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Globalisation Anticapitalism :: Globalisation
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Europe - Britain in particular - is now at the forefront of developments. Because of the 'weight' of British capitalism, Brexit represents a giant boulder dropped into a lake. There will be an immediate ripple effect but the repercussions will be felt for months and years.
To give a measure of the potential scale of this crisis, the UK has the second biggest economy in the EU and fifth in the world. As a comparison, its economy is 15 times bigger than Greece, which confronted ejection from the eurozone and the EU in 2015.
The consequences of the referendum were expressed by a front cover of the Economist magazine entitled "Anarchy in the UK" - referencing the 40th anniversary of the punk rock phenomenon! The rise in discontent reflects how capitalist globalisation has stored up mass indignation, which is used to inflict blows on the elite.
The situation in the UK following the referendum continues to be covered in the pages of the Socialist. However, 'Brexit' has also had huge repercussions internationally. The International New York Times reported "US profits shudder after Brexit'"! A stronger dollar against the pound and euro reduces the value of American companies' earnings in Europe.
In Nigeria, ethnic groups demanding independence are asking that if the UK can have a referendum to leave the EU, why can't they have one to leave Nigeria?
But it is in Europe that the main effects have so far been felt. In the first session of the European Parliament after the referendum, Jean-Claude Juncker, president of the European Commission, asked Ukip leader Nigel Farage: "Why are you here?"
Juncker reflects the deep exasperation and concern that the UK referendum might see calamitous consequences in Europe, even the break-up of the eurozone and the EU itself. The EU establishment is desperately trying to prevent 'contagion'.
There is now deep gloom amongst the European capitalists and their political representatives. Dutch Prime Minister Mark Rutte, with the far-right, anti-EU Party for Freedom (PVV) ahead in national opinion polls, bluntly stated: "England has collapsed politically, monetarily, constitutionally and economically." In the Netherlands though, 47% of voters would like a vote on EU membership.
Brexit has put a new independence referendum in Scotland on the agenda. Scotland's First Minister Nicola Sturgeon would like to stay in the EU. This has been rebutted by the prime minister of the Spanish state, Mariano Rajoy, who has warned of the consequences for European states if this is granted. This would give new impetus to national groups, particularly in Catalonia and the Basque Country, for independence from the Spanish state.
Sinn Féin immediately called for a new poll on the Irish border following the referendum. This risks a new outbreak of sectarianism - which must be countered through a mass mobilisation of workers. Sinn Féin leaders commented that Northern Ireland was forced out of the EU by 'Little Englanders'!
The referendum result has had repercussions throughout Europe. Lucy Redler from Germany pointed out that there was not a week without crisis in the EU. It was a "spring and summer of discontent in the EU": The EU had told Ireland it could not abolish the hated Water Tax, stronger militarisation of the EU had been proposed and more and more opposition to the 'unreformable' EU was raising its head. But in Die Linke (the Left Party), only she and one other national committee member was opposed to the EU.
International Secretariat member Danny Byrne said the EU question has divided the left in Europe and become a microcosm of the difference between a 'reformist' and a 'revolutionary' approach. This was now beginning to open up divisions in left organisations.
The Left Bloc in Portugal and the United Left (IU) in Spain were moving towards a policy of breaking with the EU because of the effects of EU-imposed austerity in these countries.
Peter explained there is a huge eurosceptic mood in most countries. About 53% in an opinion poll in France want a referendum on EU membership; but neither there nor in the Netherlands is a majority yet for leaving the EU.
Greek workers, following the EU-imposed austerity, are now the most eurosceptic; 92% believe the EU badly handled the crisis. Not so long ago, Greece was the most pro-European country but that was before being placed on the rack of EU austerity. That has led to a collapse in support for the Syriza government. This may hand opportunities to the Nazi Golden Dawn, now the third party in opinion polls.
Andros from Xekinima (CWI in Greece) said that for the Greek working class, the most important development has been Brexit. There is very low mood in Greece following the EU-imposed eye-watering austerity but new battles will come.
The general European economic situation is dire. Because no improvement in conditions is likely, capitalist commentators fear a domino effect through Europe. Italy could be the next country to follow Britain out of the EU exit door. This would just about finish the EU; already discussions have taken place about a 'two-tier' Europe. There is chronic economic stagnation in Italy. Broad swathes of the population have had no rise in living standards for decades.
There is a crisis in the banking system, including the world's oldest bank. Prime Minister Renzi wants to recapitalise the banks (burdened with €330 billion of bad debts), by government aid or nationalisation. Yet the EU is preventing this because it opposes 'state intervention'!
This is classical neoliberalism and poses further disasters for workers. However, Italy could be the precursor of political developments elsewhere. The populist Five Star Movement has had electoral successes and leads the opinion polls.
Germany has seen the rise of the right-wing Alternative für Deutschland (Alternative for Germany - AfD), that started as mainly an anti-euro party, but which has grown to 11% support in opinion polls due to its virulently anti-migrant and anti-refugee propaganda. (AfD is now trying to politically capitalise on the recent attacks on bystanders by lone refugees in Germany).
Brexit will have important economic effects on Germany. It is reliant on exports to UK, Spain, Italy and Britain, which may be reduced if economic uncertainty takes hold.
Austria has entered a serious political crisis with the presidential elections, narrowly won by the Green party's candidate over the right-wing Freedom Party (FPÖ) candidate. The election has to be rerun over a technicality. The FPÖ is anti-EU and welcomed the UK's referendum result.
Battling against the far right is a key question following the referendum as it can articulate the anti-EU mood and fill the political vacuum left by the former workers' parties. The struggle for new, independent left-wing mass parties is important in this respect.
French workers have been resisting up to now the worst aspects of neoliberalism, including the government's determination to push through anti-working class labour 'reforms', backed by the EU.
Given current polls, President Hollande will be defeated in the first round of presidential elections next year, if he stands. Marine Le Pen of the far-right National Front (FN) is likely to be in the final round of voting.
Le Pen also welcomed the Brexit vote and strongly supports the idea of a referendum in France.
Spain has seen two general elections in the last seven months and the left parties, on the joint Unidos Podemos list in June's elections, lost a million votes between the two.
Viki from Spain said this was disappointing for the working class and youth (see issue 910 of the Socialist). Some believed the Brexit vote had a negative effect on the left's vote as the electorate chose stability, although the left's programme and campaign were not adequate.
In Ireland the Anti-Austerity Alliance/People Before Profit TDs (MPs) in the Dáil (Irish parliament) have been the only ones to welcome the referendum outcome. Irish workers have suffered in the last few years from EU-imposed austerity.
Belgium has also seen a strike wave, and Els from Belgium remarked that on the morning of the referendum result, Belgian workers were on strike. The pickets saw Brexit as a victory while their officials thought it was a mistake!
Poland is symptomatic of developments in Eastern Europe. Governments there have embraced neo-liberalism and the EU but the current politically right-wing nationalist government has taken a certain tilt against the market in the direction of 'state capitalism'.
This is an indication of a partial rejection of the effects of the market and the need for a more 'regulated' capitalism including renationalisation. It raises the question of the planned economy and a socialist alternative.
But a storm cloud on the horizon in Eastern Europe is the increased tension with Russia, not just over the Ukraine but also the spreading of Nato's (Western military alliance) tentacles to the Baltic States. EU states in Eastern Europe have hosted military manoeuvres in recent months
Peter concluded by stating that we face a new disturbed period in Europe. The UK referendum showed that a polarisation is taking place that will not necessarily always take place on clear class lines.
But this is provoking discussion and debate and forcing working people, and then the youth, to attempt to think things out. This will bring new supporters to the CWI.
The undermining of traditional capitalist parties throughout Europe is clear but in the absence of fighting left organisations, we see the rise of right-wing populism, which are largely anti-EU. We cannot see the struggle against the far right as separate to the struggle of the workers' movement against austerity.
In new class struggles we can look forward to the broader development of a socialist consciousness than now. That will then pose the changing of society on socialist grounds.
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Article dated 27 July 2016
The Socialist, weekly newspaper of the Socialist Party
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