Going to wire, again

Europe after Brexit

As the British and European powers continue haggling, Paul Demarty assesses the state of the EU

Attention, in these last stages of the Brexit negotiations, has focused on what it all means for Britain: the length of lorry tailbacks in Kent, the arrangements of customs borders through the British Isles, the impact on national prosperity, on medical supplies, on everything imaginable ...

To the establishment circa 2015, now reconciled in despair to Brexit, this adds up to a colossal, self-inflicted wound, which saw ‘red wall’ workers vote effectively for further deindustrialisation, the elderly for shortages of medical supplies and staff, Thatcherite financiers for an end to passporting, and so on. For us communists, who refuse to romanticise the old ‘normality’, it seems indeed to be an incomparable failure of political regime, and a poison pill for all who have attempted to build a new order in light of it. This will be so, whether or not Boris Johnson can cease his vacuous brinksmanship long enough to do a deal.

There remains the question of the other side of the negotiating table, however. If the picture painted of post-Brexit Britain is unflattering, what of post-Brexit Europe? Is the European Union better off without us, or has a lethal precedent been set for further disintegration?

Both opinions are available, and viable to a point. Evidence for the EU coming out stronger than it went in comes in two forms. Firstly, it has successfully maintained a united front at all the crucial moments in the process. The Franco-German core backed Ireland to the hilt, with the result that successive Tory prime ministers have been forced to accept in principle a border separating Northern Ireland from Great Britain. Ireland will still suffer, as will other EU states which have a lot of trade with Britain. But, just as Lenin gambled on the European revolution to save the infant soviet state, so Brexiteer ideologues gambled that Brexit would prick the EU balloon, unleashing the contradictions between the remaining states. That certainly has not happened.

The second pointer is the matter of Britain’s historic role in the EU as a saboteur of its grandest ambitions. The core states operate on a shared strategy (albeit with variants and competing interests). That strategy is to slowly create out of the EU a ‘great power’. Only the most deranged Gaullist could argue that France, for example, can play that role herself ever again (though perhaps Emmanuel Macron allows himself to dream sometimes …); and Germany’s defeat in two consecutive world wars ought to dissuade even those who can see past the great national guilt of the Hitler years. Britain’s primary commitment, however, is to its alliance with the US, and so the UK’s role was to retard developments in the direction of European consolidation. With the UK gone, in theory greater progress ought to be possible.

However, the bad news, first of all, is that, though the EU was not popped like a balloon, a precedent has nonetheless been set. A country has left the union - admittedly at greater cost to itself than to the EU - but enormous diplomatic capital has been expended hammering out a deal with a polity whose government lacked, for most of the negotiation period, a mandate to strike any plausible deal. A few more ‘victories’ of this sort will tend to exacerbate the contradictions between the EU powers. And those contradictions are real: between the northern and western powers and their ‘problematic’ southern and eastern subordinates, who increasingly resent their second-class status relative to the Franco-German core.

End of a dream?

In reality, Brexit is merely one of many crises to test the EU regime this century, and particularly in the last 10 years. The 2000s began with the rollout of the euro currency, and the doomed attempt to agree an EU constitution - sunk by referenda in the very countries whose elites thought it was such a great idea. Not to be denied, the Eurocracy repackaged that constitution as an incomprehensible treaty; but even that was voted down by the Irish, who were then - with the EU’s famous respect for popular sovereignty on full display - given another referendum and asked to give the right answer this time.

That was in 2008-09, and it is not difficult to see why the Irish might have proven so troublesome. They initially bore some of the worst consequences of the financial crisis: the votes on the Lisbon Treaty followed the nationalisation of the Anglo-Irish Bank (and then the collapse of its rival, Allied Irish), with the result that the Irish state was effectively bankrupt. Not long afterwards, the contagion spread. Most disastrously, the Greek economy collapsed - laden with debt, particularly to German financial capital. The Greek crisis would last until 2015, when the European authorities humiliated the government of Alexis Tsipras (as a social catastrophe, of course, it persists today); it is almost certainly worse because the EU authorities conspired to protect German financial firms from a default on their Greek investments - a default that was inevitable, and indeed took place.

The bare facts of this sorry saga are fairly well-known at this point. We bring it up, because, as Adam Tooze argues in his history of the crisis, Crashed, the story is one of decisive action by the US government and federal reserve, contrasted with hopeless obstructionism from the core European powers - especially Germany and those EU institutions most in its thrall. Tooze reports the claim of Nicolas Sarkozy, the repellent former French president, that Angela Merkel’s attitude as the crisis hit was “chacun sa merde!” (‘to each his own shit!’) - though her people claimed that she used a more elegant quotation from Goethe to make the same point.1

So far as Perry Anderson is concerned, in a recent essay on the house historians of the EU, there is something similar going on with Brexit. He objects to Luuk van Middelaar’s contention that the cornering of Britain into a choice between humiliation and economic ruin is good strategy, by suggesting that it need not have happened:

If the Union’s great breakthrough was to [overturn] one rule after another in pursuit of financial stability … wouldn’t it have made more sense to concede to Cameron the brakes on migration he was asking for to win his referendum, rather than to risk Britain’s desertion by invoking immovable principles that are continually being moved? If, when necessity calls, the Treaty of Maastricht’s precise and detailed clauses on budgetary discipline and its prohibition of central bank purchase of government debt can be dismissed in the shake of a lamb’s tail, why not the far vaguer provisions of the Treaty of Rome on the free movement of labour?2

Of course, no such compromise was politically possible on the issue. There are contingent reasons for this - the fact that so much political capital was spent limiting financial contagion, for example - and problems of political structure (treaties cannot be quietly ignored, as Maastricht was in the early 2010s, except by the consent of the signatories, so any ‘brakes’ would be subject to veto).

But there are also problems of political dynamics among the wider population. Though left and liberal ‘remainer’ sentiment relied a great deal on sympathy for migrants and the free movement of people within the EU, the truth is that free movement EU-style immanently generates anti-migrant sentiment. The decisions in the cases of Viking and Laval illegalised trade union action taken to ‘level up’ wages of migrant workers to prevailing local standards. State aid and budgetary discipline laws obstruct attempts by national units to mitigate the effects of financialisation. The result is stagnant real incomes in the boom years and collapse in bad times, combined with a situation where migrant labour must undercut native labour. Even if we had a strong, militant, socialist labour movement across the continent, there would be some uptick in xenophobic attitudes. We have no such thing, of course, so the result is a carnival of reaction.

Finally, there are geostrategic concerns. The brute fact is that it is no accident that the Fed and the American executive could act so decisively in 2007-08 - theirs is the global reserve currency. The Americans could take the risk because of their extraordinary advantages in the financial system; the euro could have been killed off by determined economic encirclement, and came close to collapsing anyway (Greece’s potential exit was termed ‘drachmageddon’ by some sharp-tongued pundit), but it would have taken a true cataclysm to do the same to the dollar.

That strength is intimately connected to military-strategic factors. The EU’s great ‘successes’ in the past 10 years are all, on closer inspection, a matter of crisis management, of successfully reacting to events outside its control. Its strategic weakness was demonstrated rudely by Donald Trump’s abrogation of the Iran nuclear deal: however much Macron, Merkel and co frothed about how it was not merely a matter between the USA and Iran, the fact is that a deal with the European powers opposed by the US is worthless to the Islamic republic, since Europe is utterly incapable of defying US sanctions.

The defenders of a post-Brexit EU will watch the number of member-states drop for the first time since the days of the Coal and Steel Community that kicked it all off in 1951, but conclude that things might have been worse. The underlying picture, however, is troubling. The European bourgeoisie succeeded in creating a united trade bloc; they succeeded in attaching political institutions to it, which function fairly well in their particular opaque manner. But they failed to make the leap to become a true world power - disposing in practice of almost no troops, having no spheres of influence apart from those possessed by member-states, and having no unified political culture beyond that which emerges chaotically from the electoral cycles of those member-states.

The centripetal forces - ambition to recapture the global leadership lost to the Americans in the 20th century; deepening economic links between states - are outpaced by the centrifugal ones: the divergence of interests between member-states, the exposure of ‘solidarity’ as fraudulent during the financial crisis, and the emergence of anti-liberal reaction from Budapest to Burnley.

True European unity is yet possible, but the power of the bourgeoisie to further it appears exhausted.

  1. Adam Tooze Crashed: how a decade of financial crises changed the world London 2018, p284.↩︎

  2. lrb.co.uk/the-paper/v42/n24/perry-anderson/the-european-coup.↩︎