The EU - what's class got to do with it?
by Gary Lefley
Just by asking what the class character of the EU is - even before we answer – it makes our position as socialists a little clearer. But it is indicative of the theoretical void of the UK labour and socialist movements that in our Constituency Labour Parties and other forums, we have to think twice before even asking that question in case it alienates our audience. “Class? What’s that got to do with the EU?” “Not everything can be reduced to class”. Or simply, “Your question makes no sense”.
FREEDOM FOR WHO?
The Single Market is a clue. The EU champions the free market, celebrates it, frees it from government intervention and regulation and protects it from ‘unfair’ competition, that is state-subsidised public ownership. The 4 freedoms enshrined in the EU Treaties – the free movement of capital, goods, services and labour – are another clue: four principles that are intended to guarantee an unfettered capitalist market.
The free movement of capital needs particular mention. The name tells us everything. It means the movement of capital, unrestricted and unregulated by sovereign parliaments and national laws.
John McDonnell has responded to the threat of capital flight, with "detailed implementation manuals”, "war-game type scenario planning" and draft legislation, recognising that a Labour government may have to introduce capital controls to protect the domestic economy from huge capital outflows. Possible measures could include exchange controls (placing restrictions on the buying and selling of currency) and caps on the sale or purchase of different kinds of ‘portfolio capital’, that is, financial assets. This puts Labour on an unavoidable collision course with the EU.
The EU allows for “exceptions and justified restrictions” to capital free movement under articles 64/65/66 TFEU, though these exceptions are reserved almost exclusively for non-EU countries. (1) It’s difficult to see how a transformative Labour government abandoning neoliberalism and privatisation in favour of public ownership and wealth redistribution would qualify for such an exception!
The slightly odd truth is that the freedom of capital has barely been challenged by Labour Remainers who have generally accepted the idea that free movement of capital is somehow in the interests of the “economy” - as if the economy is class neutral - and without potentially disastrous negative consequences for working people.
EU POLITICS AND STRUCTURE
Only 15% of the political parties that make up the 10 configurations of the EU Council describe themselves as socialist. The leading bodies of the EU are constituted overwhelmingly by representatives from capitalist parties. (2)
The EU’s multi-layered structure has 6 unelected bodies: the Council, the Council of Ministers, the Commission, the Court of Justice, the European Central Bank and the Court of Auditors. This structure is designed to progressively remove the actual policy makers and decision-takers from any form of democratic accountability. These powerful bureaucrats are, however, accessible on a daily basis to the Brussels-based corporate lobbyists. The only elected EU body, the Parliament, is not imbued with the most basic power of a democratic legislature, namely the right to introduce legislation. As a consequence, the Parliament is little more than a talking shop that tinkers with, then rubber stamps, policies and laws drawn up by the Commission.
The crushing of Greek democracy by the Troika dictatorship is well documented. The imposition by the combined power of the EU, the European Central Bank (ECB) and the IMF, of extreme austerity, large scale privatisation and impossible terms of debt repayment, has impoverished the working people of Greece indefinitely while gifting the banks unearned billions of euros and gifting further billions of public wealth to private capital interests. Those who offer a spurious defence of this, by identifying corruption or Greece’s membership of the Eurozone as the cause, miss the point: of the various possible solutions to the Greek crisis the EU leadership chose that which most benefitted capital and which most punished the working people of Greece for daring to elect a left-leaning Government. And it did so despite cautionary advice from the IMF. This was international class conflict waged by the European Union and the ECB on behalf of monopoly capital.
THE EU SERVES BIG CAPITAL
The joint Gross Domestic Product of Germany, the UK and France is roughly equal to the GDP of the other 25 EU members states put together. This inequality in economies is reflected in weighted voting on the EU Council. The reality is that policy and decision-making within the EU is dominated by the most powerful states. This inequality is accentuated in the free movement of (EU) capital which disproportionately benefits the larger economies.
The EU is not, as is sometimes naively imagined, an internationalist federation of equal partners. Nor is it even an alliance of non-conflicting homogeneous national capitalist classes. Rather it is a union that reflects the unequal development of capitalism across the continent, where political power within the EU is determined by national economic power and where the minor capitalist nations essentially do as they are made to do, while feeding off the breadcrumbs of German, UK and French monopoly capital. Furthermore, the EU’s structures and policies are designed to consolidate the authority and power of these major EU players in their global rivalries.
MYTHS AND REALITIES
Larry Elliot, Economics Editor of The Guardian wrote: “Remember Project Fear? Unemployment would rocket. Share prices would crash. The government would struggle to find buyers for UK bonds. Financial markets would be in meltdown. Britain would be plunged instantly into another deep recession.” And remember George Osborne saying he would have to bring forth an emergency extreme austerity budget?
We should note that all the doom and gloom forecasts were predictions not of the eventual outcome of leaving the EU, but of the market reaction to a Leave vote.
In August 2018 the CBI’s survey reported that both manufacturing and retail sales were strong, unemployment was lower than at any time since 1975 and public finances had the biggest July surplus in almost two decades. “The UK economy grew faster than the Eurozone in the second quarter of 2018... There has been no collapse in house prices, unemployment has not risen by 500,000 [as forecast by the Treasury] and the two-year recession never materialised.” (Larry Elliott)
All this, in spite of sustained austerity and under-investment in the public sector.
The Treasury has a dismal track record when it comes to forecasting. Distrust of its projections is justified. Neither the Bank of England nor the Treasury, nor the Office for Budgetary Responsibility, predicted the financial crisis of 2008 and all massively underestimated the damage it would cause. In short, the Treasury’s assertion that the economy could be 10% smaller by 2030 in the event of a no-deal Brexit needs to be treated with scepticism. Yet it is Treasury forecasts that underpin virtually all the clichés about a Brexit economic Armageddon.
Elliot sums it up neatly: “The idea that we’ll be impoverished after Brexit is complete cobblers. The economy that will be created after Brexit will depend on the choices we make after Brexit.”
Free movement of labour
This concept is hugely misunderstood by the liberal-moral left, who have accepted at face value the view that this is a libertarian right.
Firstly, we should note that the EU treaties refer not to ‘people’ but to ‘labour’, that is to an economic category.
Secondly, the EU has never been in favour of the free movement of people. It rejects free movement from Africa, Asia, Australasia, the Caribbean and the Americas, from the 167 United Nations countries that are outside the EU, that is 7.1 billion people. In short, the EU discriminates against 93% of the world’s population.
Even within the EU, free movement is a sick parody. The EU reality is that millions of eastern and central European workers have been forced to uproot from their communities, not in search of culture, education and broadening horizons but as a route out of extreme poverty. This is not free movement of people; it is the economically enforced transportation of labour, of people who are, effectively, economic refugees. By 2011 this migration had created more than 500,000 EU orphans, according to the Children Left Behind Network.
While liberals have championed this enforced migration, they have nothing to say about the right to stay put, the right of communities to survive and thrive, rather than be torn apart by the movement of capital, austerity and extreme exploitation. Nor do they reflect on the outcomes of that migration. When these people arrive in the UK they frequently do not have access to the legitimate workforce. Where I live you can see these demoralised souls lining up outside Wickes DIY store in the early morning waiting and hoping to be picked up for a day’s labour – cash in hand, no tax, no national insurance, no health & safety, no rights. For them, a zero-hours contract would be an improvement.
EU immigrants are being ghettoised in the most deprived, run-down areas. Those that are fortunate enough to bring their families with them see their children struggling in schools that are poorly equipped to deal with the influx of students where English is an additional language. These children are often sidelined in special needs classes. They are prime targets for gang recruitment and violence, drugs and sexual exploitation, and are propelled into the criminal justice system. Their parents are disempowered, dispossessed, and desperate - exactly the condition preferred of its under-class workforce by capitalism. This extraordinary exploitation of migrants is being championed in the name of ‘free movement’. See also (3)
As already stated, the EU discriminates against 93% of the world’s population, the vast majority of whom are Black, Asian and Minority Ethnic. The irony is, of course, that as and when we leave the EU, migration from these non-EU states is almost certain to resume, if only because the UK capitalist class will wish to continue importing non-unionised, cheap labour.
We should be aware that the EU uses import tariffs to maintain Africa in neo-colonial subjugation and under-development. For example, unprocessed coffee beans in large sacks are imported without tariffs. But if the countries of east Africa wish to export roasted, ground beans then they must pay a 7.5% duty. The object is to maintain Africa as an under-developed supplier of cheap raw produce. Rather than being a bulwark against racism, the EU is in fact a transnational perpetrator of racism.
In his article, “The Growing Myth of Social Europe”, Mick Carty observes that the primary function of trade unions is to place democratic controls on capital in the collective interests of the workforce. This is seriously compromised by the four ‘freedoms’, especially the freedom of capital. (4)
The myth of social Europe is transparent when we consider that the member states hit by bailouts from the EU, the European Central Bank and the IMF are suffering the largest percentage drop in workers with collective bargaining rights of anywhere in the world. According to the UN International Labour Organisation the largest decline in collective bargaining coverage was in Romania with a 63 per cent drop, and Greece at 45 per cent.
In its 2015 briefing on Labour Relations and Collective Bargaining, the ILO revealed that the sharpest decline in bargaining coverage occurred in the group of European countries that suffered severe economic difficulties during and after the 2008 crisis. The bargaining coverage rate for this group of 10 countries fell by an average 21 per cent. Many of these countries — Cyprus, Greece, Ireland, Latvia, Portugal and Romania — required international financial assistance. The destruction of trade union rights reaches across the entire EU with an average 14 per cent reduction in collective bargaining rights since 2008. Carty concludes: “This fully reflects the policy position contained within a report prepared by the European Commission’s directorate general for economic and financial affairs, which advocated employer-friendly reforms, including undermining collective bargaining, abolishing industry-level agreements at workplace level, decreasing bargaining coverage and an overall reduction in the wage-setting power of trade unions.” (5)
Remainers assure us that the rights of workers within the EU are protected in such documents as the directives on individual employment rights, the Community Social Charter for the Rights of Workers, the Social Charter Action Programme and the Charter of the Fundamental Rights. The reality is this:
(i) Many of these rights are already embodied in UK legislation fought for and won by the UK labour movement; or
(ii) They are enshrined in international law laid down by the U.N. or the Council of Europe, which consists of 47 European states and, by the way, has nothing to do with the EU. It is the Council of Europe, not the EU, that has given us the European Convention on Human Rights and the European Social Charter; or
(iii) These rights are effectively trumped by the EU Court of Justice ruling that the 4 freedoms incorporated in, for example, the Right to Conduct Business, supersede in case law any other EU rights, including collective bargaining.
When it comes to workers’ rights, the EU is simply not on our side. In the very few cases where EU legislation may be stronger than UK or international law then a Labour government can and will supplement existing UK law, as Jeremy Corbyn has already indicated.
None of the following pivotal moments of national and international law owes its conception, existence or legal authority to the European Union.
1948: Universal Declaration of Human Rights
1950: the European Convention on Human Rights
1965: UK Race Relations Act
1965: International Convention on the Elimination of All Forms of Racial Discrimination
1966: UK signs up to the European Court of Human Rights
1975: UK Sex Discrimination Act
1976: UK Race Relations Act
1976: International Covenant on Economic, Social and Cultural Rights (ICESCR)
1979: Convention on the Elimination of All Forms of Discrimination against Women (CEDAW)
1984: UN Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment
1989: UN Convention on the Rights of the Child
1995: UK Disability Discrimination Act
1998: Human Rights Act
2006: Universal Periodic Review of UN Member States Human Rights’ records
2008: UN Convention on the Rights of Persons with Disabilities (UNCRPD)
2010: The UK Equality Act
Remain and Reform
This argument usually starts with something like, ‘It may not be perfect but we’re better off in than out, where we can have some influence and introduce reforms.’ At its most naïve, this argument imagines transforming the EU into a Socialist States of Europe. But the EU is no more susceptible to socialist reform than are the CBI and the Institute of Directors. Reformers imagine that the European Parliament can make fundamental changes, but, as stated above, it does not even have the right to draft legislation. The Constitution of the EU is embodied in its Treaties - Rome, The Single European Act, Maastricht, Amsterdam, Maastricht-Nice and Lisbon. These Treaties may only be amended with the unanimous ratification of all 28 members. It is a constitution that has been intentionally constructed to exclude fundamental reform.
I have asked Remain-Reformers on umpteen occasions to describe the process by which they foresee the EU being reformed into a democratic socialist union. No one even tries. They don't know where to begin. It is an assumption without feasibility. The treaties of Rome, Lisbon and the Single European Act would all have to be amended just to abolish the free movement of capital, a measure that is fundamental to the prospects of the next Labour government as it attempts to halt the anticipated flight of finance capital.
War or Peace?
The EU has not kept the peace, most notably with the Yugoslav Wars 1991-1995. The EU, particularly Germany, benefitted from these wars. It was the first country to recognise Croatia and Slovenia, guaranteeing the break-up of Yugoslavia into 6 small states and precipitating conflict. It was then in the driving seat to capitalise, literally, from the export of German monopoly capital and the privatisation of huge expanses of formerly publicly owned assets. The death toll, destruction and suffering in the region was immense. (6)
After the demise of the Soviet Union, the USA, supported by NATO - 23 EU states are full NATO members - was free to undertake regime change wars in Iraq, Afghanistan and Libya. The EU has not only failed to keep the peace, its arms companies have benefitted to the tune of billions of pounds from NATO’s wars. According to the Stockholm International Peace Research Institute, 3 EU based firms rank in the world’s top 10 biggest arms companies: The European Aeronautic Defense and Space Company, Finmeccanica, and BAE Systems.
More recently, the NATO-EU endorsement of the 2014 far-right coup in Ukraine has seriously destabilised the region with the very real prospect of war between Ukraine, backed by the west, and Russia.
The process of European militarisation and war preparation has been further advanced by the EU Commission’s proposal to create an EU Defence Fund with a budget of €20 billion. This expenditure is in addition to member states’ national defence budgets. The fund is to be created by means of a 2/3rd cut to the EU civil and peacebuilding budgets. (7)
A CAPITALIST PROJECT
The myth is that the EU is an internationalist partnership which can be changed by its member states and their peoples. The reality is that it is fundamentally capitalist in nature, benefitting big capital with structures which are designed to prevent progressive and socialist transformation.