The campaign for the June 1979 elections to the European parliament, which was launched with a propaganda barrage several months ago, has begun to falter as the political and social crisis has increased in a number of countries.
While the June date still holds, the problems throw a naked light on the contradictions facing the European bourgeoisies in their plans for centralization and integration across the continent. In fact these plans require that the social, political, and economic situations in different countries be brought into line with each other, and is designed to step up this process.
In their respective countries the bourgeoisies are faced with crises that are, for the time being, driving them toward a closing of their ranks, which are divided on the question of Europe, in order to meet the working class head-on.
But we should not forget that the bourgeoisie's attempts to housebreak the working class in each country, and its plans to set up a European parliament in order to spread this process evenly throughout the European Community, go hand in hand.
This means that the working-class response to the austerity plans in each country and to the centralization of attacks on the working class on a European scale, must also go hand in hand The need for an international response is becoming increasingly clear to the workers, as the situation in the steel industry today shows.
That is why it is necessary to gain a grasp of the plans the European bourgeoisie has in mind in order to counterpose to them a working-class, internationalist response and not lead the workers into the blind alleys of administering the crisis and of chauvinism.
A Plan Inscribed on the EEC's Birth Certificate
The establishment of supranational European institutions is the logical consequence of the Europe-wide concentration of capital, of the creation of European multinationals. Under the capitalist system, the state's field of activity must be in keeping with the scope of the productive forces and the relations of production. Thus the internationalization and concentration of capital within the EEC is increasingly running up against the powers retained by the member states and the absence of supranational institutions.
The founding of the EEC was itself a response by European big business to the contradiction between the development of the productive forces and the restraints of the national states. To face up to American and Japanese competition, the European industrialists had to unite, had to derive benefits from an increasingly coordinated economic policy (raw materials, infrastructure). This is what led to signing the Treaty of Rome that established the Common Market.
But because of the decisive role of the state (monetary, fiscal, and credit policies; infrastructure; social policy), these big European corporations need to rely on supranational institutions with governmental powers that can carry out a centralized policy on their behalf.
When European interpenetration and centralization of capital reaches a certain level, the pressure for a supranational state becomes irresistible.
Since 1969 the most advanced sectors of European capital have been arguing in extensive economic and favor of more political integration. Agnelli, the owner of FIAT, told the Italian parliament's Standing Committee on Industry on February 20, 1969: "If we want to have planning in the automobile industry, we'll have to get down to brass tacks at the supranational level."
In the same period Raymond Barre, then vice-president of the EEC Commission, spoke in a similar vein:
The Common Market of capital is lagging behind the Common Market of goods because the Treaty of Rome is ambiguous on this point and also because of the attitude of the member states who fear that capital mobility will compromise the attainment of their national objectives. Also in the same period Giscard d'Estaing, who was then minister of finance, favored the creation of a European currency.
Although this was the historic tendency, in a period of growth it was not necessary to go beyond measures to further exports and guarantee profits. The full scope of the crisis of the EEC was only seen when the great world economic recession of 1974-75 broke out. There was no supranational state able to carry out the anticrisis policies needed by the giant European corporations, which had to face up to competition from American trusts that had a powerful state at their disposal.
In this situation, in the absence of a supranational state, each bourgeoisie began to concern itself with its own economy
(see for example Italy's demand for a waiver of the EE's economic accorde at the time of the severe crisis of the lira). In addition, the capitalists looked to their own national states to confront the deep social crisis that was developing.
At that point there was a possibility that the EEC might break up under the pressure of the tendency for each member state to adopt protectionist measures in order to arrest competition from the other economies. This confirms what Ernest Mandel wrote in 1968:
The EEC's moment of truth will arrive when Europe undergoes a general recession. This will be the decisive test of the Common Market (Europe Vs. America: Contradictions of Imperialism, New York: Monthly Review Press, 1970, p. 117).
In 1977 the most clear-sighted representatives of the long-term interests of European big business (Social Democrat Helmut Schmidt and Giscard d'Estaing) began to react to the threatened break-up of the EEC. After initially explaining the crisis as the temporary consequence of the rise in the cost of oil, the bourgeoisie then settled in for what it projected as a crisis of long duration and had to polish up its tools for making the workers bear the costs.
At the time of their February 4, 1977 "summit," Giscard and Schmidt stated their willingness to be the motor forces of the European upturn. Their joint declaration explained:
The government of West Germany and the government of France hope that in 1978 the EEC will again be able to begin moving toward monetary and economic union, which is a necessary step on the road to the European Union. They hope that the recovery policies [meaning austerity policies!] undertaken by the various member states will contribute to this.
Schmidt concluded by saying:
We believe that the economic policy put into practice in Germany during the world economic crisis, as well as the economic policy carried out in France under the designation of the 'Barre plan' will lead to good results in 1977. Paris and Bonn would like to strengthen this development, not only through consultation, but also through coordination, obviously within the framework of decisions and options made on a European scale. We expect to be able to convince our partners to take part in a much closer convergence of economic policies (Le Monde, February 6-7, 1977).
Thus the objective is clear: to coordinate the anti-working-class austerity policies put forward by the governments of the member countries of the EEC and to use the crisis for a new expansion of European capitalism.
The European bourgeoisie is now trying to carry out three joint measures that serve these aims. The three measures are the creation of the European Monetary Union, the election of the European parliament, and the enlargement of the EEC.
The Tortuous Path of the European Monetary System
The creation of the European Monetary System corresponds to several concerns of the European capitalists:
• To not be at the mercy of fluctuations of the dollar.
• To remove impediments to the movement of European capital.
• To coordinate antirecessionary policies (credit, etc.).
• To create a common reserve fund so that (strong) countries could apply pressure regarding the social, economic, and political decisions of governments that face a powerful workers movement (in the tradition of the International Monetary Fund's role in recent years in countries such as Peru, Italy, Britain).
As the British weekly Economist bluntly put it, the EMS should be supported:
Because it sets up a framework for coordination and even discipline of fiscal, monetary and exchange policy, which could benefit Europe as the IMF has benefited the world. Because it presses governments who at present do not conduct their economic policies helpfully to do so: and even partial success here would be success indeed (October 21-27, 1978, p. 15).
The EMS would be the corollary and guide for national austerity policies. Thus, for example, the EEC's Committee on Economy Policy admits that the poor countries joining the EMS would have difficulties since they would have to place greater priority on their balance of pay. ments and less on other objectives such as growth and jobs. Furthermore, by fixing the exchange rates, the EMS would reduce the number of political weapons governments have at their disposal to try to deal with an economic crisis.
The main obstacle on the road to establishing the European Monetary System rests in the disparity between the different national currencies, different economies, and different social and trade-union situa tions in the various countries. The article we have already cited from the Economist makes this point very clearly:
If any government believes that the present art of economic convergence could bear all the burden of making EMS stick, the negotiators might as well stop wasting their time. Not only the different policies but the different trade unions, expectations, whathaveyous of the Nine make it impossible that a set of exchange rates between them should hold for as much as a year.
And it is precisely these existing differences that are now blocking establishment of the EMS, which the bourgeoisie wanted to see established before the beginning of the new recession. The reactions of different governments on this question clearly illustrate this fact.
Britain refused to join the EMS from the word go last November, feeling that there was too great a disparity between the different inflation rates. But Callaghan refused to join also and especially because of the political and social difficulties he was facing owing to the rejection of his incomes policy by the British workers and trade unions and by his own party.
There is already a big crisis in• the Labour Party as a result of Callaghan's refusal to follow the decision of the party conference regarding the "5 percent," and he does not want to feed it by deciding to join the EMS when there is a strong anti- EEC lobby in the Labour Party. It should be noted, however, that Callaghan took care not to launch a crusade against the EMS.
On the other hand, the Italian government-which was then made up entirely of Christian Democrats ruling through the support of a majority that included the Italian CP and SP-decided to join the EMS at an inopportune moment, despite the opposition of the Communists, who were the government's main support.
The Italian bourgeoisie's objective was simple: to use this European "agreement" to impose an austerity policy on Italy that is less and less acceptable to the workers. The decision to join the EMS was one of the main factors that determined the Italian CP's decision to withdraw from the parliamentary majority and, as a result, to bring down the Andreotti government. Italy's entry into the EMS means nothing, in the immediate sense at any rate, when it is under a caretaker government: the unknown elements in the social and political situation are occupying center stage for the bourgeoisie of the Italian peninsula.
The French government's attitude is even more revealing and significant. At a time when Giscard was appearing with Schmidt as the champion of a European currency, France's chairmanship of the EEC-which began in January-has been marked by a stalemate of discussions and progress in regard to the EMS, the EEC's 1979 budget, and common agricultural prices, to name just a few.
This obstruction reflects the domestic concerns of the representatives of the French government.
In fact, Paris would very much like to put off the start of the EMS until after June because of the poor state of the economy and of French exports, and because of the massive workers upsurge in the North and Lorraine regions, as well as in a number of other sectors.
The other problem for the French government is the question of agricultural prices and the notorious "compensatory amounts."2 France would like to see the dismantling of this old system, which favors German agricultural producers and breeds discontent among French growers, before the EMS is set up and begins laying the basis for future compensatory agree ments. Once the EMS is set up, so as not to lower German agricultural prices, it would be necessary to raise European agricultural prices by 10 percent. It goes without saying that the other countries do not agree and that, in this situation, the German growers—who are the electoral base of the Liberal Party, Schmidt's coalition partner-want to maintain their current edge.
Thus it is a difficult situation. Witness the embarrassment shown by Giscard d'Estaing at his last news conference:
The launching of this system [the EMS] has not taken place due to a problem of a different kind, the existence of what are called compensatory monetary amounts. Thie problem is distinct from that of the monetary system, but it also
2. When the common agricultural policy was set up in 1962 it was decided that agricultural prices would be the same in all six countries that then made up the Common Market. These prices were calculated in a fictitious currency that reflected the relationship of each currency to all the others. In 1969 France devalued its currency by 16%. This made its agricultural produce 16% cheaper than that of the other countries. Under the rules it should have raised its domestic farm prices to bring them back up to the level of the rest of the Common Market. But France did not want to raise its domestic prices: in fact it froze its prices at the level that existed before the devaluation-meaning they were 16% cheaper than in the rest of the EEC. This meant that it had to "compensate" its partners. French agricultural exports are taxed a "monetary compensatory amount" equal to the amount the franc was devalued with respect to the currency of the importing country.
The opposite situation can, and does, occur as well. When the mark was revalued in 1969 and 1971, the mark value of agricultural support prices in Germany should have fallen to keep the German prices in line with those of the rest of Europe. But German farmers resisted. As a result, German farm exports had to be subsidized: these are "positive compensatory amounts." The same thing happened in Holland when the florin followed the mark upward.
As a result of these upward and downward currency fluctuations, the fixed agricultural prices within the Common Market are a fiction. Farmers in weak currency countries are getting less than farmers in strong currency countries, and the differences are made up in the trade between countries through positive or negative compensatory monetary amounts.
The establishment of the EMS, which is supposed to stabilize the currency variations, will require new compensatory monetary amounts, but they are projected to be stable and smaller than the present ones.
calls for a golution. ... We are in favor of launching this European Monetary System as soon as the exiting difficulties regarding the compensatory monetary amounts can be overcome. (Le Monde, February 17, 1979).
This will not happen tomorrow!
The final element is the French government's reservations about the EEC's 1979 budget. France continues to reject the decision by the European parliament to double the credits allocated to the European regional development fund.
This decision would in fact amount to an admission that the European parliament has extensive powers, while the Giscardians are under heavy fire from their Gaullist allies, who are denouncing the widening of these powers and the abandonment of "national sovereignty."
This is the political side of the problems facing Giscard in the achievement of his policy decisions on Europe. They are divid. ing the French bourgeoisie down the middle at a time when it needs to be more united than ever in the face of the rising working-class anger.
Thus in his recent press conference Giscard, who had himself opened the European election campaign several months before, expressed the wish to see it downplayed:
First of all it is much too early to begin [the campaign]. There is a contradiction between the things that concern French public opinion, which are basically economic and social at the present time, and an early start in the campaign for the European elections. The statutes project campaigns lasting from two weeks to one month. Therefore there is no need to begin them several months in advance. Thus, I hope that the nation will concentrate on its economic and social problems, and that it will wait to have its debate, at the proper time, not on the question of Europe, but rather on French representation within the European Assembly (Le Monde, February 17, 1979).
This is a very defensive way of approaching the issues. In other words, Giscard is calling on the French bourgeoisie to close ranks in face of the workers and, instead of speaking of the "great idea of Europe" that seemed so dear to him, he no longer envisions anything but petty haggling over the French delegation to the Strasbourg parliament!
The reactions of these different governments amply show the difficulties the European bourgeoisie is encountering in achieving its plans. The establishment of the European parliament would make it possible to move ahead with these plans (which go beyond the parliament itself, but achieving them rests essentially on bringing the political and social situationa in the different countries into line with one another, a goal that is still a long way off.
The Election of a European Parliament
The election of this parliament by universal suffrage would legitimize the whole operation in the eyes of the peoples of
Europe, particularly the reformist leaderships of the working class.
In this sense we could call it an institutional yoke on the European workers and their organizations. The different bourgeoisies also hope to be able to use the parlia ment to reduce the political strength of the workers organizations in each country.
For example, Agnelli explained to France Soir on July 10, 1976, just after the
Schmidt: A clear-sighted representative of European big-business interests.
Italian CP's strong electoral showing, which was to lead to its inclusion in the Italian parliamentary majority:
In an integrated Europe, the problem posed by a strong Communist presence in Italy and France would be partially diluted. The Communists would thus have the time needed to fully carry out their turn toward democracy (if they are capable of doing so) and we would have time to verify the sincerity of their respect for pluralism—not only political but also economic pluralism-and for the ties that unite us here in the West, which we do not wish to renounce.
The difficulties and setbacks encountered on the road to the realization of this project by the European bourgeoisies does not, however, mean that they are going to give it up.
The Question of Enlarging the EEC
The perspective of the entry of Greece, Portugal, and Spain into the EEC falls within the same framework. For the bourgeoisies of these countries, the economic problems facing them puts their entry into capitalist Europe on the agenda.
In certain sectors of the bourgeoisie in the other EEC countries there is considerable hesitation regarding their entry. But, for the European bourgeoisie, four factors argue in favor of including them.
• The advantages accruing from the establishment of a market encompassing one-fourth of the world market.
• The interest of the big European agribusiness trusts in monopolizing the agricultural raw-materials market in these Mediterranean countries and opening the road to the markets of the third world in this area.
• The interest of the big corporations in moving their production facilities to coun tries with cheap labor costs.
• The need to politically support weak regimes confronted by a deepgoing social crisis.
For all these reasons, which are stronger than those causing the hesitation, the motion is toward an integration of the three candidate countries-which may still, of course, encounter setbacks under special long-term provisions (especially aimed at stopping the free circulation of workers from these countries of high unemployment).
The entry of these countries into the Common Market, which is supported and desired by the workers parties of the three countries, will have immediate negative consequences for the Spanish, Portuguese, and Greek workers.
The Brussels Commission clearly explains what these consequences will be when it writes:
A very marked growth in productivity in the candidate countries requires a restructuring in the form of a substantial reduction in the number of jobs... similar productivity gains in agriculture can only be achieved by increasing unemployment and emigration. For this reason the problem of jobs may well become central during the first years of the enlargement.
The entry of these countries into the Common Market will strengthen the dominant sectors of native capitalism and thus their ability to exploit the workers.
These reasons suffice to explain why the workers of these countries should reject entry into capitalist Europe. However, they should not reject it for the reasons put forward by the French CP, which is opposed to enlargement-these can only lead to counterposing French workers to those of the three countries, especially Spain.
While the policy of the European bourgeoisie leade to an immediate division between the workers of the different coun tries (by stimulating unemployment and therefore competition within the working class for jobs), this cannot be dealt with by falling back on defense of "French jobs" that might be coveted by the "foreigner." For this reason, the entry of Spain, Greece, and Portugal into the EEC can only be opposed in the name of centralizing the struggles of workers in these countries and in the countries of the "Nine" against austerity. This should begin with a joint campaign for the reduction of the workweek and culminate in the battle for democratic planning of the European economy, which means the overturning of capitalism.
Notes
1. Last October, after the TUC conference, the Labour Party conference rejected the government's policy of limiting raises to 5 percent annually. Callaghan decided to override this decision. But the strike wave that later swept Britain went beyond those limits anyway.