EUROPEAN UNION: Tensions with US sharpen over Iraq

May 7, 2003
Issue 

BY DOUG LORIMER

The US-led invasion and occupation of Iraq has brought to surface the conflict that has been immanent between the US capitalist rulers and their French and German rivals since the collapse of the Soviet Union and the end of the Cold War.

Backed by Germany, France led the opposition in the United Nations Security Council to the US-led war drive. After Washington launched its invasion of Iraq, however, both Paris and Berlin did an about-face, declaring support for the US assault and wishing it success in defeating the Iraqi regime of President Saddam Hussein.

Now, as Washington seeks to consolidate its military victory in Iraq, Paris and Berlin are trying to assert their claim to be part of the imperialist occupation of Iraq and the exploitation of its wealth. They are doing this by calling for a central role for the UN in the construction of a new regime in Baghdad.

"The political, economic, humanitarian and administrative reconstruction of Iraq is a matter for the United Nations and for it alone", French President Jacques Chirac said on April 11, a dig at the US and its British bulldog.

Both before and during Iraq's occupation, Paris fought to defend the lucrative investment and trade deals built up between French corporations and Hussein's capitalist regime. French companies signed almost 800 contracts to supply parts and equipment for Iraq's oil industry — second only to those signed by Russian companies.

The French-dominated oil company TotalFinaElf, which is also the world's fifth largest (after Exxon-Mobil, BP, Royal Dutch Shell and Chevron-Texaco), had negotiated deals that would have given it control over 25% of Iraq's huge oil reserves, the second largest in the world.

These agreements were built on the close political relations between Paris and the Baathist regime going back decades. But most of them were signed under the UN-imposed sanctions regime that began 13 years ago.

Paris is now seeking to maintain these deals by insisting that it has a say in the construction of a new regime in Iraq. French representatives have threatened to use their veto in the UN Security Council to maintain the UN "food for oil" program, under which sales of Iraqi oil must be approved by the UN, with earnings being deposited in a UN-controlled account.

By contrast, Washington wants the "food for oil" program phased out and the income from Iraqi oil sales placed under the control of a US-appointed Iraqi interim authority.

According to the April 28 London Times: "After a power struggle between the State Department and Pentagon, the White House has endorsed the Pentagon's hardline view that Washington should push the UN to endorse an interim Iraqi authority and lift sanctions on the country.

"The goal is to set up the new Iraqi administration at a conference in Baghdad by June 3, when the present phase of the UN's oil-for-food scheme expires. The interim authority could then take control of Iraq's oil sales under the supervision of the World Bank or the International Monetary Fund (IMF)."

Having used its massive war machine to conquer Iraq, Washington is in the box seat to cut the French capitalists out of the Iraqi oil industry and turn it into a US corporate monopoly.

Inter-imperialist rivalry

In his 1917 book, Imperialism — the Highest Stage of Capitalism, Russian Bolshevik leader Vladimir Lenin pointed out that the essence of imperialism is "monopoly capitalism": the domination of the separate economies of the industrialised countries by giant capitalist associations (corporations) that monopolise advanced industrial technology and which strive to monopolise control over sources of raw materials and energy, as well as markets, across the world.

Behind the political conflict between the major imperialist powers over Iraq's oil resources is a sharpening of inter-imperialist economic competition in a world capitalist economy characterised by a continuing tendency toward stagnation and weighed down by massive levels of productive overcapacity.

In 2001, the US, the European Union and Japan accounted for 72% of world gross domestic product (the US accounted for 31.5%, the EU 26% and Japan 14.5%).

While the US economy is still considerably bigger than those of its main capitalist rivals, for nearly two decades now the US economy has depended on foreign capitalists, mainly from the other imperialist nations, to finance its accumulating external debt, which is now around US$2.7 trillion — greater than the foreign debts of all underdeveloped countries combined — and continues to grow by $1.9 billion a day.

This has produced a changing relationship of economic power within the imperialist triad — the US, the EU and Japan — reflected in a change in their respective capitalists' relative share of world economic assets.

A measure of the latter is the accumulated stock each has of foreign direct investment (FDI). The US capitalist class, with about $1.4 trillion accumulated FDI — 21% of the world's total — is still dominant, followed by Britain with 14.4%, France with 7.87% and Germany with 7.84%. A decade of economic stagnation has cut Japan's share of accumulated world FDI from 11% in 1990 to 4.6%.

Together, the capitalists of the EU hold 52% of accumulated FDI — two and half times as much as the US capitalists. In 1980, they had almost equal shares.

The US invasion of Iraq and its contemptuous disregard for other imperialist ruling classes' economic interests there have emphasised the fact that no imperialist ruling class can afford to allow a chasm to exist between its international economic power and its ability to use military force aboard to defend its economic interests against its competitors.

European military force

It is not surprising that the governments of France, Germany, Belgium and Luxemburg — all of which opposed the US attack on Iraq — are pushing for a European military force that is independent of the US-dominated NATO military alliance. The Europeans want a military force that can be used to defend their business interests in the Middle East, Africa and eastern Europe.

At a "mini-summit" in Brussels on April 29, these four EU members announced that they would seek the creation by a European military command independent of NATO and the formation of a European "rapid reaction capability" — something already backed by all 15 EU governments — with the aim of setting up a 60,000-strong force by the end of the year.

The creation of such an independent European force has long been opposed by Washington. Throughout the Cold War, Washington used its command over NATO to indirectly defend and advance US business interests against its imperialist rivals, which became for all practical purposes US military-political protectorates.

However, the end of the Cold War threatened to undermine Washington's military-political leverage over its European rivals' relations with each other, and with Russia and the Middle East.

The most urgent task facing the US rulers in the 1990s was how to block France and Germany from becoming the core of an alternative Europe-based military-political centre, with an independent capacity to project military power toward the Middle East and create a European imperialist sphere of military, political and economic influence between Germany and Russia.

These objectives clashed with Berlin's goal to first bind Germany's neighbours to it through a political bloc that would underpin the euro currency zone, and to draw the former Soviet bloc states bordering Germany and Austria into secure relations with Berlin that would enable it to advance German business interests in these new capitalist countries.

Both of these German objectives require close cooperation with Paris to strengthen the EU, not simply as an integrated capitalist market and currency zone — which Washington had no objection to since this made it easier for the European subsidiaries of US corporations to expand their operations in Europe — but as a military-political centre independent of Washington's domination. Since the latter goal has long been an objective of the French imperialist rulers, Berlin's goals meshed with those of Paris.

Confrontation with US

Thus from 1991 Paris and Berlin have been headed for confrontation with Washington. Until the US rulers' war drive against Iraq, however, these conflicts were not in the open. They went on behind closed doors in NATO, the EU and other bodies — and through manoeuvres in the military-political and diplomatic spheres.

Through the 1990s, they were played out in the various wars that accompanied the breakup of Yugoslavia. Washington manoeuvred to ensure the primacy of NATO, thus of US control, over imperialist military intervention and policy into the Balkans.

When the Bush administration came to office in 2001, it sent a strong warning to European governments via the British media that it would vigorously oppose the formation of an independent European military force.

On January 11, 2001, the London Daily Telegraph published an article based on a briefing it had been given by a top Bush official. Under the headline, "President Bush to Europe: it's no more Mr Nice Guy", the article made it clear that the European Security and Defence Policy (ESDP) — the independent power project of the European caucus within NATO — was unacceptable.

Two weeks later, the London Financial Times' Washington correspondent spelt out the Bush gang's attitude toward the ESDP: "A common EU approach in NATO's councils ... is anathema to US foreign policy doctrine. Those close to Mr Bush have made it clear the US will not tolerate an agreed EU approach to NATO questions."

Under the Bush administration, the former Soviet bloc countries in east and central Europe have been reintegrated into the capitalist world market as US satellite regimes. Furthermore, Washington has encouraged their integration into the EU and NATO as a counterweight to Paris and Berlin's attempts to transform the EU into an independent military-political centre.

These new EU and NATO members lined up behind London against Paris and Berlin to back Washington's invasion of Iraq. "The centre of gravity [in NATO] is shifting to the east", crowed US war secretary Donald Rumsfeld in response to these developments, referring to Paris, Berlin and Brussels contemptuously as representing "old Europe", in contrast to the London-led "new Europe".

The British Labour government's backing of Washington's war in Iraq was consistent with the increasingly heavy reliance of the British rulers on their "special relationship" with Washington — which dates back to World War II — to defend their global imperialist interests.

The Iraq war also revealed the limits of European imperialist integration, exposing the fact that greater European economic integration has failed to translate into a common European imperialist foreign policy. Instead, the EU was revealed to be anything but unified, as Britain, Spain, Italy, Portugal, the Netherlands and Denmark identified their own interests with those of the US rulers' drive to war.

Commenting on the Brussels mini-summit's decision, the US Congress-funded Radio Free Europe/Radio Liberty observed on April 29: "No-one expects the four countries to launch a serious challenge to the military might of the United States, which spends more on defence than its principal NATO allies and largest would-be competitors like Russia and China combined.

"However, the summit highlights growing concern in the European Union that unchecked US dominance in global affairs is beginning to hurt the bloc's own security interests."

From Green Left Weekly, May 7, 2003.
Visit the Green Left Weekly home page.

You need Green Left, and we need you!

Green Left is funded by contributions from readers and supporters. Help us reach our funding target.

Make a One-off Donation or choose from one of our Monthly Donation options.

Become a supporter to get the digital edition for $5 per month or the print edition for $10 per month. One-time payment options are available.

You can also call 1800 634 206 to make a donation or to become a supporter. Thank you.