The Illusions of a Social Europe

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Erik Meijer, MEP, reflects on how an entire trade union movement is being led up the garden path.

At the beginning of this year European Commissioner Fritz Bolkenstein called the 10-year existence of the single market in the European Union a great success, claiming that it had produced 2.5 million jobs and a growth of GNP of 1.8%. These are reasons Bolkenstein gives for continuing the liberalisation of the economy. Of course no one bothered to mention that the same market gave rise to many problems for the public services, for those living and working along the borders, or for agriculture, such as the enforced slaughtering of healthy cattle as a means of preventing disease from spreading. Neither did anyone state that many of the new jobs were only temporary and under bad working conditions. In the name of freedom, member states, local authorities and trade unions were put under pressure to privatise. Nevertheless these kind of claims of success messages are contributing to the continuation of half a century of confusion within the left wing and the trade unions over the advantages and disadvantages of the European Union and its predecessors.

 The forces seeking to defend various opposing interests, although all arguing for a united Europe, never agreed on what that united Europe should look like or which policy it should follow. The heads of the big international corporations wanted one market with one currency. The right wing parties that supported this wanted in addition a military power. This military power had to be able to compete with the United States. Stability within that hegemony had to be protected by low government spending, wage restraint, strong security services, great freedom for corporations, and most of all a wide availability of risk capital. On the other hand, left parties and trade unions saw the opportunity in all of this to restrain the supremacy of the international world of high finance; and to raise the standard of wages, working conditions, democracy within the corporations and social security to the highest level within Europe. European unity would be an important step forward to international solidarity, democratisation, human rights and world peace.

In most European countries the majority of political parties, employers and trade unions already agree on the desirability of a united Europe. Only in the UK and the Scandinavian countries is this not the case. In these countries a permanent debate is being held on the advantages and disadvantages of a united Europe. In the countries of southern Europe, however, which acceded later to the Union, and in the future member states, this discussion hardly takes place. The left and right wing in those countries think of the EU as an enormous financier, one which transfers earnings from richer member states -mainly the Netherlands, Belgium, Germany and France- to poorer newcomers. In practice this means that the richer member states buy the internal markets of the poorer member states for their domestic companies, using taxpayers' money. If the rich no longer paid for the survival of the poorer regions and small farmers, as some right wing forces on my own country have proposed,  support for the EU from these Europeans in the South and East would soon be history.   

The existence of the EU and the international entanglement of capital have changed the trade unions' position. The old situation was reasonably well organised. You put together a group of people who work together and with this group you set standards for the company that should guarantee local wellbeing and prosperity. Nowadays, on the other hand firms can easily move production from one country to another if they think the wages or taxes are too high or when the rules concerning the environment are too complex. This causes discord and gives trade union leaders, who are busy with international co-ordination, more influence in  the decision-making process.

The EU is capitalistic globalisation on a small scale, with all the disadvantages that implies for working people and the environment. Nevertheless, the illusion exists within the trade unions that the internationalisation of the economy gives rise to new opportunities, especially through a better co-operation between capital and labour. This co-operation is purported to lead to further economic growth and through this growth to security of existence for the mass of people without the need to redistribute wealth. At large demonstrations of the trade unions during the European summit in Brussels, in December 2001, the slogan more Europe could often be seen next to the slogan for   A social Europe. This optimism makes it seem like ´more` will lead to `social`; But does a stronger EU really mean that life will become better for all of us?

In the spring of 2002 in Lisbon the European leaders tried to see whether a social Europe was possible within the Europe of the free market. This subject had been put aside for years, when it was finally put on the agenda by the then left wing government of France. This government was composed of social democrats, communists and a green party. With 11 social-democratic Prime Ministers in 15 member states, you would have thought we could expect something. In the end, however, the negotiations did not touch upon such matters as an honest sharing of work by reduction of working hours to 35 hours a week, or pension at 60, as in France. Neither did the negotiations include levelling of incomes, security of existence, social security, sickness and disability insurance or the creation of jobs in public service. On the contrary, once again negotiations were about the withdrawal of the state from anything which might touch the real stuff of people's lives. Economy and public provisions had to be left to the care of private companies. Growth had to be encouraged by lower taxes. Tasks of the public authorities, such as postal delivery, telecommunications, energy supply, and public transport had to be privatised. The leaders of Europe concluded that Europe had to become the most competitive economy in the world.

This of course is nonsense. Japan and the United States had said the same earlier in history. The idea of competition was no more than a justification for low wages, low taxes and flexible environmental protection rules. Again, the summit in Lisbon made clear that we are not on our way to a social Europe, but to a capitalistic Europe. The majority of the right wing in the European Parliament has applauded this development and wants to accelerate it.

Nevertheless, it may become possible to stop this acceleration, namely when it becomes clear what the negative consequences are. Years before the summit in Lisbon it was being said that the EU would oblige member states to accept free competition in public transport. State monopolies had to be put to an end and contributions from the treasury had to stop. Companies owned by the government were not forbidden, but they had to compete with private ones when it came to getting or losing, for example, regional transport contracts. The result is that a Dutch transport company like GVB from Amsterdam may be allowed to transport things in Tampere (Finland), Messina (Italy) and Graz (Austria) but not in Amsterdam. It could also mean that the Dutch Railway Company NS is allowed to work in Poland, England and Spain, but not or scarcely in the Netherlands. Companies can no longer do what they were established for. They can no longer provide good and affordable transport in their home countries. Shortly after the summit in Lisbon the European Commission proposed a new "regulation", a measure.  directly binding on the member states. This stipulated that public transport had to be put out to tender by local authorities for periods of 5 years. The company that could offer the best transport with the lowest subsidy would win the area. In practice this would probably mean in the Netherlands dividing the market between recently set up concerns like Arriva, Connex, Keolis, Stagecoach and perhaps the German state railway, the Deutsche Bahn.

To win these areas the companies will surely set their price below cost. The consequence will be that smaller companies will disappear from the market within 20 years, because of the loss of their transport areas. This system also causes great insecurity among employees, who could lose their jobs after the end of the 5 year contracts. According to the right wing in the European Parliament this is just what the sector needs. They think wages in the transport sector are 30-40% too high. Wages should fall until they are at the same level as for those who drive a cab or coach. Fortunately, through the responsibility-sharing arrangements prevailing at the European parliament, it was the United Left Group's turn to write a report, and I was appointed "Rapporteur", giving me a certain influence over the procedure. However, with the final vote in November, 2002 I was able to get 224 votes in favour of my countermeasures with 317 against. My proposal was that subway lines, tram lines and railway lines shorter than 50 km would not have to be put out to tender. Not only the left wing in the European Parliament supported my proposal. A group of the right wing, that had had enough of the overbearing ways of the EU or feared that no public services would be left in their regions, supported it as well.

At this moment the EU is trying to transform as much of the pension reserves as possible into risk capital, or stocks and shares. The EU wants to recruit cheap labour forces from Third World countries to work in the docks. Giving subsidy to public services to keep them working is labelled as distortion of competition. Subsidies are also being fought because they can lead to a deficit, which can threaten the Stability Pact. The Stability Pact has to ensure that the Euro keeps its value. Problems of working on the border of a country or the disturbance of the housing market in Belgium and Germany caused by the Dutch rules on mortgage interest are not being dealt with. This super state called "Europe" is remote from the reality of daily life of the Europeans and it will not become a social Europe. Only when these illusions belong to the past, will we mount a successful resistance. 

Erik Meijer is a Member of the European Parliament for the Socialist party of the Netherlands, the Dutch section of the European Parliamentary Group of the United Left. This article was translated by Hetty Telman.