The formation of the European Union as an economic bloc 


In many ways “Europe” is an abstraction when we compare it as an entity with the United States. In reality, European capital is not a homogenous bloc - not politically, not militarily and not even fully economically.

At first sight, integration of the EU 15 as an economic bloc has developed slower than globalisation worldwide. The EU has expanded its trade with the rest of the world faster than its internal trade between member states. Intra-EU trade as a share of the whole EU trade has decreased from 64.0 per cent in 1995 to 61.6 per cent in 2002 in exports. It’s a similar picture for imports. (24) However, if one looks at the direction of external EU trade it becomes clear that more than 15 per cent of the extra-EU exports and 13 per cent of extra-EU imports respectively went to, or came from, the 10 EU candidate countries which joined this year. Therefore, this extra-EU trade has to be seen in reality as part of the process of EU integration.

Having said this, it also has to be noted that EU exports to the United States have increased in the last decade although imports have declined: From a share of 21.2 per cent of extra-EU exports (1990) to 24.3 per cent (2001) while slightly decreasing its share of extra-EU imports from 20.8 per cent (1990) to 19 per cent in extra-EU imports (2001). (25) Russia and China have also gained in importance as trading partners for European capital – particularly its strongest nation, Germany.


The challenge of unifying imperialist Europe


To understand the kind of attacks the European working class will face in the coming period it is essential to grasp the challenges facing the bosses. Against a background of economic stagnation, competition between multinational firms increases massively. This leads to the need for stronger political and military ties between national governments and “their” monopolies.

The USA has been by far the most successful capitalist power - the undisputed world’s leading power. And it has succeeded in putting other imperialist states “on rations”, to use Trotsky’s phrase. The US subordinates its rivals or makes their opposition more or less irrelevant, as could be seen in their Afghanistan and Iraq wars.

However, the situation cannot remain completely static. American power seems to be unsurpassable at a military level and it is also a superpower in the world economy but Europe cannot afford to let matters rest there. As a result, Europe’s leading powers, Germany and France, are collaborating to turn the EU into an alternative superpower, one independent of the USA. Along this road, however, they are forced to make repeated compromises with Washington as well as with reluctant or oppositional states inside the EU.

The central, strategic task of the European bourgeoisie is, therefore, to take forward the formation of the EU as a strong challenger to the US empire on the world stage. For this it has to make a qualitative step forward towards a more economically competitive, politically unified and militarily independent (from the USA) entity that is capable of challenging the US empire.


Defeating the working class


The most important task for the European bourgeoisie in reaching this goal is to defeat the working class. European capital has to raise the rate of exploitation of labour substantially if it is to out compete the US giants. It has to emulate the enormous successes Reagan, Clinton and Bush Senior had in the 1980s and 1990s. This is not to deny the, often successful, neo-liberal attacks of the European bourgeoisie so far. But they fell far short of what would be necessary to catch up with the US.

So the central task of the European bourgeoisie is to lower labour costs drastically, extend the working week and working lifetime, and make workers work harder while at work. This implies several attacks. First, wage levels will have to be pegged; second, the costs of providing social welfare (i.e. unemployment benefits, pensions, health insurance) which are substantially born by employers or the state in much of Europe, will have to be ditched or the costs of maintaining them shifted onto the working class.

Since Europe is the continent with the best organised and, in this sense, most powerful working class movement, the bosses will not be able to erode wage levels and social gains without substantially weakening the organised workers’ movement, particularly the trade unions.