The “recovery” funds and the Germanization of Europe

6 October, 2020 · News> Europe> European Union

Germany. Celebrations of the 30th anniversary of the reunification Report of the State TV channel:

The German head of state, Frank-Walter Steinmeier, spoke about the centrifugal forces in Europe, the challenges posed by the coronavirus pandemic, the division of society, climate change and the breakdown of old alliances.

Quite explicit. In translation: the themes of the German historical moment are: how to avoid the EU’ s implosion, the disaffection of the German petty bourgeoisie and how to keep it under control, revitalize national capital and above all, how not to be left behind in the competition between big national capitals trapped between the technological development of China and the US tendency towards trade war, or in other words, unsettled between two adverse blocs.


The object of this article was chosen yesterday by the readers of our news channel in Telegram (@Communia) .


Funds, rebelliousness and discipline

The Next funds, the famous recovery funds, are macroeconomically insignificant. But that doesn’t mean they won’t have a brutal impact. The first impact will be to orient national capital around common development axes (the digitalization and green deal mantra) which are, in fact, joint ways of organizing a massive transfer of labor income to capital through technological change; the second one will aggravate and tend to homogenize the conditions of exploitation through the famous reforms to which they are conditioned (pensions, precarization of the labor market, etc.). The general problem of the EU as a political structure is that every step forward in this direction aggravates the centrifugal forces and fuels the conflict between different capitals and national states.

Why? In large part because of the euro. Nobody denies anymore today, and in fact it has become a cliché to remember that the setup required for the common currency generates an income flow from the southern countries towards Germany and the so-called frugal countries. There are even German estimates like those in the table above which provide some approximate figures. It is not a question of discussing these figures now, they probably fall short, but they provide a reference. It should be added that these flows are accompanied by restrictions on the capacity of indebtedness of the states limiting the capacity of strategic orientation of national capitals. The lesser the real sovereignty -the less they can spend- the more they need Brussels and the more violently they fight for the funds and in order for the political, sectoral or imperialist orientation guidelines not to condition them even more.

The problem that Covid and the worsening of the crisis has accelerated is that, at a certain point, the costs of breaking up from the EU begin to seem lower than the cost of remaining in the system. Greece was a first warning shot. Brexit came next. France first, and later Germany, realized that either a compensation system through transfers were to be established even temporarily, or the whole thing risked imploding. Problem for Germany: the level of contradictions is so high that the subordination of some capitals to others, of some states to others is turned even more explicit with the funds… and logically, confrontations keep multiplying.

The EU therefore survives as a tool for the joint enforcement of capital’s requirements in a common market, by making national capitals subject to other capitals through market mechanisms encouraged by a shared currency and reinforced by credit mechanisms and one-off transfers. But the more it reasserts itself as a conglomerate of capital, the less viable it is as the basis of a possible imperialist bloc, and the greater the political tensions with which it burdens its members. Each European revival reproduces the contradictions of such an imbalance at a greater level.

EU funds: when “aid” means cutbacks, precariousness and attacks on pensions“, 21/7/2020

German-style solution: use the funds to discipline the more fractious states and send a signal to the hesitant ones. First movement: a report of the Commission on the rule of law in the EU intended to dispel the casuistic arguments of Hungary and Poland. The second step is to encourage the Netherlands, which ends up linking the approval of the funds not only to the monitoring of how the money is spent in other countries, but also to changing the institutional framework in Hungary, Poland and, to a lesser extent, the Czech Republic. Three countries that, coincidentally, can only be described in economic terms as semi-colonies of German big capital. Third step: a German consensual proposal to withdraw funds only when failures in the rule of law call into question the good management of the funds. Spain and Italy have been the first to support it, with their governments terrified by the delay already accumulated in the implementation of the funds.

But if we combine the initial conditions with the clauses on the rule of law, what we have is that, in addition to the direct control of a crucial part of the state budgets by countries benefiting from the euro, companies and investments from these same countries become untouchable by the local judiciary in any dispute over access to funds in those states that are in one way or another identified as problematic. A curious way of defending the rule of law.

European technological sovereignty/h2>

Volkswagen plant in Zwickau, Germany. From 2021 it will only produce electric cars.

It is very significant that the European Summit, which was to be centered on China, the United States and Turkey, highlighted as a central issue the European digital sovereignty. It is clear to Germany that it has lost the AI race to the US and China. And it believes that Europe is losing the race for 5G technology. It seems a fact that Nokia and Ericsson cannot compete with Huawei. But it is not going to give up the 4.0 industry, which is the main German technological product. European digitalization is increasingly taking on the appearance of a germanization of industry under the guise of a joint claim to technological sovereignty.

On the other hand, the green deal is associated with a technological effort in which the German position is also fragile. The conversion of the automotive industry to the electric car brings with it a race for the next generation of batteries in which large German companies feel increasingly insecure. At the beginning of this year, Volkswagen enlarged its battery factory in order to reduce its dependence on China, while other countries such as Spain are looking to France and South Korea for manufacturers willing to invest by building a plant on their soil. The sensation of losing momentum leads to the fact that after many debates last year and imposing not a few bureaucratic and political obstacles, now the German press and bourgeoisie acclaim the Tesla factory next to Berlin as their own success, emphasizing that Tesla is in the race for the new generation of electric batteries.

That is, Germany and the EU are accelerating the green deal without having yet ensured whether it will provide them with decisive advantages in the global competition… and even domestically beyond logistics.

Therefore Merkel is both politically conciliatory and commercially aggressive with China. For the European green deal, China taking an emissions reduction target like which Xi announced at the 75th UN assembly is a real lifeline. Both because it opens the opportunity to sell green products and technologies, and because of the promise to invest European capital in energy production businesses with practically assured profitability. Of course, for that, China should open its markets to the EU, or rather, to German industrial production which is the European position. As Merkel said at the end of the summit:

If there is no market access on the Chinese side for certain areas, this will of course also be reflected in the fact that the access to the European market will become narrower.

What does German imperialist assertion mean in Europe today?

Poster in the European Commission building stating that “Europe is the future”.

The so-called recovery fund is becoming not only a way to accelerate the transfer of income from labor to capital throughout the continent, aggravating the conditions of exploitation of the vast majority of workers, but also is becoming the way in which Germany conditions the development of the large national capitals of the South (France, Italy, Spain) and guarantees tools to discipline its semicolonies of the East (Hungary, Czech Republic, Poland…) by placing their companies outside the local judicial systems.

In addition, Germany is conditioning the technological development of the whole EU through regulation, standards and trade and investment policy to ensure a captive market for the digitalization that will be driven by European funds. All while turning the common market and the Mediterranean and Eastern countries in which China wants to invest, in the currency of exchange to ensure access of their capital and products linked to green technologies to the largest market in the world.

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