors, structures (such as Airbus or the European Space Agency) did emerge, thanks to the pooling of capitals from the main EEC states. But that was the only way their capitalists might hope to resist the domination of Boeing, NASA, and groups from across the Atlantic.

In the other sectors, as even within those transnational structures, the struggle kept raging. The ongoing globalization, however, concealed how intensely, by displacing it onto a wider battlefield.

Each state continued to protect and support its own capitalists, with public procurements, specific rules and laws, and financial aids, constituting so many crutches. That is how entire sectors of French capitalism, in particular that of armaments, thrived under the state’s protection, and even inside it, in the case of nationalized sectors and their affiliated companies.

That virtually organic tie between those groups and their state apparatuses did not prevent those same groups from conquering areas of influence on other parts of the continent and well beyond, at the expense of their rivals. Those ties were even, to a certain extent, the condition for it.

After the adhesion of Greece in 1981, then of Portugal and Spain in 1986, the end of the Soviet bloc and the integration of its former dependent states in the capitalist orbit from the early 1990s onward, offered a new prospect for these appetites, expanding opportunities beyond all hopes. Not one sector (agriculture, industry, finance, retail, etc.) emerged unscathed by the plundering and the delocalization. The leaders of these countries put themselves into a situation of virtual vassalage. For to the European imperialist countries, these countries represented a threefold advantage: transport and industrial infrastructures, a skilled workforce – and much lower wages. On account of its position as Europe’s first power, its central geographical situation, and its former ties with those territories, German imperialism grabbed the lion’s share in what had historically constituted its sphere of economic influence. But French imperialism, which had already long been present, for instance with Renault in Romania, was not far behind. The same was true in Greece, especially with the banks.

The Creation of the E.U.: Setting up New Rules and the Euro

To increase the stability of that market and make it even more profitable, it was still necessary to establish rules to organize competition and to introduce a common currency, which the Treaty of Rome already provided for. For four decades, the rivalries between European powers and between capitalists had indeed meant a great fluctuation of the currencies, repeated devaluations, which the creation of a European Monetary System, in 1979, was at pains to mitigate. That situation, further aggravated by the persistence of multiple tariffs between the countries, was increasingly incompatible with the large groups’ need to produce and exchange throughout the whole continent.

The Maastricht Treaty in 1992 led to the adoption of a guide which claimed to regulate the economic war between capitalists, and the passing of budget rules for the states (the notorious “convergence criteria”), which gave a semblance of equal treatment in the eyes of public opinion, while maintaining the dominant position of the great powers.

On January 1st 1999, eleven countries adopted the euro for their financial transactions. Among the great powers, only Great Britain stayed out, probably in the hope that it could combine the advantages of its integration into the common market and of its status as a global financial center as well as privileged ally of the U.S. Three years later, coins and banknotes came into circulation to the sound of the “Ode to Joy.” Between 2004 and 2007, ten countries from the soviet bloc joined in by integrating the E.U.

But the euphoria that accompanied the birth of that monetary union and the European Union, which represented a kind of accomplishment after decades of strenuous haggling and subdued struggles, lasted only a few years. The 2008 financial crisis, which exacerbated the competition within the continent and with the U.S., shed a light on the fragility of the edifice.

The European Union and the Test of the 2008 Crisis

That crisis revealed particularly the extent to which the relations of domination between the states, inherited from the past uneven development, continue to act in a subterranean way. Behind the mask and the language of diplomacy, some are – to paraphrase Orwell – more equal than others.

In other words, the capitalists of Germany, France, and Great Britain in particular, through their governments, imposed their rule onto the weaker ones: Greece, Spain, Portugal, let alone those who, in the east of Europe, were less able to resist their domination on account of the still semi-developed character of their economies.

Those relations were brought to light during the euro crisis between 2010 and 2011: the economies and the popular classes of those states were brought to their knees, to the point of jeopardizing the existence of a common currency shared between 19 countries. As a result of the speculation and interest rates imposed by the banks, a Greek or Portuguese euro de facto wasn’t worth as much as a French or German euro anymore. The “monstrous rule of the financial oligarchy” evoked by Lenin in Imperialism is not a theoretical construct: BNP-Paribas or Deutsche Bank and some other banks have kept all their power even within European structures, to the expense of their competitors, and increasingly of the states themselves.

Shamelessly, those same powers broke the rules they themselves had established and dictated to all countries. To save the banks and the financial sector, and consequently capitalism as a whole, they funneled unprecedented amounts of capital, nationalized vital sectors when necessary – and got into unlimited debt.

As early as 1957, the treaty setting up the EEC included the aim to establish a “free, undistorted competition” within the Common Market. But the piles of regulations written over the years can hardly conceal the unwritten law of the strongest, and a struggle with – virtually – no holds barred.

While the economic war used to go on with ceaseless devaluations, it has partly been transferred to the tax area in order to attract capitals and companies from around the world. In this rivalry to offer the most, which drains the states’ budgets, Ireland boasts the lowest corporate tax, with 12.5%. Only Bulgaria does “better”, with 10%. But everywhere, the taxes actually paid by the capitalists are even more ridiculous.

To extract more surplus value and weaken their rivals, large companies have implemented a policy of wage cuts and casualization aggravated by austerity policies. Germany has been setting the trend for twenty years, by turning millions of salaried workers into working poor. But thereby, it has maintained its place as the continent’s first power and first global exporter. For workers, whatever kind of unification is happening in the E.U. in terms of labor regulations or work conditions, it is a leveling down. Besides, the UE gives ample freedom to all its members to further aggravate that evolution.

Europe: How Many Divisions in the Face of American Imperialism?

The congenital weakness of Europe is to remain a patchwork of states, which are as many fortresses for the bourgeoisies, like feudal castles which served as shelters in times of crisis or war. Whether the critics of Brussels’ institutions and the European Commission, which is supposed to embody a form of executive power, like it or not, Europe has neither a central power, nor a common economic or foreign policy, let alone an army. Its policy is fundamentally determined by the bargaining between the various leaders, which express the relations of domination between the powers.

As for the euro, which has never been able to supersede the dollar as the international reference investment currency, it has grown even weaker since the 2008 crisis, because the suction pump of the financial markets feeds almost exclusively on that fuel. Besides, without the loans granted by the American Federal Reserve, the European banks and states themselves would have been left hung out to dry.

While politicians and some intellectuals once considered the prospect that, thanks to its GDP, its place in world trade, and its interior market, the European economy would be in a position to compete with, and even outperform the U.S., now more than ever the U.S. is able to impose its will and that of its trusts.

That was brutally confirmed when Trump decided to scrap the 2015 “horrible deal” with Iran, and to blockade the country. Thanks to the principle of extraterritoriality which prevails in the U.S. – as the legal formulation of the hegemonic position of its imperialism – the president can sanction any companies in the world that break the rules of the OFAC (Office of Foreign Assets Control). One after another, PSA, Total, Airbus, the European banks and industrialists withdrew from Iran so as to avoid being barred from the American market, and even the financial market itself, or having to pay heavy fines. Already in 2015 because of its activities with Iran, but also with Sudan and Libya, BNP-Paribas had to pay a fine of 8 billion euros. In the economic war, Europe is still a dwarf.

In the areas of the military and intelligence strictly speaking, the U.S. still maintains permanent bases in the E.U. – especially since the collapse of the Soviet bloc – and privileged ties with many countries, most of which are integrated into NATO as vassals and outposts against Russia. Additionally, they are loyal customers for the American arms industry. In June 2018, the European Union started a European Defense Fund, whose secret aim was to sideline American and British armament companies in calls for tenders. But that posture will remain ineffective, except perhaps against British industrialists.

Nor is Europe the one who is engineering the crisis that has been devastating Ukraine since 2014. As for the Visegrád group, which brings together Poland, Hungary, Czech Republic and Slovakia, it too epitomizes those links with U.S. imperialism and the centrifugal forces they generate or facilitate within the E.U.

Populisms and Nationalisms, the Rotten Fruits of the Past and of the Decomposition of Capitalist Economy

Permanent instability and the struggle for the sharing of surplus value in a decreasingly solvent market have spawned “Eurosceptic” and “Europhobic” ideas and parties, mostly on the right, and increasingly the far right, of the political spectrum, but also on the left, as in France with La France Insoumise or in Spain with Podemos.

For the political interests of the bourgeoisie do not always coincide with the interests of the parties that represent it – or that are eager to do it. And only experience can prove to all the protagonists how much room for maneuver they can afford, and the breaking point beyond which electoral demagogy can have irremediable consequences. The political environment, which is considered as “more and more toxic” by many observers, is in its turn becoming an aggravating objective factor of the crisis.

That campaign in the name of the struggle against “federalism” and for “the peoples’ sovereignty” has been especially strong in Central Europe, where the Hungarian Prime Minister Viktor Orbán, in power from 1998 to 2002, and since 2008, has played the role of pioneer and aspiring leader. Those parties have achieved over 20% of the vote in ten Eastern European countries, and over 30% in Poland. Orbán has made Hungarian nationalism the touchstone of his economic policy, by claiming to liberate his country from foreign domination. He is pressuring the working class in its name.

In Italy, the League and the Five Star Movement came to power with the general elections in March 2018, by focusing their demagogy and their promises on the denunciation of “the Europe of Brussels.” Abetted by the European campaign, there were also electorally minded criticisms of France and Macron, which reinforced the latter’s ambition to embody a progressive image against nationalists and Eurosceptics, as well as Salvini’s posture as the first defender of the Italian people.

Everywhere far-right parties are staying strong or doing better: the Rassemblement National in France, Alternative für Deutschland (AfD) in Germany, the Vlaams Belang in Belgium, and the Party for Freedom (PVV) in the Netherlands most notably.

These last years, with the decision to close their borders against migrants fleeing wars and the imperialist chaos, and to partly outsource that dirty work to Turkey, the leaders of the great powers have strengthened that reactionary drive. Angela Merkel had at first refused to align herself on that policy, probably due to her convictions, but also because it could satisfy Germany’s capitalists’ need for labor. But she has paid the political price for it, and today has to compromise with her electorate’s rightward drift.

And even if the exit from the E.U. or the euro has mostly disappeared from the manifestos of the “Eurosceptics,” it is still a real threat, as the Brexit vote and ensuing painstaking implementation have shown for the last three years. For the first time in the history of the European construction, one of its members – and not the least – has slammed the door. That exit, which has been fought by the British bourgeoisie, might be enforced without a deal with the E.U. Only one thing is certain: the capitalists will ensure the popular classes foot the bill. As a domino effect, or as a backlash, Brexit could revive centrifugal forces within the United Kingdom itself, chiefly in Ireland, but also in Scotland.

Ever on the lookout, the main powers in the European Union, beginning with France and Germany, like the industrial and financial groups whose interests they protect, probably hope to take advantage of this situation, and will not spare their British competitor. But everywhere, workers will bear the brunt of this new stage in the economic and political war.

Only the Working Class Can Offer the European Continent a Future and Unity

The intensification of the economic war has resulted in an upsurge in nationalist movements like Europe hadn’t experienced since the 1930s. The ongoing crisis has brought to the fore the inability of the various bourgeoisies to sever their ties with their state apparatuses and to unify the continent. The creation of a vast market, rendered indispensable by the straitjacket of national states, has not abolished the competition between large companies and banks, especially as the main ones also vie on a world scale. Nor has it put an end to the relation of domination between countries. Lenin qualified the League of Nations, which already claimed to end all wars and promote prosperity, as a “den of thieves.” That characterization fits the E.U. just as well.

In the “Communist Manifesto,” Marx highlighted that “to the great dismay of reactionaries,” the bourgeoisie had “pulled the national basis out from under the feet of industry.” In Imperialism, Lenin added that capitalism led to “the threshold of the most comprehensive socialization of production,” but that “the yoke of a handful of monopolists on the rest of the population” became “a hundred times heavier, more burdensome, and intolerable.”

Since then, the bourgeoisie has amply demonstrated its inability to resolve that fundamental contradiction between the organization of production and exchange on the largest scale, and the private appropriation of the wealth thus produced, of which the states are the best guarantors for the bourgeoisie.

The current political divisions are the expression of these bourgeoisies’ opposite interests, and no one can tell whether the nationalist upsurge will result in a deeper break on the political field, and a generalized retreat into protectionism. As a repercussion, the crisis may rekindle the flame of federalism. No bourgeoisie has any interest in the dislocation of the common market, let alone German and French imperialisms, which remain the cement of today’s Europe. But that is not a philosophical option. The talks on the possible end of the euro zone or the reorganization of the E.U. on the basis of a multiple-speed Europe a few years ago, show that the precarious balance may be upset at any time, due to the permanent instability of capitalism itself. And the whole past proves that economic wars can be the prelude to other clashes that are infinitely more devastating.

For revolutionaries, what is at stake is not to think in terms of more or less Europe, nor is it to choose either option, for those are bourgeois solutions, and therefore dead alleys. It is to maintain the prospect of a revolutionary outcome from capitalism’s congenital inability to work towards the progress of humanity. It is to keep up the flag of internationalism, which has been discarded by social-democratic reformists, followed by Stalinists, in order to offer a prospect for the working class – that of a Europe and a world rid of borders, national antagonisms, competition and anarchical production. That can only be achieved by the revolutionary overthrow of the bourgeoisie.