On Thursday, 23 June, a referendum will be held to decide whether Britain should leave or remain in the European Union. When Jacques Delors, then EU Commission President, announced his vision of a social dimension for European integration in the late 1980s, in the UK he won large parts of the British trade unions over into a pro-EU position. Against the background of neo-liberal restructuring by consecutive Conservative governments, social regulation at the European level offered advances, which would have been impossible in a purely domestic context. Is this situation still the case today?
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In this post, I will first assess the current state of affairs for social policies in the EU. Then I will focus on the dangers of nationalism and xenophobic reactions to migration, implied in a no-vote, before concluding in the third section that the focus of the debate should be redirected on what kind of EU we want, rather than the issue of further or less integration.
Corporate, not Social Europe
Hopes for a Social Europe were high in the 1990s. Following the Treaty of Maastricht, multi-sector social dialogue has made it possible that the European Trade Union Confederation (ETUC) on the one hand, and Business Europe, the European employers’ association on the other, directly negotiate work related issues, which are then transferred into binding EU law via directives passed by the Council of Ministers without further discussions. First directives have been passed along this road. Collective negotiations on the directive on parental leave, for example, were concluded in November 1995 and accepted by the Council in June 1996 (Falkner, 1998: 99-155). At the Amsterdam summit in 1997 an employment chapter was added to the EU, bringing employment into economic policy discussions at the European level.
Overall, however, while these developments are not unimportant, they should not be overestimated either. The fact that there is an EU social policy is not significant in itself. The real question is in relation to the actual contents of a common social policy. The collectively negotiated directives constitute only framework agreements with an emphasis on minimum standards. In contrast to the UK and several Southern European members, for Germany, France and Scandinavian EU members they have had no practical impact. The employment guidelines by the European Council must be compatible with the broad economic guidelines of Economic and Monetary Union (EMU). A focus on price stability is the dominating goal in the monetary, economic and social policy-mix. Employment policies within the individual EU members have consequently had to focus on supply-side measures such as improved vocational training. More employment is mainly to be created via restructuring through the deregulation and liberalisation of goods and services as well as capital and labour markets, not through government spending on infrastructure projects, for example. Hence, the full employment policy as envisaged by the Lisbon strategy, including its revisions in 2005, is in full accordance with neo-liberal restructuring and has not changed the overall dominant focus on competitiveness (Hager 2009).
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In general, it can be concluded that it was neo-liberalism and a focus on the free market, which has dominated European integration since the mid-1980s including developments in the social policy area. The Internal Market established the so-called four freedoms, the free movement of goods, capital, services and labour on the understanding that free competition will increase efficencies, lead to higher profit levels and ultimately result in more jobs and wealth for everyone. Economic and Monetary Union, in turn, enshrined the principles of price stability, low inflation and balanced budgets for members of the Eurozone, but indirectly also for the EU as a whole. And neo-liberalism does not only characterise EU internal dynamics. In its outward policies too, the EU has pushed restructuring. This includes the eastward enlargements in 2004 and 2007, when Central and Eastern European countries had to adopt neo-liberal policies as a precondition for being allowed to join the EU, as well as the EU’s free trade policy agenda Global Europe, initiated in 2006, putting pressure on partner countries in the Global South to open up their markets to European goods, services and capital (Bieler2012: 201-6).
Who would have thought that the Eurozone crisis results in a change in neo-liberal economic policy was soon to be disappointed. On the contrary, neo-liberal restructuring was asserted in the imposition of austerity policies. This was carried out most directly vis-à-vis peripheral EU members struggling with the sovereign debt crisis. In exchange for bailout programmes imposed by the Troika of Commission, European Central Bank and IMF, Greece, Portugal and Ireland had to implement drastic restructuring measures including (1) cuts in funding of essential public services; (2) cuts in public sector employment; (3) push towards privatisation of state assets; and (4) undermining of industrial relations and trade union rights through enforced cuts in minimum wages and a further liberalisation of labour markets.
Nevertheless, austerity has not only been imposed on countries struggling with sovereign debt. At the EU level, the bailout packages were backed up with a new set of regulations around the so-called ‘six pack’ on economic governance applicable to all member states. ‘According to these six new EU laws that came into force after their publication in the EU’s Official Journal on 23 November 2011, Eurozone countries that do not comply with the revised EU Stability and Growth Pact or find themselves in a so-called macroeconomic excessive imbalance position, can be sanctioned by a yearly fine equalling 0.2 per cent or 0.1 per cent of GDP respectively’ (Erne2012: 228).
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These mechanisms have been further enhanced by the ‘Fiscal Compact’, which came into force on 1 January 2013. It includes the so-called ‘balanced budget rule’, requiring the national budgets of participating member states to be in balance or in surplus (European Council 2012). If the balanced budget rule is breached then an ‘automatic correction mechanism’ should be initiated to bring the ‘deviations’ in line over a fixed period. It is to be implemented through legislative means, preferably through constitutional amendments (EuroMemo Group 2013: 19). This is all based on recourse to the European Court of Justice if such structural constraints are not observed with its rulings legally binding.
As a result, from a labour point of view, today’s EU offers very little. While the promises of the social dimension seemed to yield results in the 1990s, by now it has become clear that neo-liberal economics rules supreme. In fact, the current financial crisis has been (ab-) used by capital to enforce welfare state cuts and undermine trade union rights. Austerity is clearly a class project of European capital to change the balance of power in its favour. The current fate of Greece at the hands of the Troika is the most visible example of what happens to those, who attempt to resist this line. In short, as the EU presents itself at this point in time, there is nothing on offer for working people in the EU. Today’s EU is a Europe for business. It is corporate Europe.
Should one, therefore, advocate a No in the forthcoming referendum from a labour perspective?
Brexit and the dangers of nationalism
One argument in favour of Brexit by some on the British left is the criticism of the EU’s undemocratic structures. Leaving the EU would imply regaining political control over decision-making within the national context. Nevertheless, while the EU governance structures include many non-democratic processes around the Commission and the Council of Ministers as well as the European Central Bank parallel to the direct elections of the European Parliament and its role in decision-making, it is highly questionable whether British structures of representative democracy and the election of governments every five years actually allow for more direct popular participation in decision-making. Ultimately, the specific institutional set-up of representative democracy be it at the national British level, be it combined at the British plus EU level is secondary to the question of balance of power in society between capital and labour. Brexit in itself will not strengthen labour vis-à-vis increasingly transnational capital and its vast resources of structural power.
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There was a strong believe amongst the British left in the early 1980s that the UK outside the EU would find it easier to move towards stronger social, if not socialist policies. Reflecting on developments in the UK and on the role of the UK in the EU since, this has not really been the case. First, many neo-liberal policies such as privatisation and financial market deregulation were actually pioneered in the UK and then exported to the rest of the EU. The UK was also first in Europe in its attack on trade unions undermining labour rights during the 1980s. Moreover, while the UK has never joined EMU and the Eurozone, austerity has been implemented since 2010 just as much severely as elsewhere in Europe. Left positions in favour of withdrawal from the EU are not credible as a viable alternative in my view. It would be incorrect to view the EU as something, which imposes austerity policies from the outside onto Britain. Austerity within the EU is pushed by transnational capital, which equally pushes it within the context of Britain. The struggles over the internalisation of capital’s neo-liberal interests within the EU and Britain are the same. These dimensions mutually support each other and should not be viewed in contradiction. As Hugo Radice had already convincingly argued in 1984, ‘the capitalist world economy is now so thoroughly integrated across national boundaries that an autonomous national capitalist strategy is no longer possible; … neither in the capitalist class, nor in the national state, can the left find partners for an alliance powerful enough to mount a reformist economic programme on a national basis’ (Radice 1984/2015: 20-1). Today, this is even more correct than it had been during the 1980s. ‘Progressive nationalism’ is not an option.
In a climate of increasing austerity and social inequality right-wing parties across the EU have gained in strength. The rise of UKIP in the UK is not an exception in this respect. It would be dangerous for British trade unions in this situation to pursue a nationalist strategy with slogans like ‘British jobs for British workers’. There is clearly the danger of nationalism in a No to the EU campaign, which can quickly turn into an anti-immigration, xenophobic course. Especially in times of crisis, people under pressure with their livelihoods threatened can be won over by discourses against immigrants, who are alleged to steal jobs of British workers and to ‘abuse’ the ‘generous’ British welfare system. Especially UKIP has linked anti-EU arguments to immigration and is likely to emphasise this in its No campaign. Moreover, it is often employers’ strategy to divide the working class in times of crisis and anti-immigrant arguments, pushed by the business and government friendly Murdoch press, are precisely doing this. If there is increasing inequality and more and more people are being pushed into poverty in the UK, then it is not the result of immigrants or ‘benefit scroungers’, but the way the economy has been organised. The bailout of banks at great public expense during the financial crisis is now being financed through welfare cuts.
Clearly, with progressive nationalism not an option and considering the dangers of a xenophobic surge, advocating a No in the referendum is not a progressive course forward for the British labour movement. What should then be the labour movement’s position on the referendum?
Forget the referendum?
A pro-EU position is in danger of ending up on the same side as British capital, which through David Cameron has attempted to use re-negotiation of membership as a way of further undermining workers’ rights. On the other hand, opposing EU membership is in danger of being dragged down into a xenophobic and nationalist campaign together with UKIP and related elements. Perhaps instead of making any recommendation for the referendum, trade unions should use the discussions to focus on worker friendly policies? The question over more or less integration has always drowned out debate in the UK over what kind of integration, what kind of policies we would like to see in Europe. Perhaps this is now the moment to turn towards demanding concrete social, worker friendly policies be it at the national or European level?
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In relation to immigration, the Norwegian construction workers’ union has put forward a strong policy of solidarity expressed in the slogan ‘we are a union for workers in Norway, not only for Norwegian workers’ (Kjeldstadli2015). Rather than engaging with the treacherous ground of immigration policy, this union focused on its core objective to avoid that workers, whatever their nationality, underbid each other in their search for employment. This could be a first progressive policy pushed by labour at the national as well as across the European level.
Moreover, from a labour perspective, trade union rights including the right to strike are absolutely essential. Perhaps the demand should be that trade union rights are strengthened at both national and European level? This demand should be easily supportable by all European trade unions. A strengthening of the welfare state and public services and the struggle against further privatisation and austerity cuts should also be put forward. Membership or not has in itself no direct impact on these issues. Public services are under attack from national policies as well as European-level developments.
In concrete terms, the focus should perhaps be put on resisting restructuring at home and within the EU. In the UK, the attack on the NHS is one of the most pressing concerns. At the European level, the negotiations of the Transatlantic Trade and Investment Partnership (TTIP) and its infamous investor-state dispute settlement mechanism are currently the most important attempt by capital to push neo-liberal restructuring yet further. Unsurprisingly, the outcome of the struggle over TTIP has direct consequences for the possibility of defending the NHS against privatisation, considering that TTIP includes negotiations of trade in services and investment protection. In other words, as already indicated above, the fight against austerity knows no borders, but needs to be waged at multiple levels. The issue of EU membership or not is of secondary importance.
In short, the labour perspective has to be informed by an internationalist perspective for the fight against exploitation and is unrelated to narrow geographical considerations. Trade unions, in my view, should not let themselves be dragged down into narrow arguments over EU membership or Brexit. Let the Conservative party and capital rip itself apart over the referendum, the labour perspective has to go beyond it!
Professor of Political Economy
Professor of Political Economy
University of Nottingham/UK
24 May 2016