PERU / WESTERN EUROPE Kohl and Mitterrand speed up plans for European unity ON APRIL 18 the Brussels-based Commission of the European Economic Community (EEC) put forward a plan for the phased integration of East Germany Into the EEC. The following day France's President François Mitterrand and the West German Chancellor Helmut Kohl proposed speeding things up so that "economic and monetary union as well as political union could be achieved by January 1, 1993." These two events demonstrate the ways in which the majority of the EEC's members are trying to overcome the existing difficulties and contradictions. CLAUDE GABRIEL
HE EVENTS in Eastern Europe T and above all the collapse of the
Stalinist regime in the GDR are being read as dangers for the European unity project. In reality, despite all the restructurings, far from embodying a coherent, rationally structured and centralized economy, the EEC today remains a field for intense competition between firms and financial companies enjoying the support of the individual member states.
In such a context and given West Germany's economic power, it might have been expected that Bonn would make its priority imperialist expansion eastwards rather than West European integration. The priority given to absorbing the GDR and the West German chancellor's brief period of hesitation over support for European economic and monetary union seemed to give credence to such an expectation.
Drive to integration still powerful
However, in fact, the new problems for the EEC project arising from the dramatic developments in Eastern Europe do not necessarily call into question the powerful tendencies towards integration, as is shown by the Brussels' Commission proposals and the Kohl-Mitterrand statement. At stake in the immediate future in
Eastern Europe is commercial expansion, the opportunities for relocating production to a region of low wage costs, and a controlled transfer of technology financially underpinned by the states and international financial institutions. At stake in the long term in the EEC, however, is the centralization of capital, the creation of a vast united market with 323 million inhabitants, and the establishment of institutional and financial tools for overcoming the obstacles to modernization of production and the employment of new technologies, in the face of American and Japanese competition.
It is not just a matter of a difference in quantity between the potential of the East and the perspectives of the West. The difference is qualitative.
This is not to gloss over the difficulties lying in the path of European capitalist construction, but, even so, it is an essential factor for understanding what the real policies at work are. Spending on mergers and purchases of enterprises involving European actors was $11.1 billion in 1988.
FRG plays preponderant role in EEC
Furthermore, more than half of the FRG's foreign investments are in the EEC, which means that the FRG plays a preponderant role in the EEC, whatever the competition between the individual
EEC countries with regard to expansion in the East. Such facts determine capital's main needs. main necas. The choice being made in Brussels, Paris and Bonn to deal with the new problems is thus to move faster to wards eternig 27 and political union. The most interesting May 7, 1990 • #184 International. Viewpoint
WESTERN EUROPE aspect is the attempt to combine the most rapid possible carrying through of economic and monetary integration (EMU)
and political union.
In their joint statement on April 19, Mitterrand and Kohl propose launching
"preparations for an inter-governmental conference on political union." "The aims of this are to reinforce the democratic legitimacy of the union; make its institutions more effective; ensure the unity and coherence of the union's actions in the economic, monetary and political spheres;
to define and put to work a common foreign and security policy." The slump in
Mrs. Thatcher's domestic popularity is also a factor working to the benefit of a project that horrifies the British government.
Obstacles to European state remain
There is, of course, a gap between desire and reality. A European state will not come into being because the Brussels
Commission gets some executive powers, the European Parliament the right to make more decisions or the Council of Europe gets stronger. Surmounting the contradictions between the internationalization of capital and the maintenance of "national"
states remains a hard task.
But even in this realm, the objective needs are becoming more and more pressing. How, for example, can there be monetary union without central control of monetary and fiscal policies to establish rigorously fixed rates of exchange between the national currencies?
The Financial Times of January 17, in an article not at all favourable Mrs. Thatcher's "nationalist" to explained: "The liberalization of the flow theses of money will greatly weaken the good functioning of the exchange mechanisms....
"If exchange rate stability is to be maintained, the liberalization of capital movements has to go hand in hand with substantial efforts by the monetary authorities on two fronts. In the first place, it is necessary to coherently formulate the monetary targets of the individual contries so that the direction of the evolution of the money supply is compatible with fixed exchange rates. In the second place, a firm and well-structured support is needed for the bilateral parities, in order to convince the markets that the stability of the exchange rates is going to last." Transfer of authority to EEC mollec These processes therefore imply a growing transfer of authority from the national governments to community institutions. In order to cope with the assymetry between the Deutschmark and the other 28 currencies, and between the German economy and that of the other countries in an International Viewpoint #184 • May 7, 1990 open market, the EMU has to be accompanied by a corresponding political and institutional project.
It goes without saying that this transfer of power will pose important problems of "legitimacy". There is a gulf between popular perceptions of the existing states and of a technocratic administration in Brussels.
This is why Kohl and Mitterrand are so preoccupied with giving democratic legitimacy to the political union. They have a lot on their plate. There are other problems that have to be solved at the same time — in the first place, the reorganization of the Atlantic Alliance, the march towards European defence and, as a consequence, the integration of the European armaments industry. There is also the need to define a common coherent policy towards Eastern Europe, where the risk of political crisis and social collapse is very real.
This is why the Brussels Commission is also keeping a close eye on economic and financial interventions in the East. There will be an increasingly closer connection between the economic and industrial perspectives of these countries and their political evolution.
The final overcoming of these problems will involve a centralized intervention by the EEC states and regional financial institutions.
As far as East Germany is concerned, the Commission states that is necessary to "pass from information to consultation, and this demands appropriate procedures, ensuring the best possible transparency in the development of the interim phase of adaptation."
In other terms, the Community will get its oar in since it will also be intervening there, including at the financial level. The GDR operation carries important risks for the whole of the EEC and the stability of the European Monetary System (EMS). Inflationary pressures risks being very strong.
But on the other hand the European govemments hope that the possibilities for extra growth in the FRG (estimated at 1%) will permit Western Europe as a whole to avoid following the United States, not to say Japan, into recession. There is thus not at the present time a big contradiction between the maintenance of the EMU and the political and economic opening to the East (at least in terms of starting both processes going at the same time for in the long term the overall costs will begin to bear down).
Things might however be different if the whole of the imperialist world went into recession. To avoid such a scenario is another reason why Paris and Bonn have decided to make a dash for the finishing line. *
Invest in the new Europe! AT A TIME of great upheavals in the Soviet Union and Eastern Europe, at a moment when the world is changing so quickly, the ideologues of the free market and capitalism are rushing Into the breach to substitute a new mystification for the old Stalinist polson. Their methods are those proper to "really-existing" capitalism -- the weight of the multinationals, state blackmail, the power of money, and so on. Social democracy has not hesitated to offer its services to this new crusade. Our goals are entirely different. We remain, today as yesterday, falthful to the fight against all oppression and exploitation, revolutionaries against both Stalinlem and capitallam! Despite their arrogant bluster, those who wish to pass off the Stalinist caricature as the Inevitable outcome of socialism have not succeeded. Democratic socialiam will remain an Ideal for oppressed humanity, and, In reality, represente the only way out of the crisis facing the human race. The collapse of Stalinlem In Eastern Europe brings new hope, but also new responsibilitles, for revolutionary socialists. Our voice must be heard in the great debates taking place in these countries, If is necessary to ensure that the advocates of capitalism do not have a monopoly of the press. For this reason the United Secretarlat of the Fourth International Is launching an International financial campaign to gather the means to respond to the new situation, to make known Its opinions and analyses, and to help Its supporters In Eastern Europe and the Soviet Union to organize themselves. Donations should be addressed to; Eastern European Solidarity AMRO bank Account no. 444 531 092 Amsterdam Holland (central agency AMRO, Rembrandt Plein 1)