INTERROGATING THE EUROPEAN UNION
Pranjali Bandhu
The U.S. American Shadow
“I have always found the word Europe in the mouth of politicians who were demanding from other powers something that they did not dare demand in their own name.” (Otto von Bismarck)
The post-Second World War scenario was one in which the nations and peoples of the world were dominated by the two superpowers—the US and the USSR. The US used its military and economic superiority to organise and initiate a process of restructuring global capitalism in forms that reproduced and enlarged its sphere of imperial dominance. Its foreign direct investment in the countries of Western Europe, particularly in West Germany, through the instrument of the Marshall Plan was designed and aimed at transforming these economies into regimes that were a bulwark against the Soviet bloc and facilitated and policed the free flow of capital around the globe in such a way as to maintain and further its own world-scale domination.1 Its domination over the countries of West Europe was also attained by making their economies oil-dependent, while at the same time gaining control over the sources of oil and other strategic minerals. This economic domination was undergirded by the security alliance of NATO (founded in 1949 in the context of the Korean War), which overrode the political sovereignty of these nations and controlled aspects of their foreign policies.
Each of the West European NATO member state was compelled to have its primary military-political relationship to the US. Peter Gowan has termed this a hub-and-spokes relationship.2 Attempts by the West European members of NATO to construct West European caucuses within NATO have always been slapped down by the US. But the process of West European economic integration was not obstructed rather it was encouraged, as it was not perceived to be a hindrance to US domination.
Political and economic interests had brought the two historically rival and powerful European nations of France and Germany together in the post-Second World War period. The Schuman Plan of 1950 placed the mining and industrial potential of West Germany under joint Franco-German control and so was formed the European Coal and Steel Community (ECSC). From the economic point of view the ECSC gave the French access to the rich coal deposits of the Ruhr and ended the dual pricing system whereby German coal bought for the steel mills of Lorraine had cost 46 per cent more than the same coal burnt in West Germany. Interstate trading in coal and steel increased among the member states of the Community (which included the Benelux countries and Italy in addition to France and Germany) and halted for a time the decline in production of steel.3 Joint control also arrested for a time the risk of West German rearmament.
For West Germany’s political elites and some of its liberal humanist thinkers and writers the integration of Western Germany within Europe (a ‘European Germany’ rather than a ‘German Europe’ in face of the megalomania of German nationalism, as Thomas Mann had formulated it in his time) helped in rehabilitating the country in the public eye from its recent Nazi past and simultaneously ensured its security vis-à-vis the Soviet bloc. In fact, the German Social Democratic Party had embraced the idea of a United States of Europe in 1925 itself as an antidote to the Nazi ideology in its period of exile after Hitler’s accession to power.4
The Treaty of Rome signed in 1957 offered outlets primarily to West German industry and to French agriculture and thus again served both their interests. Adenauer, the then CDU Chancellor, while seeking to strengthen European unity in tandem with US interests, also made sure that the expected eventual reunification with the GDR, as inscribed in the Basic Law of the FRG, would be accepted by France. The Customs Union, common external trade policy, the free trade zone and Common Agricultural Policy (CAP) that followed with the formation of the EEC served the interests of West European capitals, while at the same time serving North American finance capital too. The CAP protected the income of farmers through a system of subsidies and price interventions while simultaneously boosting food production and trade. The strategy of export-led growth benefited from an expanding barrier-free West European market, which enabled Euro-American firms to achieve scale economies and successfully expand their markets.5 The collapse in 1971 of the Bretton Woods system of fixed exchange rates also gave an impetus to the Common European market and monetary union by creating a zone of monetary stability.6
The fifties and sixties were also the period of decolonisation in Africa and Asia. Most of the countries joining the EEC—such as France, Sweden, Denmark, Austria, Italy, UK, Spain, Belgium and the Netherlands—were seeking in this economic and eventually political union a substitute for the lost empires, while pursuing their interests in the lost territories by other means. Others like Greece, West Germany and the Irish Republic (the latter after the 1998 agreements) were giving up at least temporarily the idea of a larger territorial nation.7
The net outcome of the formation of the European Community has been that Western Europe, a zone of warring neighbouring countries and a source of two World Wars, became in the post-Second World War period a zone of peace. War between the core capitalist West European states has been avoided through initially the two-superpower parity and Cold War and subsequently through unipolarism since the late 1980s and the break-up of the Soviet Union. Simultaneously, in the period of the post-Second World War economic boom, it was possible and politically necessary to retain the welfare state and make substantial concessions to labour implementing a ‘social contract’ between capital and labour, whereby wages were allowed to rise in parallel with productivity at national levels.
Challenge to US military supremacy came from North Vietnam in the late sixties. The refusal of the US government to increase taxes to pay for the war and its consequent need to issue more dollars is seen as one important factor in the suspension of the convertibility of the dollar into gold in 1971.8 By imposing a dollar system on the world and manipulating exchange rates the US managed to retain its economic and military supremacy vis-à-vis serious born-again competitors like Germany and Japan on the world markets. Simultaneously, it put restraints on the EEC ambitions for greater political integration and autonomy vis-à-vis the US.9
Subsequent Reaganite and Thatcherite economic policies in the US and Great Britain helped the revival of their respective capitalisms, but in ways that were simultaneously an assault on the rights and privileges of labour in their countries. The social-democratic welfare states and import substitution models in the Third World all came under concerted attack for restricting the free movement of Western capital and the ‘freedom of markets’ (this freedom being one-sidedly interpreted as freedom for only the western capitals) and they were sought to be scrapped. Privatisation helped the capitalist classes to tremendously enrich themselves through pillage of public/state resources. The erosion of trade union power, the introduction of labour flexibility as against ‘rigid’ labour laws helped in overexploiting the working people. The systems of capital controls were also to be scrapped, giving capital the power to exit or enter national jurisdictions at will, thus strengthening further their domestic social power over labour or enabling them to super exploit labour in lower wage economies in Asian/East Asian countries.
West European elites responded to the Reaganite drive by, on the one hand, also starting the process of privatisation of state assets and ‘reforming’ the welfare state by pushing through public sector cuts in order to remain competitive on the world market. Simultaneously, together with the shift against the social rights of labour, the establishment of a monetary union and later a single currency were aimed at providing monetary stability against the US dollar dominated system of international monetary relations. The monetary union and single currency have eroded the national sovereign powers of EU member states to undertake fiscal interventions unilaterally in their respective economies. It precludes the options of devaluation and deficit funding (though you have countries like Germany breaking Stability and Growth Pact rules and going against the EU norms on this count) and leaves the disparate economies of the Euro zone with no other mechanisms for cyclical and other adjustments than to wring concessions from labour.10 Italy, for example, is facing tremendous problems by remaining in the Euro zone. Under the single currency arrangements and the rules laid down by the Stability and Growth Pact, Italy can no longer devalue against Germany and other European countries, that is, find remedies on a national level to regain competitiveness and boost output and employment. The fact that the stronger/dominant economies like Germany and France can break rules with impunity throws further light on the nature of the European Union and whose interests it is actually serving.
Germany, France and Italy, the largest economies in the Euro zone, are being forced to adjust to the Anglo-American shareholder oriented lower-wage, unprotected labour economy. Germany, in particular, is trying by all possible means to improve its status as an attractive industrial site and investment destination. Its large and medium-sized firms have massively shifted locations into neighbouring countries of Central and Eastern Europe to reduce costs because it has been a country with the highest wage rates, a short working week, large number of annual vacation days, a heavy business taxation system and the most stringent environment standards. All these combined have led German big industry, particularly in the automotive, electronics and chemical sectors to export jobs and investment to lower wage economies with less stringent standards. Though the profit rates of big industry continue to ride high and increase, the growth rate within Germany is low, low paid insecure temporary employment and unemployment remain high and domestic demand low. Germany too is guilty of ‘social dumping’, something that low wage countries such as India, China and Brazil are accused of. This is reducing labour costs by not paying social security, pensions, health care, education and other benefits. There is no minimum wage law in Germany leading to tremendous economic inequality within Germany. The irony is that this deregulation of the German labour market was brought in by the Social Democrat Chancellor Gerhard Schroeder in the 2000s.
While thus trying to retain and enhance the economic status and competitiveness of their big industries the core countries of the European Community are also trying to carve out a durable margin of strategic political and military autonomy from the US without totally breaking away from this transatlantic alliance. But the US remains determined to stamp out any such regionalist challenges, whether these come from the EU, from Japan, or from Japanese-Chinese or Chinese-Russian regionalist projects. Pax Americana must as far as possible continue to thrive. For some European Union countries—particularly for Germany and France—political and military autonomy from the US remain important goals especially since the collapse of the Soviet bloc.
Expansion eastward, initially by way of swallowing the German Democratic Republic, has been West Germany’s goal in the post-Second World War period. The “Drang nach Osten” and the search for “Lebensraum” were its goals in the pre-War period too. ‘Ostpolitik,’ the politics of détente towards the Soviet bloc and including the East German state, were meant to serve this end. It is realising its expansionist aims within the European Union. The destruction of Yugoslavia, in which Germany played a key role, the compradorization of Slovenia and Croatia have served towards the Latin Americanization of Eastern Europe, as Samir Amin terms it. This and the weakening of Russia have certainly not been contrary to US strategic objectives in the region. But its concerted bid, in unison with France, the revivifying Russian Federation, and China to strive for a multipolar world and a seat in the UN Security Council, which it has sought along with India, Brazil and Japan, is certainly cause for alarm to US hegemonists. The US is not prepared to tolerate even the least dent in its supremacy in the region and would like to keep Eurasia on leash. The war on the Yugoslav Serbs over Kosovo was a means of the US to assume leadership in Europe. The West European states and multilateral institutions were subordinated to NATO. The ensuing European Security and Defence Policy institutionalised Europe’s subordinate position despite French resistance.11
The political leadership of the European Union has so far not been able to completely break out militarily and economically from Washington’s diktat and acceptance of American global leadership. This is clearly evident through the compromises made in the cases of Iraq and Iran, and its sedulous support of Israel in the Middle East conflict. Europe continues largely to remain subordinate to US economic and foreign political goals in the region, a “subcontractor for US interests.”12
Post the fall of the Berlin Wall and the dissolution of the Warsaw Pact and the disintegration of the Soviet Union the purpose of NATO’s creation was no longer in existence. But we find this organisation has only been strengthening and enlarging itself. It continued its anti-Russia focus by granting membership to the former Warsaw Pact countries in East Europe and to the Baltic states. ‘Colour revolutions’ were sponsored in countries such as Ukraine and Georgia to wean them away from pro-Russian stances. NATO has been involved in the breakup of Yugoslavia and in Kosovo’s independence declaration.
NATO spearheaded US interests in Asia through its intervention in Afghanistan against Islamic terrorism post the September 2001 attacks on targets in the US. It was also involved in Libya in North Africa to oust Gadaffi. In general, it is repositioning itself as a global policeman over the head of the UN against international law. In 2009, NATO declared the Arctic zone as coming under its responsibility. There is a scramble of the five Arctic littoral states—Russia, the US, Canada, Norway and Denmark (through its control of Greenland)—for chalking out claims to the energy rich Arctic as the receding Polar ice makes its resources more accessible and opens the region to round-the-year shipping. Intervention in Afghanistan is linked up with access to mineral resources in the region and safeguarding transit routes. Sidelining the UN, NATO is becoming a tool of US neo-imperialism in various parts of the world reviving memories of occupying and meddlesome colonial powers in many developing countries.
Under de Gaulle, from 1958-1969, France opted out of full membership of NATO because of perceived lack of parity with the UK-US combine, and wanting greater foreign policy independence and a corresponding independent defence force and nuclear weapon capability. The French Atomic Energy Commission was founded outside of Euratom and French nuclear weapon capability developed. In 2009, under Sarkozy France returned to full membership of NATO while maintaining independent nuclear deterrence, in general submitting to US domination in Europe. But by its direct intervention in Mali and in Syria France is trying to maintain its hold on its earlier colonial sphere of influence in northern Africa and the Middle East, again with an eye on the resources of the region.
On its part, Russia has organized the Eurasian Customs Union (ECU), an economic bloc of former Soviet states to counter the EU sphere of influence. Started in 2010 by Russia, Belarus and Kazakhastan the plan is to expand the ECU as a Eurasian Union to include further countries as Ukraine, Kyrgyzstan, Azerbaijan, Tajikistan, Armenia, Georgia, and Moldova. Ukraine being a current area of violent contestation between the EU/US and the Russia dominated ECU, Russia has been trying to dissuade Ukraine from pursuing an Association Agreement with the EU containing the Deep and Comprehensive Free Trade Area agreement, negotiations for which were completed in 2011, and to join the ECU instead. Membership to the Eurasian Union could be expanded to include other countries that have been historically or culturally close, such as Finland, Hungary, the Czech Republic, Bulgaria, Vietnam, Mongolia, Cuba and Venezuela, which is giving rise to speculations about the ghostly resurrection of the erstwhile Soviet Empire. (See, A Militarily Resurging Russia by F. Chowdhury at www.countercurrents.org/chowdhury221213htm).
Democratic deficit of the European Constitution
In order to forge out a much needed political and democratic dimension to the European Union and to strengthen it vis-á-vis the US and its imperial ambitions, a draft Constitutional Treaty was drawn up by the European Convention nominated by the European Council and was subsequently signed by all 25 EU member states in 2004. After having being accepted by the publics in 9 countries in referenda it was rejected in the referenda held in France and the Netherlands in 2005. Requiring unanimous approval the process of political integration of the European Union into a United States of Europe has been stalled for the time being. This firm repudiation by the public in these two key countries of the EU and the under fifty per cent voting in the last two elections to the European Parliament is a telling indication of grassroots discontent with the much-hyped European project that is widespread in most European countries. Its myriad mythification on the part of politicians and their intellectual counterparts has seen massive holes blown into it. A closer critical look at the proclaimed goals of the Constitution for Europe and the myths invented around the idea of Europe and the addition of the dimension of European identity to the national identities will help expose better the ultra-imperialism and inhumanity underlying the European Project.
Any formation of the United States of Europe, of a federation, confederation or even of a simple political union presupposes within a democratic framework the participation and consensus of the public/s involved. The majority of the citizens constituting the various nation states must have the ‘will’ to come together in a political or even economic union giving up voluntarily some of the sovereign rights of nations. As we have already indicated, the integration of the European states has so far been the handiwork solely of its political class/es and the European Union level bureaucracy in the interests of West European and US finance capital and transnational corporations, often under the combined diktat of these and international financial institutions, and it is they who have benefited most from this Union. When the core European countries (Germany, France, Italy and the Benelux countries) felt the need for convergence on the political front, that is, in their foreign and defence policies, in order to further their own imperialist ambitions particularly in Eurasia, which at times cross those of unipolar US hegemonism, they put together a draft Constitution. In the face of growing complaints about a ‘democratic deficit’ in the EU they also placed it before the publics of the constituent nation states where it failed to receive the necessary ratification.
The grounds for the lack of satisfaction with the proposed Constitution were many: Foremost among these was that it failed to satisfactorily incorporate in its provisions the usual parliamentary, multiparty, electoral mode of representative rather than participatory democratic functioning. The supranational Commission retained its monopoly of legislative initiative and decision making. The European electorates were denied any right to determine the composition of the Union’s executive body, the European Commission, the members of which are now appointed by the Council in agreement with its president, which it also nominates. The European Parliament, the only body elected directly through universal suffrage, would remain largely consultative, with no meaningful power to resist or initiate legislation, although it would now be able to propose amendments, which the Commission could take up or ignore as it saw fit.13
The draft Constitution was also not one that provided only a basic legal framework within which policies could be debated and decided. Instead it had laid down in fine detail what these policies were to be. And lastly, far from as yet laying the basis for an independent foreign and defence policy capable of opposing the US, due to intra-European contradictions and differences, which also exist within the nation states concerned, it had subordinated all security questions to NATO’s leadership and retained the single-country veto on foreign affairs. This would make it easy for any pro-US country within the Union, and there are many such, to oppose and veto any strategy directed against US interests.14 There are political and economic forces, for e.g., the corporations and banks in Germany and the UK, which have strong ties with the US corporate and financial world, and would not as yet venture to forgo the transatlantic alliance even if their position within it is a junior one. They also need the vastly superior military might of the US to defend their imperialist interests on a world-wide scale.
The Constitution in its Preamble spoke in lofty terms about Europe as the continent that has brought forth civilisation, which has developed the values underlying humanism, namely equality, liberty and respect for reason. It asserted that reunited Europe would strive to continue promoting these values, while deepening democracy and striving for peace, justice and solidarity throughout the world.
Unfortunately, it is very easy to pierce the hypocrisy of these claims and assertions. We have already dealt with the aspect of the ‘democratic deficit’ of the EU with relation to the publics of the respective nations. Among the EU members too—as we have touched upon—there are some who are more powerful than others and largely set the agendas. These are the so-called ‘core’ nations. To these belong France, Germany and the UK, while Italy, Spain, Poland and others are second-rung nations in terms of power, leverage and policy-making.
In the initial stages of the formation of the European Community member states had weighted voting rights: in this system the big four France, Germany, Italy and UK had greater weightage than the other member states.15 The new voting system proposed in the Draft Constitution treaty would have retained and strengthened the position of the four largest members while diminishing the influence of smaller members, particularly those that had joined the Union in May 2004. Germany particularly tried to increase its power even more vis-à-vis other countries by trying to push for a system of voting rights according to population size of the member countries.16 Germany’s economic strength within the Union is such that the Bundesbank—the German Central Bank—has a major say in the European Central Bank.
The 2004 enlargement of the European Union had led to 10 countries from eastern and south-eastern Europe becoming member states. But they were denied full membership and given second class status. For example, direct payments under the Common Agricultural Policy were applied to them at 25% of Western rates, labour mobility to Western Europe was limited, and structural fund payments* were set at less than half of those to Greece, Spain, Portugal and Ireland17
The Treaty of Lisbon that came into force in 2009 is another version of the European Constitution of 2004: It allocates votes to member states according to population size; it has made the European Council a formal institution; the president of the European Council, elected by its members, serves a longer term of 2.5 years, while the presidency remains for a six-month rotation period of member states; it has enhanced common foreign and security policy by appointing a High Representative for Foreign Affairs and introduced a fundamental human and legal rights charter, which has not been accepted by Britain and Poland.
German Expansionism
If we look at the record of the European Union with regard to its declared number one objective of promoting peace in Europe, in this case too we see a hidden imperialist agenda. So far only war among the erstwhile imperialist powers themselves has been prevented, but not on the continent as a whole. German interests and interventions have been paramount in the wanton destruction of Yugoslavia through fomenting, aiding and abetting ethnic conflict there (see my article “The Demise of Yugoslavia,” Frontier Annual issue, 2006). In other regions of the world, like Afghanistan, where NATO forces are playing a major role, Germany has been aiding US goals. Moreover, the role played by Germany in Sudan through its Darfur policy is very revealing. It is indicative of the role played by neo-imperialist governments in many devastating civil wars raging in many parts of Africa and causing death and untold misery to millions.
In line with its expansionist agenda Germany is making efforts to have access to oil and natural gas resources independent of the US. Its rapport with Russia and overtures to Middle Eastern countries is also related to its concern with energy security. It supports the South Sudan region in its autonomy bid against North Sudan controlled by Arab Muslims because this is a region having vast oil, gold and diamond deposits. A railroad contract awarded to a German firm will help open up the oilfields and connect South Sudan with Kenya and Uganda bypassing North Sudan. The aim is to create a western oriented free trade zone in East Africa spanning Kenya, South Sudan and Uganda. Numerous projects in Egypt—like in shipping and telecommunications —also involve a split between North and South Sudan.18
Germany’s game plan of hegemony within a United Europe can be exemplified through its relationship with East Germany, the former German Democratic Republic and the question arises: reunification or colonisation of the GDR?
Within united Germany East Germany seems in some ways to have the status of an internal colony. With the collapse of the Soviet bloc the people of the German Democratic Republic could have replaced the one-party oppressive regime through a “democratic and reformed socialism”, as many of its dissident intellectuals and writers supported by some West German intellectuals and writers campaigned for. But the majority of the GDR citizens, weary of the earlier lack of freedom and who in any case had not en masse by their own choice and efforts opted for socialism in the post-Second World War period in the first place, were overwhelmed by the propaganda emanating through Western media channels now accessible in their country. They seemingly preferred the consumerist paradise enticingly held before them and the model of a welfare state democratic capitalism vis-à-vis that of a ‘reformed socialism’ and elected to go in for unification on West German terms, that is, they allowed the accession of the GDR to the West German state and economy and accepted its Basic Law as their own Constitution.
It took only a few years after reunification for most former GDR citizens to realise that they had been taken for a ride by the West German political elite and industrial class. The costs of the unification that fell on West German and other European citizens through a special reunification tax and through cuts in welfare schemes and public sector wage freezes did not really better the situation of the East German ‘poor’ cousins, now called the ‘Ossis’ as against their more ‘advanced’ cousins the ‘Wessis’. Rather, it worsened with a 13.3% decline in GDP in the new states and an unemployment rate that rose to 33% in 1990 and till today remains at double that in West Germany.
In 1997, the percentage of East Germans expressing a favourable opinion of the Federal Republic’s economic system stood at 22%, down from a high of 69% in 1990. Between 1992 to 1997 the percentage of East Germans who believed that the country’s problems could be solved by democracy dropped from 52% to 30%.19 This state of economic affairs in East Germany can be linked to a rising percentage of voters voting for right extremist and left wing parties.
The anticipated improvement in the East German economy did not happen after reunification and integration into West Germany because of the privatisation of East German industry that was carried out in great haste by the West German state. East German industrial units were sold off to West European and US multinationals. With such a policy creating an industrial set-up in East Germany along the lines of that in West Germany was certainly not possible. Some observers have therefore termed the reunification of Germany as a process of colonisation, the transformation of East Germany into a dependent colony of the western part of Germany.
This process actually began during the years of ‘Ostpolitik’ and the deepening of West and East German economic ties. During this period, when other East European economies were becoming mortgaged to international financial institutions like the World Bank and the IMF, the East German economy was shackling itself to that of West Germany, which became its main source of technology imports. The GDR managed to get into debt in the same way as Poland, Hungary or Romania did because of their inability to compete on the world market with the cheaper goods producing countries of East Asia and due to the lack of sufficient and rapid technological innovation in their industries. As a result, they could not pay for credit-financed imports for the modernisation of their industrial capital stock. In the 1970s the GDR then had to go in for import restrictions and export of its goods to the FRG at dumping prices.
In 1983, the FRG organised and guaranteed loans by the West German banks to the East German regime. In return ‘Kompensationsgeschäfte’ (compensatory business transactions) were allowed by the East German government. West German firms were allowed to establish factories in East Germany. They were attracted by the cheaper labour there. Investments were paid back with the goods of these enterprises. By organising the market access of goods from East Germany West German firms got the right to intervene in the management of some of the East German factories, particularly in their marketing departments. However, ‘joint ventures’ were on the whole not encouraged in the GDR due to the pressure of SED (Socialist Unity Party) hardliners who wanted to continue the line of autarky embarked upon in the early stages of building the GDR economy and free themselves as far as possible from ties to the West German economy.20
The annexation of the GDR in 1990 ended in deindustrialisation on a massive scale through the process of privatisation of the public state-owned enterprises. By the time the last industrialised unit in the East went into private hands the most industrialised states of the East (Saxony and Saxony-Anhalt) were transformed from industrial heartlands into industrial wastelands. Saxony’s share of industry in GNP descended to a level lower than that of the least industrialised state in the West (Schleshwig-Holstein). On average, the industrial level in East Germany in 1995 reached only 60% that of West Germany; the capital intensity 56%. Of East German industry 95% was privatised by selling it to West German firms making them into subsidiaries and benefiting from lower wages there due to the lower cost of living.21 In addition, the tendency for West German and other European and US companies having production units in Germany to relocate and outsource operations abroad, particularly in other East European countries like Poland, Hungary and the Czech Republic, which provide even greater cost reduction benefits, has contributed to the deindustrialisation of the East German states.
Large-scale agriculture also collapsed in the GDR with the stores being flooded with West German and EC agricultural products leading to high rural unemployment as well. There ensued an exodus of the young from the countryside and deindustrialised towns and cities in search of jobs. Such jobs are found not only in West German towns and cities, where sometimes the migrants conceal their East German identity and try to ‘pass’ as West Germans, but also in other West European countries, like Switzerland, the Netherlands, Norway and Great Britain. Austria has a large number of guest workers from East Germany, particularly in the tourism industry where they work as waiters, bar staff or even as cleaners. Some of them are able to find opportunities to study further as apprentices in the hotel and tourism industry.
The education system in East Germany was also restructured and harmonised with that in the West with a dominating role played in this by the West German government and its experts. Many subjects offered in higher educational institutions were changed and school level history textbooks were of course rewritten to correspond with the official anti-communist West German point of view. For all these reasons the term colonisation has been used to describe the relationship between the two Germanies. The different post-Second World War histories, the present differences in economy, culture and mental make-up have provoked the following remark by the East German maverick playwright, Heiner Müller: “It is a privilege for a writer to have experienced the end of three states: the Weimar Republic, the fascist state and the GDR. I don’t suppose I’ll live long enough to see the end of the Federal Republic.”22
Contradictions within the European Union
The pro-corporate (US and West European) profile of the European Union has alienated not just large sections of the working people and middle classes but also a good section of the farmers. Introduced in 1963 the Common Agricultural Policy (CAP) with its price guarantees and other subsidies was a means to boost production in the face of severe food shortages in the post-War period. It was also a means of neutralising the rural-urban contradiction by not allowing market forces full sway in agriculture and hence avoiding a situation where farmers, borrowing heavily from banks to support the high costs of mechanised agriculture, did not finally run the risk of penury and possible suicide, if they were unable to realise sufficient returns on the market from sales because of competition, crop failure due to adverse weather conditions, or any other reasons.
Benefits of the CAP went mainly to the big farmers of the core countries of Germany, France and the UK. Small family farm owners still had to struggle hard to survive and the trend is specialisation and getting integrated into larger farms. Farmers’ suicides are not an unknown phenomenon in the West also. Inorganic, unscientific agricultural and animal husbandry practices have had health consequences, for the people and the soil.
However, the regime of high subsidies and tariffs to prevent the market from being inundated with cheaper agricultural products from low wage countries is under attack within the WTO. The underdeveloped neocolonial low wage countries want the higher import tariffs to be scrapped and export subsidies to be dismantled so as to open the European market for their products and to avoid their own countries from being flooded with agricultural produce at below cost price due to the high surpluses and export subsidies in the EU. The proposed complete liberalisation of agriculture in Europe is also in the interest of corporates that want market access for industrial products and services in the neocolonial world and would like this to be paid for through the export of agricultural products. Moreover, the scrapping of the regime of agricultural subsidies is also in the interest of the global food industry dominated by TNCs. Domestic price supports, by raising prices of agro-industrial inputs, are a disadvantage to food processors and grain traders in the world market.23 This and the WTO ruling against the de facto ban on GM food in the EU as being against ‘free trade’ are raising ire among the consumers and farmers of the EU. As a result of the resistance of European farmers subsidies by and large still continue to be in place, whereas subsidies are being lowered in the dependent countries to the detriment of the farmers here.24
The assaults on the welfare state and increasing unemployment as a result of liberalisation and globalisation policies have set free a wave of neo-nationalism, xenophobia and racism in all the countries of Europe, worsening the status of immigrant minorities. There is not only growing friction and lack of unity between East and West Germans in Germany, as we have seen, there is a rising tide of feelings against asylum seekers and immigrant workers, although the demographic profiles of the most advanced industrialised countries with their declining birth rates require these extra hands in order to keep their economies flourishing. Chauvinistic nationalism has come up in a strong way all over Europe including Russia. Right extreme, anti-immigrant parties have established themselves as serious contenders for votes and political offices in countries such as Italy, Austria, Switzerland (not an EU member), Denmark, Portugal, France, the UK and the Netherlands in Western Europe25 and in Hungary, Greece and Bulgaria in Eastern Europe.
Right-wing extremist parties across Europe share some common ideological features: Mainly they hold a restrictive notion of citizenship which would confine this to only long-standing citizens sharing a common culture and values. [In Germany this is called the Leitkultur (leading or dominant culture)]. Under their influence or kowtowing to their pressure restrictions on immigration, longer waiting periods or even the passing of citizenship tests before one can become a citizen are some of the measures already taken or planned. Unemployment, job insecurity, education and health problems are explained in terms of the numbers of foreigners, and in the context of rising unemployment and underemployment ‘national preference’ is advocated. There is a fear of ‘benefits tourism’, that is, migrants from East European countries such as Bulgaria and Romania, would migrate into richer EU countries as UK and Germany in order to become eligible for welfare benefits doled out by these states.
Within the context of globalisation and the hegemony of American culture and a feared swamping by foreigners the radical right has increasingly focussed attention on questions of a homogenous national and cultural identity; their politics is an identity politics, a politics of Heimat (homeland) rather than a politics of class. In its more extreme variants a hysteria is being created about the possibility of extinction due to being overwhelmed by Islamic hordes as a result of European Union expansion to include Turkey or increasing migration from North Africa. The spectre of an Eurabia populated by a large Muslim minority is also being raised. There is a strong aversion to integration, multiculturalism and cosmopolitan projects aimed at giving space to ‘other’ peoples and cultures to co-exist with the dominant national culture. Racist and exclusionary attitudes are reinforced. The immigrants, particularly the Muslim migrants, have become the new Jews for the neo-fascist parties and organisations. Muslims, particularly after 9/11, are increasingly serving as ‘the other’ even as anti-semitism is certainly very much alive in those European countries where there is a sizeable Jewish population. The rightist Danish Progress Party even raised the slogan of making Denmark a “Muslim free zone” to preserve Denmark as a Christian country with Christian values.
The Italian extremist organisation Lega Nord is both anti-American and anti-Islam. It perceives immigration as a form of demographic imperialism designed to turn European nations into appendages of countries not belonging to the European continent. It hence calls for stopping the Islamic invasion and for new crusades to defend European culture and identity. Le Pen, leader of the French rightist party, Front National, also draws a parallel between American hegemonic designs and the Islamic invasion of Europe as undermining European identity. In some European countries social democratic parties too have submitted to the rightist rhetoric about migrants. In others, they continue to vigorously uphold multiculturalism as a solution to immigration, which is continued to be perceived as economically necessary for the corporates.
Multiculturalism was and is the preferred liberal solution to the problem of the Thirdworldisation of the First World. Following decolonisation, the economic growth and expansion of West Europe required a larger labour force than available within it, and efforts were made to recruit this labour from the periphery, where imperialism having thwarted and destroyed indigenous agriculture and industry through its penetration, had created a reserve labour force it could draw upon. This reserve labour force was not admitted as full citizens with equal rights, but as temporary guest workers who were expected to leave when they were no longer required. The governments, the corporates and the corporatised central trade unions in these countries pursued discriminatory and racist policies against these workers, which resulted in their ghettoisation and political and economic marginalisation because they were paid lower wages than the ‘native’ workers, which was possible to an even greater extent in the case of illegal workers.
Not being integrated into their host societies, often not wishing to be integrated into societies perceived as having alien cultural values, often leading illegal or semi-legal lives, these workers formed their own support organisations on ethnic and kin terms. This was the response of most of the migrants in West European countries and of the Negroes and currently of the Hispanics in the US, who were/are under no pressure or requirement to ‘assimilate’. Rather, they were expected to keep to themselves, which has resulted in the segregated residence of various ethnic populations in the cities of Europe. Because they are not expected or allowed to integrate and because they want their separate ethnic identities to be recognised and affirmed, there is a demand for the recognition of minority institutions, particularly educational ones, where they are taught their own languages and about their own religion and history and can follow their own customs and traditions. These ethnic minorities would wish to interact with others in the public domain on the basis of their separate identity.26
Integration in this manner, allowing for diversity and difference is considered to be in line with Western liberal principles and based on a creed of humanism and tolerance, although there are differences of opinion among the liberals as to whether this diversity should be on the basis of group (minority) or individual rights.27 But such approaches based on Western liberalism and enlightenment values camouflage the fact that non-Western cultures and societies—the economic bases of which are colonialism/neo-colonialism—are regarded as inferior.28 From this perspective multiculturalism is then no longer seen as a policy functional to the integration of society but as an ideology constructed in order to legitimise the socio-economic inequalities between different ethnic groups, and is indeed looked upon as a device by which the majority rationalises its hold over the minorities as well as its control over social resources. Structural hierarchical differences are suppressed in the theory of the existence of a cultural mosaic.29 The realities of neocolonialism and consequent underdevelopment, now very much visible within the centres of world capitalism, are sought to be whitewashed.
Two sets of movements that have risen in Europe, recently most visibly and strongly in France, are indicative of the social tensions and ethnic conflicts produced within an advanced industrial economy in the context of globalisation.
Outsourcing, that is, the export of mainly unskilled and semi-skilled labour but also skilled labour and R&D activities to the low wage ‘developing’ economies of the Third World is creating unemployment in the First World. But within the centres of world capitalism is now also the periphery—the second or third generation migrants from Third World countries, who are harder hit than the ‘native’ whites by the ensuing unemployment. If average officially declared unemployment is around 10% in France, and it is much higher than this among its youth, it is more than 40% among the migrant youth, the Africans from the Maghreb and sub-Saharan Africa and the Arabs, who are often school drop-outs.30 It was this migrant youth corralled in suburban ghettos of cities and towns of France who rioted in 2005. It is not just unemployment, it is the living in degraded conditions without adequate amenities and facilities and the daily racist discrimination and humiliation meted out to them that were the trigger. Such treatment is also the lot of a large section of German Turks, particularly after the reunification, and the very miniscule number of Afro-Germans in Germany. The reason why they are specially subjected to abuse and humiliation is the colour of their skin and their religion. Discrimination and persecution of the Roma communities is rampant. The worst countries in this regard apart from Italy and France are the Czech Republic, Greece and Hungary. Other east or southern European migrants face discrimination but not on the same level and in the same way due to their more acceptable skin colour, religion (Christianity) and country of origin. Those coming from North or sub-Saharan Africa are looked down upon more and treated like scum because their countries of origin were earlier French/German colonies.
A second wave of unrest is coming largely from the European youth and workers. In Germany, students have agitated against the introduction of tuition fees in hitherto free higher education institutions. In England too, in the recent past, students have agitated against tuition fee hikes in higher education and cuts in governmental funding. In the early part of 2005 there have been strikes in a number of industries demanding higher wages. In France, the youth took to the streets in March 2006 to protest a new labour law, against which a nationwide general strike was organised. This law with its hire and fire clauses was claimed to resolve the problem of rising unemployment in France, but this was not considered an acceptable solution. So far, there has been no overt unity between the migrants and the French students and workers—both of whom are hard hit by neoliberal policies of the French government. The trade unions have not overtly championed the migrant workers and youth and in fact throughout Europe have either connived in or failed to adequately counter discriminatory racist practises. This is by and large particularly true of socialist and left trade unions, though an objective basis for unity against the state and its neoliberal policies certainly exists.
Whereas joining the European Union helped some countries like Portugal and Spain to increase their economic growth rates and employment levels initially (while incidentally simultaneously increasing regional disparities), the same was not the case in East Germany—as we saw— or in a country like Greece. Here the gap between the rich and the poor has been growing. While the banking and shipping sectors have witnessed booming profits the number of people below the poverty line has increased. The privatisation, austerity programmes and new labour laws introduced by the government after being inducted into the EU in 2004 have led it to become a target of attack by workers. In December 2005, a militant group calling itself ‘Revolutionary Struggle’ bombed the Finance Ministry in Athens to protest its “economic terrorism.”31 In 2012, Syrzia (Coalition of the Radical Left) became the second largest party in the Greek parliament and the main opposition party.
In the Polish elections of 2005 a party (Law and Justice Party) was voted to power that espoused nationalism rather than European identity. It had been voted to power because of the people’s aversion to any further neoliberal reforms as these had obviously worsened the poverty levels. In 1988, only 4% of Poland’s people were poor—defined as having an income of less than £1.25 a day. By mid-2000 it had increased to around 17%.32
In general, the majority of the population of the former Soviet bloc countries has not benefited from the liberalisation and privatisation process—a mandatory condition for EU entry. For most of the people in these countries the transition from planned to market economies has meant a big fall in living standards and conditions and unemployment is widespread. This enables super exploitation of the labour force in these countries, which either migrates to work in the advanced industrial West European countries, is employed by manufacturing corporations setting up shop in their own countries, or engaged in outsourced software services by West European and US big companies, banks and multinationals such as the SAP, Siemens and Commerzbank (German), French chemical giant Rhoda, and IBM, Dell and banks such as Morgan Stanley (US). In all cases wage rates are lower than the standard West European levels. Spending on healthcare, education and social welfare generally continues to be slashed, while after joining NATO the defence expenses of these governments have gone up in order to modernise and adapt the respective armed forces to the demands of NATO and EU membership.33 All this has led to the charge of the Latin Americanisation of Eastern Europe, that is, the making of Eastern Europe into Western Europe’s backyard.
Neoliberal policies are leading to strike and other militant working class actions both among the ‘white’ as well as ‘coloured’ migrant workers and other affected sections. Regional inequalities within nations are also growing and are giving rise to the revival of older struggles for national liberation on the one hand and to new sub national regional movements for greater autonomy or even separation within the nations of the European Union. Spain, for instance, has seen the long-standing Basque struggle for national liberation as well as a secessionist movement in Catalonia. The armed separatist group ETA (‘Euskadi Ta Askatasuma’ meaning ‘Basque Homeland and Freedom’) has been demanding the creation of a separate state within the European Union taking in the Basque region of Navarre in Spain and parts of South-West France, though it announced a definitive cessation of its armed activity in 2009.
Catalonia province in Spain lobbied for and was granted greater autonomy by the Spanish government. This demand for greater autonomy was made on the basis of Catalan leaders claiming a national status for Catalonia albeit within Spain. The autonomy law passed in 2005 gives the Catalonian government headquartered in Barcelona the power to change laws passed by the Spanish Parliament and a status of peer in its dealings with the Central government. Both the Basque region and Catalonia are the wealthier, more industrialised parts of Spain and are very much linked to the wider European economy. In the case of both regions an important question within the struggles is that of retaining greater wealth for development within the region through local control over natural resources and over tax revenue in the place of centralised control over these through the government in Madrid.34
The banned hardline pro-independence ‘Batasuna,’ the political wing of ETA, opposed the European Constitution which it sees as defending a “Europe of states”, which ignores the reality of peoples and their languages and denies the right of self-determination to the Continent’s peoples. The more moderate Catalan nationalists supported the EU Constitution under the condition that Catalan be recognised as an official language.
Other regional movements that have revived recently in Europe are those in Flanders, Scotland, Brittany, Corsica, Sicily and Wales. Scots would be voting this year in a referendum for independence, which could possibly see the country soon become an independent one. Ethno-regionalism/nationalism has been a by-product of globalisation. Old-style centralised monolingual and monocultural homogenous national unity is being questioned as integration into the globalised economy takes place on a regional, sub-national basis. As a result not only are some earlier sub-national regionalist movements revived, new cross-border economic regions are formed in Europe as across the globe, which may demand independent, autonomous political status later on leading to redefinition and redrawing of borders. Creating such ‘euro regions’ in border areas between Germany and its neighbouring countries of Poland and the Czech Republic, for instance, is helping in integrating these territories on a colonial/neocolonial basis for the benefit of German capital. Often these cross-border areas are territories that have historically already been colonised by German settlers. All these sub-nationalist and regionalist tendencies are part of the fissiparous, centrifugal tendencies predominating worldwide as a result of globalisation and the extremely uneven development that it is fostering.35
In Italy, as in other advanced industrialised countries, strong regional sentiments for greater decentalisation have largely been seized and are being manipulated by rightist forces and parties. Regionalisation in this sense and from their perspective, not from the perspective of facilitating greater grassroots democracy and self-reliant local economic development, gives greater power to the local elites and becomes instrumental in increasing inequalities between regions. It is also used as an instrument by corporates to break up nationally organised trade unions and integrate them into the regions, which makes them more amenable to corporate controls and demands.
In Germany, during a strike of hospital workers in March 2006 for higher wages and against an increase in the number of working hours the main public service trade union, Verdi, accepted negotiations within the framework of the municipalities and Laender (the federal states) breaking the unity of the national collective contract and opening up the path to the undermining of the union and its link to the confederation of German trade unions (DGB). The intention of the dominant elites, and the trade union bureaucrats and bourgeoisie are very much part of them, is to break up the traditional system of institutionalised collaboration of the trade unions as social partner of industry and management. Collective agreements valid on a national level are no longer welcome by employers and governments in a situation of intensified competition between states for industry. If negotiations happen on regional levels it is easier for the employers to enhance the process of flexibilisation of the labour force that has already begun.
Breaking with the tradition of national level collective bargaining must also be seen in the background to new moves, not just in Germany but in some other West European countries like Italy and Spain, to give greater powers to the constituent states in a number of specific areas—such as education, taxation, health and immigration—through a reform of the federal system. It is the ‘wealthier’ states that have been pushing for such reforms because they want to decouple themselves from poorer neighbours and abolish the existing compensatory arrangements. In Germany, where such a reform has been passed by parliament, it is the East German states and those western states with high rates of unemployment and lower standards of living that are likely to suffer more and where the rate of impoverishment might increase. In Italy, where such projected reforms were rejected through a general referendum, it would have been the southern Italian states which would have suffered the most.
As a whole the European Union still lacks clear positions on the question of regionalisation within its component nation states. This is because such national or sub-national struggles touch upon the very sensitive issue of political borders of nations and they embody the threat of secession endangering the national integrity of states. The European Union promulgated the Convention for the Protection of Minorities and the Charter for Regional and Minority Languages, which cover some aspects of the national question in Europe, but even these have not been signed by all European Union states although the concessions on this question are very minor. For instance, the languages of recent immigrants from other states are excluded from such protection. France is an important European Union country that has not signed either the Convention or the Charter.
The 2008 Financial Crisis and its Repercussions
The recession that set in worldwide since 2007 starting in the US is a manifestation of the fundamental anarchy of the capitalist system, the periodic crises of capital accumulation. Cyclic booms and busts are rooted in the capitalist mode of production with its many contradictions, namely, the alienation of labour from means of production and the end product; socialisation of the production method vis-á-vis privatised appropriation of profits; the tendency for the rate of profit to fall and the drive for super profits leading to shifting production to low labour cost economies; crisis of overproduction and domestic market saturation leading to the opening of overseas markets/world markets and by the dumping or destruction of goods. The 2008 financial crisis happened in a situation in which speculative finance capital has become dominant worldwide. From the 1970s the US led bloc of imperialist countries has turned to the expansion of the financial sector as a means of stimulating the economy.
In European strongholds too companies and banks were affected. And when that happens unemployment rises as companies close down, downsize, increase the number of casual workers, cut wages, welcome cheaper migrant labour or shift to cheaper locations within or outside the EU.
This situation led to a resurge of nationalism as countries worked to bail out their own banks and rescue important national factories of global automobile companies. The financial crisis has seen Germany emerge as the dominant European power giving rise to its characterization as the Fourth Reich, under the leadership of Angela Merkel. The ECB functioning under the diktat of Germany’s chancellor has pushed for lending at high rates of interest and reducing budget deficits. Additionally, the fixed exchange rate because of a uniform currency gives the German economy greater competitiveness. Germany is able to run large trade surpluses because others run corresponding deficits. “The euro’s value pools the strengths and weaknesses of individual members. So, the euro is greatly undervalued for an economy as productive as Germany’s, and this artificially boosts German exports. But the euro is also greatly overvalued for the less productive economies of the PIIGS, and prevents them from exporting more. Seen in this light, the PIIGS are actually providing huge support for Germany’s exports at their own expense.” (Swaminathan Anklesaria Aiyar, “Is Germany Trying to Win World War III?” Times of India, 12 Feb. 2012).
European countries particularly affected by the crisis and the mode of resolving it were Greece, Portugal, Spain, Italy and Ireland (collectively called PIIGS). In the first four countries, over 40 per cent of the youth are unemployed with many going under the poverty line. A North-South (and East-West) division grew up within the Union with one set of countries becoming indebted. A wave of protests and strikes arose across Europe as austerity measures and new labour laws imposed by the EU were implemented in their own specific ways by national governments. The dichotomy between the core and the periphery of the EU does not allow for economic and political stability which affects the ability of the euro to become a global reserve currency challenging the dollar, the yen or even the Chinese renminbi, which has started to emerge as a currency of settlement for a portion of China’s international trade. (See Sanjay G. Reddy, “Europe shall not be crucified on euro’s cross, The Hindu, July 16, 2012).
Rather than attempting to find ways out of the crisis, to resolve it, those in charge are aiming only for ‘crisis management.’ One mode of ‘crisis management’ is to transfer the burden to the maximum possible extent on to the shoulders of the weaker, dependent peripheral countries of the East and South within Europe and in Asia and Africa. India is one of these. There is an imbalance in the relationship between the EU and India. India is an outsourcing destination for manufacturing and supply of parts for big industry. It is a big market for military hardware and is sought to become one for nuclear reactors and environmental protection products. Education is another area in which EU countries such as the UK and Germany have a fairly heavy involvement.
Further penetration of the Indian market for its goods, services and finance capital is the aim of the ongoing negotiations with the Indian government for a Broad-based (Bilateral) Trade and Investment Agreement (BTIA). These are being conducted since 2007 in a patently non transparent way by politicians and bureaucrats without public consultation with affected sections of the population, parliamentary oversight or the involvement of State governments, but in consultation with business lobbies particularly in the EU countries.
The EU side has been demanding significant duty cuts in automobiles, tax reduction in wines and spirits and dairy products and a stronger intellectual property regime, which is likely to affect the health sector. The TRIPS (Trade related intellectual property rights) agreement of the WTO provides the right to member countries to manufacture and export off-patent generic drugs. However, the EU has been demanding that a stricter regime be applied in the India-EU bilateral pact. It is expecting the Indian govt to rewrite its patent and copyright acts. This would affect the availability of low-priced generic medicines in the country. It also has interests in the Indian services sector, more specifically in obtaining additional market access to the banking, health, insurance, education and construction sectors; in consolidating market access in IT and telecom; and in tapping into the still very protected multibrand retail (foreign investment), legal, accountancy, postal and distribution services sectors. Its negotiators have been pressing for hiking the FDI cap to 49% in the insurance sector.
The agreement is likely to further worsen the country’s trade deficit and increase current account deficit as customs duties and barriers would be lowered on our side (0 to 5%) while being retained on the other leading to a surge in imports. Agriculture, industry and service sectors all will be affected. Proposed massive cuts in import duties on industrial goods would greatly impact the country’s manufacturing sector that is already facing job losses and shrinking markets. The agriculture sector—landless dairy farmers, small businesses and cottage industries—is likely to be particularly affected by the possible dumping of subsidised agricultural products, such as dairy products, from the EU. Strong investor protection mechanisms will undermine the government’s ability to regulate industrial and financial corporations in national interest and the Indian government could be sued by multinational companies for billions of dollars in private arbitration panels outside of Indian courts, if national laws, policies, court decisions or other actions are perceived to interfere with their investments.
Huge reduction of tariffs would lead to substantial losses in customs revenue for the Indian government and this may lead to an increase in direct and indirect taxes as well as to cuts in public spending, that is, decline of investment in public services and in subsidies for food grain primarily affecting women. There has also been a demand to open up government procurement to foreign firms which will undermine even the minimal social protection measures in place, such as the public distribution system. Public procurement includes public utilities and the EU has not stated that it would want to exclude essential services such as infrastructure for health, education and water.
From the Indian side it wants the European Union to grant it data secure nation status. The matter is crucial as it will have a bearing on Indian IT companies wanting market access. It also wants liberalised visa norms for its professionals and market access in services and the pharmaceutical sector. It is very clear in whose interests the FTA is being negotiated on both sides.
Opposition to the ongoing negotiations comes from Indian and European advocacy groups that have called for a halt in the negotiations until all positions, draft proposals, stakeholder contributions and government commissioned studies are made public, comprehensive impact assessments and meaningful and broad consultations with the most affected groups in Europe and India are carried out. They demand that people’s livelihood, food sovereignty and environmental, social and gender justice should form the core of the trade policy agenda and not just the interests of some sections of big business. In India the Assocham (Associated Chambers of Industry and Commerce in India) has also advised caution. It says the country has inked as many as 15 such FTAs but India’s imports from these countries and regions (ASEAN, Indonesia, Japan, Malaysia, Singapore, and South Korea) have increased and exports have either stagnated or registered a minimal growth. The exceptions are Sri Lanka and Singapore with which there is a trade surplus.
Prospects
The European Union, as presently constituted, is a concert of capitalist states where West German capitalism is striving to play a leading role. The question of a full-time professional army that can be deployed independently and within the framework of NATO and/or UN is being raised in its parliament in order to better enable it to fulfil such a role. The Union is a regional bloc, currently mainly in economic terms, and is in both rivalry and collusion with the other major capitalist-imperialist states, the US and Japan, for markets and resources on a worldwide scale. France has so far chosen to go along with and has supported Germany because it believes that in this way it can also play a dominating political role within this bloc having the advantages of being a nuclear power (which Germany is not), and already having a seat on the UNSC (which Germany does not have but aspires towards).36
Germany’s objective, sought to be realised by Hitler at the time of the Second World War, is “European unity” under German domination. All the crimes that were committed by Hitler in Europe were committed in the name of “European unity”. Remember the occupations of France and of Belgium (as a base for operations against England), the conversion of Poland and Bohemia-Moravia (non-German territories in the then Czechoslovakia) into colonies, the annexation of Austria and so on and so forth.37 Now again Germany is seeking expansion—this time mainly eastwards and in alliance with other West European powers and in collusion with the US. It has as its target zones Turkey and even Russia. The final goal is a European federation or confederation with its own armed forces (independent of NATO, which is under American high command) as an alternative to the ruling neoliberal Washington Consensus** in the world’s economic institutions.38
In a manifesto39 calling for a ‘Renaissance of Europe,’ Habermas, a leading West German intellectual, who has been campaigning for a European Germany from the social-democratic perspective, emphasized the need for Europe to bring its full weight to bear at the international level and within the UN in order to balance the hegemonic unilateralism of the US.
Western Europe, according to him, has the moral basis to take on such a role. It has presented a Third Way, an alternative set of concepts for consolidating Atlantic/OECD hegemony over the populations and states of the world. This includes the use of the rule of law rather than brute military force for upholding the hegemony of metropolitan capitals. International law and treaty obligations are to be used to refashion and subjugate domestic law so as to provide predictable environments for EU capitals. This has been the approach within the framework of the EU, and within that of the WTO. The EU has used the concepts of Human Rights, Democracy and Good Governance (HRDGG) diplomacy to push forward its economic imperialism agenda. When target states resist EU economic policy goals they can be hit by HRDGG diplomacy, and if they are compliant on the economic-political front they are let off lightly even if they do not satisfactorily comply with HRDGG norms.40 This is so even as key EU member states themselves hardly conform to proclaimed ideals of democracy and human rights within their own borders, and historically also have often transgressed these norms at home and abroad in their colonies.41
The constitution of the EU itself, as we have seen, took place undemocratically and bureaucratically. It is business lobbies [and related corruption (bribe scandals) to some extent] that play a decisive role in the functioning of the European Union. Multi-party elections are projected as the signature of democracy and are made into a pre-condition for entry and participation in the EU, but elections are by and large a farce and a ritual because most parties support the one basic neoliberal agenda and hence are not able to present any fundamental choices or alternatives to the voters resulting in a deep divide between rulers and ruled and voter apathy. In a neoliberal economy the state is increasingly indifferent or repressive towards the human needs of its citizens. By creating a division between the centres and the peripheries within the European Union through destroying the national economies of the East European countries the dominating countries within it have achieved more or less the same results as fascism had attempted in an earlier era: huge transfers of workers and farmers, forced low wage labour, privileges for members of the dominating nations, the razing of entire villages. Only this time round it is being done legally, in the name of democracy and good governance, while demonising the Stalinist Communist era in these countries.
According to Habermas, among other things, Europeans still prefer the ethics of “more social justice” as against the (North American) individualistic ethics of competition that accepts extreme social inequity. An EU with such an alternative vision of global and domestic politics regulated by law and powerful international institutions (global governance) would embody a project that counters US hegemony and unilateralism. To accomplish these goals in any realistic manner, however, the EU has to acquire greater qualities of state, particularly greater military power. Only a common and independent foreign, security and defence policy would make Europe into a ‘superpower’, a global player of first rank.
A major point of criticism against such a vision of EU role on the world stage is that to effectively balance US hegemony considerable financial investment in the coordination and modernisation of European military forces is required. That would have the paradoxical effect of draining resources away from the welfare state, which is held out in the Manifesto as a distinctive characteristic of Europe vis-à-vis North America. Neoliberal policies have also in any case being destroying the welfare state and deregulating labour markets as the only way to remain competitive on the global markets.41
We repeat: Euro imperialism, turning on a Franco-German axis, offers only another version of the dominance of the richest capitalist countries over the rest of the globe in the 21st century. The only difference is that such a project of hegemony would have to be based upon global collegial bodies within which the leading capitalist states would haggle over the precise content of the various legal regimes to be imposed upon other countries. The West European states would want the (US American) use of aggressive military force to be under the discipline of the UNSC.
Thus the West European concept of a new world order would also be a patently coercive one and designed to transform domestic jurisdictions, politics and economies throughout the world in greater alignment with imperialist interests. But there would be an attempt to be different from the North American model by trying to legitimate as far as possible all the coercive instruments within the realm of jurisprudence.42
However, any such plan at counter-hegemony meets with overt hostility and resistance on the part of the US. It has many strategies in place to counter Franco-German initiatives towards greater political autonomy from the US. Pressure is applied via the many interlinkages of US capital with the capitals of these countries. Then there are its financial and political linkages with those East European countries that would wish to resist German hegemony in Europe as a result of previous bitter experiences. Finally, there are the possibilities of currency manipulations that weaken the Euro and the Euro monetary zone through devaluation of the dollar making the European Union less competitive on the world markets. The US is also trying to beat back Russian, Chinese and European influences in Central Asia by trying to control the energy belt from the Middle East through to the Caspian Sea. This is an exclusivist project: it entails the exclusion of strong West European, Russian or East Asian influence in the region. US control over the energy belt would give it an enormously powerful lever for re-subordinating both Europe and East Asia.43
It is not clear whether the inter-imperialist rivalries are as major a force today as in the pre-Second World War period considering the increase in the degree of transnational merging of the major corporations within Western Europe and between Europe and the US. Although currently there is a greater defence of national interests against cross-border mergers and takeovers and new trade barriers are coming up particularly in Poland, Spain and France, the European Union has certainly developed into a formidable economic region that includes advanced capitalist/imperialist states and their colonies/neocolonies. So far the inclusion within the Union has been confined to white, Christian nations, though this may change. The nation state has given way in large measure to supra-national institutions.
This has led to a crisis of the state and the democratic system as monetary policies are being regulated and controlled not by the governments, but by private financial and banking interests, who are the creditors. According to Article 104 of the Maastricht Treaty, the central banks cannot be forced to provide credit to the government and monetary policy cannot be used as a means of state intervention in the broad interests of society, that is, to mobilise production or to generate employment as it was the case in the post-Second World War period. Real political power is now with the creditors rather than with the elected representatives. And across the political spectrum with perhaps the exception of far left parties and groupings such as the Party of the European Left pan European political parties have a consensus regarding the necessity of carrying out neoliberal reforms in the economy, even if these hit citizens badly in terms of economic stagnation and increasing unemployment.44
Anti-globalisation activists and ordinary workers, farmers, students, immigrants and other citizens, who are out on the streets in the metropolises, would like restoration of the sovereignty of the nation state; they are nationalists, sometimes even ultra-nationalists. However, restoring the full sovereign power of their respective nation states within the parameters of globalisation is not possible as global corporations require the fragmentation and destruction of the domestic economy, particularly and first of all of the economies of the so-called developing countries. The poverty that is thus created in the Third World is needed in order to make them into cheap labour reserves for First World capital, but it also impacts back on the economies of the advanced capitalist world. There ensues a contraction in the demand for their goods, and this in turn affects economic growth and employment in the OECD countries themselves. The outsourcing of jobs from high-wage to low-wage economies also contributes to a decline in consumption in the First World as a result of unemployment and stagnant, even falling, real wages. In its turn this impacts on the ability of the Third World to sell goods to a shrinking Western market. On a world-scale there is a contraction of spending, which leads to a global level stagnation of the world economy. Production and consumption become largely production of luxury goods for a small segment of high-income consumers spread in enclaves throughout the world. As income disparities increase dynamic growth gets concentrated in the luxury goods economy, whereas there is a contraction in needs based consumption, in fact there is an increase in starvation deaths and suicides.45
Under such conditions the reality of national oppression and the slogan for sovereignty and national self-determination are relevant not only in the case of colonial/neocolonial countries, but also in the case of some of the advanced capitalist countries and regions within them. For instance, even in the UK there is a feeling that the country has become a puppet state of the US. The North Americans control the UK, its foreign and domestic policies. According to Tony Benn, who has been an MP, Cabinet Minister and foremost voice of the Left within the Labour Party: “We don’t have our own nuclear weapons – the Americans lend them to us, and we can’t use them independently” …. “even if you wanted simple things like jobs, trade union rights, no means test for pensioners, no student loans, no privatisation and no war – even if you wanted those things, for the US you’d be a rogue state.”46 Even Germany regained full sovereignty from the allied powers only after reunification in 1990.
However, it cannot simply be a question of restoring the status quo ante as these Western nations have been and continue to be oppressors of other nations. It is not a progressive solution to want to return to an era of capital-labour partnership, that is, to the model of a social welfare state. This was a model that nurtured a labour aristocracy at the centres of the world capitalist economy on the backs of the labouring peoples in the peripheries. The nation state is facing a crisis in Western Europe today, but it will have to broaden itself to include the periphery on an equal basis. The question of national sovereignty cannot be solved within a narrow eurocentric/francocentric or anglocentric framework. It must be taken up and resolved within the context of a general application of the principle of self-determination of nations—applicable to the nations of East Europe as well as to the neocolonial nations of the Third World. It has to be on the basis of internal equality and non-discrimination against migrants from these countries and be directed against and aim at overthrowing the racist, divide-and-rule policies and profit-based economies of global capital that benefit from this racism and in this way perpetuate national oppression.
In the context of the European Union, if the historically rival nation states are able to achieve a united Europe by overcoming nationalist barriers, it does have the advantage of precluding wars among these nation states, which have caused devastation in Europe and elsewhere. But for this unity to have real meaning it must be combined with free self-determination and national development for each of the peoples and nations constituting it and not just for some. The social aspect must also be included in the course of achieving national liberation. National liberation must include the class aspect, the anti-capitalist aspect and the goal should be that of a free and voluntary unification in a Socialist European Federation, which was also Lenin’s dream and expectation at one point of time in history. But this Socialist Federation of European states must have an internationalist perspective of becoming part of a world federation of socialist states and must act accordingly. Such unification will be the difficult product of whole historical epochs. And ultimately with the withering away of states there could be a withering away of the borders between states without the withering away of national and regional/subregional cultures.47
Notes and References
1. See Leo Panitch: The New Imperialist State. New Left Review, 2, 2000, pp. 5-85. Also see Nicos Poulantzas: Classes in Contemporary Capitalism. London: NLB, 1975. (Verso ed., 1978).
2. Peter Gowan: The American Campaign for Global Sovereignty, Socialist Register, 2003, Kolkata: K.P. Bagchi and Co., p. 2.
3. See Philip Thody: An Historical Introduction to the European Union. London and New York: Routledge, 1997, p. 3.
4. Thomas Risse and Daniela Engelmann-Martin: Identity Politics and European Integration: The Case of Germany. In: A. Pagdon (ed.): The Idea of Europe – From Antiquity to the European Union. Cambridge University Press, 2002, p. 287.
5. Jeffrey Anderson: German Unification and the Union of Europe – The Domestic Politics of Integration Policy. Cambridge University Press, 1999, p. 56.
6. The Allied nations (excluding the SU) in a 1944 Conference at Bretton Woods, US, set up a system of rules, institutions, and procedures to regulate the international monetary system and established the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), which today is part of the World Bank Group. A fixed exchange rate was pegged in relation to the US dollar. The U.S. promised to redeem dollars in gold to other central banks. Trade imbalances were corrected by gold reserve exchanges or by loans from the International Monetary Fund. This monetary system enforced US world hegemony, but it collapsed when the US government ended the convertibility of the US dollar for gold in 1971 and introduced a system of flexible or floating exchange rates with the US dollar becoming a reserve currency for many states. (See also, Samir Amin: Capitalism in the Age of Globalisation. The Management of Contemporary Society. New Delhi: Madhyam Books, 1997, pp. 47ff.)
7. See Michel Foucher: The European Republic. New Delhi: Manohar Publishers and Centre de Sciences Humaines, 2002. P. 61.
8. Philip Thody, op. cit.
9. Peter Gowan, op. cit., p. 8.
10. See Susan Watkins: Editorial: Continental Tremors, New Left Review, 33, May-June 2005, p. 13.
11. Dorothee Bohle: The EU and Eastern Europe: Failing the Test as a Better World Power.” Socialist Register, 2005, p. 323
12. M. Foucher, op. cit.
13. See Susan Watkins, op. cit., p. 8
14. Ibid., p. 9.
15. Philip Thody, op. cit., p. 35.
16. Susan Watkins, op. cit., p. 8. See also: Of Wars and Weighted Votes, The Economist, Dec. 30, 2003.
17. Susan Watkins, op. cit., p. 17.
18. See Stephen Gowans: Sudan: Round Gazillion. July 27, 2004. http://www3.sympatico.ca/sr.gowans/gazillion.html. Accessed 15.04.06
19. Also See Jeffrey Anderson, op. cit., p. 44.
20. Jörg Roesler: The Economy as a Pushing or Retarding Force in the Development of the German Question During the Second Half of the Twentieth Century, in: Alice Teichova, Herbert Matis and Jaroslav Patek (eds.): Economic Change and the National Question in Twentieth Century Europe. Cambridge University Press: 2000, pp. 60-62.
21. Jörg Roesler, op. cit., p. 64. Also see Wolfgang Dümcke and Fritz Vilmar (eds): Kolonialisierung der DDR, Münster: 1995.
22. Heiner Müller: Krieg ohne Schlacht: Leben in 2 Diktaturen. Köln: 1992.
23. Cf. Philip McMichael: Global Food Politics, Monthly Review, July-August, 1993.
24. See among others Philip Thody, op. cit., p. 65 and The Hindu editorial of Nov. 1, 2005.
25. See Hans-Georg Betz: Xenophobia, Identity Politics and exclusionary Populism in Western Europe. Socialist Register, 2003, pp. 233-53.
26. See C.W. Watson: Multiculturalism. Open University Press, Buckingham, 2000.
27. See for e.g., Michael Dusche: Discourses on Multiculturalism in Continental Europe, paper presented at the International Seminar on Multiculturalism in India and Europe, held at the School of International Studies, JNU, New Delhi on 6 and 7 Nov. 2003. See also Jutta Limbach: Making Multiculturalism Work. Speech delivered at the Canadian Embassy in Berlin on August 3, 2005. Source: sightandsound.com
28. Bhikhu Parekh: The Concept of National Identity. New Community 21(2) 1995, pp. 255-68.
29. Gopal Singh: Multiculturalism and Ethnic Movements in India: A Study of Sikhs in the Punjab, in: Rajeev Bhargava, Amiya Kumar Bagchi, R. Sudarshan (ed.): Multiculturalism, Liberalism and Democracy. OUP, 1999, p. 240.
30. See among others Vaiju Naravane: France in Ferment, Anger on the Streets, The Hindu, April 4, 2006 and Jenny B. White: Turks in the New Germany. American Anthropologist 99(4), pp. 754- 769.
31. Helena Smith: Greeks Protest as Poverty Deepens. The Hindu, Feb. 18, 2006. (© Guardian Newspapers Ltd.)
32. Jonathan Steele: Poland’s Disenchanted killed off New Europe. The Hindu 29.10.2006 (© Guardian Newspapers Ltd.)
33. Neil Clark: Behind New Europe’s Façade. The Hindu, Feb. 12, 2005. (© Guardian Newspapers Ltd.)
34. Report in The Hindu, Nov. 4, 2005. (Source: Associated Press).
35. Samir Amin: Capitalism in the Age of Globalisation, op.cit.
36. See Peter Gowan, 2003, op. cit., p. 19.
37. See Jean van Heijenoort writing as Marc Loris: The National Question in Europe. 1942. Reprinted in Fourth World Bulletin. Spring/Summer 1996. (Available on the Internet).
38. See Jürgen Habermas: Towards a United States of Europe, The Standard, 10, 11 March, 2006. See also Guy Verhofstadt, The United States of Europe, A Manifesto for a New Europe. Federal Trust for Education and Research, 2006.
39. “Unsere Erneuerung. Nach dem Krieg: Die Wiedergeburt Europas.“ Frankfurter Allgemeine Zeitung, May 31, 2003. The text, written by Habermas and signed by a number of other European intellectuals (not including East European ones) such as Jacques Derrida, Umberto Eco and so on appeared simultaneously in a number of European dailies.
40. Peter Gowan, 2003, op. cit., pp. 28-29.
41. France under Napoleon had exterminated a large number of blacks in Haiti and Guadeloupe in the Caribbean to put down a ferocious uprising in Haiti at the start of the 19th century. New docile slaves from Africa were imported to replace those killed. Incidentally, many French officers had refused to take part in the massacres. Germany in addition to being responsible for the holocaust was also responsible for the killing of 65,000 Herero persons in what is now called Namibia at the time of their uprising against colonial rule in 1904-07. The Belgians were responsible for genocidal plundering in Congo and of course British atrocities in India are too well known to bear repetition.
42. For an extended critique of Habermas’s Manifesto see: Frank Deppe: Habermas’s Manifesto for a European Renaissance: A Critique. In Socialist Register, 2005, pp. 329-340.
43. Peter Gowan, 2003, op. cit., p. 30.
44. See Michel Chossudovsky, The Globalisation of Poverty. Impacts of IMF and World Bank Reforms. Other India Bookstore, Madhyam Books and Research Foundation for Science, Technology and Ecology. 1997, pp. 24-25.
45. Ibid., Chapter 3, pp. 76 ff.
46. “Bush and Blair: Iraq and the UK’s American Viceroy.” Tony Benn in Conversation with Colin Leys. Socialist Register, 2005, pp. 346,345.
47. Jean van Heijenoort writing as Marc Loris, op. cit.
* The Structural Funds are made up of the European Regional Development Fund (ERDF) and the European Social Fund (ESF). Together with the Common Agricultural Policy (CAP) and the Cohesion Fund they make up the great bulk of EU funding and spending. They are financial instruments intended to narrow the development disparity among member states and regions.
** The Washington Consensus refers to trade liberalisation and privatisation policies initiated in 1990 by the IMF and the World Bank with the consensus of the US Treasury Department. These were meant to open up the markets of the so-called developing countries to penetration and exploitation by the mncs by lowering tariffs and other barriers to the free movement of goods across borders.
[First published under the title: “Whither European Union? The National Question in Europe Today.” Frontier, October 29-Nov. 4 and Nov. 5-11, 2006]
(Revised and updated January 2014)