Januarv 2.5. I993 The Nation. 81

ARTICLES. = LETTER FROM EUROPE

The Continent Divided DANIEL SINGER

N 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 prospect of one currency and one central bank by the year 2000, and the rudiments of 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 as a magnet for the rest of the Continent-first, the prosperous Swiss, Austrians, Finns and Swedes, later the wan- nabes of Eastern Europe.

Then, suddenly, this glittering scenario fell 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 nations’ interest 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 that next May they will reverse their verdict. Prime Minister John Major prom- ised 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 this rewritten script than Just a change in the timetable. The single market was duly inaugurated on January 1 but under very gloomy auspices.

Let us try to draw some lessons for the future from the re- cent drama. It clearly confirmed the crucial role of the reuni- fled Germany, which was both the cause of the crisls and the decisive (or undecided) actor in all of its stages. The strong mark and the Bundesbank’s high interest rates were at the heart of the financial storm that wrecked Europe’s Exchange Rate Mechanism, raising doubts about its future shape and even its survival. The other unfinished 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. Thus deeply divided, Europe proved impotent to handle

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Dame1 Singer IS The Natlon’s Europe correspondent.

external tragedies like Bosnia and Somalia; potentially an eco- nomic giant, it is still a political pygmy.

Yet probably the most signiflcant development has been the revolt of the people. Europe was built hitherto by big business and for big business, the politicians and technocrats cleverly preparing the institutional framework for a stage-by-stage ad- vance. 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 from below, by the people and for the people. Nice but, to put it optirnisti- cally. premature.

Primus Inter Pares? In the package prepared in Edinburgh the E.E.C. for the

first time broke the rule of parity among its Big Four. Hither- to Britain, France, Italy and the Federal Republic of Germany had eighty-one deputies each in the European Parliament. At the next election the first three will have six more each and the reunited Germany eighteen more. The Parliament has limited powers, and this symbolic gesture merely recognizes the fact that Germany has 20 million more inhabitants than its most populated partners. The real question is whether Germany will be satisfied for long with being simply first among equals.

T h e current upheaval is Europe’s German crisis and the crisis of German reun&ation.

The current upheaval is Europe’s German crisis. Maas- tricht, after all, IS a byproduct of German reunification. The purpose of the Monetary and Polltical Union, designed In Maastricht in December 1991, was to keep the reunified Ger- many 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 cap- ital invades new territory, it tends to destroy existing industry in order to provide a market for its consumer and capital goods. Thls process, involving mass unemployment and a sharp drop In living standards, is very painful, 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 pain for the East proved costly and the government tried to transfer the burden to the shoulders of the western German workers, who went on strlke to defend their current wages. To maintam the pressure, the Bundesbank kept up a deflatlon- ary policy with high Interest rates. The snag was that Germany’s 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

82 The Nation. Januarv 2.5. 1993

to be met in order to Join the monetary union-a low infla- tion rate, budget deficit and public debt-were also deflation- ary. 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 the Swedish 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 the British re-enter the Exchange Rate Mechanism? Will the march toward monetary union be slowed so that all the Twelve can Join it, or will the laggards be left behind while the French, the Dutch, the Danes and the Belgians unite in a smaller group more thoroughly dominated by the mark? Will the French be able to wait until the end of March, after their parliamentary election, to make up their minds about what to do with thelr currency, and will the Ger- mans be driven by 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 Europe’s

monetary system it is because the world of international fl- nance 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 Ameri- can 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 dally level of some $900 bil- lion, more than the combined reserves of all the great powers. Whether this monster invented by capltal wlll one day collapse,

crushing its begetter, is another matter. Its extraordmary growth is enough to explain the weakness of national govern- ments and the vagaries of Europe’s currencies.

One of the E.E.C.’s contributions to this expansion was the abolition, in 1990, of all controls over capital movements. Eu- rope may still be “soclal democratic” by Amerlcan standards, with greater state interference in the management of the econ- omy and in matters of health and education. These, however, are remnants of the past. In Europe, too, the 1980s were a pe- riod of privatization, of attacks against the publlc sector, of deregulation. (Social welfare budgets increased dur~ng that period but that was because of rising unemployment.) To put it differently, the nation-states of Western Europe are gradu- ally 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, the charge is richly deserved, though not because of Maastricht, which did not significantly expand the powers of the unelected Brus- sels Commission and Its Eurocrats. Like previous acts, Maas- tricht strengthens the prerogatwes of the Ministerial Council, where heads of government and their assistants reach deci- sions, increasingly by a majority vote. The road to European integration may be so bumpy because it involves a strange at- tempt to abolish the nation-state with the help of nation- states, 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 all mem- ber countries but also to grant more powers to Europe’s Par- liament in Strasbourg, France, a transfer of sovereignty that many of the community’s crltics are not ready to concede. The question is, What kind of Europe? This issue usually crops up whenever a matter involving Europe’s relations with the United States is at issue.

E.E.C. and the Open Sea The latest confrontation between the two is taking place In

the GATT negotiations over 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 Italian out of three, was working on the land. Continental Europe was still very much the land of the peasant. Today one Frenchman out of twenty works on the land, just below the E.E.C. average. The Common Agricultural Policy, introduced in 1962, brought about this change. With domestic prices fixed at a high level and protectionist import duties and ex- port subsidies in effect, this policy boosted output, turning the E.E.C. from a heavy importer of food into a producer of surpluses. And it did so by raising spectacularly the produc- tivity of farm labor, while simultaneously smoothing the way for the mass migration of peasants to town.

The snag in this policy was that, since it absorbed nearly half the community’s budget, it was getting too costly. There- fore, last May it had to be revised. From now on, the emphasis in Europe will no longer be on maintaining prices but on di- rect subsidies to farmers. Thus the conflict with 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 nature of their clash. More than ag- ricultural 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 Maastricht treaty, the French say, then dilute it further by bringing in new members; they also want to exclude foreign policy or defense functions to preserve NATO's domination. At the bottom of their hearts they really want an Atlantic free- trade 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. Prog- ress in European integration in the past has always been the result of Franco-German Initiatives. General de Gaulle worked hand in hand with Chancellor Konrad Adenauer until he re- alized that between Paris and Washmgton, Bonn will always choose the latter. Since Germany's reunification, Kohl is no longer working under the same constraint. Will he support the British, because farming IS secondary for him, or will he back the French to 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 point of view of

the rulers because, until recently, they were the only ones in- volved in its construction. The Common Market, set up as a rampart against Soviet influence, spurred by the first fif- teen 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 clouds gathered on the economic horizon while unemployment spread, that the mood has changed. It is time that the debate should also shift from whether one 1s for or against Europe to what kind of Europe, in whose interest, for whose purpose?

Some progress has already been 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 progres- sive. That posltion was based on the absurd assumption that a Labor government in office would introduce reforms so rad- ical that they would clash with the liberal framework of the Common Market. Actually, a contemporary Labor govern- ment would not hurt a capitalist fly, and its leadership now is, logically, for Maastricht, even if its electorate is not. Slm- ilarly, the French Socialists, whatever their original ambltlons, surrendered to the forces of domestic capital in 1983 and are now wholeheartedly for a capitalist Europe. During the re- cent referendum debates, quite logically again, Socialists often shared platforms with moderate conservatives. Indeed, the main backing for Maastricht comes from this new establlsh- ment combining the respectful left and the respectable 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 decade witnessed the Amerlcanlzatlon of European politics, with the blurring of class lines and the glorlflcation of the center. Thls trend seems to be stymied. The European crlsis IS also the crisis of the new consensus.

Who opposes this capitalist construction of Europe? On the right, you have the traditional conservatives, who really want to stop the clock. Next to them, however, you have the dangerous demagogues seeking thelr polltlcal fortunes by channeling discontent against “allen” scapegoats-the Arab, the Asian, the Gypsy, the Jew. It IS the voice of these dema- gogues that now echoes loudly across the Contlnent.

Harder to define are the left-wmg dlssenters, best described as opponents of Maastricht in the name of a different Europe. Depending on the countries they come from, these include former New Leftists, progressive Greens, unorthodox Commu- nists and Socialists disappointed by thelr party’s moderation. Theirs is the most dlfficult discourse to formulate. They must, at all costs, avoid any confusion with the Jingoists. Hence they must show that they don’t give a damn about frontiers and are ready to cooperate with workers’ councils or labor unions of other countries. They must point out that only a Western Europe with grass-roots democracy and a different social struc- ture can stand up to the Unlted States and attract the rest of the Continent in a progressive direction. Actually, proponents of this stdl uncharted soclalist alternative are to be found on both sides in the Maastricht debate: Some think the capitalist invaslon must be fought within natlonal borders, while others believe the battle must be waged on the European front.

The movement that is foreshadowed by such skirmishes will not be built overnight. And In one sense, there is ample time. However dramatic the warnings, the E.E.C. w~ll not fall to pieces; it embraces too many commercial ties and vested In- terests for that. The rush toward some kind of federation, however, has undoubtedly been slowed.

In another sense, though, tlme IS running out. The terrible stories from Bosnia tell us where “ethnlclty” can lead; the rac- ism in Rostock revives ghosts of the past. The murderers are among us. With the Stalinist Soviet model duly shattered, it is high time for people throughout the Western world to start thinkmg again of an entirely different society and not to do so in purely domestic terms. 0

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BRINGING DOWN THE TEMPLE

Democracy at Risk in India PRAFUL BIDWAI

T he cataclysm in India has exposed the awesome pro- portions of the crisis that grips the country. It IS as if the nation were faced wlth the prospect of a sec- ond partition, now along more than one religious

divide. Millions of Indlans, above all Hindu Indlans, have been plunged into despair over the viability of the constltu- tional secular/pluralist/democratic order. A question mark now hangs over the project that independent India launched in 1947 and that gave the country Its raison d’etre.

The event that trlggered the shock wave on December 6 be- longs for many Indians to the realm of the unthinkable-the demolition, as police passively watched, of a protected his- torical mosque at the hands of a mob of fanatics led by the Bharatiya Janata Party, a right-wlng Hindu fundamentalist organlzatlon, and other groups of Hmdu communalists who seek to create a theocratic or confessional state and who op- pose the separation of religlon from polltlcs. The destruction of the mosque was the communalists’ revenge agamst history. The 465-year-old structure, known as the Babri mosque, in Ayodhya in the state of Uttar Pradesh, was a special target (although only one of more than 3.000) because the B.J.P. claims that the Mogul emperor Babar had I t built after de- stroying a temple to Rama consecratmg his birthplace.

There IS no historical or archeologlcal evldence that a tem- ple once stood on the mosque’s site. Confronted with this ar- gument, the B.J.P. moved to the posltion that t h ~ s is a matter of faith not open to ratlonal or legal disputation, and that In any case it would build a temple at that site. The party’s pre- cursors indeed had surreptltiously entered the mosque in 1949 and installed some idols.

Actually, the mosque was attacked so as to humiliate Mus- lims (an eighth of the population), to challenge the secular foundatlons of the Constitution and to destroy a symbol of India’s cultural. ethnic and religious diversity. Its destructlon is a triumph for the B.J.P.3 strategy of physlcally confrontlng a weak-willed state and pushing It to yield political ground- a strategy perfected since 1986. In that year the Uttar Pradesh government, led by Rajiv Gandhl’s Congress party, decided to unlock the gates to the structure, long shut under numerous admmstrative and judicial orders, to appease Hindu fanatics, who wanted to worship the idols installed inside the mosque thirty-seven years earlier. State collusion gave Hindu commu- nalism precisely the confidence boost it needed.

Since the mid-eighties, the B.J.P. has attempted to reshape the Indlan polltlcal agenda, harnessing the temple dispute to mass agitations and using these as a lever to exert pressure on

Praful Bldwal, a senlor editor of The Times of Indla m New Delhr, IS currently a vlsitrng professor at Amherst College.