Brexit: the new tactics of British capital in face of Europe economic unification

On January 31, the departure of the United Kingdom from the European Union (EU), what has been dubbed Brexit, is an event which, without being major in itself, is of some importance on the international scale. The economic repercussions of Brexit will inevitably be felt, although relations between the United Kingdom and the EU are still the subject of debate within the bourgeoisie and among its public commentators. Brexit is still so controversial that a transition period will stretch until the end of 2020, when the transition will have the possibility to be renewed once again. In reality, the current transition has changed almost nothing that prevailed before. Above all, it has not changed the central issue of economic borders and customs tariffs, issues at the heart of the disputes surrounding economic relations and the process of the economic unification of Europe. This contributes to the additional mystery that has been hovering since the end of last month. However, we know for sure that the English bourgeoisie had a vested interest in the tactics of Brexit since it effectively proceeded to leave Europe. To know what will be the continuation of the maneuver, or in what overall plan this tactic is part, the future will tell us. Far from the events, our newspaper will not risk unnecessarily predicting the upcoming future.

We send our readers the following summary allowing to grasp the common thread of the latest events concerning Brexit, as well as to have a general understanding of what the European Union consists of as well as the significance of the exit of the United Kingdom from the latter. Such an exercise is not in vain since it reminds us of the importance of closely monitoring the movements and changes of configurations within the imperialist powers, as well as the importance of dealing with the facts and events by strictly adhering to a materialist method. In the end, capitalism and bourgeois society, after so many battles, have still not fallen. On the contrary, it is still fulfilling itself. History, still in development, submits to our analysis contemporary events such as the creation of new bourgeois institutions. It is then easy to get lost.

The short story of the UK’s withdrawal from the European Union

When we speak of the United Kingdom, we mean the entity comprising England, Scotland, Wales and Northern Ireland. It is England, cradle of the industrial revolution and of capitalism, which constitutes the center of economic and political gravity of this regrouping. The UK has a population of around 67.5 million people; continental members of the European Union, has 447 million. England has 55.9 million inhabitants; Scotland, 5.4 million; Wales, 3.1 million; and Northern Ireland 1.8 million. In 1707 took place the unification of the island of Great Britain (England and Scotland). In 1801, Ireland was integrated into what is now called the United Kingdom. The latter was later only changed by the national liberation struggles of the Irish people during the 19th and 20th centuries.

England, which had reluctantly joined the European Economic Community (EEC), the ancestor of the EU, in 1973, left it almost 50 years later. The ambivalence of the British bourgeoisie vis-à-vis the European Union prevailed throughout the EEC-EU adventure. The refusal to adopt the euro as the national currency in the United Kingdom attests to this. But it took almost 4 years of heated negotiations and maneuvers for the country to finally resume its marbles. Indeed, it was in June 2016 that the withdrawal was announced following a referendum in which 17.4 million people voted in favor, which represented 52% of the vote. The referendum, announced in February 2016, itself followed several years of public campaigns and publicity campaigns such as that of the “Peoples pledges”. David Cameron, who led the Conservative Party from 2005 and who was Prime Minister of the country from 2010 to 2016, will have ended his political career by breaking his teeth on Brexit. Theresa May succeeded him and she burned her fingers just the same. In June 2017, a general election was held and the Conservatives emerged as a minority in parliament. Brexit was originally supposed to take place on March 29, 2019. It was postponed twice, to October 31, 2019 and then to January 31, 2020, after the deals negotiated by the former prime minister were rejected by parliament. At the third rejection, Theresa May resigned. Another general election was held on December 12, 2019. Boris Johnson, former mayor of London (from 2008 to 2016) and long-time supporter of Brexit, had then found himself at the head of the Conservative party by winning the majority of vote. Finally, the proposed agreement was ratified on January 23, 2020 by the United Kingdom and on January 30, 2020 by the European Union. The questions of payment of reciprocal debts, national borders and customs tariffs, the legal and legal mechanisms which will remain, the border between the north and the south of Ireland, the movement of travelers and the work force were at the heart of this period of negotiations punctuated by twists and turns.

The economic unification of Europe: origin and historical basis of the European Union

The European Union rests above all on the process of economic unification of the capitalist countries of Europe. This process consists of a form of economic alliance to face foreign competition. This alliance has become a tangible objective in response to a number of new parameters emerging from the Second World War: the destruction and ruin of Europe, the rise of American imperialism with its financial domination through the Plan Marshall, the existence of real socialism with industries and an imposing economy, and the national liberation struggles in the European colonies (Vietnam, Algeria, Egypt, Suez Canal, etc.). In other words, the isolation of the old great European powers, now weakened in the new world configuration, looked to be disadvantageous. The period of European reconstruction stimulating the two major industries of coal and steel laid the foundation for the first industrial treaties which formed the ancestor of the EU.

This economic unification has continued until today and characterized the second half of the 20th century on the other side of the Atlantic. At the heart of this movement are two main processes: 1) the creation of a single European market and of customs alliances; 2) the creation of the euro and the monetary integration into the euro area. These processes are the backbone of the EU. They are at the base of the European coalition; they connect its production and its economy. It is through these processes that the export and import of goods as well as the export of capital takes place in Europe, thus tracing the general contours of the confrontation and the economic alliance between the different European capitalist countries. . These processes also develop, in the superstructure, that is EU political and legal institutions such as the European Parliament.

This process of unification and economic alliance of Europe went through a certain number of stages and transitional forms: the European Coal and Steel Community (ECSC, 1951 Treaty of Paris) followed shortly by the European Economic Community (EEC, 1957). The 6 founding countries are Belgium, France, Germany, Italy, Luxembourg and the Netherlands. Over the years, other countries have entered it: the United Kingdom (1973), Greece (1981), Portugal and Spain (1986), to give just a few examples. The EU was formally created in its current form in 1993 with the Maastricht Treaty. Following the breakup of the Eastern bloc, some of the former people’s republics joined it: Hungary, the Republic of Cyprus, the Czech Republic, Estonia, Latvia, Lithuania, the Republic of Malta, Poland, Slovakia and Slovenia in 2004; Bulgaria, Romania and Croatia in 2007. The adoption of the euro in 1999 and its entry into force in 2001 was the major milestone in the history of the EU. Today the EU brings together 447 million people spread across 27 countries, the most populous of which are France (67 M), Germany (83 M), Italy (60 M) and Spain (47 M) .

The euro area, that is to say the countries that have adopted the euro as their currency, only includes 19 of the 27 countries members of the EU. Apart from the United Kingdom, the countries which have not adopted the euro could not do so for the simple reason … that they were refused! For these countries, all the disadvantages of the EU prevail (massive inflow of foreign capital into their territories) without the advantage of the euro (greater currency stability). The EU has managed to repatriate these countries under its aegis by blackmailing their economy. The majority of capitalist economies that do not benefit from the euro come from the accession wave of the former Eastern bloc countries. Bulgaria and Croatia have submitted their applications for the euro, but are still awaiting a decision from the committee. The Czech Republic, Hungary and Romania have been granted the right to switch to conversion when the criteria and drastic economic reforms that the commission has set for them are met. The national bourgeoisie of these countries is thus forced to liquidate many assets at the expense of the working classes in an attempt to access the euro and obtain better conversion rates.

The other major process at the heart of Europe’s economic union is the creation of a single European market through customs alliances. This phenomenon generates a lot of confusion. It is that the European Union is neither a simple free trade treaty in the most widespread form nor a new and authentic internal national market. To think otherwise leads to erroneous, non-Marxist conclusions. The creation of the European Union was not the creation of a single nation or the emergence of a historic process supplanting the old form of nation states, on the contrary. Within the EU, the framework of the revolution remains national; capital accumulation maintains a national framework; the center of imperialist decisions is steered by the national bourgeoisie of each country; nation states remain essentially unchanged; and the modern state remains the expression of national monopoly interests. The force of history (notably the decline of the old European empires already prevalent at the beginning of the 20th century) has quite simply pushed a certain number of countries to regroup. In the end, the EU is not a form qualitatively different from other forms of alliances already known such as free trade agreements, non-aggression and military solidarity pacts, international political groupings, etc.

Brexit: new opportunities and alliances for British capital

Let us recall that the United Kingdom never adopted the euro and that it has always been ambivalent in the face of the proposal to unify Europe to face international competition. It is that historically, at the end of the Second World War, England occupied a special position in Europe, a position which was still enviable despite the new world conjuncture (notably because of its colonies and the Commonwealth). Likewise, England had already woven more economic ties with the United States than other European countries. For the past few decades, if England has been eyeing the EU side and has agreed to join it, it is because it was in its interest to inject massive amounts of capital into new markets, namely those of the former bloc countries. Today, border and tariff issues as well as the heavy payment required to join the EU have got the better of the United Kingdom’s presence in the grouping. The possibility for the United Kingdom to continue trading with the EU as does China and the United States has encouraged its withdrawal. Furthermore, the possibility for the United Kingdom to enter into free trade agreements with the United States weighed heavily.

Questions remain unanswered: which sectors of the British bourgeoisie are the driving force behind the new economic tactics? Why do France and Germany still see the economic unity of Europe as a tactic to keep? How will the transition period end? Let us content ourselves here with affirming that to answer these questions, we must not analyze superficially Brexit and the European Union by examining only their super-structural aspects (the European Parliament, the ideas and motivations of British citizens who have voted for Brexit, etc.). We must analyze the material forces in production, trade, finance and the British economy which led to the UK’s exit from the European Union.