EU enlargement plan puts power in the hands of the big countries
Most of the British media hailed the EU's Intergovernmental Conference (IGC), held in Nice from December 9-13, as a failure. The spin had it that Blair had held the line in maintaining Britain's veto on domestic tax and social security. The summit had been a shambles, failing on its key objectives. is was an effective spin, but it was an illusion, reports ALAN THORNETT.
The success of Nice for big capital cannot be measured against its failure to bring tax and social security under Qualified Majority Voting. That was always unlikely at this stage. It is to be re-discussed 2004 anyway, with more determination behind it.
In fact Nice was successful in its principal objectives. It produced a new Treaty of Nice (which requires domestic endorsement) which builds on Maastricht and Amsterdam, and marks another major step towards a European super-state - the central objective of the European ruling class since the Single European Act of the mid-1980s.
The aim is a single economic and political entity under which European capital can more effectively exploit the working class and compete more strongly with Japan and the Pacific rim and the North American Free Trade Area (NAFTA) dominated by the USA. The stakes, therefore, are high.
The anti-EU Daily Telegraph (December 11) assessed Nice this way:
"Make no mistake. Nice is another federal treaty. Listening to the BBC, you might have got the impression that, apart from some wonkery about voting weights, the summit has really turned on Tony Blair's heroic defence of our veto over taxation and social security.
"But, even before the publication of the final text, we know that the summit has seen giant strides towards closer integration in four areas: the establishment of a European military force; the adoption of a European constitution (dressed up as a "Charter of Fundamental rights"); the extension of EU competence into several home affairs matters; and the general removal of the national veto".
The pro-EU Economist (December 16) assessed it this way:
"Peer past the verbal sludge and fudge, bad blood and bruised egos, and you can now see - thanks to four days of argument amongst the EU's 15 leaders - an imposing new shape rising on the global stage. ... This is surely a cause for celebration. Whatever its imperfections the Nice summit was a success".
Certainly Nice was the longest and most fraught EU summit yet, with bouts of bare knuckle in-fighting amongst the delegations - all but two of which represented social democratic governments. They were split into two camps, the big countries and the small countries.
But this conflict simply reflected the enormity of the task involved: to prepare the EU for enlargement - a major new stage in the development of the EU - and at the same time continue the process of integration, centralising the EU's decision making processes, and consolidating its institutions.
At stake in Nice was who will be the real decision makers in the EU under enlargement, the first round of which is due in four years time. There was bound to be feathers flying over that.
If EU structures were not reformed, enlargement would shift the balance of power towards the smaller countries by diluting the influence of the biggest and most politically powerful countries. This was unacceptable to the big countries, who have long wanted a major shift in the other direction. And that is exactly what they used Nice, and the preparation for enlargement, to achieve.
Enlargement to the east, unavoidably posed with the collapse of the Warsaw Pact, will expand the EU from 15 to 27 member states. Of the 12 applicant members accepted for negotiations (some in 1997 and others in 1999) 10 are from former Eastern Block countries, plus Malta and Cyprus.
Turkey has been knocking at the door and has been granted applicant status, but it has not been accepted for negotiations. Enlargement on this scale will create an EU stretching from Ireland in the west to Bulgaria in the east, and from Sweden in the north to Malta in the south.
Enlargement will create by far the biggest single trading block in the world, with a population of nearly 500 million - twice the size of the USA. But it's a difficult process, and success is not guaranteed - even given the massive political will behind it.
Nice opened up a critical four year period for the EU - from now until the summer of 2004 - when the first round of applicants - Estonia, Slovenia, Poland, Czech Republic, Hungary and Malta - are due to join. A "Super Summit" will then be held (under the Dutch presidency) to promote a "deeper and wider" discussion on the future of the EU - to map out the next stage of integration.
The role of the EU in the global economy
Nice has further strengthened the fundamental character of the EU as a bosses' Europe based on a neo-liberal, privatised, deregulated model, designed to increase the profitability of the employers, increase the power of multi-national capital, maximise flexibility in the work-place, and run down the welfare state.
It is a Europe controlled by unelected bankers and the so-called stability pact, designed to keep government borrowing permanently below the 3% of GDP ceiling set by the Maastricht convergence criteria.
It is a reactionary, anti-working class project, which becomes more reactionary as it moves towards its goal of a federal super state - something it needs if it is going to challenge its main rivals in today's globalised economy.
The US and Japanese ruling classes have advantages which the existing EU, as a glorified trading block with multiple decision making centres, cannot match. Tokyo and Washington dominate and politically lead their power blocks in a way that even a unified Germany cannot do within the EU. They have a single leadership, totally dominant currencies, lower social spending, and multi-nationals even more powerful than those in Europe.
It is the need to resolve these problems which lies behind the drive for a European super-state.
The successful introduction of the Euro - at the moment uniquely a currency without a state - is a prerequisite to that. But public opinion remains deeply divided on it in most countries of the EU, as can be seen by the recent referendum in Denmark.
But the Euro is not as weak as often argued - at least its weakness is not chiefly reflected in its current weakness against the pound. That has been created by the strength of the dollar, and is likely to change substantially as the US economy moves towards recession.
The Euro, in any case, cannot be allowed to fail if the possibility of transcending the established nation states and creating a truly European ruling class with its own institutional framework or state is to be a reality.
And it has massive backing behind it. The driving force behind the EU, as well as its neoliberal policies, is the European Round Table of Industrialists. This consists of 47 European based multi-nationals, which include Nestl‚, Unilever, GKN, BP, Amoco, Renault, Marconi, ICI, Olivetti, BT, Pilkington and Fiat. They have long shaped the development of the EU behind the scenes.
The EU today is an integral part of an increasingly globalised world economy, which has given a renewed impetus to the formation of large, competing trading blocks and intensified global competition between ever larger multinational companies.
Globalisation is an integral part of a world increasingly dominated by international capitalist institutions such as the IMF (International Monetary Fund) and the World Bank. These institutions are the driving force of the world-wide neo-liberal offensive against the working class, promoting economic and financial deregulation, privatisation and labour flexibility.
The key decisions at Nice
The Nice summit agreed to extend Qualified Majority Voting (QMV) in the Council of Ministers - the law- making making body of the EU - into 29 new areas. Currently about two thirds of the Council's decisions are subject to QMV.
Fortunately attempts to make trade, education, cultural, and audio-visual services subject to QMV failed. But trade in services and intellectual property rights were brought under OMV. This is a major development. The proposal is to modify Article 133 of the Amsterdam treaty, where QMV already exists for trade in goods, to include trade in services and intellectual property rights.
This could open the door to the liberalisation and deregulation of services throughout the EU within the framework of the World Trade Organisation and the General Agreement on Tariffs and Trade (GATT). What could not be achieved in the form of the OECD's Multilateral Agreement on Investment (MAI) can now be smuggled in through via the EU.
Once this change is carried through, multinational and other companies from anywhere within the EU, will be able to bid for local services with no local restrictions or preferences. It will also open the EU to liberalisation in trade in intellectual property rights, including the wider privatisation of natural resources, including human genes, through the patenting process.
The summit also agreed a radical reallocation of votes between the member states on the Council of Ministers, for implementation once the process of enlargement starts.
Under this the biggest four - Germany, France, Italy and the UK - get 30 votes each and Spain 28. After that Holland gets 12, Greece, Belgium and Portugal 11, Sweden and Austria 9, Denmark, Finland and Ireland 7, and Luxembourg 4. Consequently any four of the biggest five can out-vote the rest.
Of the applicant countries Poland will join the big league with 28 votes. Of the rest Rumania will get 13, the Czech Republic and Hungary 11, Slovakia 7, Lithuania 5, and Latvia, Slovenia, Estonia, Cyprus 4 and Malta with 3.
These changes tripled the votes of the big countries, and mean that after expansion the big six will be able to out-vote the other 21 EU member states.
These changes in voting allocation go alongside a change to the "qualified" part of the majority voting - that part which is weighting according to population. Under these changes a vote on the Council of Ministers would have to represent 62% of the EU's population before it is valid.
This gives the big countries considerable clout beyond their voting allocations. It means that any three of them could block a proposal by the rest of the 27. It was the introduction of this rule which persuaded Germany to drop its demand for additional votes to reflect its huge 82 million population.
The weight of the big countries was also increased by changes proposed in the allocation of Commissioners. After 2007 the size of the Commission will be capped at 20, and not all countries will have a commissioner: it will be the smaller countries which lose out.
The allocation of seats in the toothless European Parliament was also changed towards the big powers. Germany gets 99 seats and the other big powers 74. The rest are on a scale down to Malta with 5.
All this caused bitter conflict at the summit.
"Stitched up" was the term some of the smaller countries used about it. The Portuguese Prime Minister called it an "institutional coup d'‚tat". Irish premier Bertie Ahern apparently blew his top, seeing it as the end of a veto which had protected Ireland's low business taxes (e.g. 10% corporation tax as against the UK's 30%).
Unprintable
The comments of Wim Kok, the Dutch PM, were said to have been unprintable. Costas Simitis, the Greek PM, accused France (who as the Presidency drafted the proposals) of trying to create a "directorate of the big countries" - which was exactly what France was trying to do, with the full support of the other big powers of course.
So it was mission accomplished. Power in the EU would now be concentrated in the hands of the biggest and most powerful countries, most importantly Germany, France and the UK the key European imperialist countries, who can run it in their own interests.
The perspective is to create a political leadership which can operate on the basis of its own European and global political and imperialist needs. The significance of this development can hardly be overstressed.
The other issue on the agenda at Nice was the proposed Charter of Fundamental Rights. Its provisions fall short of the existing situation in many of the member states, and it does not include key rights such as the right to a job, to housing, to a pension, to a minimum income, or protection against sacking or redundancy.
The significance of the Charter, however, is in its role as a fore-runner of a EU constitution - another essential requirement for the development of the structures of a super-state.
Fortunately, the Charter was blocked from becoming a part of the treaty. Unfortunately this was due to the opposition of Blair, who opposed it from the point of view that it gave too much away to the working class!
He also succeeded in removing from it any reference of the right to strike or protection against unfair dismissal.
The proposed European Rapid Reaction Force was not on the formal agenda at Nice, but it was dealt with just the same. It is linked to the development of a European police force and a European prosecution service.
100,000 personnel (army, navy, air force and special forces) are to be made available, along with 400 aircraft and 100 ships, by the member states to be used under the command of the EU. Germany, Britain and France will provide the bulk of the personnel and equipment.
Its significance, however, is not in the initial size, but in the principal of establishing an EU army. Alain Richard the French defence minister, for example, made it clear that he saw it as the first stage towards a fully-fledged EU army.
Blair, facing jibes from Hague ("if it looks like and elephant and sounds like an elephant, it probably is an elephant"), argued that it is not an EU army, that its components will remain under national control, and it will not challenge NATO or change its role. But that is a difficult line to sustain. Creating an armed force on behalf of a political entity of 500,000 people is clearly a highly strategic decision.
The US is divided on it. It wants to reduce its share of the costs of European "security", but a European armed force is ultimately a challenge to NATO. It will be there to act on behalf of the USA's principal economic rival.
The US is insisting that a European Rapid Reaction Force does not build up its own military bureaucracy. Fat chance of that!
Chirac explicitly called for the force to have a command structure independent of NATO. William Cohen, the outgoing US Defence Secretary, said that "an ill-conceived EU defence force could reduce NATO to a relic". The Bush administration is not going to soften that line.
Also the relationship between the EU Rapid Reaction Force and NATO is complicated by the fact that not all EU members are members of NATO: Austria, Finland, Ireland and Sweden are not. And not all European members of NATO are members of the EU. Six are not - including Turkey which has the second biggest army in NATO.
Nor can Turkey be ignored, since it is a geopolitical linchpin in Europe, and a powerful member of NATO. Turkey, currently excluded negotiations because of embarrassment over its human rights record, is insisting that it is not frozen out of EU-led military operations either at the planning stage or on the battle field.
The proposal is that Turkey could be a part of any EU-led operation which drew on NATO equipment, but would not if it did not.
Ultimately, however, the Defence Force will be established and developed since it is difficult to have a super-state without an army, and thus the ability to wage war in defence of its own interests. Particularly when it is a super-state which, after enlargement, will have external borders in the east stretching from Lithuania to Belarus, and Ukraine to Turkey and the Balkans.
The conditions the new applicants face when they join
Enlargement will not just change the size of the EU, it will change its social character. Although the EU currently has 62m people living below the poverty line, this will escalate dramatically with enlargement. The richest new applicant, Slovenia, has a standard of living roughly in line with Portugal - the poorest of the existing members.
David Piachaud (Guardian December 1) makes the point:
"At present about 17% of the EU's population is poor, ranging from 9.4% in Denmark to 33.3% in Portugal... Among the candidates in the likely first round of enlargement the average [poverty level] is 69% and among the second-round countries 83%. Full enlargement would almost double the proportion of people living in poverty from 17% to 30% and that poverty would be heavily concentrated - 55% - in the 10 candidate countries".
EU membership will not drag the peoples of the east out of such poverty. It is more likely that the differences will be structured into the expanded EC - with the people of the east providing a cheap labour zone within it.
They will have little chance of tapping into the EU's cohesion fund (currently directed at poor member states) or the regional fund (currently directed at poor regions). Before the new entrants get in to the EU, these funds are likely to be put beyond their reach.
The EU budget has been fixed up to the year 2006. It contained no significant increase in finances to deal with enlargement. Cohesion funding and regional funding were therefore be reassessed in order to deal with enlargement - and the existing member states (Greece, Portugal, Spain and Ireland) and regions (including Wales) currently receiving such funds could also lose out.
Under the current proposals, entitled Agenda 2000, the present five categories of regional assistance will be reduced to three: Objective 1 - the poorest regions, with a GDP less than 75% of the EU average. Objective 2 - industrial and rural areas with unemployment above the EU average. Objective 3 - replaces the EU social fund, aiming to tackle high unemployment, combat poverty, anticipate economic change and promote opportunities for women.
Funding for Agenda 2000 will only be automatic for Objective 1 areas. Areas which lose Objective 1 status are having their funding phased out over six years; those that lose Objective 2 status will have their funding phased out over four years.
The common agricultural (CAP) policy (the biggest single EU spending) may also be changed to the disadvantage of the new applicants. The idea that Poland, with a huge agricultural population, could be brought into the CAP without a major restructuring of EU finances to find the money is excluded.
Detailed criteria have been laid down for the new applicants before they can join. They must have a strong market economy and stable institutions that guarantee democracy, the rule of law and human rights. (That rules a good chunk of the existing members out, including Britain!) And they must have adapted their laws to comply with 35,000 pages of EU legislation (known as acquis) and have the ability to implement such legislation.
If this is serious, it is not credible - unless enlargement is put into a completely different time table that the one currently set - and that poses serious political consequences for EU strategists. Much of it however involves subjective judgements, and if those who call the shots want a way round it, they will find one.
If enlargement goes ahead with the current differentials in poverty levels - and that seems inevitable since such differences cannot be redressed in the nest four years - the issue of the free movement of people within the EU after enlargement, under the Schengen agreement, will be writ large.
The rich countries of the EU are unlikely to agree to open their borders to the poor people of the east. Some are already talking about being "swamped" after enlargement. Right-wing populists and neo-fascists from Haider in Austria to the Vlaams Blok in Belgium and the Northern League in Italy are whipping up racism around the issue, talking of "hordes" of impoverished people streaming in from the east and taking all the jobs.
In practice the external boundaries of Fortress Europe are likely to remain where they are - between the poor countries of the east and the rich countries of the west. This is not easy but may be justified by some kind of 'transitional' arrangement with new conditions written into the treaty which triggers the process of enlargement.
The EU has been developing into a two-tier Europe: those inside the Euro-zone and those outside it. This has been formalised at Nice, with the decision that any eight countries (minimum) can go ahead as an "inner core". But enlargement creates another tier; the poor countries of the east.
However the final proposals shape up in 2004, one thing is clear enough: the new applicants are going to be offered a very raw deal indeed. And the assumption seems to be that the populations of the applicant countries will accept a raw deal.
This may not be so. It will be true of the governments, but not necessarily the people. It is true that at the present time that a lot of people in the ex-Stalinist states countries are trying to get into the richer west. But these countries have to have a referendum before they can join, and the outcome of that in some countries is not so certain.
In the Czech Republic, for example, support for EU membership has dropped from three quarters to just over a half. It may be that people will want to hold out for a better deal, or that they may have seen more of the realities of the EU as its neo-liberal polices go deeper.
None of the existing members of the EU are likely to hold a referendum on Nice or on enlargement - although some will be under pressure to do so. But Nice has to be ratified by the national Parliaments and there will be opposition around that.
The EU and integrationism have little popular support in many of the member states, apart from the poorest ones which receive cohesion funds. The Danish referendum was a shot across the bows for those who are marching down the road towards a federal super-state - particularly since it rejected entering the single currency in the teeth of opposition from every major political party and all the mainstream media. Nor was the vote based on British Tory-type nationalism, but on a genuine fear of a loss of democratic control.
The need is to build an opposition to the EU and the Euro which rejects completely the nationalist agenda of the Tory right.
We need a position which recognises that to oppose the EU and the single currency is also to defend the working class against the ravages of the neo-liberal offensive and the global economy as it is reflected through the institutions of the EU, which are designed to increase the rate of exploitation and destroy welfare and social provision.