The euro: What change in global balance?
By
Andy McInerney
Amid a flutter of pomp and balloons, European bankers
inaugurated a new currency on Jan. 1.
The euro marks another step by the capitalists in 11
countries toward a plan of economic unity set out in the
so-called Maastricht treaty of 1991. Participants range from
Germany--a mighty imperialist powerhouse--to lesser-developed
countries like Ireland and Portugal.
The other countries involved are Spain, France, Belgium,
Luxembourg, the Netherlands, Italy, Austria and Finland. Only
Britain, Sweden and Denmark chose not to join. Greece isn't
included because it did not meet the inflation
requirements.
What does the euro mean for the European working class? Any
class-conscious worker knows that what's good for the bosses
can't bode well for the workers. And this is true of the
euro.
Despite the fanfare, until 2002 the euro can only be
exchanged electronically. Workers may write checks or use
credit cards for euros, but day-to-day transactions like buying
milk or bread will still be carried out in the old local
currency--such as marks, francs, lira or pesetas.
The real change is that this step nearly completes the
creation of a massive European internal market, a process that
began in 1957 when the Treaty of Rome created the European
Economic Community. While the immediate impact will be an end
to currency exchanges, it sets the stage for an end to separate
fiscal policies among euro countries.
This process will be regulated by the new European Central
Bank, based in the German financial capital of Frankfurt. The
ECB, run by the heads of the central banks from the member
countries, coordinates the financial policy of the member
states, including interest rates and money supply.
The effect of this increased financial centralization will
be to strengthen the economically powerful capitalist
concerns--mostly in Germany, and to a lesser extent in
France--at the expense of the weaker ones. Workers across
Europe will pay the price.
For example, the Spanish government has already announced it
would be forced to close coal mines because they cannot compete
with their European rivals. Five thousand miners are expected
to lose their jobs; those left over will face speed-ups.
In Germany, the government issued an appeal to unions for
"restraint" in upcoming contract negotiations.
In fact, unions across Europe have poured into the streets
over the last two years to protest belt-tightening economic
policies by governments moving to meet the strict requirements
of the Maastricht treaty. Strikes in defense of social benefits
and for jobs have swept Spain, Italy, France and Greece.
Official unemployment in the euro countries averages 11.8
percent, compared to 4.4 percent in Japan and in the United
States.
In the wake of heavy working-class opposition, most of the
key politicians who pushed for the euro have been dumped at the
ballot box. French Prime Minister Alain Juppe and German
Chancellor Helmut Kohl both lost their posts to
social-democratic parties that promised more concern for
workers' living standards. Europe's capitalists are counting on
these social democrats to do a better job of selling sacrifice
to the continent's workers.
Despite the outward appearances of unity, European
capitalists remain competitors--the only relationship that can
exist between profit-driven bankers and corporate barons. That
could be seen in the last-minute struggle over who would head
the European Common Bank: the German-backed Wim Duisenberg or
the French-backed Jean-Claude Trichet. Duisenberg won out after
heavy German arm-twisting.
So why are the European bankers putting their differences
aside in favor of the ECB?
Temporary agreement
for mutual gain
Capitalism is by nature a competitive social system based on
the life-and-death struggle for profits. But that is not to say
that capitalists cannot enter temporary agreements for mutual
gain.
The most notable example of such an agreement on a world
scale was the anti-communist alliance of imperialist countries
after World War II.
In 1945, troops from the Soviet Union had liberated half of
Europe from Nazi Germany's iron grip. The Chinese and Korean
Red Armies were handing Japanese occupying forces heavy
defeats. Within a year, workers were occupying factories across
Western Europe. Communist parties gained wide support.
Communist-led workers' strikes and mass demonstrations swept
Japan.
Faced with this threat to their plunder, the capitalist
countries' political leadership united behind the military and
economic might of U.S. imperialism to halt the communist
advances. U.S. capitalism--relatively untouched by the scourge
of the war--poured money into West Germany and Japan to rebuild
its former opponents as anti-communist allies. The other
imperialist powers like Britain and France emerged from the war
as junior partners in the new capitalist alliance against the
socialist camp.
Under the terms of this alliance, open economic rivalry was
subordinated to the U.S.-led military confrontation with the
Soviet Union and People's China. Through formations like NATO,
the Pentagon took the predominant role in organizing the
overturn of working-class political gains.
Since the collapse of the socialist camp, however, the
Pentagon's role has changed. It is no longer on the
imperialists' front line against a powerful socialist camp.
Emergence of
inter-imperialist rivalry
Japan and Germany emerged from the Cold War as massive
economic powers, but the Japanese economy is in a deep
capitalist recession. The German economy has had long-term high
unemployment. Open inter-imperialist economic rivalry is again
the order of the day.
The Maastricht treaty that set the stage for the European
Central Bank was signed in 1991--the year the Soviet Union was
formally disbanded. Eight years later, European capitalists are
uniting behind German imperialism to better compete with their
U.S. and Japanese rivals. Britain, the closest U.S. ally in
Europe, has so far kept out of the common currency.
The new euro market accounts for 18 percent of world
output--roughly the same as that of the United States. In
trade, the new European economic zone accounts for 20 percent
of world exports, compared to 16 percent for the United States
and 10 percent for Japan.
"The euro is going to pose a powerful challenge to the
dollar," British analyst Nick Parsons told the Washington Post.
This view is widely circulated by bourgeois commentators. It
acknowledges the attempt by the big European capitalists to
shift the economic center of gravity away from the United
States toward a German-dominated Europe.
European economic and monetary union "doesn't just change
the world's financial landscape," wrote the Wall Street Journal
Jan. 4, "it also could alter the global balance of power."
This change can only end up in widening inter-imperialist
competition. "Conflict between the two poles could easily
arise," warned economist C. Fred Bergsten in a 1997 Foreign
Affairs article.
In fact, just weeks before the euro was inaugurated, a
sizable trade battle between U.S. and European Union
capitalists was already shaping up.
Massive U.S. conglomerates Chiquita Brands and Dole Food
charge that the EU is imposing penalties on their bananas,
costing them over $1 billion a year in lost profits. On Dec.
21, the Clinton administration announced that it would issue a
100-percent tariff on "luxury" goods--such as cheese, olive oil
and wine--imported from Europe to retaliate on behalf of the
U.S. corporations.
While a settlement could be reached before the tariffs are
imposed in March, EU spokespeople are fuming. "It is time to
take action against the pernicious and unlawful effect of this
wholly unilateral trade legislation," warned EU Trade Minister
Leon Brittan.
The intensified economic rivalry since the collapse of the
Soviet Union is also beginning to have echoes in the political
and military sphere. French and British politicians signed an
agreement in December calling for an EU role in the military
affairs in Europe and beyond--a clear snub to Washington's
traditional dominance through NATO. Washington is finding it
more and more difficult to line up European support for its
military adventures in Iraq.
U.S. imperialist dominance in Europe--disguised under the
phrase "NATO's traditional role"--is increasingly being
questioned in the months leading up to the April NATO summit in
Washington, called to mark the pact's 50th anniversary. The
Dec. 19 Christian Science Monitor headline "Partners are no
longer marching to the American drummer" is typical of the new
period.
Of course, U.S. capitalism has a single centralized state to
manage its interests--an advantage over the European
capitalists, still divided into smaller national states. And
the Pentagon remains the dominant military force in the
world.
The 1992 Pentagon white paper threatening against "emergent
powers" showed that the generals are prepared to defend this
dominance not only against countries like Iran, Iraq or China,
but also against France, Germany and Japan.
European imperialists are unwilling to submit to U.S.
dominance, though. In an attempt to compete with the U.S.
military-industrial complex, there is a growing move toward
creating a European arms conglomerate. This firm, tentatively
known as the European Aerospace and Defense Company, is to be
formed by British Aerospace, DaimlerChrysler Aerospace and
Aerospatiale.
The current situation of two imperialist powers, Germany and
Japan, without any sizable military force--an historical
anomaly resulting from the Cold War anti-communist bloc--is
untenable. Economic rivalry has historically spilled into
military conflict.
Need for international
working-class solidarity
To confront this threat of growing militarism,
class-conscious European workers need to challenge their
bosses' efforts to build a war machine. They have already held
demonstrations against government subsidies for a European war
industry. In the same way U.S. workers have to challenge the
Pentagon's plan to turn NATO into a U.S.-led worldwide police
force.
The European working classes have already begun to feel the
effect of the European capitalists' euro deal. Unemployment
continues while social benefits are under attack. But at the
same time that the euro-zone strengthens the bosses on the
international arena, it opens the opportunity to expand the
workers' most powerful weapon: international solidarity.
In June 1997, some 50,000 workers from Britain, Belgium,
Germany, France, Spain and Portugal converged on Amsterdam, the
Netherlands, as part of the European Marches against
Unemployment, Poverty and Social Exclusion. Their main demand
was "No to the euro."
This example of multinational solidarity points to the way
forward--not only for the European working class, which has
been in the streets in the millions, but for the U.S. labor
movement in building solidarity with the Mexican, Caribbean and
Latin American labor movements. Solidarity with Europe's
besieged African, Arab and Kurdish immigrants can only
strengthen the workers' movement there.
Capitalism, Marx wrote, creates its own gravediggers. The
united action of Europe's working class--and the worldwide
solidarity it will create--will be the biggest obstacle for
their bosses' march toward plunder and war.
This article is copyright under a Creative
Commons License.
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