Workers' Liberty #53  


The socialist answer to the euro

Alan Thornett from Socialist Outlook and Martin Thomas from Workers' Liberty debated the socialist response to the euro at a Workers' Liberty meeting in London on 21 January 1999.

Martin Thomas

It is not the job of socialists to support or oppose the single currency. More precisely, in principle we are for the single currency, but not in this way, by these people. Our answer to the single currency is to advocate workers' unity across Europe, a democratic, united Europe and a socialist united Europe.

Nations have not always existed. In Europe, the growth of trade created units with a common language, culture, laws, tax systems and communications, the nation states which developed between the 16th and 19th centuries. But then a contradiction developed. The capitalist economy became more and more tied up with the nation state. Today, even after all the Tory talk about "rolling back the state", the state is still a tremendous factor in the British economy. About 40% of national income passes through the hands of the state. On the other hand there is a tendency for capitalism to outgrow the limits of the nation state, to become more and more international and global.

So capitalism creates nation states and ties itself to them, but also overflows those limits. This contradiction has been managed in different ways at different times. In the first part of this century it was managed by trade wars and by world wars. Since 1951, in particular, the capitalist states of Western Europe have tried to manage it in a different way - by a unification of those states. The background is:

  1. The semi-destruction of the European states' colonial empires after World War 2;
  2. The weakness of their economies then, which meant they were under the US's thumb;
  3. That the US wanted a stable Europe which would be a better arena for the American multinationals.

Paradoxically, although the European Union has developed to provide a bigger home market for European capitalist corporations to compete with American companies, it has also been a development pushed on Europe by American capital.

That is how I see the development, from the European Coal and Steel Community of 1951 through to the creation of the euro at the start of 1999. We cannot respond by seeing what the capitalists want and proposing the exact opposite. We cannot simply put a minus where the ruling class puts a plus. If we did that we would lose all independence of judgement.

In principle, we are for unification, for the breaking down of national barriers, for larger political units. The reason why we are not simply in favour of the slow unification of Europe taking place today is that the capitalist class are doing it, and doing it in their own way.

They are constructing a very bureaucratic, undemocratic and wasteful unity, with a deliberate policy of high food prices, for example, and higher barriers against immigrants from outside Europe while barriers inside Europe are reduced - Fortress Europe. We are against those things. We oppose them - but not by counterposing the British state and the past to Europe and the present.

Britain did not join the union when it was first set up, or for a further 15 years. Of all the powers in Europe, Britain had by far the biggest Empire remaining after World War 2 and the closest economic links with the US. The British ruling class could look to an economic policy oriented towards the old Empire and to the US.

Also, in the time around Britain's entry into the European Community in 1972, many in the British labour movement felt they were in a stronger position than labour movements in continental Europe. It was a sort of national self-satisfaction. They believed that in Britain the unions had the ear of the government, and in a broader Europe it would not be so easy.

It was a sort of "reformist capitalism in one country" doctrine.

As Marxists we have no sympathy for the nostalgia, the desire to orient to a declining Empire and the US, or for "reformist capitalism in one country". In debates over whether Britain should join the European Community, we refused to take sides. We would not favour entry, because of the capitalist, undemocratic nature of the European Community, and neither would we oppose it by saying "Keep Britain Out". No matter what the capitalists decided, we said, our answer must be Europe-wide workers' unity.

The single currency reduces the risks and costs of trade within the EU. It gives an impulse towards a uniform financial system in the EU and to economic integration and genuine European multinationals (whose base is Europe rather than a particular European state).

The Maastricht Treaty conditions had about as much to do with the viability of a single currency as a university degree in classics had to do with showing that people were the "proper sort" to run India in the heyday of the British Empire. The EU bosses reckoned that a government prepared to cut in the way demanded by the Maastricht conditions would be the "proper sort" of government to take part in the single currency. A single currency gives more opportunities to run budget deficits than the separate currencies, and the big powers in the EU wanted to restrict that. They have given the European Central Bank undemocratic powers and a mandate to keep inflation low at all costs, which means a regime of high interest rates and "tight money". We are not in favour of that.

But we do not just say "no" to the single currency, for the same reasons that we do not say just "no" to the general tendency of the internationalisation of capitalism. The immediate alternative to the single currency is not a socialist Europe. The immediate and realistic capitalist alternative is being advocated by the Tories: Britain does not enter the single currency, and orients instead to being within the EU but having cheaper labour, less social provision, lower business taxes and, therefore, being a better place for Japanese and US multinationals to invest. That is not a better option for the working class.

We should not say "no" to the single currency. We should say that one currency or many is a matter for the capitalists. It is not our job to give the capitalists advice. We are in favour of a single currency in principle. We are against the way it is being done. and against the people who are doing it. Our answer is workers' unity, and a fight for levelling up of benefits, pensions, wages, conditions, union rights across Europe. It is a fight for democracy in Europe, and towards a socialist Europe.

Alan Thornett

Thanks for the invitation to speak and the opportunity to present Socialist Outlook's view. There is clearly some common ground when Martin says, on the single currency, "in principle we are in favour of it, but not by these people in this way" and "we're in favour of the breakdown of national barriers, but not the way it is being done by these people".

The problem is, the whole point is the way it is being done by these people at this time. A different single currency at a different time may well be a different matter. But we are considering this single currency at this time. It is not a matter of putting a minus where the bourgeoisie put a plus. We need a serious analysis of what the EU project is all about. And in our view it is aimed absolutely at the European working class.

I will just make a few points about the history. There are two quite distinct periods of the development of European integration. There is the period from the early days of the Coal and Steel Community, up until the mid-1980s and the Single European Act, and then there's the period after that. They are quite distinct periods.

Before the mid-1980s the project was driven mainly by France and Germany, very concerned to create the political conditions to avoid another European war. By the mid-80s there was a change, with the emergence of major trading blocs around the world. The EU has become the way the European bourgeoisie organises itself against other trading blocs, round Japan and in North America. The European bourgeoisie recognise that in competing with those blocs they have some major disadvantages. Living standards and welfare rights of workers are higher in Europe and stand as impediments for the European capitalists' ability to compete in export markets with other trading blocs.

Therefore, from the mid-'80s they began to recognise that they needed more than a common market or customs union. They needed to move towards a European super-state which could have political control over the economy of Europe in the way Japan dominates its area and America has control over its region.

From the mid-'80s the whole European project became politicised at a new level. First the Single European Act, and then the Maastricht Treaty, began to put in place what is necessary to attack the European working class, reduce living standards and cut welfare provision.

That is why the single currency criteria are shaped in a particular way - limiting government spending. The single currency, as it has been introduced, with the convergence criteria and the stability pact, is a way of forcing the member states to attack the welfare state and put the European bloc in a better trade position. It is an anti-working class strategy of the European bourgeoisie aimed at increasing the exploitation of workers.

From this point of view we cannot be neutral. European integration in the abstract is a good thing, but this particular integration has very particular objectives in mind. The objective is clearly a European super-state. We have now a single currency, a European Central Bank, a Supreme Court, a common fishing and agricultural policy. All these are being developed in order that political control can be taken by the European bourgeoisie.

Martin's presentation seriously underestimates the attack this represents against the working class. It is not just an attack on the welfare state, not just an attack on wages, not just about mass unemployment and poverty in Europe, but also about rationalising capital across Europe. With the advent of the single currency, all barriers come down for rationalising capital across Europe. What is the point of duplicating services across countries if the single currency comes in and there are no barriers? We will see now is a rapid pace of mergers and take-overs as the direct result of the single currency. I cannot understand how you can be neutral on this. No one is neutral when an individual capitalist announces job losses, restructures the company and attacks the trade unions. So why are we neutral on a European scale?

There are things that we can agree on. We can oppose Fortress Europe. We can agree to put democratic demands on the EU. We are in favour of getting the highest level of bourgeois democracy possible, whether in a single state or across Europe.

But the Europe of Maastricht is not reformable. Our policy is, therefore, that Maastricht should be dissolved. It is a reactionary institution and there is no justification for becoming a part of it. We are in favour of withdrawal from the EU and the dissolution of the EU.

There is more common ground when we discuss what the alternative is. What we are looking for is a socialist Britain within a socialist Europe; we favour a socialist United States of Europe, but not as an agitational demand at this time. We want workers' unity, in action across Europe. And that has not been an abstract matter, either. Comrades will know that the attacks on the working class generated by the Maastricht Treaty and the convergence criteria received a mass response from the European working class - with the mass French strikes of 1995, and, in the following two years, general strikes in a series of European countries, repeatedly in some cases.

Most of these strikes related in one way or another to the attempts of the member states to meet the conditions of the Maastricht Treaty in preparation for the single currency. The process was shaken but not stopped. And now the single currency has gone ahead. The rule limiting budget deficits to 3% - and the limit is likely to be reduced below that level - means that austerity policies continue.

Alan Thornett - summing up

I think that the Alliance for Workers' Liberty has re-written the history of the Juppé plan and the demonstrations against it. It is obvious that when workers demonstrate against such a plan they will do so against its practical effects. That is why the Euro-marches [1997 Europe-wide demonstrations for jobs] were against the social effects of the single currency. We would not expect workers to be marching explicitly against the single currency as such. But we have to make a political analysis. And Juppé was very clear about the issue. He said the plan was necessary because of Maastricht.

Everyone here sees that capitalism attacks workers, and will do so in whatever way it can. But it seems to me very difficult to argue that the Maastricht Treaty and the single currency is not a more effective way to attack workers, and a more systematic, structured way.

There would be attacks anyway, but this structured framework co-ordinates the attacks across Europe and directs them in the most effective way. Capitalists reorganise themselves at every level. Look at Rover cars. Do we say, "They're capitalists, it will not make any difference how they organise themselves"? Why comrades cannot see that the Maastricht Treaty is doing this on a Europe-wide scale beggars belief.

The Maastricht Treaty imposes on Europe a neo-liberal monetarist policy. Now Jospin and Schroder, who would like to get out of that framework, are locked into it because the Maastricht Treaty determines the nature of Europe. And we cannot possibly be neutral.

I find the comments made during the meeting about nationalism deeply offensive. I wish I hadn't come, and I won't come again. [Voice from floor: "Grow up!"] I won't be heckled! To say that because we are opposed to being in an anti-working class European structure, we are little Englanders or nationalists and want to stand in isolation is deeply insulting. There are people who want to do that: the Tories. We were clearly linked to the Tories in this discussion. But the Tories have a totally different agenda. You may not like our position, but we are putting forward a working-class objection to the Maastricht Treaty. We have nothing whatsoever to do with the right-wing Tory racists who are xenophobes and who want nothing to do with anyone outside the borders of Britain. We are a million miles from them! Speakers from the floor linked us to the Tories.

Absolutely insulting!

The campaigns we have been central to building were internationalist campaigns. You have linked us in this meeting to people campaigning to defend the pound. You should know that on the march we organised in Cardiff people carrying pound signs were expelled from the march. They demonstrated a hundred yards behind us, separated from us by a cordon of police.

There are strands within the labour movement that we have not been able to unite with - precisely because we are internationalists and they are little Englanders. We have fought and had success on an internationalist platform. What is your bottom line? Do you say the Maastricht Treaty is a reactionary treaty aimed at the workers? I say it is. Well if you say so too, then recognise that the core of the EU is the Maastricht Treaty. It is the most important treaty that has shaped the EU. The single currency is based on the Maastricht Treaty.

This meeting has degenerated into farce. There is clearly a big difference. You think that there is something incredibly progressive about the current project - not the principle of a single state, but this particular project of the European bourgeoisie, as it has been shaped by the Single European Act. You think there's something progressive in that. And we do not.

That is what we should debate. And you should not poison that debate with lining us up with Tories and accusing us of being nationalists. Comrades may sigh, but that was said very clearly.

Martin Thomas - summing up

A question was asked: why would the AWL abstain if a referendum was called on Maastricht? A referendum on Maastricht would be asking the people of Britain - do you want the European capitalists to pursue reactionary policies together, or do you want them to pursue these policies separately? Our answer is that we want to fight them whatever they decide. And so we would abstain.

I was on some of the French demonstrations in 1995. And I've read the French left press. What has been said in this meeting about the left's propaganda is perfectly true. I saw no banners or placards against Maastricht, none at all. There were only a few leaflets, handed out by small groups, targetting Maastricht.

However, there were two sizeable organisations there who have Alan's slogan "No to Maastricht" - the French Communist Party and the Ligue Communiste Revolutionnaire. Their papers carried opposition to Maastricht, but in the small print, not the headlines. They had understood that focusing on the Maastricht Treaty would be counterproductive. To focus on Maastricht, a little town in Holland, when the main enemy of the French workers was at home, in Paris!

Of course the French government said, "we are bringing in the Juppé plan because of Maastricht". That was just their excuse. The French workers replied: "We do not care about Maastricht. That was your choice. We are fighting you. Our main enemy is at home, not in Maastricht, Frankfurt or London."

The problems you get into by focusing on Maastricht are shown by Alan's remark that Jospin and Schroder really want to break from the dominant capitalist policies. No, they don't! They use Maastricht as an excuse. We should not allow them to use it as an excuse.

Alan said that the Euro-marches marched against the effects of a single currency. But, Alan, remember, we had an argument about that. Your comrades wanted to use the slogan "No to a single currency". We refused. We said "single currency - not at our expense", and you agreed, I am glad to say. But "no to the single currency" was what you wanted, together with "withdraw from the European Union".

The comrades from Outlook said they thought it was obvious that when capitalists got together to discuss at European level, they would decide on something bad for us. Yes, but consider a meeting of a company's board of directors to discuss introducing new technology. Obviously they want to use it against the workers. Our answer is not: we demand to use the old machines forever. Nor do we congratulate the capitalists on bringing progress! No, we say that we are for new technology, but only on our terms.

Alan says "the Europe of Maastricht is not reformable". But it is no less reformable than the United Kingdom of Queen Elizabeth II. To say that Europe is not reformable is bad because it is paralysing. It comes down to saying that we could fight the capitalists when they only had the police, the army and the courts - but now they have the Maastricht Treaty, and we are done for!

Look at welfare cuts. Where is the end of welfare being proclaimed? America - with no Maastricht Treaty. Where have there been the worst cuts in Europe? Britain - without the single currency. Where had the first welfare state in the world and now has soup kitchens? New Zealand - about as far as it is possible to get from the Maastricht Treaty.

Finally, the questions of denunciation and debate. My understanding of what AWL comrades were saying was: we understand, Alan, that you are not a nationalist, but despite your intentions - and those exact words were used - you give ground to nationalists.

Alan, this is a debate. Debates mean disagreement and argument! You can hardly be surprised. We have been in dispute with the rest of the left on this for 30 years. If you have debates, people are going to say rude things about your ideas. Your comrades here have accused me of being "pro-imperialist". I can live with that.

Our way of arguing today is not some special bad treatment reserved for Socialist Outlook! We debate with each other the same way in Workers' Liberty. We unite in action, but argue hammer and tongs when we disagree. A united revolutionary party can only be built in this way. It cannot be built by sinking our differences. We must unite in action and debate our differences, as vigorously as necessary.

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