frontline 7 - No to the Euro

Debate: Socialists and the Euro

The SSP special conference on 22 June will decide how the party should approach the expected referendum on Britain joining the Euro. SSP members Gordon Morgan and Nick Rogers debate the key points.
Gordon is the secretary of the Pollokshaws Road branch and was active in the 1975 "Labour Vote No" campaign against the EEC referendum. Nick has been a member of the SSP since February 1999, is currently Kelvin branch secretary and is not a member of any platform.

You can read Nick's contribution here: Socialists must face up to the EU

A brief summary of the origins of the EU can be found here.

Against a bosses Europe - Vote No to the Euro.

Whilst over 500,000 demonstrated on the streets of Barcelona at the European Union (EU) summit against globalisation and imperialist aggression, Blair and Berlusconi plotted how best to diminish workers rights throughout the (EU). With the launch of the Euro, European capital has entered a new phase of integration. The costs of trade between EU countries has been reduced by introducing a single currency. The stage is set for cross border expansion of the largest firms, centralisation of production and cost reduction by shutting factories and distribution centres. This can only be achieved by layoffs and increased unemployment.

The introduction of the Euro was not accompanied by any extension of democracy, rather the removal of control of monetary policy from national governments. Britain is not in the Euro. It is likely that a referendum on joining the Euro will be called in May next year, on the same day as the Scottish Parliament elections.

This article explains why and how we should Campaign for a No Vote.

Designed to promote capitalism

From the end of the Second World War, European capitalists have sought to create governmental structures which protect their interests and pursue their policies. These structures have evolved since the Second World War to the formation of the EU and the launch of the Euro. (see box). We now have, an EU comprising 15 countries, 12 of which are in the Euro

Undemocratic

The only directly elected body in the EU is the European Parliament. It has no power to implement its decisions. Any decisions it takes are subject to the agreement of the Commissioners, who are directly appointed by heads of state. They make up the commission which is the most powerful body within the EU. They decide, the elected parliament merly advises, Neil Kinnock who couldn't win an election in Britain was appointed a European Commissioner.

Although nominally the Council of Ministers- the meeting of the heads of state - decides policy, in practice the permanent lobby groups and the Commission decide. The Council of Ministers is not accountable to the European Parliament or national parliaments. Thus if a country's vital interests are sold out, its government can happily blame it on other countries. This exacerbates distrust and fuels xenophobia. Far from bringing Europe together, the current decision making process reinforces divisions between the working class in different countries.

Power of Multinationals

The most powerful policy committee, the Economic and Social Committee (ESC) reports directly to the Commission. The executive of the ESC meets the Commission weekly. The ESC includes representatives of Multinationals and Trade Union federations.

The most important group on the ESC is the Association of European Chambers of Commerce and Industry. This is simply a bosses' club, members of each of the largest European Multinationals are in this group. Its purpose according to its website is to: "Reflect the opinion of European industrial federations in supporting the development of a European Union of free market economics". Also on the committee are representatives of the European Trade Union Congress (ETUC). However, these trade union bureaucrats are not responsible to their members and have had little effect on legislation. We should however, note that the latest EU treaty supposedly seeks to minimise unemployment in the EU. But given the free market agenda of the EU, workers rights to employment and protection from redundancy are continually being undermined. Two million workers marched in Rome to protect workers against lay offs.

Alongside this we have the European Central Bank charged with setting interest rates and controlling inflation. Members represent unelected international bankers. Another unelected committee monitors member states' compliance with the convergence criteria. This committee recently issued warnings to Germany that it was in danger of breaching the criteria on government borrowing and should cut welfare spending. So health spending in Germany is no longer decided by the government but by a group of unelected, unaccountable bankers in Brussels.

Who Gains?

Although Britain has given power over monetary policy and interest rates to the Monetary Policy Unit of the Bank of England, any Westminster Government could reverse this. If Britain joins the Euro, power over monetary policy will pass forever to a group of EU bankers.

A single currency has the following merits for industry: no exchange controls; the ability to use the cheapest labour on the continent; weakened government environmental and labour laws; and the ability to avoid paying tax.

The convergence criteria, "the stability and growth pact", limits government borrowing to 3% of Gross Domestic Product (GDP). This was intended to force privatisation of state companies, cut public spending and cut taxes for the rich. With the turn in the economy to recession, government money from taxation across Europe is set to fall, and unemployment is rising. Even at present levels of welfare and social spending, budget deficits are rising above the limit set by the convergence criteria. Governments are being told to cut their spending. Which means cuts in state benefits or further privatisation of public services. If we call for a Yes vote we will be agreeing to this "stability pact" and implicitly backing a reduction in state spending.

Reasons to Campaign for a No Vote

We are being asked to give away key economic controls from a democratically elected government to an unelected committee of central bankers. We are also being asked to commit ourselves to the "convergence criteria" which will ensure either cuts in welfare spending or higher taxes for no additional benefits.

If Britain joins, the European Capitalist project will be strengthened. Rather than undermining rightwing nationalism the current structures of EU monetary policy build in conflicts between different countries, at the same time removing democratic rights, leading to an increase in racism and xenophobia within society.

A Europe with Britain fully on board will more effectively conduct a trade war with America. A single currency has world trade advantages for European capital. The Euro zone has 370 million members, it is larger than the US in population and has a similar GDP. The EU conducts more trade than the US. In simple language Europe is in a trade war with America to see who exploits the Third World. A single currency improves European capitalism's clout.

In the lead up to the launch of the Euro, the left across Europe generally campaigned for a No Vote.

In France the Yes Vote was won by less than 1%. There was also a campaign on the French left for an abstentionist line which could have made the difference. A defeat for the Euro in France would have been a set back for the free market agenda of the EU.

In Denmark in 2000, the No position won a referendum by 53.1% on an 87.8% turnout. It was clear from the analysis of the left groups who campaigned against, that in general the rich voted for, the poor against.

Protests against the EU and its pro capitalist nature are growing as part of the anti globalisation movement. These struggles are backed by the left across Europe and are, in embryo, part of the struggle to reform or dismantle the EU. Whether Britain joins the Euro or not, the SSP should be part of these struggles. The fight against the free market and to increase workers cooperation across Europe do not depend on us being part of the Euro.

The Euro debate

Some comrades argue that we should abstain or call for an active boycott. A few also argue for a Yes vote. Many others appear worried about how a no campaign will be perceived.

The following are based on quotes from members at branch meetings. They illustrate a range of views we may have to confront when we launch a Vote No Campaign.

"The UK and EU are run by and for capitalists. The Euro is just another capitalist restructure. Workers are interested in overthrowing the whole structure not opposing a form of organisation. We should abstain."

If a firm proposes to change working conditions we do not abstain. We are being asked whether we support the Euro and the convergence rules. These will remove democracy and undermine workers rights. We do not abstain when the government attacks workers rights while trying to restructure capitalism on a national level. We oppose the Euro and the capitalist project.

"A united capitalist Europe is in the long term interest of workers. It will undermine nationalism which has been used to divide workers. In Britain a Yes Vote would deal a death blow to English nationalism. This would forge a united working class and advance the prospects for socialism."

Capital has always been a world system. Its productive methods lead to higher stages of development, concentrating capital in fewer hands. The working class has organised as a class, acting for itself, since the days of the First International. The working class has been organised across the world for over 100 years, successive developments of capitalism have merely extended its size. The political development of the working class acting in it's own interests does not rely on methods of capital organisation, rather it is continually in conflict with them. Any belief that workers should suffer pain now for future hypothetical advances in class unity is an argument which disarms the working class, for the current struggle.

"We accept your concerns about convergence criteria but European capital may not stick to these. We should vote Yes"

We should not accept the strictures of the "Stability Pact" in the hope or anticipation that the capitalist class will change its mind. The pact and monetarism in general have been designed to weaken workers rights. It's like accepting a wage cut when the factory is in profit and hoping they will realise their mistake. We do not accept defeat now the better to fight in the future.

"Europe is cool. Workers visiting Europe are going to use the Euro on their holidays and say let's join."

The convenience of a single currency is obvious, but not at the price of unemployment, tax competition between nations, attacks on workers rights and welfare, smashing East European economies, unequal trade with Africa, loss of democratic rights, increased power to capital and increased risk of inter-imperialist conflict. We are in favour of a single currency but not on a free market basis.

"Socialists in the Euro are not campaigning to come out."

Although socialists in the Euro countries are not campaigning to come out, they are opposed to the "Stability and Convergence pact" and the lack of EU democracy. They mostly campaigned against the Euro in referendums. But now have to adjust the slant of their struggle as their countries have joined.

"Most improvements in UK workers' rights e.g. the working time directive, have originated in the EU. By contrast the UK has less rights. We will be able to compare how much we get paid in Euros with other workers across Europe and this will help UK workers fight to improve their conditions."

Whilst some improvements in workers conditions have come from the EU, these have been fought for by trade unions and workers organisations, and only when won in most countries has a minimum standard been set across the EU. We are not calling to withdraw from the EU. But we don't need to join the euro to determine what workers are paid in each country or to co-ordinate workers solidarity across Europe.

Imagine a scenario where right wing Thatcherite governments came to power in several countries launching an assault on the working class without even the pretence of democracy.

"Joining the Euro is going to happen anyway, they will try again if it's defeated - why stand in the way?"

To claim the campaign for a No Vote is lost before we start is a form of defeatism we should not subscribe to. It will be harder to win the campaign now that the Euro is a reality and this is why Brown and Blair have delayed. However, this delay is a recognition of the level of distrust in the government and questions giving more power to the undemocratic institutions of a capitalist Europe.

The EU post Euro is a very frightening place. EU security powers have been increased and civil rights are under threat. This is genuinely new, not just more of the same. During the No Campaign we can explain what is happening and bolster the willingness to fight back.

European Workers are seeing the downside of the current system.The huge rise in anti Globalisation protests, especially against the European summits, indicates the opposition which exists against the EU. Through a workers campaign against the Euro we can help strengthen the anti globalisation/anti capitalist struggle internationally.

"Only the Tories will oppose the Euro and the SSP will look daft standing alongside them. We will be seen to defend the pound. It will be bad for the party, linking us with the right."

The SSP will not be sharing a platform with Tories or any other far right group fighting to "Defend the Pound". We will cooperate with trade unions and socialist organisations to build opposition to a "Europe of Capital and War". We will ask for solidarity from workers in other European countries to support our campaign.

There is a clear precedent for this. In 1974/5 socialists in Scotland built a labour movement campaign against the EEC in advance of the 1975 referendum. There were separate far right campaigns, separate nationalist No Campaigns and Labour Campaigns For the EEC. There were several packed meetings of around 1,000 people at our Vote No meetings. There was no confusion as to where we stood in relation to workers unity across Europe.

The Tories have fought the last two elections on saving the pound and lost. Everyone knows their argument and those in the workers movement reject it. Most workers have not heard our arguments but the SSP is held in sufficient respect that our supporters will realise we have a different position from the Tories. If Labour and the SNP campaign to join the Euro, advocating the transfer of power to bankers and diminishing democracy, many Labour and SNP supporters will turn to our campaign. We may win them to becoming SSP supporters, particularly if the referendum is held at the same time as the Scottish Parliament elections.

"Denmark voted against and this contributed to a growth of the right, maybe we can't vote Yes, but let's not make an issue of it."

The Danish referendum in 2000 also shows the importance of a No Campaign. For years the Social Democratic and Liberal parties had extolled the virtues of the Euro and the convergence pact, yet all workers saw was privatisation, attacks on trade unions and unemployment. The Liberals, Conservatives, most large social democratic parties and the trade union leaders demanded a Yes Vote. The far right were organizing a No Vote. Most of the Socialist Peoples Party (SF), the Red-Green Alliance and other left groups campaigned against the EU, a "trade unions against the union" campaign was set up.

Outside the far right campaign, most of the campaigning was carried out by the left. They found little difficulty in explaining the structural problems of the EU, lack of democracy, the effects on public spending and the "convergence pact"

In the event 70% of the rich voted for, 60% of the poor and workers voted against. The No vote won 53%. Around 40% of social democratic voters rejected their leaders line and voted No.

There has been a rise of the far right after the campaign, but how much worse would this have been had the left allowed the right a free hand and not launched a progressive No campaign. The EU and capitalist policies pre and post Euro are fuelling racism.

"We are being asked to choose between the two imperialist blocs, the EU and America. If we stand outside the Euro, sterling would be drawn to the dollar. We should organise an active boycott."

We reject both blocs. European imperialism is as equally reactionary as the US. We are part of the EU and must work with other left and socialist organisations to democratise or dismantle it. We have no illusions that the problems of capitalism can be solved on a national basis. Only the working class acting in solidarity internationally can solve the problems of inequality, poverty and war by taking power.

An active Boycott however, would be seen as negative and evading our responsibilities to give direction. We would have no influence over events. We would receive no coverage. How do you distinguish an active boycott from a passive stay at home ? We can present a positive campaign - Vote No to the Euro, for a workers Europe. We may even break through the media bias but not with a boycott campaign.

In a boycott campaign it is more difficult to present the arguments against capitalism.

The Campaign Against the Euro

In the '60s and '70s the left across Europe was divided over whether the EEC was reformable or not. In Britain, the Labour Party and Labour government was split over the 1975 referendum. Although party policy was against joining, the Labour government did not campaign for a No vote. The Tories campaigned for joining the EEC. In Scotland, there was a separate Labour Party Vote No campaign backed by the STUC, most Labour party members, and most of the far left. The result of the referendum was support to join the EEC.

The type of No Campaign

We can have a positive campaign, a socialist campaign, not a xenophobic campaign.

The successful Danish campaign used the slogans: Vote No to struggle for a different Europe; Vote No to create a new community; against money markets; against the undemocratic EU project; against financial hegemony and globalisation

We can build a Labour Movement campaign in Scotland along these lines. The other parties SNP, Labour and Liberals will call for a Yes Vote, however, many of their members will respond to our campaign.

We will have no difficulty in building a socialist campaign and differentiating ourselves from the Tories, "save the pound", petty nationalist campaign. The slogans could almost write themselves, to build an effective campaign we need the widest discussion and agreement in the labour movement..

Let us call a conference with the STUC, other unions and socialists from other parties to agree the key progressive slogans for a campaign which unites workers across Scotland and Britain and if possible the EU.

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