As the “great and good” meet in Castleknock Hotel to hear Joan Burton and other right-wing speakers discuss ‘Ireland 40 years on: the benefits, opportunities and challenges of EU membership.’ We reproduce a “A brief history of the European project – never social, never democratic” originally written by Paul Murphy MEP as part of a pamphlet on the Austerity Treaty.
The European social model “has already gone.” This how Mario Draghi, the President of the European Central Bank summed up the reality of what sort of Europe we have. The illusions of a ‘social Europe’ which were promoted by ‘social democrats’ across Europe have been smashed by the reality of the economic crisis and the swift speed with which the political and economic establishment have moved to use the crisis to go even further in a neo-liberal direction. However, some, including critics of the Austerity Treaty, continue to suggest a return to a better, more ‘social Europe’.
This is a false idea. The EU has not been transformed – ‘Social Europe’ has not been replaced by ‘Austerity Europe’. Instead, with the economic crisis, the nature of the EU has simply become much clearer as capitalism and its representatives within Europe have bared their teeth. The Austerity Treaty is simply the latest in a line of Treaties and legislation which shape Europe in the interests of the capitalist classes of Europe rather than working class people.
From the very beginning, the EU and its previous incarnations have not been ‘social’. It has always been a capitalist club, aimed at meeting the needs of the capitalist classes in Europe, enabling them to compete more effectively on the world stage. This is not a process that has been driven from below, with working people playing the role of participants or even beneficiaries. Instead, it is a project that has been driven by the political elites across Europe in the interests of the capitalist classes they represent. It has been driven by the fact that, as Russian revolutionary Leon Trotsky observed in 1923, “the capitalist forces of production had outgrown the framework of European national states”, with the capitalist classes seeking broader markets and increased political power.
Initially, the impetus for developing the European Union, starting with the European Coal and Steal Community established in 1951, was primarily geopolitical for the capitalist classes. The French capitalist class, supported by US imperialism, wanted to constrain the redevelopment of German dominance in Europe in the aftermath of World War II.
The key strategy to do this was to lock Germany into a project of development of western Europe. It was also driven by a fear of the strong labour movements across Europe that threatened the very survival of capitalism within Europe. The hope was that integration could deliver economic stability and therefore protect capitalism from the threat of revolution.
As the European project developed, there emerged two key mechanisms by which it would meet the needs of the capitalist classes in Europe:
(i) Establishing a free common market, with free movement of capital and labour within Europe and using this to create downward pressure on wages and workers’ rights and press for increasingly economically liberalised societies;
(ii) Through acting together on the world stage by pooling resources and ceding a certain amount of sovereignty. This aspect has two dimensions – one being an increase in the power of the European capitalist classes to effectively exploit the people and resources in lesser developed countries through negotiating as a bloc, with the results seen in the many Free Trade Agreements signed by the EU. The second, which is a preoccupation running through all the strategic documents of the political elites within Europe over the past decade, is attempting to compete on the world stage with the declining US on the one hand and the rising China on the other hand.
Clashes between capitalist classes in Europe
There has been a tension between these two key aims and clashes between the different capitalist classes. The British capitalist class, with its ‘special relationship’ with US imperialism, has always emphasised the first – trying to build a huge free trade area without much political integration. In contrast, French capitalism has emphasised the political integration and independence of Europe, seeking to become independent of the power of US imperialism. One of the results of this clash was French President de Gaulle’s veto of Britain’s entry into the Common Market in 1963. Britain was later able to enter, but has played the role of a less than enthusiastic participant since.
Between the capitalist classes in Europe, there has always been tension and differences over the nature of the political integration that took place. This is generally referred to as a clash between the ‘federalist’ and ‘intergovernmentalist’ approaches. Germany has generally favoured a move towards a ‘federal’ Europe, with key powers resting with bodies like the European Commission and to a lesser extent the European Parliament, while successive French governments have emphasised the ‘intergovernmental’ nature of the project – seeking to have power rest more with the European Council which has representatives of the different member state governments. These differences reflect the confidence of French capitalism in its ability to negotiate a better deal for itself in inter-state negotiations,
as well as German capitalism’s ambition for further enlargement to the east, where German capitalism would be dominant, which would increasingly necessitate federal institutions.
Successive Treaties have seen increasing steps in the shaping of a neoliberal Europe. This has reflected itself in each Treaty becoming more open than the last in terms of pushing a neo-liberal economic agenda. The Maastricht Treaty with its ‘Convergence Criteria’ and the subsequent Stability & Growth Pact criteria were an attempt to embed neoliberalism and quicken the pace of attacks on the working class across Europe through a reduction in public expenditure. Both Nice and Lisbon took this process further, pushing privatisation and attacks on workers’ rights. They also drove the process of political integration and military integration.
Despite the setting up and knocking down of the strawman of conscription to a European army by the Yes side in Lisbon II, it remains a fact that the political establishments in back up their political power. French President Sarkozy outlined the thinking behind this when he declared: “”Europe cannot be a dwarf in terms
of defence and a giant in economic matters.” Javier Solano, former High Representative of the EU declared upon appointing a head of the European
“The need to bolster Europe’s military capabilities to match our aspirations is more urgent than ever. And so, too, is the need for us to respond better to the challenges facing our defence industries. This Agency can make a huge difference.”
This is a process that has been advanced, although constrained by massive opposition from public opinion, in the different Treaties, with Lisbon allowing the setting up of internal military alliances within the EU.
A social Europe?
Those more ‘social’ elements of European capitalism, namely the significant welfare states and workers’ rights, were achieved in the context of the post-war boom. They were not granted benignly by the political and economic establishments in Europe, instead they were won through struggle and relatively strong labour movements. Even where the transposition of European legislation has on occasion brought about an improvement of conditions for women and workers in Ireland, these are the results of struggles both domestically and across Europe, rather than a gift of the establishment. However, generally speaking, these gains, rather than being
protected by the EU and its forerunners, have been systematically undermined
The parties that are referred to as ‘social democratic’ across Europe, such as the Labour Party in Ireland, the Parti Socialiste in France and the SPD in Germany, have undergone a fundamental transformation in the past 20 years. While previously they were parties with a workers’ base and a pro-capitalist leadership, they have now gone over entirely onto the side of capital. While the leaderships of those parties never stood for genuine socialist transformation, the parties did offer a certain alternative to the capitalist orthodoxy.
In the aftermath of significant industrial defeats for the working class in the 1980s, like the miners’ strike in Britain, and the collapse of Stalinism which ideologically disorientated much of these parties, they shifted significantly to the right. Their connection to their working class base was lost and they are now out and out capitalist parties. Across Europe, parties like the SPD and New Labour have led the drive to neo-liberal policies, undermining the previous gains that they in many instances could claim some credit for. The same is true at the European institutional level, where ‘social democrats’ like Neil Kinnock and Peter Mandelson have just as
faithfully represented big business as their Conservative ‘opponents’.
The process of European integration took place concurrently to the rise of what is known as neo-liberalism. This is a right-wing economic theory propounded by economists like Milton Friedman and politicians like Margaret Thatcher and Ronald Reagan. Essentially, it calls for a much smaller state, demanding privatisation of public assets and reduced welfare provision, together with a monetary policy geared solely towards the control of inflation rather than reduction of unemployment.
This came to be the dominant ideology of capitalism, both in an academic sphere and politically, in the context of the capitalist crisis of the 1970s. David Harvey outlines the reasons for this position in his book, A Brief History of Neo Liberalism. In essence, in the context of declined rates of profit, it expressed the need of the capitalist class to increase the rate of exploitation of the working class, to reduce the share of wealth going to labour and to open up new markets and commodities for capitalism, such as healthcare and education.
Launch of the Euro
The moves towards a common currency, first with the Exchange Rate Mechanism in 1979 and then with the launch of the euro in 1999 were another side to the creation of this capitalist club. The establishment of a common currency had both an internal and external purpose from the point of view of the dominant capitalist classes within Europe.
Internally, it would lead to a further integration of the common market, through lowered transaction costs and improved capital allocation. The establishment of the ‘independent’ European Central Bank (independent of any democratic check or control) was a further weapon for neo-liberalism within the EU. The ECB was given an even more limited mandate than the Federal Reserve, with its only aim being to control inflation, with no reference to the need to achieve full employment. With the option of devaluation to regain competitiveness removed, extra pressure was to be applied on workers’ wages and conditions throughout Europe.
Externally, the launch of the euro was an attempt to create a new reserve currency that could compete with the dollar on the world market. This would work to the advantage of the growing financial sector within the EU and would turn Germany into a key international financial centre. The whole process of integration has been riven with contradictions and conflicts between the capitalist classes in Europe. This is essentially because capitalism within Europe remains fundamentally national – with the major corporations rooted in particular nation states, which are generally the ones where they originated and which represent their interests. There has undoubtedly been a process of a ‘Europeanisation’ of capital, with an increasing number of cross-border mergers within Europe and increasing activity of companies based in one European country in another.
This is reflected organisationally in the establishment of powerful big business lobbying organisations on a European plane such as the European Roundtable of Industrialists, which lies behind many of the key ideas behind the six-pack and the Austerity Treaty. However, this process has only gone so far and the majority of the corporations remained tied to a particularnation state.
These contradictions have come sharply to the fore with the economic crisis and have been exacerbated by the existence of monetary union without fiscal and political union and the reality of economic divergence instead of convergence across Europe. The euro crisis has seen not only clashes between the capitalist classes and the working class, but also between the different capitalist classes as the crisis exposes the differences of interest.
Democracy within Europe?
The EU from its very creation has been a profoundly undemocratic project – driven by political and economic elites with little reference back to the peoples of Europe. There is much within the current stage of the project that recalls the phrases of the theorist of neo-liberalism, Friedrich von Hayek, who for a time was extremely positive about the prospect of European integration. He saw the prospect of a federation of Europe diminishing the possibility of ‘interference’ in the economy by states.
As Peter Gowan explained:
“For Hayek, Europe’s problems derived from the rise of popular sovereignty and democratic control over economics. His brilliant insight was to grasp that under international treaty law, the ordinary parliamentary laws and policies of individual states can be trumped. So a treaty about domestic issues can block democratic policy-making – hence the EU treaty-mongering since the mid-1980s. The Hayekian EU should thus be a negative force, blocking the exercise of democratic will on economics at a national level.”68
This rings true about the current EU. Now Commissioner, then Belgian Foreign Minister, Karel De Gucht explained the Lisbon Treaty’s relationship to the EU Constitution which was rejected by the French and Dutch people:
“The aim of the Constitutional Treaty was to be more readable; the aim of this treaty is to be unreadable [...] The Constitution aimed to be clear, whereas this treaty had to be unclear. It is a success.”
This is not simply a question of Treaty changes, but an approach whereby both politics and economics are technocratised. Discussions at an EU level, which have an impact on our daily lives, are shrouded in technocratic language and are extremely difficult for people to follow, nevermind exert pressure over. As with the six-pack and the Austerity Treaty, decision making is shifted further away from the peoples of Europe.
The institutional architecture of Europe is profoundly undemocratic even by the standards of capitalist parliamentary democracy. Its convoluted nature owes something to the different ‘federalist’ and ‘intergovernmentalist’ viewpoints of its key actors. In reality, real power lies with the unelected European Commission and the European Council.
The European Commission is made up of those appointed by different governments across Europe. Its function is to act as the strategic driver for the capitalist classes within Europe. It has the sole right of initiating legislation. The European Council then brings together heads of government and ministers from the various EU states.
The European Parliament is not worthy of the name – lacking the most basic rights of a Parliament – to initiate legislation and to, in any real sense, hold the Executive to account. Perry Anderson accurately summed up its role:
“it functions less like a legislative than a ceremonial apparatus of government, providing a symbolic facade not altogether unlike, say, the monarchy in Britain.”
The purpose of the facade is to create the illusion of democracy, as with the “Citizen’s Initiative” which will allow a million people to gather a petition, which the European Commission will then “carefully consider”! Despite the much heralded increases in power for the European Parliament which were promoted by the supporters of the Lisbon Treaty, the reality is that the functioning of the EU has become even more undemocratic.The European Parliament was even completely by-passed by this treaty.
There is no social-democratic past of the European project. It has always been, as it remains, a project driven by the capitalist powers within Europe. One of the results of the crisis is that the ‘social Europe’ shroud it covered itself in has been ripped off. It is therefore clearer that the capitalist European Union offers no way forward for working class people. An alternative Europe needs to be built.