Economic nationalism on the rise in Europe

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Economic nationalism on the rise in Europe

15 August 2009

The economic tensions between Europe and the US, and within Europe
itself, are intensifying in the run-up to the G20 summit to be held
next month in Pittsburgh, Pennsylvania. Major European countries are
responding to the financial crisis with protectionist trade policies
and appeals to national chauvinism.

Every international meeting of finance ministers and heads of state
over the past two years has featured pledges from all participants to
refrain from economic nationalist measures in defense of their
respective industries and banks. The last G20 summit, held in London
at the start of April, issued such a statement, declaring the nations’
determination to fight protectionism and develop new international
regulations to oversee the financial markets.

What has taken place since the London summit, however, is a virtual
free-for-all, in which individual nations—occasionally in a block with
neighbours—have enacted nationalist measures aimed at securing the
interests of their own domestic banks and business concerns.

The figures speak for themselves. According to the World Trade
Organisation, the number of new investigations launched by national
governments against dumping and other protectionist measures rose
dramatically in both 2008 and the first half of 2009.

Trade conflicts between the US and leading European nations are
heating up. At the start of this week, a German cabinet minister
criticised a “buy American” provision adopted by the US Congress. “The
big industrial nations should set a good example and refrain from
erecting new barriers to trade,” said Karl-Theodor zu Guttenberg, the
German economics minister, who speaks for Germany’s major banks and
corporations.

Tensions are also growing over proposals to regulate the banks and
finance houses. Since the start of the financial crisis, the German
and French governments, in particular, have been waging a concerted
campaign against Anglo-American domination of the world’s financial
markets.

On Tuesday, the German vice chancellor and leader of the Social
Democratic Party (SPD), Frank-Walter Steinmeier, warned the British
government to take tougher action against the City of London and
impose stricter regulations on City traders. Steinmeier made clear
that the German government would prioritise the issue in Pittsburgh.

The French government has also intervened in the dispute. A few days
before Steinmeier’s comments, French Finance Minister Christian
Lagarde sought to deflect a scandal enveloping the French bank BNP
Paribas—which plans to pay out more than a billion euros in bonuses to
its leading employees—by blaming international banks.

Lagarde declared that BNP Paribas was forced to pay its executives
exorbitant bonuses because of the lack of international controls.
“What I find scandalous,” Lagarde told Le Monde, is that certain
foreign banks are dispensing with the G20 principles and thus gaining
a competitive advantage by, for example, offering guaranteed bonuses.”
The “certain foreign banks” to which Lagarde was referring are first
and foremost major US banks such as Goldman Sachs and JPMorgan Chase,
which have awarded huge bonuses in recent weeks. Lagarde told Le Monde
that she would raise the issue in Pittsburgh.

All of the criticism from France and Germany of the “excesses of the
Anglo-Saxon model” is aimed at creating the conditions for Paris and
Berlin to emerge as leading players in a revised global financial
order. Already in June, French President Nicolas Sakozy said that the
financial crisis had weakened the City of London and declared, “La
Défense (the financial district in Paris) intends to take over.”

For his part, the Conservative Party mayor of London, Boris Johnson,
made clear that he will resolutely defend Anglo-American financial
interests—in particular, the hedge fund industry. Johnson told a
business conference in London in July: “It’s utterly crazy that we
should allow the EU (i.e., France and Germany) to launch an attack on
the City’s alternative investment funds ... Hedge funds won’t go to
Paris or Frankfurt, they’ll go to New York or Shanghai. What is good
for London is good for the UK, and what is good for London is good for
Europe.”

The most pernicious role in this outburst of protectionism and
nationalism is being played by the Social Democratic and nominally
Communist organisations in Europe, in alliance with the trade unions.
These parties and unions, in turn, have the backing of a host of
petty-bourgeois “left” organisations.

In the US, Democratic congressmen were amongst the loudest calling for
a “Buy American” clause in the Obama administration’s economic
stimulus package agreed earlier this year, and American auto and steel
trade unions have been the most virulent advocates of new tariff
measures to prevent Chinese products from entering the US market.

In Germany, the SPD, which is part of the grand coalition government,
has just issued its own nationalist “Germany Plan” for the benefit of
German corporations and banks. Seeking to outdo its conservative
coalition partners in the run-up to national elections in September,
the SPD election platform mentions the word “Germany” no less than 146
times.

As trade conflicts sharpen between the major powers, the European
trade unions play a thoroughly treacherous role, siding with those
sections of finance capital which offer the respective national labour
bureaucracies the best chances of advancement. In the current conflict
over the future of the GM-Opel auto company, for example, the German
unions are backing the bidder who promises to cut the most jobs in
European countries other than Germany.

For their part, the British unions are supporting a rival bid which
would shed the most jobs in Germany. The British trade unions have the
full backing of the Labour Party for their chauvinist campaign.

When building unions, carrying placards demanding “British jobs for
British workers,” conducted chauvinist strikes earlier this year
against the employment of Portuguese and Italian workers, British
Prime Minister Gordon Brown defended his own advocacy of the same
slogan two years earlier.

The pattern is the same in one European country after another. In the
wake of the financial crisis, national governments are rushing to
implement protectionist policies at the behest of international banks
and multinational companies that are based in their respective
countries. The defence of the profits of the leading banks and
corporations and the fortunes of the bankers and CEOs has become the
single-minded goal of every government across the globe. Every aspect
of domestic policy is subordinated to this aim.

The inevitable consequence of the nationalism of the labour and trade
union bureaucracies is an intensified onslaught on the living
standards of the working masses in every country. At the same time,
the resurgence of protectionism inside Europe strengthens centrifugal
forces that threaten to tear the continent apart.

The reemergence of the political phenomena—trade war, colonial war and
“beggar-thy-neighbour” economic nationalism—which many thought were
peculiar to the first half of the twentieth century—is the surest sign
of the crisis and decay of the capitalist system. There is no national
solution to this crisis. The only alternative to the growing dangers
of chauvinism, war and mass poverty in Europe is the socialist
reorganisation of society through a revolutionary struggle of the
working class for the establishment of the United Socialist States of
Europe, as part of the fight for the international unity of the
working class and world socialism.

Stefan Steinberg

http://www.wsws.org/articles/2009/aug2009/pers-a15.shtml

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