frontline 7

Debate: Socialists and the €uro

The SSP special conference on 22 June will decide how the party should approach the expected referendum on Britain joining the Euro. SSP members Gordon Morgan and Nick Rogers debate the key points.
Gordon is the secretary of the Pollokshaws Road branch and was active in the 1975 "Labour Vote No" campaign against the EEC referendum. Nick has been a member of the SSP since February 1999, is currently Kelvin branch secretary and is not a member of any platform.

You can read Gordon's contribution here: Against a Bosses Europe

A brief summary of the origins of the EU can be found here.

Socialists must face up to the EU

In the 45 years since the Treaty of Rome established the EEC, the attitude of most British (including Scottish) socialists to the process of European integration set in train back in 1957 has been one of either complete indifference or outright hostility. June's Special Conference on the Euro provides us with an opportunity to consider not just the tactical issue of our position in a referendum on a single European currency, but to debate broader issues related to our strategic approach to the EU.

I intend to argue that neither apathy nor calls to break with what is now the European Union rise to the challenges and opportunities presented by the restructuring of Europe.

EU cannot be ignored

Ignoring the EU is not an option. The 15 nations and 350 million people of the EU encompass the largest economic block in the world - a GDP of $6 trillion compared with the US's $5 trillion and Japan's $3 trillion. The EU is already a huge market place within which barriers to the free movement of goods, capital and people are being progressively removed. Over the next decade it is set to become larger still as many nations from central and eastern Europe along with nations such as Malta and Cyprus join.

Socialists in Scotland must respond to one of the key political developments of our time. That response will be determined by the conclusions we draw about the nature of the EU. Recent events can help sharpen our analysis.

The successful launch of the Euro at the beginning of the year challenges once again the confident prediction of many that European integration is a project doomed to fail. Twelve nations of the EU now share a common monetary policy with the same interest rates set by a central European bank in Frankfurt and the same exchange rate with the rest of the world. A clear momentum has been built towards a single European economy managed by pan-European institutions.

The opening salvoes in the trade war between the EU and the US over Bush's imposition of tariffs on imports of steel into the United States illustrate the emergence of the EU as a global economic player in its own right. The vigorous defence by EU institutions of the interests of Europe's steelmakers also reveals something of the underlying dynamic of European integration.

The fundamental purpose of the EU is to create the most favourable conditions for the development of European capital partly in order to enable it to compete successfully with both US and Japanese capital. No single European nation can provide sufficient economies of scale or a large enough domestic market for this purpose. A single European economic entity by contrast can host European-wide aerospace, vehicle, chemical, steel, electronic, telecom, and finance companies that can hold their own against US and East Asian competitors.

But a simple customs union is not sufficient for the task of promoting the consolidation of European capital and defending the interests of European capitalists. The history of the creation of European capitalist nation states in the 18th and 19th centuries shows that each national capitalist class requires a state apparatus fulfilling the whole range of political, legal, policing, military as well as purely economic roles.

European integration today is a parallel process. It is true that the fact that Europe is already composed of a multitude of nation states complicates the process and will impact on the shape adopted by the future European state. Nevertheless, the EU is in the process of developing independent state structures. The current EU constitutional convention is designed to launch a debate, primarily within the European elite, about how European integration is to be continued as well as proposing a constitution for the EU. The momentum of European integration is not slackening.

The recent warning issued by the European Finance Commissioner about the dangers of Britain and Germany's budget deficits exceeding the limits set by the Growth and Stability Pact that accompanies the Euro and the subsequent decision by the Council of Finance Ministers to reject the warning is instructive. As is Blair's alliance with Europe's most right-wing premiers - Italy's Berlusconi and Spain's Aznar - in order to advocate further deregulation and privatisation against the Franco-German axis of Jospin and Schroder.

These events illustrate the class nature of the EU's institutions - designed to defend capitalism - and the extent to which Europe's capitalists back the more than 20-year-old neo-liberal offensive to role back the social democratic consensus established across Europe in the post war period. Indeed the processes of lowering trade barriers, creating a single European market and launching a single currency that are at the heart of the EU project have often been used to support attacks on state economic intervention and welfare spending.

Rulers Divided

But these events also demonstrate that there are divisions between Europe's rulers about how to manage relations with the working class and promote the interests of capitalism. Most of the rest of Europe has a greater degree of state involvement in the economy and higher levels of state investment in health, education, transport etc than Euro-sceptic Britain.

While all Europe's leaders (whatever their political affiliation) are seeking to curtail state expenditures and regulations, there is far from a consensus about how far the neo-liberal agenda should be pursued. The recent EU directive on employment rights for temporary workers that so appalled Blair highlights the divisions. In other words, the European working class retains the capacity to defend its interests and force compromises on Europe's leaders.

How should socialists respond to the EU? For many a series of simple equations serves as an answer. Socialists oppose capitalism. The capitalists are seeking to integrate Europe in order to strengthen capitalism. Therefore, in order to undermine capitalism, socialists should oppose the EU project.

But socialists following this logic forget a fundamental lesson. Socialists condemn capitalism as a brutally exploitative social system that degrades human beings, destroys environments and blocks humanity from releasing the huge potential of science and technology to transform our world for the better.

Yet, capitalism also contains within itself the seeds of its own destruction and provides the raw material for building a socialist society. The working class - Marx's "gravediggers" of capitalism - is a product of capitalism. As are the technology and productive capacity that provide the basis for building a society in which each human being can fulfil their potential. And the processes of globalisation (including European integration), while spreading the horrors of capitalism around the planet, also create the potential for a challenge to capitalism on a global scale.


Who can deny that the frontiers dividing Europe's nation states have not also divided Europe's working class? The lowering of those frontiers makes the building of links across Europe a vital priority.

For socialists to seek to break up the EU would be to take the side of some of the most reactionary forces in Europe today - neo-fascists, xenophobes and narrow nationalists, not to mention Iain Duncan Smith's Conservatives. The fragmentation of Europe might well weaken European capitalists in relation to their competitors. But it would hardly strengthen the position of the working class across Europe. Divided by petty nationalisms and ruled by governments competing with each other to provide the lowest taxes, fewest regulations and weakest rights for workers in order to attract international capital, the European working class would be less likely to mount a challenge to capitalism.

If the task of socialists is to engage with the process of European integration, to build working class and socialist unity across Europe and to make demands of the EU while working for a socialist Europe, what are the broad outlines of the programme we should adopt?

When I drafted Glasgow Kelvin's amendment to the SSP's 2001 General Election manifesto, accepted by the EC, that called for a special debate on the Euro, I wrote that we should advocate "democratic institutions directly accountable to the people of Europe that carry out policies in the interests of the working class and poor". And I made the analysis that in the EU "political power is concentrated into the hands of unelected commissioners and national government ministers who take decisions without being held accountable to their own national parliaments."

This is a crucial point. As long as the most powerful political institution in the EU remains the Council of Ministers, political power in Europe will increasingly transfer from national parliaments to premiers and government ministers making collective decisions that can be challenged neither by national parliaments nor any democratic European institution.

This is a problem inherent in the kind of loose 'confederation of sovereign states' or 'cooperative federation' that socialist seeking to withdraw from the EU sometimes pose as an alternative European arrangement. Whenever key decisions are made by summits of political leaders, lines of accountability are inevitably blurred with each leader blaming the others for unpopular decisions.

We should develop demands for European political institutions directly elected by the people of Europe and with powers to build the kind of 'social Europe' for which the European labour movement is campaigning.

At the same time, while seeking to exploit the opportunities presented by the capitalist integration of Europe, there are aspects of that process we should vigorously oppose. Any aspiration to construct a European superpower falls into this category. It is no business of socialists to defend the national nature of Europe's military forces. But we should campaign for a European nuclear-free zone, for massive reductions in European military expenditure and against international interventions.

Given the nature of globalisation, inter-imperialist rivalries of the sort that ravaged the first half of the 20th century are not in prospect, but we should oppose any attempt by the EU to project military power around the world either in alliance with the US or independently. The absence of a genuine pan-European nationalism and the fact that military expenditure in every other European nation is already lower than Britain's increase our chances of success.

Historically, European powers colonised much of the so-called Third World and imposed by military force forms of production that benefited the colonial powers, but have left a legacy of underdevelopment and poverty for many of those formerly colonised. European capitalism continues to benefit from Third World debt, terms of trade that are unfair to poor countries and the ability to force open Third World markets while protecting European ones.

International links

Our international links should not stop at the borders of Europe. We should take up the demands of the most impoverished and exploited sections of the world working class (and semi-workers and peasants). Socialists should seek to turn the European working class movement into a tribune not just of a social Europe, but of a socialist world in which the obscenities of poverty, underdevelopment and environmental destruction are speedily banished.

The successful anti-capitalist mobilisations in Genoa, Brussels and Barcelona and the 3 million who marched through Rome in defence of workers' rights reveal an increasingly combative and self-confident European working class. In developing a European strategy, socialists should limit neither their horizons nor their ambition.

Nick Rogers who joined the SSP in February 1999 does not belong to any platform