European Union in crisis after rejection of Constitution
28th June 2005
“Europe is not in a crisis, it is in a
The rejection of the proposed EU constitution in referenda in France and the Netherlands has thrown Europe into a crisis. It has brought to the fore the divisions that exist between member states over the future direction of the EU. At the most recent EU Summit the member states failed to agree a budget for the years 2007 to 2013. There were bitter recriminations between the various heads of Government with Chirac and Schröder demanding that Britain give up its rebate and Blair countering with a demand for farming subsidies to be slashed. Such acrimony is in contrast to the unanimity and optimism that accompanied the unveiling of the new EU Constitution only a year earlier. Its expected ratification was to herald a new advance towards Europe’s political, economic and military integration. However, the no votes in France and Holland have thrown the whole European project into question. So what was rejected in those referenda and why has it led to such a deep crisis?
The EU Constitution was portrayed in a number of ways. Those who sought to downplay its implications presented it as a “tidying up” exercise to formalise the rules of the EU and provisions of past treaties. Those more enthusiastic for integration presented it as the foundation for a future European state. These varying interpretations were largely conditioned by the domestic politics of each member state and how governments thought the Constitution could be best sold to their populations. However, to determine its real character we have to examine what’s actually in it, not what we are told is in it.
Unlike any normal constitution, the EU Constitution goes well beyond simply defining institutional structures and how they function. It also lays down the policies that the EU must follow.
The ideology that underpins the EU Constitution is unambiguously capitalist, and the policies it advocates are neo-liberal in orientation. The Constitution enshrines as a principle that: “Member states and the Union shall act in accordance with the principle of an open market economy with free competition”. Following from this article I-3-2 proposes "a single market where competition is free and undistorted"; article I-3-4 guarantees free trade; article I-4-1 calls for free circulation of commodities, services and capital; and article I-29-3 gives the European Central Bank absolute control over monetary policy. These provisions create the framework for the wholesale privatisation and dismantling of the welfare state. Any state support for public services such as health, education and social security could be viewed as a barrier to “free and undistorted” competition. Defenders of the constitution claim that its provisions on competition do not cover public services. However, it gives no special recognition to public services. The only reference is to "services of general economic interest". According to article III-166:
"Undertakings entrusted with the operation of services of general economic interest or having the character of an income-producing monopoly shall be subject to the provisions of the Constitution, in particular to the rules on competition, insofar as the application of such provisions does not obstruct the performance, in law or in fact, of the particular tasks assigned to them. The development of trade must not be affected to such an extent as would be contrary to the Union's interest."
Article III-167 goes on to specify that "any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, insofar as it affects trade between Member States, be incompatible with the internal market." The few exemptions mentioned do not include public services.
The implications such “free and undistorted” competition were highlighted by a recent European Commission draft directive on the liberalisation of services. This is the Bolkestein directive, named after its author EU Commissioner Frits Bolkestein, a former head of Shell Oil and right-wing Dutch political leader. Its main feature is "principle of origin". Services sold abroad would submit to the rules of their country of origin. This means that companies in France or Germany could hire services from Poland or Slovakia under the lower wages and looser professional standards of the "country of origin". This directive, along with the provisions in the Constitution, make it quite clear that the thrust in the EU is towards privatisation and bringing social standards down to the lowest levels.
The provisions of the Constitution also lay the basis for an expanded EU military capacity. Article I-15 states that "Member states shall support the common foreign and security policy actively and unreservedly." This common policy was to be conducted through the new office of European foreign minister. In the Constitution, military spending is the only area to be exempted from strict budget controls. The commitments it places upon member states actually point towards an increase in military spending. Article I-41, on the "common security and defence policy", calls for improvement of military capabilities, and specifies that "commitments and cooperation in this area shall be consistent with commitments under the North Atlantic Treaty Organization". These security and military provisions are also tied in with the current “war on terror”, with the Constitution emphasising the importance of combating "terrorist attacks" (Article I-43) and on states making military contributions to the "fight against terrorism" (Article III-309). The Constitution envisages an EU which is more active and aggressive on the international stage, and which has the capacity to use force to pursue its political objectives. The idea that a policy of “neutrality” can be preserved by a member state within this framework, as the Irish government would claim, is nonsense.
Although the Constitution was trumpeted as creating a more democratic basis for the EU, in reality it was a means of conferring legitimacy on the neo-liberal policies espoused within in. The Constitution is inherently undemocratic. Its provisions dilute accountability, and give more power to unelected EU officials. This was reflected in the pseudo-democratic ratification process, with most states opting to ratify it through a parliamentary process rather than through referenda. Any popular verdict on the Constitution was to be minimised. This is indicative of the undemocratic character of the EU. Rather than the popular project its advocates have claimed, the decisions driving European integration have always been taken at an elite level. The result of the various treaties over the years has been the transfer power from national parliaments to the unaccountable EU bureaucracy. This has been done to make political decisions less susceptible to public opinion. How often have governments defended unpopular policies on the basis that they have to comply with EU directives? The objective is to demoralise people and to undermine their belief that they can bring about political change, making them more likely to accept unpopular measures on the basis that they are inevitable or that nothing can be done to stop them. The EU constitution is the most blatant example of this. It is an attempt to create a framework to push a more intensive and generalised neo-liberal offensive throughout Europe. It is a means of subverting the mobilisations against neo-liberalism that have taken place on a national level. If neo-liberal policies are seen to be emanating from the EU rather than national governments then the effectives of such mobilisations will be reduced.
Another undemocratic feature of the Constitution is that it is almost impossible to change. Once the Constitution was in place it would have been there permanently. It was to stand for “an unlimited period" and could be amended (Article IV-443) only by an extremely tortuous process requiring unanimity of all Member States. The endorsement of the Constitution would have strengthened neo-liberal policies by conferring a on them a democratic veneer. It would also have been used as means to attack any opposition to these policies. Governments would have claimed that they had to comply with the Constitution, and that any opposition was defying the democratic will of the people of Europe.
The nature of the “no”
The EU Constitution was killed off by the no votes in the referenda in France and the Netherlands at the end of May. These polls returned clear-cut rejections of the Constitution with 55 per cent of French and 62 per cent of Dutch voters saying no. Just as significant as the results was the nature of the campaigns that preceded them. In both cases the main thrust of the No campaign was opposition to neo-liberalism. The campaign was successful because it linked people’s anxiety over the consequences of neo-liberal polices, which are being pursued by their governments, to the EU Constitution. It was presented as the embodiment of these policies, and voting against it as a way of demonstrating opposition to them. The debate in the referenda campaigns focused on the extent to which the Constitution was a threat to social gains such as pensions, public services, and employment rights that had been won in the past. The Yes campaigns were forced on the defensive, even claiming that the Constitution had nothing to do with privatisations and would actually protect public services. The debate over the Constitution was defined by the left. Sections of the liberal media have tried to portray the no vote as reactionary and racist. And while there was certainly an element of this in the no vote it wasn’t its defining character. People didn’t vote no because of fear of Polish plumbers or hatred of Turks. In France a poll found that the issue that counted most for voters — 41 percent of all voters, 55 percent of no voters—was the social situation. The possible entry of Turkey into the European Union (EU) came only fifth — counting 14 percent of all voters and 20 percent of no voters. Politically the decisive force in the no votes came from within the mainstream reformist left. In France the rank and file of the Socialist and Green parties and of the CGT trade union federation rebelled against their leaderships and voted against the constitution.
The no votes were also class votes. The division between the no and yes camps was along class lines. In France, three-quarters of blue-collar and two-thirds of white-collar workers, as well as the majority of small farmers and rural workers, voted “no.” While most company executives voted “Yes”, 81 per cent of manual workers, 60 percent of white-collar workers and 79 percent of the unemployed voted “no”. In Holland, lower income voters were more likely to vote “no”. Amongst the highest earners the “no” had a narrow majority, while two-thirds of average and below average income voters voted “no”. The “no” votes were largely working-class in composition and left-wing in political orientation. This poses a huge challenge to Europe’s rulers.
Future of the European project
The rejection of the Constitution has called the whole European project into question. The process of building a European state has been brought to a grinding halt. It is particularly shocking to the rulers of France and Germany who see their interests being bound up with the creation of a powerful European state that can challenge the power of the United States, and advance its own particular interests. This view was expressed most clearly during the French referendum campaign by the leading right wing political François Bayrou. When asked in an interview to give reasons for voting “yes,” he answered: “We need a united and strong Europe against the US, China and developing powers. Look at the enormous pressure from China. Look at American supremacy. Without Europe, without a constitution, we find ourselves in a position of submission.” The rejection of the Constitution and the deepening divisions among its members reduce the ambition for the EU to develop as an imperialist rival to the US to ashes.
Doubts over the viability of the EU project had already come to the fore over the Iraq war, when its members failed to agree a common position. It split into two camps with Britain leading a group of states that supported the war and France and Germany leading another group that opposed it. Most of the recent EU member states were in the pro-US, pro-war camp, and this gave rise to the concept, first propagated by US Defence Secretary Donald Rumsfeld, of a division between “old” and “new” Europe. So instead of EU eastward expansion increasing the weight of Europe against the US, it has strengthened American influence within Europe. The weak and unstable regimes that emerged from the collapse of the Eastern Bloc look to the US for military and political protection. Although economically dependent upon the EU, as soon as tensions arise they side with the US politically.
The rejection of the Constitution and the failure to agree a budget has highlighted the divisions within the EU once again. Despite the process of European integration being in development for nearly fifty years, it has still not achieved unity between the member states. National antagonisms and rivalries continue to exist. It is these rivalries within Europe and between Europe and the US that drive the neo-liberal agenda. In order to compete more effectively with their rivals the rulers of each state must carry out new attacks on the working class. European governments may not agree on the future of the EU but they are unanimous in their support for the neo-liberal agenda, and have been pursuing it at a national and international level. Despite the Constitution set back, the pressure of the world market compels them to press ahead with the policies it set out. When Britain takes over the EU presidency on July 1, there will undoubtedly be fierce battles, with Tony Blair continuing to insist on “economic reform”. This was emphasised by Britain’s EU Commissioner Peter Mandelson, who said that the EU now faced the stark choice of “painful reforms, or economic decline”. The problem is that they don’t have the legitimacy that ratification of the Constitution would have conferred upon these “reforms”. The affect of the rejection is to weaken the hand of the Governments, particularly in France and Holland, and also strengthen the hostility of the European population to their demands for austerity.
The rejection of the EU Constitution is a blow to Europe’s rulers. It has demonstrated that their project for European integration and economic liberalisation has very little public support. However, the rejection of the Constitution doesn’t mean that the neo-liberal offensive will come to a halt. The nature of the world market compels the European capitalist class to carry on with this agenda. In the wake of the Constitution rejection the environment for doing that is more difficult. There are ongoing struggles against neo-liberalism on a national basis, and the general hostility of people in Europe towards it has been heightened by the no votes in France and the Netherlands. This is likely to lead to greater class polarisation and confrontation.
The referenda campaigns have shown that the left can tap into this sentiment and give a political lead to millions of people. To carry that momentum forward the left needs to unite across Europe and present a credible alternative to the discredited policies that are on offer. This requires the creation of a Europe wide working class movement with socialism as it objective. It is only a socialist basis that Europe can be united.