It’s been 70 years since the political leaders of European capital began the process of trying to integrate the previously warring states of Europe into a single trading bloc with a view to turning Europe into a force capable of rivalling US imperialism across the Atlantic and later, the rising powers of Japan and industrial Asia.
It started with the integration of key basic industries in the European Coal and Steel Community in 1951; then with the formation of a Common Market based on the core economies of Western Europe and then to the wider European Economic Community in 1957 with a customs union. Finally, the political project was completed with the formation of the European Union in 1993. Such was the early success of this project that eventually the declining imperialist power of Britain decided to join and put its future in the hands of Europe rather than with any ‘special relationship’ with America.
In the period of fast growth and high profitability of the 1950s and 1960s, the EU was a relative success. Indeed, when the weaker capitalist economies joined, like Spain, Portugal and Greece after their revolutions to overthrow military rule, these economies made gains through more trade and investment, even converging somewhat towards the rich core economies of Germany and France.
But, as the world capitalist economy entered the 1980s with low profitability of capital across the board, that early success in integration began to subside. The French and Germans then took an historic decision to drive integration forward with a move to single currency area and the euro. But convergence to the euro was based not on closing productivity, employment or income levels, but purely on monetary and fiscal convergence. The squeezing of the weaker capitalist economies into the Eurozone’s monetary and fiscal straitjacket turned convergence into divergence and set up faultlines for future crises.
Franco-German capital took advantage of cheap labour and the single currency to invest in the weaker Eurozone economies, but not always productively and not necessarily to the benefit of weak. Indeed, the strong got stronger and weak got weaker. The weak were only able to expand by borrowing heavily. Private sector credit rocketed in Spain, Greece, Portugal and Ireland. At the same time, EU governments cut taxes on the rich and corporations and so lost revenues, while still trying to sustain welfare benefits and public services. Then came the global financial crash and the Great Recession.
The credit crunch and the collapse in world output and trade pushed the weaker Eurozone economies into bankruptcy. They could not pay their debts to German and French banks. Public sector finances were trashed by the loss of revenues and the huge rise in unemployment and other welfare benefits. And then the banks had to be bailed out and the public sector had to pay.
Greece’s public sector debt had risen to 100% of GDP when the euro was launched, so already very high. But in order to pay off the Franco-German banks in the Great Recession, the government had to nearly double that debt. It only got the funds to do that by borrowing from the IMF, the ECB and the EU funds – the dreaded Troika. In return, the Troika demanded the most vicious austerity measures since the Versailles treaty imposed on Germany after WW1. Pensions, wages, public services and benefits were decimated; public assets were sold off for a song. The funds saved and raised were not used to sustain the Greek people in this terrible depression. They were used to pay off the banks and then meet the repayment schedule of the IMF and the ECB.
The Greek people fought back. When the Syriza government reluctantly called a referendum on whether the government should accept the draconian measures demanded by the Troika, despite the international media pressure and despite the domestic big business attacks, they rejected the Troika deal by 60-40. This was not what European capital or Syriza expected, and as we know, within days, the Syriza government broke the people’s mandate and capitulated. Finance minister Varoufakis, having failed in his policy of trying to ‘persuade’ the German and the EU leaders to ‘see reason’, resigned and rode off into the sunset. Syriza split but the bulk of the government party stayed behind Tsipras to keep Greece in the EU and Eurozone and impose the Troika’s austerity.
Now four years later to the very month, Greece’s public debt ratio remains unchanged at 180% of GDP. This debt that Greece owes to the EU will remain on the books for a generation at least and so austerity has become permanent! No wonder Greek will probably vote to oust Tsipras and return the conservative pro-business New Democracy in the July elections.
Was there an alternative to this capitulation? And what can we learn from this tragedy for the future of the EU and the outcome of the current battle in Britain over Brexit? Was Grexit the answer? At the time, some on the left in Syriza and much of the revolutionary left groups outside Syriza, as well as the Greek Communists, put forward this alternative. For example, Costas Lapavitsas, a Marxist economic professor and Syriza MP, who correctly broke with the government over its capitulation, advocated Grexit. Lapavitsas said at the time: “the obvious solution for Greece right now, when I look at it as a political economist, the optimal solution, would be a negotiated exit. Not necessarily a contested exit, but a negotiated exit.”
But would that have worked to avoid austerity and put the Greek economy back on its feet? Even if the Troika were to have agreed to such a ‘negotiated exit’, which is a moot point; and even if the new Greek drachma only depreciated by 20% (extremely unlikely), the Greek economy would still be on its knees, unable to restore living standards for the majority. Devaluation and rising prices would eat into any gains made from cheaper exports. Lapavitsas seemed to recognise this: “Wages must rise, but even if they rise, you’re not going to go back to where you were. It’s just not feasible at the moment. We need a growth strategy for that.” Exactly.
But Lapavitsas was opposed to a growth strategy that took away the levers of power from capital in Greece and put it the hands of the government and people. “I don’t think that Syriza should come out with a broad and wide nationalization program right now.” Apparently, that was something for the future, the medium-term, not then in 2015. “I am very skeptical, though, about this in the context of Greece right now… These are medium-term questions. These are questions that one should knuckle down and begin to confront once the problem of debt, fiscal pressure, and the monetary union have been resolved.”
But this idea of stages: first exit and devaluation and later, socialist measures, seemed to me to be both suicidal economically and also weak politically. The Greek people opposed austerity but the majority also wanted to remain in the EU and the single currency (and still do four years later). They sensibly recognised that exiting the EU would put Greece overboard in the Aegean without a paddle, suffering the fate of Argentina in the early 2000s of hyperinflation and mass unemployment.
Sure, if the Syriza government had nationalised the banks, taken over the major sectors of Greek big business and introduced controls to stop the flight of capital, as well as taxing the rich and ending huge spending on NATO-style defence, the EU leaders and the ECB may well have moved to kick Greece out of the EU. But then the government could show the Greek people and the wider European labour movement that they were not exiting out of choice but being thrown out because the government opposed austerity and was for class policies. That seems to me a much better way of raising the consciousness of the people as well as being much more effective in taking the Greek economy forward.
For me, that lesson applies to Brexit as well. The Brexit referendum in 2016 and the argument since was a product of a split in the British ruling class over which direction to take British capital. The British finance sector in the City of London and the multinationals want Britain to stay in Europe as it benefits their profits most. But there has always been a layer of the ruling class, based on old empire and imperialist ideology, particularly among smaller business where exports are less important and finance capital is remote. This layer has always opposed entry into the EU and Europe. It still reckons that Britain could ‘go it alone’ in the world of capital and do better.
This is nonsense, of course – no capitalist economy is an island, particularly island Britain. But this old ‘empire’ view held the hearts and minds of the old petty bourgeois elements that make up the ruling Conservative party and a layer of voters. And these elements whipped up a myth that ‘EU regulations’ and a flood of EU immigrants were the cause of the woes of many workers, particularly in those areas where austerity under the Conservative government had hurt most. Thus the myth was created that the EU was the enemy, not capitalism or the Tories and their austerity policies. This myth was enough to deliver such a potential loss of votes for the Conservatives to pro-Brexit forces that the Conservatives opted for a referendum to solve the issue. Much to their amazement and chagrin, the vote went for leave, if narrowly.
In the referendum, the British population was split down the middle; split in the top 1%; in the middle-class, in the working class, between city and town, town and country; between young in the cities and the old in the small towns; between the south and the north. The class lines within British society were totally submerged into whether to leave the EU or not.
But the reality is that the Great Recession and the ensuing Euro debt crisis in 2012-14 was not the product of the euro or EU structures as such, but the result of the global crisis in capitalism. The British capitalist economy is already suffering from the uncertainty about Brexit as parliament bickers and drags out a way of reaching a deal with the EU on the future.
The solution to austerity in Britain and a raising of living standards is not to be found in exiting the EU but in the replacement of capitalism and implementation of socialist measures by a socialist government. If the UK leaves the EU, then most realistic estimates are that the UK economy will end up being about 4-10% smaller in output in ten years than it otherwise would have been. But if there is another global slump in capitalism, that will be much more damaging. The Great Recession lost four times as much potential output from the UK economy over the last ten years than Brexit would in the next ten. So Brexit is not vital to the future of British capital or the British people: the state of capitalism is.
That’s why I do not think that putting Brexit at the top of any left programme for socialist change in Britain is the best way to proceed. The Brexit referendum did not unfold on class lines and Brexit is not an opportunity to promote socialist policies. On the contrary, it is a reactionary smokescreen erected by far right nationalists and the Conservatives to shift the blame for working people’s miseries onto the remote bureaucrats of the EU and onto Polish and other Eastern European immigrants who have contributed so much to keeping the UK economy going since the Great Recession.
My approach would not be dominated by some ‘Lexit’ policy as such. It would aim at getting a socialist government elected that would push for taking over the banks and multinationals and reversing austerity through a plan of production and investment involving workers in control. If such a government then came into conflict with the EU leaders who threatened to expel Britain, then Brexit would become a class issue for the first time. Unfortunately, for now, leaving the EU can only be posed as a reactionary nationalist demand.
In my political life, I have learned to structure my thought in a way that it is led by the wider long-term political strategy, connecting it with the short term more specific tactics pf everyday political life. So, if our strategy is to live in a better and more just society, which implies the overthrow of capitalism we need to analyse the opponent, the decisions of capital. A strategic move of capital is its integration in economic, financial and geographical terms. A move like this, pioneer, back then, in the 1950s, in the world, is the EU.
Just a clarification here. Europe and the EU, let’s be clear, are different. So, being a European does not mean that you are in the EU, this is a significant impact of the dominant debate in the UK. Let’s be clear about terminology. Europe is a continent, defined by physical geography and geopolitics aspects, and the EU is a union of capitalist states. They have different population levels, different countries, 55 to 28 states, but the EU is expanding gradually from 6, to 15, 25, and 28 member states. Why is the EU expanding? Capital seeks new markets, fresh opportunities for deeper workers’ exploitation. How is it expanding? The candidate member states need to apply for membership and then initiate structural adjustments in their market, politics, labour market, finances, to comply with the criteria of the EU.
In the left spectrum of political thought there are three stances related to the EU:
- EU can be reformed
- The left should not deal with the EU, let’s focus on capitalism
- The left must fight against the EU in the wider strategy of anti-capitalist struggle
I would like to argue why the EU cannot be reformed, why fighting against the EU is important in the struggle for a better life, and why the EU is the Europe of capital.
The EU has been created by capital, by capitalist governments, in detail. All started in 1945 with the initiative of Churchill, who declared the United States of Europe and then in 1952 the European Coal and Steel Community emerged. So, the foundations are clearly based on capital and markets, since coal and steel were the two industries that were most developed, at that period. And then, late-1950s, the European Economic Community was established, regulating the customs union.
The EU is the integration of capital, capital created it in the post-war Europe to address the intra-capital competition, to open new markets, to signal a new era for the Europe of capital. Let’s see some aspects, which are either inherent in the character of the EU or are addressed in its constitution.
-Fiscal stability pact: Maastricht conditionalities: 3% of GDP deficit, 60% of GDP public debt. Public debt is a very useful means for capital to impose austerity.
-These entail certainly permanent austerity within the EU
-The whole neoliberal agenda was passed through the EU directives
-Structural adjustment programs
-Privatisations, such as rail and post: industries cannot be re-nationalised within the EU
-Several left positions in the UK argue that the EU is a defender of working rights. Let’s have a look
-The EU has been driving wages down, sometimes increases but much lower than productivity and inflation increase, just securing the profits of corporations
-Less working rights
-Anti-trade union policies, just to recall the anti-trade union law in 2015, in the UK, within the EU, that regulated that in every trade union ballot, more than 50% of its members should participate, in order for the ballot to be legal.
-Marketisation of universities
-Increase of tuition fees
-Further downgrade of degrees
-More specialised and flexible workers, with less working rights, who when the conditions of the market change, they will be in a very difficult position
-Assessment of universities according to private and economic terms, not the social needs
-Migration is not an opportunity; it is a necessity, since people are obliged to move. After the economies in their countries being deregulated, they are obliged to move to the core, where bosses hire them under very bad working conditions, as people are desperate, which has sometimes impact on the working conditions of people already in the core. And then some others take advantage of high paid positions, but this is not working class, this is not the majority, and they would probably move even without open borders.
-In this way, corporations shift labour around countries, drive wages down, and increase the degree of exploitation
-And let’s recall another example, in the UK, within the EU. What were the rights of the EU migrants in the UK during Cameron’s era? Everyone has an example of a migrant who could not have access to the benefits, which have an exclusionary character towards migrants.
Imperialist role – refugees
While the EU countries have stopped fighting each other, the EU has been transformed to a major imperialist power with invasions in several countries. This has entailed huge refugee flows. The concept of Europe fortress is important here, while we cannot ignore Frontex and the concentration centres. Hundred thousands of dead people in the Mediterranean Sea.
-Single market, customs union: free movement of capital, goods, and services, based on market forces
-De-industrialisation: weakening the social bonds and solidarity that were developed through manufacturing
-Inherent division between core and periphery
Conceptualising the EU?
EU is an integration of capital that benefits the economies (as a whole) of the core and deregulates the economies of the south. Capital is the winner with deeper exploitation of the working class and migrants. The EU benefits upper classes in both core and periphery, mainly in the core, while the big losers are the working-class people in both core and periphery. How? Apart from the previous terms, there is the following inherent and structural process of the EU.
In the open market we have foreign investments and migrant flows. The peripheral economies had structural weaknesses before the integration which expanded within the single market. Then, they saw a deregulation of the productive structure and huge unemployment, which brought migration of people from the periphery to the core. On the other hand, we saw migration of capital from the core to the periphery. Capitalists take advantage of desperate people, offering low paid jobs with weak working rights.
Eurozone was one step forward for capital. It has deepened austerity with stricter fiscal criteria, and implied lower interest rates for workers. Therefore, it has been driving down wages, increasing subprime lending, and expanding the debt of households.
In summary, the open borders, the integration, the flows, are all for the capital in the EU. This is what we should respond to the left that is afraid to speak about the EU. The EU is internationalist, yes, but it is internationalist for capital. From this perspective, we need to defend all the people who were forced to migrate, in every country. But all the migrants, we should forget neither the visas for the overseas people, nor the refugees. There is not a single convincing argument for not speaking about the EU.
So, what should we do?
The main question that needs to be addressed is what the left actually wants. Europe of capital or Europe of people? If the left wants a better society, it cannot be in favour of the EU. What has been happening in the EU till now? Unfortunately, the big dissatisfaction about the EU, which exists in all the EU member states, has been absorbed by the far-right parties which speak about national democracy. Why?
-Since the left has been afraid to lead the anti-EU struggle, due to the weaknesses of the left. Most left support the EU. Important here, is to examine whether there is an alternative within the EU. The example of SYRIZA in Greece is illustrative. People were surprised in 2015 when the Greek government decided to reverse the result of the referendum and apply austerity, but we should not forget that SYRIZA is a pro-EU party. This explains all the events after the referendum. And then people just punished them in the euro elections
-This absorption of dissatisfaction from the far right is also a strategy of the capital. We should not forget that the far right has historically been a very useful weapon for capital, a strong ally. After the 2007 capitalist crisis, the far-right parties recorded significant growth. Then, the neoliberal and ex-social-democrat forces took advantage of this and now highlight the dilemma to the working class people: Do you want the unified EU or a divided Europe based on nationalist ideas?
Regardless of the rhetoric of the far right, we know their agenda which is always serving the capital, be careful within the EU! The examples of Hungary, where Orban voted 400 hours of compulsory overtime annually, paid only after negotiations with the boss, and Austria, where the right and far right coalition regulated the 12 hours working day (within the EU, just to respond to the argument the EU supports working rights), are illustrative. This is the far right. It targets the foreign workers, it is racist against the poor, to destroy the whole working class. It seeks to renegotiate the position of the upper class of each country within the EU.
In the UK, several trade unions have opposed the EU, like RMT, however, the big unions, UNITE, Unison, have supported the it, perceiving it as an umbrella of the working rights, such as maternity and paternity pay and leave, the right to paid leave for holidays, a working week limited to on average 48 hours a week. Apart from the examples of Austria and Hungary and other compelling evidence about the negative impacts of the EU on working rights, there is the question about whether this is what we want. This is not an argument for fighting to stay in the EU, it is evidence that speaks to stronger working struggles to make it 30, 25 and 20 hours per week, not to stay in the EU.
In my opinion, the left, especially in the UK, has been afraid to speak about the EU, as they would be considered as racist. And what has been the outcome? The great weakness of left groups speaking only anti-austerity, not putting into the game the bosses and capital, not targeting the deeper scopes of capital and the EU, even to condemn them politically. In the referendum, some of them, supported the Remain, claiming that the left cannot ask now for an exit from the EU, when it does not have the power. This is a significant proof of no connection between strategy and tactics. Then we should question the participation of the left in the elections, as according to the argument, the left program and demands cannot be implemented. From this perspective, this is also an extreme lack of faith and determination. After the referendum, things got really bad. Few left voices in terms of Brexit, the discourse has been dominated by others, while on top of this, several left people support the Brexit party of Farage.
Addressing the three positions about the EU, remain, ignore, or fight against, I think that we need to demand an internationalist, working class and migrants’ friendly, overthrow of the EU.
Accounting for the connection between tactics and strategy means that believing that the EU can be reformed entails the belief that the system can be also reformed. There is an issue of wider political stance, here. The Radical Left needs to structure the strategy, to adjust the tactics and the struggles of everyday life based on this strategy, to support the working class for a better life, out of the EU, without exploitation, since there is no improved life within the EU; the latter cannot be reformed. The EU has its own structural features and rules, it is impossible to reform them. Overthrowing the EU is a crucial step in the wider anti-capitalist struggle, towards a more just, fair, equal society, but of course it does not certify it. So, it is a necessary, but not sufficient step.
From this perspective, questioning the EU should be associated with the bigger question about who owns the economy. If the Left does not ask this question, then the chances to get into the nationalist trap increase dramatically. Overthrowing the EU is not sufficient on its own. The overthrow of the EU should be associated with a wider spectrum of immediate demands that would relieve working class people, such as write off the public debt, public health and educational system, nationalisation of the banking sector and key industries under workers’ control, decent jobs, rise in wages and pensions, stable work with rights against the flexible work, against fascism, racism, and war. All these simply cannot happen within the EU.
How to do it?
We need to create anti-EU initiatives in each EU member state which will be connected with the labour movement and then be unified at a European wide level. From this perspective, we need to fight for the overthrow of the EU, not just the exit of a country. In this way, the Radical Left can highlight the wider role of the EU, weaken far right and nationalist ideas, and connect this fight with the wider struggle. Can we do it in the UK? I think that there is always time. We need more imagination, to vision another type of society and economy. We need to get stronger by the result of the referendum and change the things. This popular ‘the country is divided’ is in reality a class divide, the poor said enough with this, ‘we are fed up’, we cannot offer these people to the far right! However, we need the left to start organising and mobilising the working class, otherwise others will do it, as they already do.
Several times the Radical Left postpones discussions and actions for crucial issues, like the EU or even the social change, to the future, like they cannot happen anytime. However, this is a methodological mistake! Labour movement trajectory is not linear, its historical trajectories have been full of wild fluctuations! This is a certain weakness of the Left. Moreover, we are not at this stage at the moment. The issue of the EU is now, more topical than ever, especially after Brexit. This dilemma Remain in the EU or Brexit under Tories is fake. We just need to respond immediately. We need to act now, to mobilise the working class for an internationalist workers and migrant friendly anti-EU, European wide struggle, otherwise history, once again, will not treat both the society and the left in a good way. We can always win!
Leaving the Garden: Brexit and the Housing Crisis
ANTARSYA UK organised a successful event in a crowded room about the topical issue of the EU and the stance of the Radical Left. A useful and lively debate followed the presentations of the speakers (Simon Elmer, Michael Roberts, Nikos Kapitsinis). You can watch the video of the entire event here
The interventions of each speaker will follow soon.
In the aftermath of the euro elections, the discussion around the EU and its features is deepening. New challenges rise as the wave of questioning the EU since the early 2010s, in the aftermath of the capitalist crisis, dominates the public debate. It is of great concern that this wave is directed towards the far right across the whole EU, although during the last 10 years, the working class and the youth in the EU fought from a progressive perspective so that they wouldn’t pay for the crisis that they did not cause. More recently, the yellow vests movement and the youth struggle against climate change have offered fresh hope to the radical left politics in the EU.
These movements have revealed the reactionary and anti-social structural character of the EU, which covers several dimensions. First, the political, with the EU being the ‘headquarters’ of neoliberal restructuring and reactionary policies, constituting the pillar for resolving the capitalist crisis with banks’ bailouts and huge deterioration of working class people’ living standards. Second, the economic, with the structural division of the EU between the core and periphery. Third, the migration perspective, with the EU forcing millions of poor and unemployed people from the periphery to the core, seeking deeper forms of exploitation, while acting as a fortress against the refugee flows that it caused by joining imperialist invasions. Fourth, the environment, with the EU promoting ‘environmentally friendly’ measures of small and ambiguous efficiency, while allowing the large multinationals making irreversible damage to the environment. Finally, the EU has an important role in the housing restructuring, facilitating the huge urban sprawl, the division between urban and rural areas, the spatial division of cities between poor and rich areas, the huge rise of housing prices, and thus the significant increase of homeless people.
For all these reasons, members of ANTARSYA, the Greek anticapitalist front, living in the UK, organise an event around the analysis of the EU and the response from a radical left perspective. We want to contribute to and deepen the ongoing discussion in terms of the ‘nature’ and structural features of the European capitalist integration. We invite individuals and political forces that consider the question of the political struggle in Europe a relevant cause in order to enrich the debate around the political strategies that the radical left and the labour movement must develop in order to respond.
Saturday, June 15, 17.00, SOAS University, Room DLT, London