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Europe’s fault lines and the global crisis

22 February, 2020 · News> Global situation> Weekly Report

Greece. Demonstration against Mitzotakis' pension reform.

The two major global issues this week have been the acceleration of the crisis into a global recession and the unsustainable tension between Turkey and Russia in Syria. Meanwhile, in Europe, Macron’s “Republican Reconquest” campaign has fueled radio talk shows across half the continent as big business results and speculative movements spoke of a deeper crisis than just the impact of China’s problems with the Wuhan Coronavirus pneumonia epidemic. But there were more important issues, the first definitions of Europe after Brexit, the logic of the trade war and… of course, the global attack on the pension systems.

Ursula von der Leyen and Angela Merkel.

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Confirming the trend towards recession and war, the Munich Security Conference provided the stage for Macron to outline the EU he wants in ten years’ time: “an effective defense policy, a larger budget and integrated capital markets”. In other words: more security for capital, autonomy through militarism to protect common imperialist interests and a certain pooling of economic risks by means of transfers between countries articulated through the Community budget. The so-called “Europe of capital” in its pure form, in theory, the most distilled version of the “European project”.

It did not receive much enthusiasm in Brussels, however. The new president of the European Commission, Ursula von der Leyen, has broken with the tradition of her predecessors and taken the violently belligerent position against France of the most right-wing sectors of the German CDU instead. At first it seemed that she was adapting to the bureaucratic forms of Brussels, responding to the French veto on the accession of North Macedonia and Albania with a proposal to reform the accession mechanism. The French excuse had been precisely the lack of a modernized mechanism, although in reality it simply hit back at Germany.

But this week von der Leyen went beyond that. On Sunday, hand in hand with Germany and the President of the European Council, Michel, she organized a “frank meeting” with the governments of the two rejected countries. On Tuesday, she raised a diplomatic war flag with the countries that have said they will veto the agreement with Mercosur by organizing a system of annual bilateral EU summits with Bolsonaro’s Brazil. It was, once again, an almost exclusively German aspiration and openly opposite to Macron’s plans, who fears a new revolt by the petty agrarian bourgeoisie and who had already used the fires in the Amazon this summer to, together with Ireland and Finland, advance a veto of the association treaty.

In case there were any doubts about von der Leyen’s “German bias”, the discussion of the EU’s budget limits for the coming years dispelled them. The starting point of the negotiations was the 1.07% of the gross national income presented by Michel, a cut of 14% for the CAP (Common Agricultural Policy) and 12% for the cohesion funds. Obviously, the southern countries, starting with France, Italy and Spain, rejected it as “disappointing”… because it obviously can only aggravate the agricultural revolt. And in the end they hoped that under pressure from the European Parliament, which is asking for 1.3% to finance the “green deal”, it would be possible to reach something closer to what was, officially, the Commission’s position since 2008: 1.11%… but no. Von der Leyen “feels comfortable” with Michel’s proposal and thus plays, once again, with the “nordist front” – Germany, Austria and the Netherlands – which openly talks about reducing the budget to undermine the already meagre income transfers from exporting countries to the South and East.

Indeed, the dominant force in Europe right now is the battle between France and Germany. A diplomatic and bureaucratic battle, but also one of capital. They have gone from the common defence of the Alstom-Siemens merger, thwarted by the Juncker Commission because of excessive market power, to Germany rejecting the purchase of the railway division of the Canadian company Bombardier by Alstom because it creates an “excessive market power” which would have to be compensated for by opening up barriers to Chinese competition.

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No less violent is the tension between the EU and Britain. This week began with the French foreign minister unashamedly declaring that “Britain and the EU will tear each other apart in the post-Brexit trade negotiations“. For their part, the British rejected the idea that the EU would impose rules on them and declared that they were looking for an Australia- or Canada-style treaty, which did not involve subordination to Brussels production standards and regulations. Bernier’s response was not long in coming. The Canadian model was not acceptable. And to further demonstrate the “good will” of the continentals, Brussels included the demand for the return of the Parthenon marbles, on display in the British Museum, in the draft negotiations.

For its part, the British government published its new law on migration that will come into force in April 2021. A system of work visas by points (minimum 70 to be able to apply) in which, among other things, it is obligatory to speak English well and to arrive with a contract of more than 30,000 euros per year.

While the press throughout Europe displayed an astonishment not devoid of indignation, Scotland was asking the central government to transfer the powers to grant work visas in its territory. More than just a nod in the search for continental complicity.

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That is to say, the Brexit may be more or less abrupt, but it is sure to be “hard”. The European countries that export most to Great Britain are beginning to worry. And it is significant from the general logic of the coming trade war that Portugal is already assessing, before the negotiations even begin, subsidizing the health of British tourists and residents. Exports -and tourism is an export of services- are sacred.

Trump is also clear about this. It is one thing to push tariffs on Chinese products under the guise of national security and quite another to invoke national security to veto a sale of sensitive technology as if we were in the Cold War. To redress the balance of trade in favor of exporting more and importing less, that is the objective of the trade war, the technological war should be won by the companies, as the American President explained in one of his famous tweets. The winners are those who export, and those who don’t, like Argentina which has been trying unsuccessfully for 10 years to find a way to export more industrial products and services, will not be able to turn their own market into a base for capitalization and capital accumulation, and will inevitably be left with less in the way of sharing global profits.

A logic that evidently exacerbates nationalism and feeds its most miserable expressions, something that was not lacking this week either. In Romania we saw the xenophobia against Sri Lankan bakers, in Italy there were outbreaks of sinophobia on account of Wuhan’s pneumonia and in the US we discovered that half of the hate crimes in New York last year were suffered by Jews and not precisely because the rest of the hate crimes have dropped significantly, but because anti-Semitism is growing as never seen before.

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No, not a single one of the nefarious tendencies that define the current crisis of accumulation, is weakening. And certainly not the global movement of states to raid, erode and privatize workers’ pensions. This week, in Argentina, the government confessed to wishing to launch a debate on raising the retirement age.

In Spain, the transfer from the central government to the Basque Country of the management of the Social Security was confirmed… the first phase to break the single fund with private “complementary funds” already organized by the Basque government as volunteers, funds that will become obligatory with the “Austrian backpack” that the Sanchez government has already communicated to Brussels that it wants to implement.

In France, in the strikes and mobilizations against the pension reform, artificially prolonged and made expensive by the unions, weariness is beginning to be felt. And in Greece, mobilizations against the pension reform that is being finalized by the Mitzotakis government, which among other things will raise the retirement age to 67, began this week. As in France, the unions began by limiting the mobilization to a transport strike, this time of only one day, therefore the worker’s forces are not weakening. Everything will now depend on the ability to break out of the stranglehold of the unions.

Refugees running away from Idlib.

The balance of this week can only cause concern. The speed at which the trends towards recession and war are developing, the violence of the attacks on the living conditions, if not the very lives, of millions of workers around the world, still do not correlate with the level of response achieved by workers’ struggles so far this year. And it is not a question of waiting to see what happens with our arms crossed. The self-interested complacency of ideology and media bombardment must be broken. We must open up the conversations that matter in the workplace with our comrades. And we must organize to collectively intensify that effort.