By Sally Low
1992 was supposed to be the year when one huge prosperous market would emerge in western Europe — a market that would lay the basis for giant European companies to match the US and Japan as the most successful exploiters of the world. But two things have thrown these plans into doubt.
First and most important are the post-1989 events in eastern Europe; second is the inability of the west European governments to reconcile their own different economic and national interests.
At the heart of the new European order stands the united Germany of close to 80 million people. Germany has now, mainly by economic might, won most of what was denied to it by the outcome of World War II.
No longer perched on the edge of the divide between two competing ideological camps, Germany is back in the very heart of Europe. And if the German bourgeoisie discovers that it is more profitable to look east alone rather than to look west together with its EC partners, then it will. What Germany does will influence the rest of Europe.
This does not mean that Germany has an unchallenged reign and an untroubled future.
Paying for unification has meant serious austerity, as the recent rise of German interest rates, against the trend in the rest of the world, testifies. Unemployment in the former East Germany is 50%, and the government's privatisation agency is under investigation for incompetence and corruption. For the first time for many years, Germany is experiencing inflation and a budget deficit. East Germans and others from eastern Europe, who face a future without jobs or decent living conditions, are marching towards the west of Germany to demand work and a decent life. Racist violence is on the increase, and the government does precious little about it.
And Germany is the best case for the capitalists of Europe. Britain, France, Italy, Sweden, Finland, are all deeper in crisis.
At the December 9-10 conference at Maastricht in Holland, the heads of the 12 EC states came together to sign a treaty that would, some hoped, be an irrevocable commitment to the formation of a single European market, a single European currency and a degree of political union. This, it is envisaged, would allow for greater economies of scale and boost profitability for the growing number of concerns that are spread right across Europe.
In April 1990 German Chancellor Helmut Kohl and French President Francois Mitterrand issued a joint statement that they hoped this would in fact all be achieved by the end of 1992. The treaty signed at Maastricht sets the target date for monetary union back to 1999.
Even then, only those countries that can comply with stringent le: they will have to have brought inflation and long-term interest rates in line with the three strongest economies of the group and have extremely small budget deficits, low public debts and stable currencies.
On present performance, only France and Luxemburg meet the requirements, and it seems highly unlikely that even a majority of EC countries will qualify by 1999. Italy, for example, has an inflation rate of 6.2%, a budget deficit of 9.9% of GDP, and a public debt of 101% of GDP. A very few will possibly achieve monetary union by 1999, but most will not.
Not only do the differences between the current EC members have to be considered but also those of other likely candidates such as the Scandinavian countries, Austria and Switzerland, Czechoslovakia, Poland and Hungary — even the Ukraine and possibly other states of the former Soviet Union and Yugoslavia.
Debate over the project and opposition to or deep reservations about it were most openly expressed in Britain, but behind the scenes there were a whole series of changing alliances and divisions over various issues. What also began to emerge is growing wariness among members of the German ruling class — which now thinks it may have better things to do in eastern Europe — and most particularly on the part of the all-powerful German Bundesbank.
The Bundesbank does not want to give up any of its power to a European Central Bank, which would be necessary if monetary union goes ahead, unless it is certain that it will be a virtual clone of itself, free from government control and committed to the same policies. The German ruling class also does not want to give up the deutschmark for any currency that would be weaker.
The Bundesbank, and increasingly also the government, are extremely wary of any project which would mean support for the less developed west European economies.
Deep or broad?
A deep union between the 12 EC members is now counterposed to the idea, probably more attractive to German interests, of a broad but not so deep union which would include parts of central and eastern Europe, or of monetary union with a few countries such as Austria and Sweden. This would fit in well with their plans for a German sphere of influence which will possibly include Czechoslovakia, Hungary and Poland — already Germany is the major trading partner for these three — and also take in Slovenia and Croatia.
Mitterrand continues to stand out for the fast track to European unity. His strategy is to try to offset competition from the more powerful German economy by inextricably linking it to the others in western Europe, particularly the French. Along with the Italians, the Spanish and the Portuguese, the French government has a vision of European-wide intervention to save its ailing industrial conglomerations by actively building up "European champions " — giant multinationals that will compete on the world market.
John Major went to Maastricht determined to ensure that as little as possible was agreed to in general and that most of what was agreed to n in particular.
The British government is determined to avoid any commitment that would jeopardise its economic and political links with the US and so opposes any suggestion of a union that would become a fortress against competition. Secondly, British finance capital is anxious to protect London's role as a major financial centre, and is therefore opposed to a single currency that would de facto be controlled by Germany. If monetary union goes ahead, however, it probably could not afford not to be part of it. So its tactic is to profess support but to slow the project down.
The criteria for economic convergence will be used by each national government as a justification for harsh restructuring and austerity.
The Italian government, for example, is now trying to introduce severe spending cuts. The budget announced in October led to a one-day strike in protest at moves to raise the costs of health care and attack pension rights.
Proponents of this particular version of European unity, especially its Social Democratic supporters, try to paint a picture of a federation in which all living standards will be raised. In fact, such a general raising is the opposite of what can be expected.
For countries with a slower productivity growth, monetary union would decrease the possibility of competing on the international or unified market. This is already apparent under the current agreement to stabilise currencies. Governments can no longer devalue to make products more competitive. Instead, there will be more pressure to slash wages.
Permanently high unemployment would also be a feature of this setup, because governments would be locked into low budget deficits and deflationary policies. As well, increased mobility of capital and labour will tend to put pressure on those countries with higher levels of labour protection, better working conditions and social security to lower their standards.
A good example of what the project will entail is France, one of only two countries that currently meet the convergence criteria. At the end of November, unemployment was at 9.7% or 2.8 million people. It is expected to reach 3 million this winter. Trade union membership has dropped by close to around 10% of the workforce.
Those who see in the collapse of the Communist regimes the opening up of a new period of sustained boom are mistaken. In the east today, the capitalist project is not to invest to rebuild industries but, as is seen in East Germany, to pick the eyes out of these economies, destroy large amounts of industrial capacity and exploit any valuable raw materials.
Just one year after unification, less than a third of East Germans were happy with democracy as it exists in Germany. Only 44% said they would defend the existing social order and, interestingly, only two-thirds of West Germans said they would. In France, Britain and Belgium during 1991, entire suburbs were rocked by riots in underprivileged working class suburbs, where often mainly migrant youth rebelled against the hopelessness and misery of their lives.
The major Social Democratic parties are also increasingly discredited. Where, like France, they have been in government over the last decade, they have inflicted right-wing economic policies, and their popularity declined sharply. Even in opposition, it is clear that they have no alternative vision to offer those suffering the most.
In December Mitterrand's popularity was down to 22%, the lowest of any president in the Fifth Republic. "The unemployment rate has reached new peaks, inequality has deepened, and the proletariat has become the new poor and the lost children of desolate suburbs", explained Socialist Party national executive member Michel Charzat.
In Spain, the government of Felipe Gonzalez has overseen a vicious policy of liberalisation. His party suffered some important defeats in regional elections during 1991.
Last September's defeat of Sweden's Social Democratic government came at the end of several years of austerity. Cuts in spending on social services and moves towards privatisations accompanied growing unemployment. The Swedish model, in trouble for some years, was officially declared dead, and the new conservative government is drawing up ambitious plans for even more austerity and privatisations.
In Portugal the Social Democrats are now seen as the main party of government by the bourgeoisie, while their main rivals, the Socialist Party, themselves presided over an austerity government in the '80s.
Just how lacking in any alternative vision Social Democracy has become is highlighted by the situation in Britain where, after the vicious cuts of the Thatcher years, when the economy is in its worst recession for several decades, with unemployment set to reach 3 million, a Labour victory in the upcoming elections is still by no means certain.
Thousands of people who followed Thatcher's advice and bought their own homes or went into business in the '80s now face declining earnings, high interest rates and rising unemployment in areas that have been Tory strongholds.
Labour has ditched any remnants of radicalism such as unilateral nuclear disarmament, repeal of the draconian anti-union laws enacted by the Tories and most recently, opposition to European monetary union. There has been a vicious campaign to purge the party's left.
As polls indicate, however, Labour's right-wing shift has not been achieved cheaply. While the degree of disillusionment is not as strong as in some countries where Social Democracy has been in government, many voters are looking for an alternative, and others will not vote at all.
High unemployment and economic hardship, coupled with the propaganda unism and the demoralisation and disarray of much of the left, have played into the hands of the far right.
In France the National Front of Jean Marie Le Pen scores over 20% in opinion polls. The Socialist Party government, along with the rest of the political establishment, bears a heavy responsibility. Their economic policies helped to create the social crisis that feeds racism, and their political measures have been grist to the far right's mill. First they reneged on their promise to grant migrants the vote, and more recently they have talked of chartering airplanes to deport so-called illegal immigrants and have introduced harsh penalties for anyone caught employing them.
The other right-wing parties have tried to win away some of Le Pen's support by stealing his policies and his rhetoric. So now Le Pen is able to present himself as part of the mainstream right.
The far right have also made electoral gains in Austria, where they won 23% of seats in the Vienna regional parliament, a traditional stronghold of Social Democracy.
Neo-fascist parties won nearly 8% of the vote in the November 24 Belgian elections.
While in Germany the far right have made some electoral gains, they are better known for their violent attacks on migrants. Kohl has responded by trying to make Germany's laws regarding the granting of asylum more repressive.
By creating high levels of unemployment, European unity is likely to exacerbate this problem. Nationalist rhetoric is used by some, mainly on the right but also on the left like the French Communist Party, to try to discredit the project. But there is a more direct racism in the project to create a west European fortress against foreigners, especially those from the Third World.
People coming from north African countries will now have to acquire visas to enter Italy and Spain. Instructively, at the behest of Germany, visa requirements for Hungarians, Poles, Czechs and Slovaks have been dropped, while people from overseas territories such as Guadalupe, Kanaky or Martinique are to be treated as aliens outside of France.
The left and the working-class movements, from which resistance to the right must emerge, are on the defensive both ideologically and organisationally. Not only are the old Stalinist parties in crisis, but much of the non-Stalinist left is suffering from the fact that the right has filled the void created by the collapse in eastern Europe and the Soviet Union.
These factors have contributed to some of the lowest postwar electoral results for Communist parties. In Portugal the party's vote fell below 10% for the first time since the overthrow of the dictatorship in 1974. In Sweden the Democratic Left, previously the Communist Party, suffered a 1.3% drop in its vote to win only 4.5%.
In Britain and Italy the projects of dissolving Eurocommunist parties more openly Social Democratic Party of the Democratic Left do not appear to be attracting large numbers of new people. But calls for similar moves to dissolve into a broad left have also gained ground in Spain.
The German PDS, although still very large in the eastern half of the country, has not been able to win support in the west. Nor does it show signs of becoming a strong pole of attraction for the millions of East Germans who are bitterly disappointed by the results of unification.
Many Green parties have lost much of the promise they held out during the '80s. In Germany a lot of the most left-wing people have now quit the Greens. The party seems to have become almost totally electoralist in activity, if not in words; those who want a liberal bourgeois ecological party seem to have the upper hand. In Britain and France, the same currents seem to control the parties.
Potential for resistance
To build the mass movements and progressive political forces capable of defeating the right offensive will be the most important challenge for the left during the '90s. The left cannot afford to allow traditional ideological and sectarian divisions to stand in the way of building an effective, united opposition.
The most important aspect of this project must be to start to win back mass support for socialism — for a left political alternative.
It is also important not to overestimate the strength of the right. There are plenty of indications that the potential for a successful resistance does exist.
In Belgium and Vienna, for example, when the far right made alarming electoral gains, progressive anti-racist Green groupings also improved their votes significantly. This indicates the potential for a polarisation rather than a uniform swing to the right.
No electoral program alone will be enough. Successful resistance will have to be based on mass mobilisations of various kinds, particularly among the trade unions. Here there is also plenty to be hopeful about.
In Germany in November, 50,000 anti-racists in Berlin clearly outnumbered their foes and were cheered by onlookers as they marched through the streets. Throughout the country another 50,000 took part in similar demonstrations. Also in Austria there was a big demonstration to mourn Nazi atrocities.
In the second half of the year, French car workers and some other blue collar unionists, along with health workers, social workers and many others, took to the streets, maintained militant pickets and struck in defence of jobs and for decent wages and conditions.
And there were farmers protesting all over the country against falling prices and moves to cut their subsidies. In September, 200,000 demonstrated in the streets of Paris.
In Italy, the Netherlands and Finland, there have been general strikes f workers against government policies.
In Britain it is also not clear whether Kinnock has been as successful as was the right wing of the ALP in bringing the party and the union leadership under control. In 1991 the left-leaning and generally radical black section of the party finally won its right to be recognised as an autonomous party affiliate. Also, within the unions there is still a significant minority current of opposition to Kinnock's policies.
There have been beginnings of regroupment on the left in several countries. In Italy a large section of the old Communist Party, unwilling to take the final step towards Social Democracy, split away to form a group called Communist Refoundation. Since its formation early last year, other groups from the so-called new left, and many individuals who had previously resigned from the Communist Party, have joined this initiative. Delegates representing 150,000 members attended the party's first congress in December.
In October a demonstration called by RC under the slogan "the opposition is again on the street" was attended by about 50,000 people.
That was just one small sign that, although this is a difficult period for leftists, it is also a time of important challenges and even new opportunities.
It is a period of defensive struggles, when workers in the east are confronting heavy defeats — and this is also having a big effect in the west. But the potential as well as the need for mass movements against racism and the far right do exist. And in some countries the collapse of Stalinism is helping to pave the way for regrouping and rebuilding of the left into the political force that is needed.