The truth about the EU

#LEXIT: the Left Leave Campaign chair ROBERT GRIFFITHS explains why socialists, trade unionists and democrats should oppose the European Union.

It’s a big business club

The EU and its forerunners (the European Coal and Steel Community and the European Economic Community) were designed to rebuild the big capitalist corporations in Western Europe after World War Two, behind a tariff wall and with no internal barriers to trade and takeovers.

The Treaty on the Functioning of the European Union (TFEU) insists upon a single internal market with the ‘free movement of goods, persons, services and capital’ (Article 26) — the cornerstone of the original Treaty of Rome (1957) establishing the EEC. Thus business corporations can freely move capital and labour around Europe in order to maximise profit.

The TFEU also declares that ‘all restrictions on the movement of capital between Member States and between Member States and third countries shall be prohibited’ (Article 63). The EU leads the drive in the World Trade Organisation to open up other countries to penetration by European monopoly capital.

Within Europe, EU directives have promoted the fragmentation, ‘marketisation’ and ‘liberalisation’ of nationalised utilities and public services, preparing the ground for privatisation of electricity, the railways and postal services. EU-funded bailouts have demanded sweeping privatisations as a condition of loans to member states in debt to German, French and British banks.

Big business corporations relentlessly lobby the EU Commission and EU Parliament, shaping EU policy on many issues through the European Round Table of Industrialists and the European Financial Services Round Table.

It’s anti-working class

The mirage of a ‘Social Europe’ to blunt labour movement opposition to the ‘Single European Market’ has vanished. Since 1992, most EU social programmes have been cut or directed towards eastern Europe.

The ‘Troika’ (EU Commission, European Central Bank, IMF) austerity programmes have imposed mass unemployment, higher taxes, wholesale privatisation and huge cuts in pensions and benefits on the peoples of Greece, Cyprus, Portugal and Ireland — in return for ‘bailout’ funds to pay German, British and French banks and to replay the Troika loans. Other EU austerity programmes have inflicted similar measures on workers and their families in Spain and Italy.

Employers have used the ‘free movement of labour’ to undermine terms and conditions won by trade unions. Even the limited protection for super-exploited migrant labour in the EU Posting of Workers Directive has been undermined by a series of European Court of Justice (ECJ) rulings. These have outlawed trade union action to enforce or achieve fairer treatment of imported (‘posted’) workers by foreign employers (the Viking and Laval cases) and government action to enforce regional procurement or national employment law in similar circumstances (the Ruffert and Luxembourg cases).

Many EU measures such as the Working Time Directive and the Parental Leave Directive are shot through with loopholes, falling short of provisions won by struggle and progressive governments in many EU member states. Employment rights no longer expand as the EU drives up the state pension age across Europe.

Experience of the EU — often in league with reactionary national governments — has driven large sections of the labour and left-wing movement across Europe towards a much more critical attitude to the eurozone and the EU generally.

It’s anti-democratic

Besides the Council of Ministers, the most powerful bodies in the EU are the European Commission, the European Central Bank (ECB) and the ECJ.

The appointed Commission drafts and polices EU legislation, including powers to sanction elected member state governments. It shares some powers with the ECB, which also controls central banks and interest rates throughout the eurozone and must remain free from any supervision or accountability under Article 130 of the TFEU.

The TFEU gives the Commission bureacracy extensive rights and powers, whereas the European Parliament must be the most powerless parliament in Europe. For example:

  • ‘Union [EU] legislative acts may only be adopted on the basis of a Commission proposal, except where the Treaties provide otherwise’ — which is almost nowhere (Article 17.2).
  • When the European Parliament ‘requests’ (!) a legislative proposal from the Commission, the Commission can refuse to make one (Article 225).
  • The Commission has extensive rights (Section 2) to participate and intervene in the legislative process that would be unthinkable in any EU member state, including Britain.
  • The Commission can speak in the EU Parliament on demand (Article 230). Again, who would tolerate a situation where civil servants can speak in the Westminster, Scottish or Welsh legislatures whenever they wish to do so?
  • The Commission can even deny the EU Parliament permission (Article 226) to establish its own parliamentary committee of inquiry!

The EU Parliament is elected on a scale so large (one MEP for every 500,000 electors) as to make it meaningless. Fewer than half the electorate bothers to vote (43 per cent in 2014 and only 34 per cent in Britain).

Unlike other parliaments, the EU Parliament cannot initiate legislation, all of which comes from the Council of Ministers, although it is drafted and mostly initiated by the Commission. Amendments must then be agreed by the Council (usually on the Commission’s recommendation).

Nor can the EU Parliament sack Commissioners except all at once (the ‘nuclear’ option). Only the Commission president, elected by the EU Parliament, can sack individual Commissioners.

Then there are the extensive powers of the High Representative for Foreign Affairs and Security Policy and the unaccountable ECB, ECJ, etc. — all set in concrete in treaties that can only be changed with the unanimous agreement of all member states (28 so far). This is the negation of parliamentary sovereignty and democracy.

The fundamentally anti-democratic character of the EU has also been demonstrated by its refusal to accept the result of national referendums that have gone against proposed new treaties: those in Denmark (1992 Maastricht) and Ireland (2001 Nice and 2008 Lisbon) were run again in order to secure a pro-EU result. After France and Netherlands (2005) voted against a European Constitution, referendums in Britain and other member states were cancelled; the proposals were transferred into the Lisbon Treaty. After Ireland voted against it (2008) in the only referendum to be held, the Irish people were bribed and bullied into reversing their decision.

When elected governments in Italy and Greece defied EU demands for even more austerity and privatisation in 2010, they resigned under pressure in favour of unelected caretaker regimes led by a former EU Commissioner and an ex-Vice President of the ECB, respectively.

It’s anti-socialist

EU free market rules prohibit national governments from planning economic development through regulating the movement of capital, goods, services and labour, across and even within the country’s boundaries.

Planned economies are, in effect, outlawed by Article 3 (for a ‘highly competitive market economy’) of the Treaty on European Union and by TFEU Articles 119, 120 and 127 which repeatedly demand that all EU member states operate ‘an open market economy with free competition’.

The EU Stability and Growth Pact sets limits on public sector financial deficits (3 per cent of GDP) and accumulated national debt (60 per cent of GDP) and commits member state governments to achieve balanced or surplus budgets.

Each member state government must submit an annual Convergence Progarmme setting out how it is implementing its deficit reduction strategy, which must not include financing current or capital spending from ‘excessive’ borrowing. Using the state bank to buy public sector bonds (people’s ‘Quantitative Easing’) is expressly prohibited by Article 123 of the TFEU.

State aid or any kind of preferential treatment to protect or promote specific companies or strategic industries — whether in the private or public sector — is banned as a distortion of competition under TFEU Article 107. The EU Commission may grant very limited or temporary exceptions.

EU directives have enshrined Value Added Tax as the EU’s ‘tax of choice’. Such indirect taxation favours the rich because everyone pays the same rate, whereas taxes on income or wealth can be levied at differential rates according to people’s ability to pay.

VAT must be imposed in all member states at a minimum of 15 per cent on most goods and services (in Britain it is currently 20 per cent), or at a minimum of 5 per cent on specified essential items not already zero-rated.

The British government has pleases with the EU Commission for permission to abolish VAT on women’s sanitary products. In June 2015, the ECJ ruled that Britain must increase its 5 per cent rate of VAT on the supply and installation of home insulation, solar panels and heating controls.

Only outside the EU would a British government be free to reduce or abolish VAT, not least as part of strategy to combat poverty and inequality.

It’s imperialist

The EU promotes the common interests of Western Europe’s capitalist monopolies. This has included trade agreements with existing and former colonies to import cheap goods into the EU, while maintaining tariffs against rivals from North America and the Far East.

As the monopolies inside ‘Fortress Europe’ have grown stronger, the EU seeks to break down protectionist barriers to their full exploitation of commercial markets (in the US and Canada) and labour and raw materials (India, Malaysia, Ukraine, Peru, Colombia). The EU Commission will soon take over all trade and investment negotiations on behalf of all member states.

As the EU develops its military dimension and merges into NATO’s structures and strategies under US domination, in line with Article 42 and Protocols 10 and 11 of the Treaty on the European Union , so it more openly pursues the common objectives of Western imperialism — particularly in relation to Russia and the former Soviet Union, the Middle East, China and Africa.

This includes the eastward expansion of the EU in tandem with NATO and greater involvement in military intervention of every kind.

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