The Nation.

Januarv 2.5. I993

81

ARTICLES.

= LETTER FROM EUROPE

The Continent
Divided
DANIEL SINGER

ineteen nmety-three was to be a banner year for

Europe. With the opening of the Single Market
people would cross frontiers without visas and
goods would flow unhindered by tariffs. It would
be a trlumphant year for the European Economic Community,
marked by a quickening of the pace toward full integratlon.
With the Maastricht treaty ratified by its twelve member
states, the prospectof one currency and one central bank
by
the year 2000, and the rudimentsof a joint foreign pollcy and
joint defense, the E.E.C. was to move toward some form of
federation that could stand up to the United States and Japan
and act asa magnet for therest of the Continent-first, the
prosperous Swiss, Austrians, Finns andSwedes, later thewannabes of Eastern Europe.
Then, suddenly, this glittering scenariofell to pieces. Last
June, the Danish people rejected the Maastricht treaty in a
referendum. Three months later, the French gave the treaty
the most reluctant of approvals. Then the SWISS, through
a
negative vote in a preliminary referendum, showed that the
outside nationsinterest In joining was not as enthusiastic as
had been thought.
Last month, the
leaders of the Twelve met in Edinburgh to
see what could be salvaged. The upshot was that the Danes
were offered speclal treatment In the hope thatnext May they
will reverse their verdict. Prime Minister John Majorpromised that the Brltlsh Parliament would follow suit and ratify
the treaty. Having reached a deal, the heads of government
departed, relieved. But more is involved in thisrewritten script
than Justa change in the timetable. The single market was duly
inaugurated on January 1 but under very gloomy auspices.
Let us try todraw some lessons for the future from therecent drama. It
clearly confirmed the crucialrole of the reunifled Germany,which was both thecause of the crisls and the
decisive (or undecided) actor in all of its stages. The strong
mark and the Bundesbanks high interest rates were at the
heart of the financial storm thatwrecked Europes Exchange
Rate Mechanism, raising doubts aboutits future shape and
even its survival.The otherunfinished confrontation-in the
General Agreement on Tarlffs and Trade (GATT) negotlations,
particularly over agriculture-revealed how far the E.E.C.has
traveled smce Its early semirural days. It also showed how
deeply I t remains spllt between those who, like the French,
favor a closely integrated community and others, notably the
British, who are reluctant to go much beyond a free-trade
area. Thusdeeply divided, Europeproved impotent tohandle
_____

Dame1 Singer

IS The

Natlons Europe correspondent.

external tragedies like Bosnia and Somalia; potentiallyan economic giant, it is still a political pygmy.
Yet probably the mostsigniflcant development has been the
revolt of the people. Europe was built hitherto by big business
and for big business, the politicians and technocratscleverly
preparing the institutional framework
for a stage-by-stage advance. This institutional construction from
above has now met
popular resistance. It would be nlce to report that this
spells
a revival of the left, the building
of a Europe frombelow, by
the people andfor the people. Nice but, to putit optirnistically. premature.

Primus Inter Pares?

In the package preparedin Edinburgh the E.E.C. for the
first time brokethe rule of parity among itsBig Four. Hitherto Britain, France, Italy and theFederal Republic of Germany
had eighty-one deputies each
in the European Parliament.
At
the next election the firstthree will have sixmore each and the
reunited Germany eighteen more. The Parliament haslimited
powers, and this symbolic gesturemerely recognizes the fact
that Germany has20 million more inhabitants than its most
populated partners. The real question is whether Germany
will besatisfied for long with being simply first among equals.

T h e current upheaval is Europes

German crisis and the crisis
of German reun&ation.
The current upheaval is Europes German crisis. Maastricht, after all,IS a byproductof German reunification. The
purpose of the Monetary and Polltical Union, designed In
Maastricht inDecember 1991, was to keep the reunified Germany within the Western European orbit German Chancellor
Helmut Kohl has been throwing his weight around ever since,
notably as arbitrator In Franco-British confhcts.
But it is also the crisis of German reuni8catlon. When capital invadesnew territory, it tends to destroy existing industry
in order toprovide a market for its consumer and capital goods.
Thls process, involving mass unemploymentand a sharp drop
In living standards, is verypainful, but In Eastern Europe,on
I.M.F. orders, the cost must be borne by the local working
population. The former East Germany could not be treated
quite so drastically wlthout anesthetlc.The subsidies to ease
the painfor the East proved costly and the government tried
to transfer the burdento theshoulders of the western German
workers, who went on strlke to defend their current wages.
To maintam thepressure, the Bundesbankkept up a deflatlonary policy with high Interest rates.The snag was that Germanys
rates set the standard for the rest of Europe, and the other
countries needed low rates to keep their economies growing.
Add to it the fact that the convergence targets that had

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The Nation.

to be met in order toJoin the monetary union-a low inflation rate, budget deficit and public debt-were also deflationary. Speculators concluded that some countries would not
bear the strain, and they made a killing. The lira and the pound
went first, followed by the peseta, the escudo and theSwedish
crown. The franc, genuinely backed by the Germans,survived.
Since France spent more
than $30 billion of its own reserves
to defend the franc, one wonders
how many more assaults it
will be able to resist.
Indeed, the financial front is now covered with question
marks. Will the Italians and theBritish re-enter the Exchange
Rate Mechanism?Will the march toward monetary union
be
slowed so that all the Twelve can Joinit, or will the laggards
be left behindwhile the French, the Dutch, the Danes and the
Belgians unite in a smaller group more thoroughly dominated
by the mark?Will the Frenchbe able towait until the end of
March, after their parliamentary election, to make up their
minds aboutwhat to do with thelr currency, and will the Germans be drivenby domestic stagnation to
lower their interest
rates? The key to all these questions lies in the Bundesbank.

Financial Frankenstein
If the flnancial storm could
play such havoc with Europes
monetary system it is because the world of international flnance has changed beyond recognition. The 1980s will go
down in history as the decade when mternational monetary
transactions leapt out of bounds. Prompted by the huge American balance of payments deficit, by deregulation, by technical
inventions, by a computerized market working round the
clock all over the globe, the turnover in all forms of foreign
money reached the astronomlcal dallylevel of some $900 billion, more thanthe combined reserves of all the greatpowers.
Whether this monster invented bycapltal wlll one day collapse,

Januarv 2.5. 1993

crushing its begetter, is another matter. Its extraordmary

growth is enough to explain the weakness of national governments and the vagaries of Europes currencies.
One of the
E.E.C.s contributions to this expansion
was the
abolition, in1990, of all controls over capital movements. Europe may still be soclal democratic by Amerlcan standards,
with greater state interference in the managementof the economy and in matters of health and education.These, however,
are remnantsof the past. In Europe, too, the1980s were a period of privatization, of attacks against the publlc sector,
of
deregulation. (Social welfare budgets increased d u r ~ n gthat
period but thatwas because of rising unemployment.) To put
it differently, the nation-states ofWestern Europe are gradually losing many of their powers, but these prerogatives are
not being devolved on the would-be European state wlth its
capital in Brussels.
Durmg the recent debates, one of the main indictments
raised against the European Community was that it has a
democratic deficit. However euphemistically put, thecharge
is richly deserved, though notbecause of Maastricht, which
did not significantly expand the powers of the unelected Brussels Commission and Its Eurocrats. Like previous acts, Maastricht strengthens the prerogatwes of the Ministerial Council,
where heads of government and their assistants reach decisions, increasinglyby a majority vote. The roadto European
integration may be so bumpy because it involves a strange attempt to abolish the nation-state with the help of nationstates, bargaining till the very end over their final surrender
or transformation. To instill democracy into this system, it
would be necessary to develop grass-roots politics in allmember countries but also
to grant morepowers to EuropesParliament in Strasbourg, France,a transfer of sovereignty that
many of the communityscrltics are notready to concede. The
question is, What kind of Europe? This issue usually crops
up whenever a matter involving Europes relations with the
United States is at issue.

E.E.C. and the Open Sea

The latest confrontation

between the twois taking place In
the GATT negotiationsover agriculture. This battle reminds
us that in 1957, on the eve of the Rome Treaty, which set up
the Common Market,one Frenchman out of
four, and nearly
one Italianout of three, was working on the land. Continental
Europe was still very much the land of the peasant.
Today one
Frenchman outof twenty works on the land, justbelow the
E.E.C. average. The Common AgriculturalPolicy, introduced
in 1962, brought about this change. With domestic prices
fixed at a high level and protectionist import duties and export subsidies in effect, this policy boosted output, turning
the E.E.C. from a heavy importer of food intoa producerof
surpluses. And it didso by raising spectacularly the productivity of farm labor, while simultaneously smoothing the way
for the mass migration of peasants t o town.
The snag inthis policy was that, since it absorbed nearly
half the communitys budget,it was getting too costly. Therefore, last May it had to be revised. From now on, the emphasis
in Europe will no longer be on maintaining prices but on direct subsidies to farmers. Thus the conflictwith the United

January 25. I993

The Nation.

83

States is no longer over the policy itself but over the pace at
which Europe will be carrying out the change of policy.
Food shipments account for roughly one-tenth of world
trade. The fact that the United States and France rank first
and second, respectively, as food exporters is not sufficient
to explain the passionate natureof their clash.More than agricultural prices is at stake. The French accuse the British, who
are keenest to make a deal with Washington,
of yearnmg for
qulte a different community.The Britlsh want to water down
the Maastrichttreaty, the Frenchsay, then diluteit further by
bringing in new members; they also want to exclude foreign
policy or defense functions topreserve NATO's domination.
At the bottomof their hearts they reallywant an Atlantic freetrade area, say the French, who are fond of quoting Churchill's
dictum: Between Europe and the open sea, Britain
will always
choose the open sea.
Chancellor Kohl is thus confronted with a dilemma.Progress in European integrationin the past hasalways been the
result of Franco-German Initiatives. General de Gaulle worked
hand in hand with Chancellor Konrad Adenauer until rehe
alized that between Paris and Washmgton, Bonn will always
choose thelatter. Since Germany's reunification, Kohl is no
longer working under the same constraint. Will he support
the British, because farmingIS secondary for him,or will he
back the Frenchto show that Germany can now stand up to
the United States? The choice is momentous and, once again,
it is Germany's to make.

Europe From Below

So far I have looked at Europe from the pointof view of

the rulers because, untilrecently, they were the only ones involved in its construction. The Common Market, set up as
a rampart against Soviet influence, spurred by the first fifteen years of unprecedented growth,to which it contributed,
became part of the landscape. On the Continent at least,it
was taken for granted. It is only In the past few years, with
the Soviet empire out of the way, with dark cloudsgathered
on the economic horizonwhile unemployment spread, that
the mood has changed. isIttime that the debate should also
shift from whetherone 1s for or against Europe towhat kind
of Europe, in whose interest, for whose purpose?
Some progress has alreadybeen made toward clarification.
There was a time in the Britlsh Labor Party, for example, when
it was enough to be "anti-European" to be deemed progressive. That posltion was based on the absurd assumption that
a Laborgovernment in office would introduce reforms so radical that they would clash with the liberal framework of the
Common Market. Actually, a contemporary Labor government would not hurt a capitalist fly, and its leadership now
is, logically, for Maastricht,even if its electorate is not. Slmilarly, the French Socialists, whatever their original ambltlons,
surrendered to the forces of domestic capitalin 1983 and are
now wholeheartedly for a capitalist Europe. During the recent referendum debates, quite logically again, Socialists often
shared platforms with moderate conservatives. Indeed, the
main backing for Maastricht comes from this
new establlshment combining the respectful
left and therespectable right,
tweedIedum and tweedledee, which may dlffer on many as-

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84

The Nation.

January 25, 1993

pects of existing society but not on its fundamentals. The past

BRINGING DOWN THE TEMPLE
decade witnessed the Amerlcanlzatlonof European politics,
with the blurring of class lines and the glorlflcation of the
center. Thls trend seems tobe stymied. The Europeancrlsis
IS also the crisis of the new consensus.
Who opposes this capitalist construction of Europe? On
the right, you have the traditional conservatives, whoreally
want to stop the clock.Next to them, however, you have the
PRAFUL BIDWAI
dangerous demagogues seeking thelr polltlcal fortunes
by
he cataclysm in India hasexposed the awesome prochanneling discontent againstallen scapegoats-the Arab,
portions of thecrisis that grips the
country. It IS as
the Asian, theGypsy, the Jew. It IS the voice of these demaif the nationwere faced wlththe prospect of a secgogues that now echoes loudly across the Contlnent.
ond partition, now along more than onereligious
Harder to define are left-wmg
the
dlssenters, best described
divide.
Millions
of Indlans, above all Hindu Indlans, have
as opponentsof Maastricht in the nameof a different Europe.
been
plunged
into
despair over the viability of the constltuDepending on the countries they come from, these include
tional secular/pluralist/democratic order. A question mark
former New Leftists, progressive Greens, unorthodox Communow hangs over the project that independent India launched
nists and Socialists disappointed by thelr partys moderation.
in 1947 and that gave the country Its raison detre.
Theirs is the most dlfficultdiscourse to formulate. They must,
The event that trlggered the shockwave on December 6 beat all costs, avoid any confusion with the Jingoists. Hence they
longs for many Indians
to the realmof the unthinkable-the
must show that they dont give a damn about frontiers and
demolition, aspolice passively watched, of a protected hisare ready to cooperate with workers councils or labor unions
torical mosque at the hands of a mob of fanatics led by the
of other countries. They must pointout thatonly a Western
Bharatiya Janata Party, a right-wlng Hindu fundamentalist
Europe with grass-roots democracy and a different social strucorganlzatlon,
and other groups
of Hmdu communalists who
ture can stand up to the Unlted States and attractrest
theof
seek to create a theocratic or confessional stateand who opthe Continent in
a progressive direction. Actually, proponents
pose the separation of
religlon from polltlcs.The destruction
of this stdluncharted soclalist alternative areto be foundon
of the mosquewas the communalistsrevenge agamst history.
both sides in the Maastrichtdebate: Some think the capitalist
The 465-year-old structure, known as the Babri mosque, in
invaslon must be fought within natlonal borders, while others
Ayodhya in the state of Uttar Pradesh, was a special target
believe the battle must be waged on the European front.
(although only one of more than 3.000) because the B.J.P.
The movement that is foreshadowed by such skirmishes will
claims that the Mogul emperor Babar had I t built after denot bebuilt overnight. AndIn one sense, thereis ample time.
stroying a temple to Rama consecratmg his birthplace.
However dramatic the warnings, the E.E.C. w~ll notfall to
There IS no historical or archeologlcal evldence that a tempieces; it embraces too many commercial ties and vested Inple
once stood on the
mosques site. Confronted with this arterests for that. The rush toward some kind of federation,
gument, theB.J.P. moved to the posltion that
t h ~ is
s a matter
however, has undoubtedly been slowed.
of faith not open to ratlonal
or legal disputation, and thatIn
In anothersense, though, tlme IS running out. Theterrible
any case it would build a templeat thatsite. The partys prestories fromBosnia tell us where ethnlclty can lead; the raccursors indeed had surreptltiously entered the mosque1949
in
ism in Rostock revives ghosts of the past. Themurderers are
and installed some idols.
among us. With the Stalinist Soviet model duly shattered,it
Actually, the mosquewas attacked so as tohumiliate Musis high time for people throughout the
Western world to start
lims (an eighth of the population), to challengethe secular
to do
thinkmg again of an entirely different society and not
foundatlons of the Constitution andto destroy a symbol of
0
so in purely domestic terms.
Indias cultural. ethnicand religious diversity. Its destructlon
is a triumph for the
B.J.P.3 strategy of physlcally confrontlng
a weak-willed state andpushing It to yield political grounda strategy perfected since 1986. In that year the Uttar Pradesh
PROBLEMS?
MOVING?
government, led by Rajiv Gandhls Congress party, decided
to unlock the gates to thestructure, long shut under numerous
If you have any problems
Send both your old malladmmstrative andjudicial orders, to appease Hindu fanatics,
or
questions
regarding
mg label and your new
who wanted to worship the idols installed inside the mosque
your
subscrlptlon,
please
address to
wrlte to us at the address
thirty-seven years earlier. State collusiongave Hindu commuto the left, or call
nalism precisely the confidence boost it needed.
THE NATION
Since the mid-eighties, the B.J.P. has attempted to reshape
1 (800) 333-8536
P.O. Box 10763
the Indlanpolltlcal agenda, harnessing the temple disputeto
Monday to Frlday
Des Moines I A 50340-0763
mass agitations and
using these as a lever to exert pressure on
7 00 am to 11 00 pm CST
Saturday & Sunday
Please allow 4-6 weeks f o r
Praful Bldwal, a senlor editor of The Times of Indlam New
8 00 a m to 6 00 pm CST
processing
Delhr, IS currently a vlsitrng professor at Amherst College.

Democracy at
Risk in India