Brexit and capitalist rivalries

by Alex Davidson

Theresa May’s Brexit deal with the EU pleased very few other than the EU. However, she clung on as Prime Minister far beyond her time was up, mainly due to the Tories fear of a General Election. Eventually Mrs May lost all authority and was so isolated that even she, stubborn to the end and through tears, was forced to resign.

Whoever replaces her as Tory leader and Prime Minister, Boris Johnson or Jeremy Hunt, will promise to deliver some kind of Brexit, especially given the thrashing the Tories took at the hands of the recently formed Brexit Party in the EU elections.

The Labour Party’s victory in the Peterborough by-election against the predictions of the commentariat, the bookies and the wishes of right-wing Labour, justified Labour’s position to respect the result of the EU referendum and to end Tory austerity.

However, British ruling circles continue to favour being in the EU, there is still a largely “Remainer” Parliament. There is pressure for a re-run of the referendum to overturn the original result and to make the Labour Party campaign to remain in the EU. Consequently, this long-running saga will continue to be messy.

Meanwhile the EU gets on with other business.

Brexit has been delayed until 31 October unless a deal is agreed before that date. The date is significant as that is when Jean-Claude Juncker stands down as President of the European Commission.  Following the EU elections there is now considerable horse-trading going on among the dominant “pro-EU” parties and groups to decide who gets the top jobs in Brussels. The European Peoples Party (EPP) has dominated the EU for decades but, whilst it is still the biggest group, it has lost ground and is in negotiations with the other groups. The EPP would like to hold on to the Presidency of the EU Commission preferably by getting its leader appointed to replace Jean-Claude Juncker. He is Manfred Weber MEP of the German Christian Social Union (CSU) and currently Leader of the European Peoples Party (EPP), the largest grouping in the European Parliament. Juncker is also a member of the EPP as are Donald Tusk, President of the European Council, and Michel Barnier, EU Chief Negotiator for the ‘UK exiting the EU’.

The EPP is a right-wing Conservative grouping comprising Conservative parties from across the EU including the German Christian Democratic Union (CDU) and its Bavarian sister party, the Christian Social Union (CSU). There are no British parties in the EPP. The UK Tory party is a member of the “Conservatives and Reformists” group.

Manfred Weber, in responding to David Cameron’s long since forgotten pathetic negotiations with the EU prior to the Referendum, stated: “The EU is based on an ever-closer union of European peoples. That is set out in the treaties. It is not negotiable for us,” Weber told the Frankfurter Allgemeine Sonntagszeitung. “We cannot sell the soul of Europe,” he added, also rejecting any demands to let national parliaments win rights to stop European laws. “If we grant every national parliament a veto right, Europe would come to a standstill,” he said. (1) This view is shared by all those vying to replace Juncker and means that, whoever replaces him, the EU will continue to be intransigent.

EU DEFENCE FORCE

President Macron has been arguing for an ever-closer European Union since he became President of France. He has been pushing especially for an EU Defence Force and he has praised Juncker as being the architect of the project. Nine EU nations, including Britain, have formalised a plan to create a European military intervention force. The force, known as the European Intervention Initiative, is intended to be able to deploy rapidly to deal with crises. (2)

While Germany has been steadily militarising and playing a prominent role in the NATO deployment in Eastern Europe in recent years, Macron is intent on putting France into pole position in the EU military apparatus. At the moment, Britain is the EU bloc’s biggest military power. If Britain leaves the EU then France will be the only nuclear armed member. The current EU Multinational Financial Framework (MFF) ends in 2020. For the next MFF (2021 – 2027) the EU Commission will allocate €500 million per year for research in defence and an additional €1 billion annually in co-finance to help member states turn potential new innovations into prototypes. Together with national contributions the EU Commission expects to mobilise €5.5 billion per year for so-called defence spending after 2020.

Since 2002 the EU has intervened abroad thirty times in three different continents. The EU High Representative, Federico Mogherini, who is the bloc’s foreign and security chief, in arguing for the EU Defence force, stated: “There are competences and tools that the EU has and NATO doesn’t have. Think of Africa, the security of Africa, EU is more present than NATO, when it comes to training, when it comes to the delicate link between development and security.”

NATO

However, the US and NATO are wary of this EU Defence Force. Using the argument of avoiding ‘duplication’ and demanding ‘complementary’ capabilities, the US and NATO’s leaders continue to put up resistance allowing the EU to operate outside of the alliance’s existing umbrella. Jens Stoltenberg, NATO Secretary-General, said, “For me there is no contradiction between EU efforts on defence and a strong NATO. Actually, that works perfectly hand-in-hand, as long as the EU efforts are done in the right way, meaning: not competing, not duplicating with the NATO efforts, but complementing. Then these efforts will strengthen the European pillar in NATO.”

However, he also firmly rejected the notion that the EU could ever - or would ever – be able to defend itself. “The only thing we have to be focused on, or aware of, is the risk for any duplication or any misconception that this is something that will replace NATO, because, of course, the EU can never replace NATO when it comes to collective defence and protecting Europe.” Stoltenberg added, “What I think is important is that we need to avoid any perception that Europe can manage without NATO, because two World Wars and the Cold War taught us that we need a strong transatlantic bond to preserve peace and stability in Europe. Especially after Brexit, it’s obvious that EU efforts cannot replace NATO, because after Brexit, 80% of NATO’s defence expenditure will come from non-EU members.” These comments came after German Chancellor, Angela Merkel, floated the idea of a “real, true European army” to complement NATO. Her remarks, made during a session of the European Parliament, virtually echoed Macron’s call. Stoltenberg stated, “It will be not a wise decision by all those nations who are members of both NATO and the European Union to start to have two sets of command structures, or duplicate what NATO is doing,”.

Chair of NATO’s Military Committee, Air Vice Marshall Sir Stuart Peach, formerly Chief of Britain’s Defence Staff, referring to Stoltenberg’s remarks, said: “Of course, as chairman of the Military Committee, I agree with [Stoltenberg]. It’s unwise to duplicate.” Peach emphasized that NATO has a “single set of forces, and in our processes, those forces are trained and assured and certified by NATO.” In this interview at the Halifax International Security Forum in November 2018, Sir Stuart Peach, speaking as Chairman of the NATO Military Committee, pointed to NATO’s strength as a single set of forces, with a unique command-and-control network and planning process. “It’s not rhetoric-based. It’s real planning based on real data,” Peach said. “And therefore, why would you wish to duplicate or replicate the strengths of an existing strong alliance?” (3)

At NATO, no one wants to be seen discouraging greater EU military investment or cooperation but equally they want to defend NATO’s command-and-control set-up and maintain US leadership. President Trump has tested the strained bonds with some of America’s closest allies by pressuring fellow NATO members to rely less on the U.S. and dedicate a greater percentage of their gross domestic products to defence. 

EU/US CONFLICTS

Besides differences over an EU Defence Force there are several other critical areas of difference and conflict between the US and the EU. These include the US pulling out of the Iran nuclear deal and imposing sanctions against EU companies; the US ending the Intermediate-Range Nuclear Forces Treaty; the tariffs imposed on EU companies related to the US initiated US-China trade war; and US pressure to stop EU countries buying Russian gas via the Nord Stream pipeline. The US opposition to Nord Stream 2, which will bring Russian gas to Germany is a source of high tension between the US and Germany. The US is using sanctions against companies involved in the project which has been met with a furious reaction from Germany.

NORD STREAM

The Nord Stream pipeline carries natural gas from Vyborg in Russia to Griefswald in Germany under the Baltic Sea. The first pipeline was officially inaugurated on 8 November 2011 by German Chancellor Merkel, Russian President Medvedev, French Prime Minister Francois Fillon and Dutch Prime Minister, Mark Rutte.The pipeline, 759 miles in length is the longest sub-sea pipeline in the world and has a capacity to carry 55 billion cubic metres of natural gas.

Nord Stream AG shareholders are the Russian company Gazprom (51%), the German companies E.ON (15.5%) and Wintershall (15.5%), the Dutch company Gasunie (9%) and the French company Engie (9%). The Chair of Nord Stream’s Board is Gerhard Schroder, former German Chancellor (1998-2005).

Nord Stream 2 will double the capacity to 110 billion cubic metres and is scheduled to come into operation in late 2019. Nord Stream AG signed a financing agreement for the Nord Stream 2 pipeline project with the German company UNIPER, the Austrian company OMV, Royal Dutch Shell, the German company Wintershall and the French company Engie. 

The aim of the US sanctions is to block Russian gas supplies to Europe and instead to sell shale gas from the United States. The Nord Stream project has split the EU, which the US is using to its advantage.

The Nord Stream pipeline bypasses countries like Ukraine, Poland and the Baltic States. 9 EU countries signed a letter criticising the project. (4)

  • Ukraine fears the loss of transit revenue if Russian gas supplies don't pass through their territory anymore once the new pipeline is built.
  • Lithuania’s state-owned gas trader signed a deal in May 2017 to buy liquefied natural gas (LNG) directly from the United States and is part of Lithuania's efforts to diversify its gas suppliers and reduce its reliance on Russia's Gazprom.
  • Poland’s state-run gas firm PGNiG received its first U.S. spot delivery of LNG from Cheniere Energy in June 2017.
  • Croatia is planning to complete the building of an LNG terminal in 2019.

THREE SEAS SUMMIT

12 countries bordering the Baltic, Black and Adriatic seas formed a consortium, dubbed the “Three Seas Initiative”, in 2016 to develop regional infrastructure, trade and energy projects. (5) On 6 July 2017 a summit of the presidents of the countries involved gathered in Warsaw, hosted jointly by Poland and Croatia. The Three Seas Initiative is seen as a Polish bid to carve out influence outside the European Union with which the nationalist government has repeatedly clashed.

US President Trump visited Poland to take part in the “Three Seas Summit” of leaders from central Europe, Baltic states and the Balkans. At the “Three Seas Summit” Trump promoted U.S. natural gas exports to the leaders from central and eastern Europe, a region currently heavily reliant on Russian supplies.

INTER CAPITALIST RIVALRIES

These various inter-capitalist rivalries are a reflection of the new era of great power politics in which American power is waning; China is becoming a bigger and bigger player; Russia is defending itself and its interests; and the EU bloc, under the hegemony of Germany, and despite internal differences, is striving for ever-closer union.

Britain’s place, as an imperialist power, in this scheme of things has long been diminished. After World War 2 British capitalism tried to ride three horses at once, that is, be the USA’s closest ally; operate as a key player in Western Europe; and still keep special relations with its old Empire through the Commonwealth.

The decision to give priority to London’s Western European interests over the preservation of special trading and financial links with the Commonwealth was taken by the Macmillan Government in the early 1960s. After several rejections Britain gained entry to the Common Market, the predecessor of the EU.

However, the question of priority between Western Europe and the United States remained unresolved and has been a continuing cause of division within the Tory Party. The latest example being the sacking of Tory Defence Secretary, Gavin Williamson, by Prime Minister Theresa May over the leak about the Government’s intention to use the Chinese company Huawei in the development of the 5G network, despite heavy US pressure to boycott Huawei.

Although the dominant position within Britain’s ruling circles has been to remain in the EU, and remains so, these divisions in Britain’s ruling circles have been reflected in the Tory Party over decades. The divisions erupted over the EU Referendum and in the three years since have intensified to the point where the Tory Party, the party of choice of the British ruling class, is engulfed by them.       

(1) UK reuters.com 7 June 2014.

(2) The nine EU nations are France, Germany, Britain, Belgium, Demark, Netherlands, Estonia, Spain and Portugal

(3) Interview with Politico, 16 November 2018.

(4) The EU countries are the Czech Republic, Estonia, Hungary, Latvia, Poland, Slovakia, Romania, Lithuania and Ukraine.

(5) The 12 countries are Poland, Hungary, Czech Republic, Slovakia, Romania, Bulgaria, Lithuania, Estonia, Latvia, Croatia, Slovenia, Austria.

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Angela Merkel at the Nord Stream opening ceremony 2011

Former Defence Secretary Gavin Williamson