Eurozone Deal and the Isolation of the British Bourgeoisie is No Affair of the Working Class

9 December was the twentieth anniversary of the signing of the Maastricht agreement which eventually paved the way for the single currency. We were already discussing re-publishing the document Maastricht - A Squabble Between Capitalists which we issued in Workers’ Voice 63 (Second Series) in Nov-Dec 1992 before the latest news from Brussels to record what the issue was for workers at the time. In fact it is the same as now.

At one level the European project is part of the competitive global struggle of imperialist interests but on another it is a fight amongst our masters about how to best exploit us. The only differences between then and now are that twenty years ago the speculative economy (note the reference to the flight of capital to US property markets in the article which follows!) was just taking its first steps and that now the crisis is even worse.

For workers inside or outside the euro the issue is the same. How far are we prepared to accept the austerity packages that every government inside and outside the Eurozone are inflicting on us. In Britain the Tory Right are hailing Cameron’s refusal to join the new arrangements as a victory for them which presages the UK leaving the EU. They want to repatriate powers to Westminster in order to stop Brussels introducing measures to protect working conditions (such as the Working Time Directive). In short they want to increase our exploitation.

But our brothers and sisters in continental Europe have hardly had a paradise for the last thirty years. German workers have had ten years of workfare via the Hartz IV programme (introduced by the last Social Democratic Chancellor Schroeder). This has not done much to tackle unemployment but it has reduced wage levels for all workers. In Italy all the old rights such as the sliding scale of wages, early retirement, etc, have long gone and Italian wage levels have plunged. The same goes for every other country in Europe. And the Tory Right may be too early with their celebrations.

In truth the British capitalist class are in the same state as they were twenty years ago. Thatcher’s deliberate and calculated destruction of the UK manufacturing base in order to defeat the workers resistance to paying for the capitalist crisis means that today the UK relies heavily on the financial sector for its growth. Today 10% of UK GDP comes from the City of London as against 8% from manufacturing. From workshop of the world to pawnshop of the world in less than century! Cameron went to Brussels to demand protection for the City of London in return for supporting a closer eurozone treaty. It has to be said (though it is of little interest for the working class) that he blew it. His demands were not great but they were technical and complicated but no document was sent to his fellow leaders to demonstrate that the City of London could be useful in helping to recapitalise the eurozone. As a result no-one listened and he was forced to reject the new so-called “treaty” between the other 26 states. It was a defeat for a British policy which had been pursued ever since Maastricht. This was to try to widen the EU in order to stop the enthusiasts from deepening it and centralising more quickly. But not one of the new EU members from Eastern Europe lined up with the UK. Now everyone was focussed on saving the euro and the British were seen to be irrelevant.

And the outcome could be that Cameron has saved the City of London from regulation by Brussels only for Brussels to ensure that the City is no longer the centre of eurozone financial trading. And remember the only reason that the City is seen as important by non-European investors is because of its relationship to the EU. The new deal from Brussels will probably first hit British manufacturing, but expect that to also reach the financial sector in due course.

The latest Brussels deal though is not the end of the story. The “Merkozy” arrangements do not deal with the debt crisis. The ECB has refused to act as lender of last resort for governments (only for European banks) and the “new” rules on fiscal rectitude are simply the old ones rewritten with the addition of automatic sanctions for states which overspend their budget. But this was supposed to be the case before and the first two states to overspend their budgets by more than 3% were… France and Germany. It remains to be seen if the new arrangement will have any more teeth than the old one.

Meanwhile the only policy they are all agreed on (which is not a solution) for dealing with the crisis is to reduce our living standards still further. Our original conclusion from 20 years ago is even more true today…

Maastricht - A Squabble Between Capitalists (from Workers Voice 63 [Nov-Dec 1992])

Twelve months ago the ruling class was confidently predicting the impossible. A united capitalist Europe where the competing rulers of each nation would abandon their differences and establish a utopia of progress and prosperity was the vision on offer.

Marxists clearly understand two things the European rulers preferred to ignore. First, the idea that the ruling classes of 12 different nation-states could abandon their conflicting interests and establish a genuine economic and political unity was a nonsense. Second, the depth and breadth of the economic recession meant that the promise of prosperity for working people within a capitalist Europe was a total deceit.

The Collapse of the Maastricht Agreement

The events since the bosses’ Dutch auction at Maastricht have vindicated the Marxist analysis time and again. The capitalists of all the European countries have pushed unemployment and destruction of social provision down the throats of the workers. Meanwhile their much-vaunted economic unity has collapsed. In the place of the Europe of the 12 we now have the prospect of a firmed-up economic, political and military union based on the relative strength of the Deutschmark. Already the Belgian, Dutch and Austrian currencies (together with the new "democracies" of Croatia and Slovenia) are closely tied to the Deutschmark. Likewise the currency convulsions left the French Franc linked to the Mark which fitted in nicely with Franco-German joint military initiatives. The spectre of a Gross Deutschland has returned to haunt Europe and the world.

The British Bourgeoisie Divided

With a revived German imperialism edging its way carefully around Europe the British bourgeoisie is now fully aware of its economic weakness. A year or two ago they were crowing that the British economic performance was outstripping a Germany which had taken on board 45 years of Stalinist decay and stagnation in the East.

The collapse of the pound has shattered that illusion. It has also brought to the fore the splits in the British ruling class. Britain’s largest market by far is in Europe so that, broadly-speaking, manufacturing (or what’s left of it) needs desperately to develop commercial links with Europe. This is the faction led by Heseltine. The other faction, led by Thatcher and Tebbit, still look to their old military and political ally, the USA. They were pro-European union as long as the USA was. But with the Cold War over and a huge budget deficit the US has become hostile to a possible rival in Europe.

In economic terms, Thatcherism was about deregulation of British financial institutions so that Britain would capture the offshore bank business (enjoyed by such major powers as the Cayman Islands and Leichtenstein). Capital would then flow into London and make it the leading centre of world finance. However capital has also flown out of London (mainly to the USA) as manufacturing capital has found profit rates in Britain too low to make it worth recapitalising industry. Instead they have preferred a bit of speculation in US property markets. But the nasty Europeans with their old-fashioned banking rules have not de-regulated in Paris, Frankfurt and Milan thus denying the British their expected reward for liquidating much of its manufacturing base.

This is the background to the revolt of the Tory Right who are already refighting the bombing of Dresden and El Alamein. But these differences spill over to involve factions in all of the parliamentary parties in Britain. They are also a more than convenient diversion from the economic and political onslaught that is being carried out against working people.

Maastricht is no Business of the Working Class

The simple truth remains that whatever the shape of Europe, united, federal or the existing hotch-potch of nation-states can only offer workers increasing misery. Workers must not be drawn into debates amongst capitalists about how to run their rotten and decaying system.

Those like the ragbag of Trotskyists, Maoists and Stalinists who try to convince workers to participate in the " great debate” about Maastricht are worthy only of scorn.

When the parliamentarians play their games they are simply reflecting the sectional interests of those layers of the bourgeoisie who are pulling the ideological and financial strings. With their agonising over referendums or the future of this or that politician they ensure that we are bombarded with endless irrelevant hype about which quack remedy can ensure the future of their system.

Workers must not get sucked in.

Two fingers to the "great debate"

For world communism not capitalist misery



Like you say: Cameron blew it, but it's of no significance to the working class. The slow collapse of the European Paradise, is just part of the collapse of the whole capitalist system. When we start to fight for ourselves and our class, we can help speed up it's collapse.

But personally I got a kick out of seeing that arch-slob and pompous schoolboy ass Cameron make a cock-up of his mission to "save the city of London" and it's gang of financially speculating dickheads. This is very childish of me, and I'm sorry for that. But then capitalism is an absurd and childish system and has a debilitating effect on many of us. When we finally get rid of it we'll all be able to grow up, and build communism.