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Franco-German proposal swan song or a \new beginning\?

2020-05-20 | EU

The Franco-German proposal to "save the EU" fills dozens of pages in the European press. They welcome the fact that Merkel and Macron have put an end to a crescendo of over a year of hostilities by devising a "federalist" proposal that would involve, in the short term, the reform of existing treaties and the approval of new ones. But is this more than a symbolic measure? Are we moving towards a new EU with greater power over the states or is it just a declaration of intent with no prospect of being realised?

The weakness of macronism

In a not so distant context, the Franco-German proposal - which provides for half the volume proposed by Spain and Italy, in other words, a quarter of that requested by the European Parliament - would have been considered "cautious". Today, however, Le Monde is talking about a "new beginning", enthusiastically fantasizing about the forever pending merger of Franco-German capital around new continental monopolies, pompously christened by Macron as "world class champions".

The German press points out that what made this surprising rebirth of the "Franco-German axis" possible was France's weakness. The Covid disaster would have proved to the French bourgeoisie that France is, by now, "a country of the South" and "not a hinge between North and South". The idea is that France has lost its grip on Germany and Merkel rewards a Macron who is actually subordinate. It is only half the story, but it is not without truth.

The attempt to overhaul the political apparatus from top to bottom that was Macronism is in crisis. After giving up on pension reform, their own members of parliament have blown up the parliamentary majority. Macron's only merit has been to prevent - at some point barely succeeding to - the petty bourgeois revolt of the yellow vests from triggering an escalation in the workers' struggles - which in any case had more than one powerful outburst during the past year.

petty bourgeois

The German side of the story

But that's only half the story. Merkel sees a similar phenomenon growing: in the polls the rejection of globalization is growing across the electoral base of all German parties and the US is becoming increasingly distant in the social perception.

But above all she sees the disaster her flagship industries have fallen into after the pandemic precipitated what already seemed like a long agony at the end of the year. The European automotive sector has fallen by 76% since January, large German manufacturers are already negotiating massive state aid and the spectre of nationalization, even temporary, is on the government's agenda. Even the mythical Thyssen-Krupp is on the brink of the abyss and plans to lay off 20,000 workers.

Renault's plant closures and the battles between France and Spain over EU aid that could reduce its local impact are child's play in the face of what Merkel has ahead of her. For Germany, not only keeping the European market, but also inflating it to buy German products, is the solution. And it has a name: "Green Deal". Today the EU is considering paying premiums for the manufacture of "clean cars", it is true. But German industry needs a much larger scale than the meager EU budget can provide. That is also why, as Merkel said, "Germany is willing to pay".

The nordist counterpart... and Italy

Italian neofascist leader, Meloni, protests against confinement

It took no time for the Netherlands, Denmark, Sweden and Austria to take a stand against the German and French plan: "The EU only issues repayable loans and does not provide subsidies," they recalled. They are right, it was Germany which imposed Article 311 explicitly stating this. When the Austrian chancellor, the ultra-right-wing Kurtz, promised yesterday to present an alternative without direct or indirect mutualization of debt, the trench was already dug.

More interesting was the rejection by the Italian right and ultra-right wing. Salvini is heading the discontent and the desire for revolt of the petty bourgeoisie and seems destined to lead the next government at the head of a nationalist coalition representative of the fusion of the petty bourgeois revolt of the North and South of the country. Salvini goes hand in hand in the polls with the neo-fascist Meloni, who was arguing today in Il Corriere against the proposal and again vindicating the coronabonds:

It's surreal that everyone is discussing what Germany and France have decided in the framework of their Aachen treaty which has nothing to do with Europe, but is an agreement for a kind of "superstate" within the EU which is moving not for charity, but for the interests of their respective countries. Just think of the hypothesis of tourist corridors from Germany to Croatia and Greece, which would do enormous damage to Italy. ‎…‎

But do you realise that, with the departure of Britain, Italy is essential to keep Europe alive? They're not doing us any favors, without us it's over. France has taken a less rigid position than the Germans for this very reason, and Germany knows that the debate is actually about the risk of milking the cow to death.

Why go back to the coronabonds? Because the Franco-German proposal is not for free, it actually implies a transfer of sovereignty over the state budget. Der Spiegel put it this way just this morning:

The mutualization of debt is not exactly popular in countries like Germany, Austria or the Netherlands. Their citizens rightly ask themselves: why should they be in solidarity with the debts of other countries without having any influence on how they do business there? The EU must give a convincing answer to this question. It can only be to finally find a common fiscal, financial and social policy. Anything else would be a cliff for the enemies of the European idea. AfD and others could say they are doing exactly what they always warned they would. The EU states should therefore jump over their shadows and be prepared to hand over some of their sovereignty over their finances to the Union.

The Chinese threat

Xi Jinping presents with Gabriel (then German Foreign Minister) the northern route of his new "Silk Road"

But why should the nordist and eastern bourgeoisies make a u-turn and move towards a modification of the treaties whose "federalism" would only strengthen German power? Merkel and Macron believe that the Chinese argument could force them into action. Der Spiegel told it like this:

If you want the future of Europeans not to be decided in Washington or now in Beijing, you'll have to take this step. A popular saying is that "if you're not sitting at the table, you're on the menu. It fits perfectly with the situation in the EU. It is no coincidence that Germany and France in their joint declaration on the reconstruction fund also emphasize that they want to "modernize European competition policy" and "speed up the adjustment of the rules on state aid and competition". The United States, China, South Korea and Japan had more than one "world champion" among their companies, Merkel said. Macron seconded this: European competition law is too focused on the consumer and less on the "technological sovereignty" of the EU. This may be due to fears that China will use the covid crisis to shop in Europe even more intensely than before. And what Beijing uses its economic influence for is well known.

Are the United States of Europe making a comeback?


But France could finally secure its "national champions" by taking up the path of capital concentration with Germany and making them "world champions", overcoming the resistance of the Brussels bureaucracy. And the "nordists" would gain power around a more centralized Europe in Germany and probably get some new "transfers", in the same way that Fiat ended up having its headquarters in the Netherlands.

The whole thing, just three years ago, would have been the first step towards a "European bloc" around Germany, the seed of a " United States of Europe" capable of averting the then nascent imperialist confrontation between the US and China. Today, with all the centrifugal forces accelerated to the maximum by the crisis within each country, between European countries and on the world chessboard, it can only be "too little, too late".


Whichever direction we look, the "United States of Europe" would mean the same thing: greater concentration of capital, greater imperialist tensions, greater local tensions between the heart of the European bourgeoisie and its peripheral peers. At a historical moment in which the national state is suffering more and more from centrifugal forces because it cannot bring well-being even to the provincial petty bourgeoisie that supported neoliberalism, this new stage of centralization would in turn increase the tendency toward state authoritarianism and could only mean more oppression and even more exploitation of the workers by a worn-out capitalism. That is why today, as a hundred years ago, the "United States of Europe" that is preparing to sell us as a social and pacifist panacea is simply impossible and its reality, if the German bourgeoisie is to overcome all difficulties, can only multiply poverty, chaos, conflicts and social decomposition.

From the point of view of the economic conditions of imperialism, that is, of the export of capital and the partitioning of the world by the "advanced" and "civilized" colonial powers, the United States of Europe, is either impossible or reactionary under capitalism.

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

"United States of Europe?" 12/12/2017