International Committee of the Fourth International
Fourth International Vol. 15 No. 3-4 (July-December 1988)

The European Internal Market and the Working Class

This article was translated from the July 1, 1988 issue of Neue Arbeiterpresse, newspaper of the Bund Sozialistischer Arbeiter, the German section of the ICFI and predecessor of the Sozialistische Gleichheitspartei.

The plan to create a unified European internal market is bound up with the sharpest attacks on jobs, working conditions and social benefits since World War II.

At their latest summit in Hannover, the European heads of state reasserted their intent to do the following by 1992: abolish border controls between the 12 member countries of the European Community, ease the circulation of capital, equalize tax and social regulations, and move toward a uniform currency.

Thus, the largest internal market in the Western world, with a population of 320 million people, is to be created, and European capitalism will be positioned to confront its two most important rivals on the world market, the US and Japan.

But far from solving the persistent crisis of the European economy (unemployment is officially put at over 16 million) or reviving its trade and production, the measures to establish a European internal market will merely exacerbate and bring on the sharpest class conflicts.

There was nothing fortuitous about Chancellor Kohl’s urgent plea to his fellow officials to strengthen collaboration among the national police departments as a precondition for the gradual abolition of border controls. Through a reinforcement of the police apparatus, a “Europe of citizens,” he said, would be created. If Kohl had been able to express himself in French and been a bit more truthful, he would have spoken of a “Europe of the bourgeoisie.”

Sparked by the prospect of being able to freely move their capital and products about without burdensome formalities and tariff duties, the largest European corporations have set a prodigious wave of mergers into motion. In 1987, 915 corporations in all, representing a total value of 500 billion marks, underwent changes in ownership. In February of this year alone, the number of company takeovers amounted to 104.

The aim of these mergers, which have been supplemented by a host of agreements involving joint cooperation, is to create international firms capable of dominating the markets. These corporations are seeking to make their position on the world market more secure by extensive rationalization and the switching of production to plants with the cheapest prevailing labor costs. This will mean discharging hundreds of thousands of workers, lowering production costs, and driving competitors from the field.

A typical example of such a merger—by no means the only one—is the fusion of the two electro giants, ASEA and BBC, with the consequent destruction of some 10,000 jobs, 4,000 of them in the West German Federal Republic. The Philips Corporation, which took over Grundig, is planning to close 60 of its 180 plants in Western Europe, a loss of 20,000 jobs.

The model for this new kind of organization of production, i.e., the merging of corporations within the European Community, is the steel industry. In 1974, there were 792,000 steel workers employed in the nine member nations of the European Community, while today there are but 400,000 in the twelve member nations of the community, and the numbers continue to dwindle.

In auto and other branches of the metal industry, plans have been hatched for the elimination of jobs on a similar magnitude. In the area of Stuttgart alone, 30,000 jobs will be at risk in vehicle production, machine construction and electrotechnology by the end of the nineties.

Besides lowering costs by mass layoffs, the European corporations anticipate that a unified internal market will enable them to drastically reduce social services and drive down working conditions. That is the meaning of the demand for a European-wide equalization of social legislation.

Once they are in a position to take advantage of the reserve army of more than 16 million unemployed to shift production effortlessly to those countries with the worst wages and working conditions, then the employers hope they will be able to force the working class to surrender its hard-won gains and rights.

Under the slogan of defending the “workshop of the Federal Republic,” the attack on union-won benefits is already being sounded—not only by the employers and their stooges in the government, but by the leading Social Democrats as well.

In the June 23 issue of Welt der Arbeit, the newspaper of the DGB (the principal German trade union federation), the influential Social Democratic (SPD) parliamentary whip from the state of North Rhine Westphalia, Friedhelm Farthmann, made a public plea for flexibility. He wrote:

“Under the cue word ‘flexibility,’ voices from many quarters have raised the demand in recent times for a relaxation of regulations covering the ceiling on hours of work. The aim of these efforts is a greater utilization of plant facilities. At the risk of stretching a point, the issue here is the operation of the machines not just for eight hours, but for 24 hours, seven days a week.

“Such discussion is combined with ever louder complaints concerning the ‘workshop of the Federal Republic.’ Indeed, there can be no doubt that when the internal market is ready for use in the Common Market by 1992, we will be facing a new challenge.

“Given a unified Europe it is naturally worthwhile to have our progressive social and environmental policies adopted by all the other European Community countries. Realistically, however, it must be conceded that there will have to be a passage of time before our goal can be realized. Hence, to forestall anything worse developing during this period and with an eye to flexibility, I advise examining the areas where concessions on working hours might be a possibility. This is a sector, in my opinion, where we have the best chance of making a noticeable contribution to cost reduction in the plants without surrendering the underpinnings of our social advances. In the judgment of employers, many factories have become so costly to run that they can become profitable only by operating them on the basis of a longer work week.” (Emphasis added.)

For the coming party convention in Munster, the SPD leadership this week adopted Oskar Lafontaine’s demand for a shorter work week, without compensation for hours lost, as its main economic-political proposal. Meanwhile, Farthmann (Johannes Rau’s expert on trade union matters) has openly attacked this demand, which Lafontaine says is an attack on a fundamental trade union principle.

This sharp turn to the right by the SPD heads is not unexpected. Since 1914, whenever German imperialism has wound up in a blind alley, the SPD has always defended the interests of imperialism against the working class.

From the standpoint of German imperialism, the efforts to create a European internal market are nothing more than an attempt to reorganize European capitalism under German domination.

Earlier plans to establish a unified European market or a capitalist United States of Europe on a peaceful basis had always miscarried, owing to rivalries between the capitalist classes of the individual countries: the bourgeoisie of the weaker nations would have had to submit to the dictates of the more powerful ones. German imperialism, therefore, had endeavored to impose the reorganization of Europe through two world wars.

If, nonetheless, the European governments are now taking steps in the direction of European unity, the reason lies in the extreme intensification of the struggle for international markets, in which Europe, if it remains fragmented into 12 states with differing monetary, economic and tax systems, will be hopelessly outmatched by its two chief rivals, the US and Japan.

If in the years after World War II, the economic and political superiority of the US provided the basis for relative stability in world markets and made an economic boom possible in war-ravaged Europe, then the decline and crisis of the US economy since the end of the sixties once again lay bare all the historical contradictions of imperialism.

That is why a considerable number of representatives of the European bourgeoisie are today speaking of the necessity for unity, even if it means accepting the dominance of German capitalism with its economic preponderance. The Federal Republic produces 27% of the European Community’s gross social product and accounts for 40% of its internal trade.

Today, these questions are being openly discussed in leading political circles. Thus at a conference of the Institute for European Policies held in November 1987, under the theme of “The German Federal Republic and the European Community—Continuity and Change,” a certain W. Wallace summarized the conference results as follows:

“Germany is once again the focal point of Europe.... We all understand the historical trauma of the Second World War and the period of the Third Reich. However, we immediately acknowledge that those who have now attained the central positions in Germany are not responsible for that period. The present generation has grown up under the democratic reconstruction in Germany following the war. It has no reason to make this trauma a cause for not assuming an international leadership role” (Integration, a Supplement to Europaeische Zeitung, vol. 11, December 1988).

In any case, a unified Europe under capitalist hegemony remains a utopia. Capitalist private property is inseparably connected to the nation-state, and the bourgeoisie is not in a position to free itself from its soil. Smoldering beneath the demonstrative show of unity at this summit in Hannover were profound conflicts, above all, those between the German and French governments on the one side, and the British on the other.

In reply to the economic and currency union called for by Federal Chancellor Kohl, including a European central banking system and a European currency as the premise for a really functioning internal market, Prime Minister Thatcher abruptly stated that such an institution was out of the question, since no sovereign European government with any common economic policy existed. The conflict was finally smoothed over by the creation of a commission to examine the question.

Besides the already mentioned attacks on the working class, the establishment of a European internal market means the ruin of millions of poor small peasants, who still form a large part of the population, especially in the nations of Southern Europe.

The only answer to the crisis of the European capitalist economy and, connected with it, mass unemployment and attacks on social rights, is a workers’ Europe: the Socialist United States of Europe.

Only when production is separated from the profit interests of the corporations and banks and is rationally planned in accordance with existing needs, i.e., only when the corporations and banks are nationalized without compensation and planned socialist production under workers’ control is established, can the productive forces in Europe be systematically utilized in the interests of the workers, mass unemployment eliminated and the living standards of all workers and poor peasants improved.

The Socialist United States of Europe cannot be created by the institutions of bourgeois democracy—parliament and bourgeois governments—but only through the unification and mobilization of the European working class on the basis of a socialist program to overthrow capitalism.

This program begins with the unconditional defense of every job, independently of whether the capitalists make or do not make profits, and with the unconditional defense of all social gains. It is diametrically opposed to the program of the SPD, which is calling on the working class to sacrifice for the sake of the unity of the European corporations.

The reactionary plans connected with the European internal market can in no way be fought by defending “national independence.” Such a nationalist course would in reality mobilize the most reactionary, even fascist, forces. The program of national autarchy was the economic program of Hitler.

The capitalist economic crisis and the reaction to it of the European bourgeoisie create not only the necessity but also the premises for the unity of the European working class. Because the latter faces international corporations, which carry on operations all over Europe, it is actually forced to organize struggles across borders.

It was the fear that the working class might carry out such a struggle that moved Chancellor Kohl to receive the West German trade union federation DGB President Ernst Breit, who also holds the same office in the European Trade Union Federation, the ETUF, prior to the Hannover summit. Breit warned Kohl of the emergence of grave social conflicts in Europe should those who create the internal market be oblivious to the social forces gathering on the periphery.

Subsequently, the Federal government let it be known that in its view, the establishment of the internal market was excluded unless all the social groups—in the first instance, the trade unions—were won over in support of the plan.

This is an open admission that the Federal government needs the collaboration of the union bureaucracy, on whose loyal support the state has depended to carry out its reactionary plans for the massive destruction of jobs in the steel industry.

As early as February, the ETUF submitted a “European Social Program,” which centered on the extension of codetermination to the European corporations, in keeping with the German model. In other words, the union bureaucrats are prepared to join in carrying out the attacks on the working class bound up with the internal market, provided they can be assured of their little corporatist posts on the boards of directors and codetermination committees.

Thus the struggle against the attacks of the European corporations on the working class and for the Socialist United States of Europe requires above all one thing: the construction of a new leadership in the working class, which is the League of Socialist Workers, the German section of the International Committee of the Fourth International.