From “energy island” to the insularization of the European bourgeoisies

26 March, 2022

Sánchez and Costa at this weekend's European summit which recognized Spain and Portugal as an "energy island"
Sánchez and Costa at this weekend's European summit which recognized Spain and Portugal as an "energy island"

The European summit and its declaration of Spain and Portugal as an “energy island”, clearly expresses the kind of contradictions stirred up among the imperialist interests of its members by the development of the EU. Contradictions that are fueled both by the growing role of Brussels in the booming war economy, and by the ever greater and more explicit weight of the U.S. in defining its policies. For the bourgeoisies of the European South, a stage of vindication of their “exceptionalities” and the hope of an insularization which will multiply rather than palliate their attack on the basic conditions of the workers is opening up.

Table of Contents

The European “success” of Sánchez and Costa

Scholz, Draghi, Costa, Sánchez and Michel during the European Council meeting that approved sanctions against Russia.

The cost of energy already exceeds 50% of total costs in many Spanish industries and the work stoppage of small truck owners further aggravates the difficulties of companies. Aware that a new wave of revolts by the petty bourgeoisie of the primary sector and transport may shake again the whole political and social apparatus of Spanish state capitalism, the whole strategy of the government has consisted in excluding from the negotiating tables the networks of angry truckers while Sánchez started a European tour to convince his peers to reform the electricity market and to put a ceiling on prices.

Read also: Economic Emergency, 18/3/2022

In Brussels, European media correspondents were warning that Sánchez – supported only by Costa – was the main landmine to circumvent at this summit. And that it would explode unless he could “secure an agreement on something he could take back to Madrid to save his political neck”. An agreement to which Germany and the Netherlands were opposed.

Today, the official press in Madrid and Lisbon congratulated Sánchez’s (modest) challenge to Germany and the “great triumph” for both of them to obtain the recognition of Spain and Portugal as an “energy island”: the peninsular governments will now be able to take their own temporary regulatory measures to alleviate the rise in prices.

In reality, the “triumph” is more than relative: they wanted European funds to compensate the electricity companies for the price caps they were seeking to impose. They won’t get them but they are allowed to pay the companies on account of their own debt for a certain period of time. Obtaining permission to further fatten Iberdrola, Endesa, Naturgy and company in order to minimally alleviate the escalation of prices does not seem a victory worth celebrating but it is important because it reveals what the “New Europe” is all about.

The contradictions of the EU once again

This whole situation and in general the fights between European states on account of the distortions generated by the Green Deal – starting with international gas prices – crudely expresses the contradictions of the EU as such. Let us summarize:

1 Spain and Portugal find themselves once again incapable of influencing global mechanisms to accommodate the needs of national capital, however pressing they may be. It is clear that like the rest of the subordinate countries and groups of countries, the most they can aspire to is temporary exemptions from general rules designed in the interests of the big French and German national capitals.

2 The ultimate reason for the recognition of this exceptionality is, as von der Leyen confessed, that both countries have “very few interconnections”. But this lack of interconnections, which historically made both electricity and gas more expensive in the peninsula and therefore less competitive for the peninsular industries, is neither accidental nor the result of lack of foresight.

On the contrary, Spanish capital has been trying for more than 30 years to compete as the necessary carrier of Algerian gas against Russian gas in Europe… and France has systematically closed all options. The only reason why it is now being considered again is because of the energy war economy and only because – without much justification – the Sánchez government aspires to be able to rely on European funds and somewhat less draconian conditions of exploitation.

Read also: Spain increasingly values Algerian gas, 19/3/2022

The paradox is that this door is ajar at a time when the very approach of the European gas war economy makes it, at the very least, improbable on the scales that Spanish capital would like.

3 Under the slogan of “making Europe independent of Russian gas” there is nothing other than an old obsession of US capital: to participate at all costs in the German gas business. This is no recent development: it conditioned the escalation with Russia from the first moments of Putinism up to the closing of Nord Stream 2. That is to say, the Gas War Economy, which has as its confessed aim on the part of Biden, its main promoter, to create a new market and new capital investments for US gas companies, is based on the subordination of German capital to the “American friend”… which in turn redefines the European strategic map.

Read also: The Russian gas war, 8/3/2022

4 In this redefinition, the Spanish state had to swallow a dangerous and counterproductive toad for its own interests: abandoning its stance on the Sahara, leaving Algeria, the main alternative gas supplier, without allies in Europe.

Counterproductive at the immediate level – Algeria will skimp on non-agreed supplies, as it is already doing, and will raise its prices – but above all in the medium term, because Algiers plans to take the production from its new fields and (that of Niger which it will transport through the Trans-Saharan gas pipeline) not through Spain but through Italy.

Read also: Spain changes its policy on the Sahara and stirs up war in the Maghreb, 19/3/2022

Insularization and national capitals

Von der Leyen addresses a nearly empty Parliament in the State of the Union 2021 debate.

The history of European summits since 2017 revealed until now an increasingly accelerating pattern: each increase in centrifugal forces – whether as a result of refugee policy, energy policy, the “rule of law”, Covid vaccines or recovery funds – brought the EU to the brink of implosion or bursting to, in extremis, end up in forms of recentralization of public spending in Brussels which concealed and sweetened a centralization of national capitals around German and to a lesser extent French capital. … which in turn fed the resistance of the less powerful national capitals by encouraging them to a new level of conflict, as we saw with Poland and Hungary.

By 2021, the spiral of crises and “early morning agreements” had already established a real “European construction model” that was as valid for healthcare as for the technology industry, cybersecurity or investments associated with the Green Deal.

After decades of serving national governments as a reinforcement of cuts and austerity, an increase in the EU budget is presented as “money falling from the sky” for the states. In exchange for accepting mutualization, political lines are centralized and aligned in favor of the strongest national capitals which, in the meantime and as it is the case, have built the foundations of a new continental monopoly.

State of the Union 2021, 16/9/2021

Replicating that in the electricity market was in fact what Sánchez and Costa aspired to. The solution, their ministers repeated, was “more Europe”. And “more Europe” meant more European funds to alleviate the costs of a centralization around German capital that continued to yield profits to the national bourgeoisies.

The famous Spanish proposal was to create a European fund in order to compensate the electricity companies for the loss of dividends generated by putting a limit on the price of gas. It meant in fact that Germany, Holland, Belgium and to a lesser extent other states would pay the costs generated by their abandonment of Russian gas to countries which, like the peninsular ones, are fed mainly from other sources.

But the entry with the war in Ukraine into a new phase of militarism and capital concentration reduces the leeway for maneuver. There is no room for “more Europe” to everyone’s liking. Each step towards centralization as a bloc – more or less autonomous or subordinate to the USA – raises the level of contradictions of the “European project”. And we have reached a new critical point of permanent consequences.

Poland and Hungary will dodge the Brussels sanctions thanks to their role vis-à-vis Russia, but they will not escape the closure of coal and the Green Deal, however costly it may be for them in all its dimensions. Spain and Portugal get a temporary and limited exemption, but in the end Spain will pay as dearly as the others the Megawatt despite the fact that it has many more renewables facilities installed. Unless it ends up involuntarily subsidizing part of the energy it supplies to France.

This ” insularization ” is going to accompany and be more and more an alternative to a ” mutualization of costs “. The EU, which was born as a club of capitals and had become, as internal imperialist tensions rose, a peculiar “fight club”, will increasingly resemble a barracks of national capitals with occasional weekend leave.

Insularization and the workers

Scholz announces to the Bundestag a military budget of 100 billion euros, higher than the GDP of Ecuador

The result for the workers is easy to foresee. The economic emergeny of more and more national capitals within the Union will inevitably accelerate at first the transfer of incomes through inflation, the contradictions with a petty bourgeoisie desperate to recover profits at the expense of wages and the impact of the energy policies of the Green Deal. But in the short-medium term it will accelerate the imposition of ” income pacts” and everything that goes with it.

According to an old Spanish proverb: “a gathering of shepherds means a dead sheep”. The “new Europe” that is emerging from the war in Ukraine is a Europe centralized for war and the struggle for markets and spheres of influence of its main capital groups. The political union of the European states can only continue to advance at the cost of accelerating the attack on the most basic living conditions of the workers and moving towards the progressive militarization of the whole of the Economy.

The old criticism of the “United States of Europe” resounds more forcefully than ever.

From the point of view of the economic conditions of imperialism, that is to say, of the export of capital and the division of the world by the “advanced” and “civilized” colonial powers, the United States of Europe are either impossible or reactionary under capitalism.

Lenin. The Slogan of the United States of Europe, 1915.

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