European Union on shaky ground
Angry residents of member nations have had it with austerity and chaos
Luma Nichol
volume:  
volume 38
issue 2
April 2017
imagestuff

A recent anti-austerity protest in Madrid, Spain. The sign reads “Greece yes. EU, no.” Credit: Javier Soriano / AFP / Getty Images

The European Union (EU) is teetering. In the past two years, three of its member countries passed anti-EU referenda: the 2015 vote in Greece against EU-imposed austerity; the startling 2016 Brexit decision to sever Britain from the bloc; and a recent vote in Italy rejecting constitutional changes proposed by the pro-EU prime minister.

A flood of refugees from Africa and the Middle East, seeking relief from wars, environmental devastation, and poverty, have landed on Europe’s shores. As in the U.S., the right wing appeals to xenophobia and fear — ripe in times of economic stress — to bolster their popularity. Nationalist candidates, buoyed by the Trump triumph, hope for victories in 2017 elections in France, the Netherlands, and Germany. All are “Euroskeptics” committed to withdrawal from the transnational organization.

While populist anger in the U.S. is aimed at Washington, D.C., in Europe it is aimed at Brussels, the EU headquarters. Far-right politicians blame the EU bureaucracy for economic and social woes, as do many working people. As a signal of their disenchantment less than 50 percent of people across the 28 member states vote in elections for the European Parliament.

Despite the nationalism of many of its critics, the problems of the European Union don’t stem from its internationalist character. They result from its capitalist nature, which is a guarantee of destructive competition, inequality, and economic turmoil.

A bulwark for the bosses. After World War II European industrialists found themselves caught between the mighty U.S., which benefited from Europe’s destruction to become a superpower, and the encroachment of the Soviet bloc. To survive, big business needed tariff-free access to resources throughout the continent.

In 1951 the European Coal and Steel Community brought Belgium, France, Germany, Italy, the Netherlands and Luxembourg into alliance. This launched a string of developments that led in 1993 to the formation of the EU as a political and economic bloc.

In 1983 major multinationals including Nestlé, Unilever, Volvo, Amoco, and Renault formed the European Round Table of Industrialists. Today the organization has 50 members and ties to the World Economic Forum and European banks. It has an outsize influence on the EU.

There is nothing democratic about the EU. Everything is weighted to benefit the founding countries. Power rests primarily with two elite entities: the European Council, which consists of heads of state from each member country; and the European Commission, the EU’s executive arm, whose broad authority includes managing day-to-day business. The allocation of seats in Parliament, the only EU governing body elected by popular vote, guarantees the core nations a majority. At the top, Germany has 96 seats; at the bottom, Malta and Estonia have six each.

The United States has a big stake, militarily and economically, in Europe. Annual summits are held between U.S. and EU policy-makers. Additionally, the U.S. plays a key role and provides 70 percent of funding for NATO, a military alliance that includes most of the EU countries.

A tool of neoliberalism. The Maastricht Treaty, signed in 1992, empowered Europe to better compete against massive trade blocs in Asia and the U.S. It created a mobile workforce through a common regional citizenship. And in 2004 business gained access to cheap labor by opening up membership to disadvantaged Eastern European countries.

Maastricht’s biggest impact came with the introduction of a common currency, the euro, managed by the newly minted European Central Bank (ECB). Nineteen nations adopted the currency, forming the eurozone. To qualify they had to meet “Convergence Criteria” which set limits on government deficits, indebtedness, interest rates and more. This, plus the inability to adjust their currency, meant that smaller, poorer nations could not compete with the more powerful.

Private banks had a field day loaning funds to strapped governments. In order for Greece to qualify for the eurozone, Goldman Sachs used complex transactions to hide its governmental red ink. By the time investors stopped lending funds in 2008 Europe had a debt crisis. While the ECB bailed out the banks, it was at the cost of punishing austerity conditions — most notoriously in Greece. Today, destitute Greece is virtually a colony of the EU.

Austerity measures like spending cuts are a tool and a result of neoliberalism. This is the global economic strategy which aims to boost corporate profits by freeing commerce from all impediments and stealing public wealth. Deregulation, privatization, attacks on unions, and destruction of the “welfare state” were neoliberal policies applied throughout Europe.

The consequence is acute disparity between and within countries. Today, unemployment and poverty do not plague only Greece, Spain, and Portugal. De-industrialization and austerity imperil core countries like France and Belgium. Germany is the exception, benefiting from servicing loans to its neighbors.

Resistance turns right. Over the years, the ruling-class version of “European union” has met opposition at every turn, primarily from the left. In France in 2005, Trotskyists led the defeat of a referendum for a new EU constitution, which was shelved after the Netherlands and Ireland followed suit.

Today, however, the most visible and vehement hostility is from the right. Approval of Brexit was based largely on the scapegoating of migrants from Eastern Europe as well as refugees risking their lives on the Mediterranean. Chauvinism from unions touting “British jobs for British workers” boosted the rightward drift. The social democracy — parties coming from the reformist socialist tradition — didn’t help. When in government many of them, like Pasok in Greece, backed and implemented harsh neoliberal offensives at the behest of the EU.

Unfortunately, today’s anti-capitalist Left is in disarray. But the potential exists for revolutionary Marxist leaders who understand the danger of class collaboration to regain the trust of the working class and mount an offensive.

A conflicted profit system. Capitalism is wrecking Europe because it has outgrown national boundaries, yet can’t do without them.

The basis of capitalism is competition and its social form is the nation-state. Today’s economy is global, but competition is still organized along national lines. As long as the profit system prevails, creating genuine unity among countries, as the EU purports to do, is impossible. On the contrary, the ruling classes of Europe’s powerhouse nations are enriching themselves by preying upon the weaker countries — as well as their own working classes.

Desperate workers, especially the globe’s 65 million refugees, need genuine internationalism more than ever before. And workers and the oppressed have the power to reach across boundaries, to build a borderless world dedicated to the good of the vast majority, if only we recognize that power and come together to wield it.

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