On January Ist 2002, twelve of the fifteen member states of the EU began using the Euro as their everyday currency. Only three EU countries are now outside of the Euro - or EMU (European Economic and Monetary Union) as it was originally known. They are Britain, Denmark, and Sweden. The Swedish parliament rejected the Euro in 1997, and the Danish people rejected it in a referendum in September 2000. These decisions were far from the end of the matter, however. Denmark and Sweden will vote again in 2003. New Labour, which is totally committed to entry, wants to call a referendum on the issue before the next election (probably next year) with a recommendation for acceptance. This has reopened the debate on the British left as to how to vote in such a referendum.
Blair hopes that a window of opportunity is opening up now that the Euro is on the streets and people see the benefit of a single currency, at that level, when they travel in the Euro-zone - although the success of this is already in doubt. Brown's five so-called economic tests are not a problem, however, since they can be presented as met whenever he and Blair decide the time is right politically.
The currently overvalued pound is a problem, since if it became the bench mark for entry, it would institutionalise current uncompetitiveness of sections of manufacturing and put Britain inside the Euro at a trading disadvantage. That problem, however, can be tackled once a referendum is won on the principle of entry, possibly by devaluation if they could get the European Central Bank (ECB) to agree.
However the British economy is now overwhelmingly service dominated - only 14% of jobs are in manufacturing, although many more are dependent on them. The Financial Times has reported that leading manufacturers believe they can now live with a Euro based on current exchange rates. In these circumstances one option would be to go in to the Euro and allow the remains of the small uncompetitive manufacturing sector and the employment involved to go the wall.
Preparation for the Euro has been the cornerstone of new Labour's economic policy since it came to office in 1997. It was behind the handing over of the control of interest rates to the Bank of England as a first step to handing over control to the European Central Bank (a requirement of the Euro which the Tories had refused to carry out), and was one of the reasons for the acceptance of Tory spending limits for Labour's first two years of office. These measures, and the cuts they involved, led Britain to qualify com-
fortably for entry into the first round of the EMU. Blair chose, however, for political reasons, not to enter at that point.
Winning a referendum will not be easy for Blair, but it is hard for him to avoid one. A clear majority of British business, the manufacturing sector in particular, is hostile to the current situation of half in and half out of the EU and want membership of the Euro. They think that economic activity will gravitate towards the Euro-zone, as the core sector of the European economy, and that they have the worst of both worlds (from a capitalist point of view) being subject to the constraints of EU membership whilst lacking real influence, and being unable to take advantage of the fixed exchange rates provided by the Euro.
Blair's problem is that the divisions in public opinion in Britain over the EU and the Euro (which cannot rationally be separated) reflects a deep division in the British ruling class over the issue. A big section of the British bourgeoisie remains staunchly atlanticist and sees European integration as a retreat from empire. They want Britain to continue in a world (and Commonwealth) role rather than throw its lot in with Europe and become, as they see it, just another European state.
It is very broadly a divide between the manufacturing sector who want a European role and access to the European market, and the financial sector (along with multinational companies operating in the Americas) who want a world role and access to a world market. This divide is reflected in the fact that the Confederation of British Industry supports the Euro and the Institute of Directors opposes it. The financial sector is also internally split since part of it is worried about being overtaken by Frankfurt if Britain stays out.
Small business is divided, mostly between those who are dependent on the big manufacturers, and on exports to Europe as well (in favour), and those dependent on the domestic market who fear the increased competition which the Euro and the EU brings. The hostitlity of these sectors is a major component of the Tory Party crisis on the issue. This is a division which has grown as European integration has deepened, and a rabid, nationalist opposition to the EU have been taken up by the tabloid press, led by Murdoch. This process has ripped the Tory Party apart for the past two decades. It is a big problem for Blair since winning a referendum has been difficult even in countries where there has been no significant divisions in the ruling class over the Euro. This was the case with Denmark for example.
Blair, however, is clear where he is going. He sees himself playing a major role in the EU, shaping its development on a range of social and economic issues. He is convinced that he can do this far more effectively if Britain is a full member, rather than standing outside of its key institution. He has already emerged as a leader of the most right-wing forces in the EU, teaming up with Berlusconi and Aznar to attack working conditions and trade union rights across Europe. He intervened with them in this years summit in Seville attempting to push through draconian measures against asylum seekers. He may be a lap-dog of George Bush in his "war against terrorism", but that does not diminish the role he seeks to play inside the EU.
UNITE V ED LED The Ct UF Party EWROP AC UNIN No: ACROSS big/ EUROPE EU LED LED fo losinhs EWROP den UNITE dos wall a racy damneratineli ACROSS EUROPE for jobs and "cracy:
AESA On the march against the bosses' Europe: Cardiff 1988 The sheer size of the zone the Euro creates - France, Luxembourg, Austria, Germany, Belgium, Finland, Spain, Greece, Holland, Italy, Ireland, and Portugal - with a combined population of over 300 million people makes it a super-currency second only to the dollar.
We have to ask, therefore, in who's interests this powerful new entity being build and who's interests does it serve? Is European integration under Maastricht and the single currency a benign reorganisation of European capital to which we can be neutral, or is it an anti-working class project which we should therefore oppose?
One thing is clear enough. European integration under Maastricht is the key political project of the European ruling class. It has been backed by the most powerful big business interests throughout. They want to see a neo-liberal Europe designed to increase profitability, maximise job flexibility, and run down the welfare state. They want to create a Europe in which the decisions of elected parliaments (with all their limitations) are handed over an unelected bureaucracy. They want a racist and mil itarised Europe controlled by a European Central Bank even more remote from democratic control than most national banks, and regulated by the so-called Growth and Stability Pact.
The central reason why we oppose the Euro in the context of the stability pact is that it prevents the adoption of Keynsian deficit financing to alleviate unemployment and cuts in welfare. The monetarist alternative forces the working class and the oppressed to bear the brunt of capitalist crisis. We do not as socialists, of course, support Keynesianism but we will unite with Keynesians in opposing monetarism. Portugal, for example, is currently (in August 2002) contravening the Pact with a deficit of 4.1%, and is being forced to implement "deep and violent cuts" in consequence. The Financial Times of July 27/28 2002 reported it this way: "Portugal yester-
day announced 'deep and violent' cuts in spending after admitting it had run a budget deficit of 4.1% of GDP in 2001 - far above the 3% limit set by the Pact". Portugal's finance minister has called "for a pact between employers, unions, and political parties, to see the country though what, she said, would be a tough period of harsh budgetary discipline." Ireland has been warned that it might breach the Criteria before the end of the year, and is making cuts as a result.
Today the EU represents a balance of power between the member states which can act outside of the limitations imposed at national level by the resistance of the working class. From the beginning its institutions have been shaped to challenge the interests of the European working class and to act in the interests of the big capital. It is a supranational apparatus designed to impose bourgeois rule more effectively, in the interests of the market and the multinational corporations, than can be achieved simply at the national level. It has always been managed by a non-accountable bureaucracy, semi-independent of the liberal democratic structures in the members states, but bound to the multi-national corporations.
The EU is not "intrinsically progressive" as some have argued in the debate in the Socialist Alliance, but intrinsically reactionary in that its purpose and design is to reorganise European capital more effectively against the European working class. Europe's rulers understood from the beginning that the relationship of forces was more favourable to them at the supranational level. There is a sleight-of-hand about the EU. All the key decisions are taken together by representatives of national governments who then present the policy outcomes as "European" decisions somehow beyond theit control, which then demand implementation at national level because there is no alternative.
The responsibility for this situation must be borne in large measure by the European social democratic and communist parties and by the trade union leaderships who have totally failed to understand the nature and purpose of the European project, and to build systematic European-wide unity in action against the developing threat to jobs and welfare represented by a neo-liberal Europe.
Employers use similar tactics when dealing with trade unions, shifting bargaining to company or industry level when confronted with shop floor militancy, but back down to plant level when shop floor organisation is weakened, and where local unemployment etc can be brought to bear.
It makes no sense, therefore, to attempt to see the Euro as simply a currency, again as some have argued in the Alliance. We are in principle in favour of a single european currency (indeed world), but not this one under these conditions. The Euro is a system of economic and monetary rule, a critical building block in a big business agenda. It cannot be divorced from the rules and structures which govern its operation, since the decision to join the Euro is a decision to accept its rules and structures. Membership is not available on any other basis.
It is useful to apply to it seven (not five) tests when deciding how to vote in a
referendum:
• Who is the Euro designed to benefit: the workers of Europe or European capitalism and the multi-national corporations?
• Does the Euro represent a democratisation of European society, or a concentration of even more power into fewer hands?
• Does the Euro challenge the neo-liberal agenda or integrate it further into the EU? • Does the Euro defend the welfare state or does it co-ordinate the attacks upon social provision more effectively.
• Does the Euro create jobs or help destroy them?
• Is the Euro designed to benefit poor countries or to make rich countries even richer? • Does the Euro undermine racism, and the far right, or does it institutionalise these phenomena further - via Schengen and Fortress Europe?
This pamphlet will argue that we should not only advocate a vote against the Euro, but we should seek to be a part of internationalist, anti-nationalistic, campaign against it, based on a socialist standpoint and the defence of the interests of the working class while rejecting the arguments of the Tory right. To fail to do so would hand the whole debate over to the Tory right and ensure that those in the workers movement who oppose the Euro from a working class perspective would not be represented.