Wednesday , April 24 2019
Home / Bill Mitchell / The Europhile dreamers are out in force

The Europhile dreamers are out in force

Summary:
It appears that the Brexit process in Britain will now stall. My understanding of the Referendum was the majority of British people who voted wanted to leave the EU and that the politicians from all sides of politics unambiguously stated they would honour the outcome, whichever way the vote fell. That is what democracies are about. A lot of people are disappointed by vote outcomes. They have to grin and bear it. But in the case of the Brexit vote, the Remainers have never accepted the outcome and have used various means – foul or otherwise – to undermine the choice of the majority. There have been regional strains involved and social class strains (cosmopolitans and the rest) involved. There have been nasty imputations that those who voted to Leave were ignorant, racist or otherwise not

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It appears that the Brexit process in Britain will now stall. My understanding of the Referendum was the majority of British people who voted wanted to leave the EU and that the politicians from all sides of politics unambiguously stated they would honour the outcome, whichever way the vote fell. That is what democracies are about. A lot of people are disappointed by vote outcomes. They have to grin and bear it. But in the case of the Brexit vote, the Remainers have never accepted the outcome and have used various means – foul or otherwise – to undermine the choice of the majority. There have been regional strains involved and social class strains (cosmopolitans and the rest) involved. There have been nasty imputations that those who voted to Leave were ignorant, racist or otherwise not entitled to cast an opinion. The Europhile Left had conniptions because their dream looked like evaporating. I use the term ‘dream’ deliberately – as in, not ground in reality. As the incompetence of the Tory government in managing the exit process reaches new heights – embarrassing heights – the Europhile Left has become emboldened and are now reasserting their claims that the British Labour Party should articulate a clear Remain position and push to reform the prevailing European treaties, which embed neoliberalism in their core. Talk about dreaming.

British Labour’s crazy position

When the British Labour Party re-affirmed its demand as part of the Brexit shenanigans that Britain should remain in the Single Market by dint of a customs union arrangement all the Europhile Left Remainers cheered them on – knowing, probably, that that decision would sink any chance of a successful compromise with the Tories.

Their cherished dream to subvert the democratic choice of 52 per cent of the voters at the June 2016 Referendum – who emphatically voted to LEAVE – which, the polity, in turn, vowed to honour – was nearing fruition.

The amazing thing about all this is that there has been very little attention given within progressive circles to how Labour’s Brexit position runs contrary to its 2017 Electoral Manifesto – For the Many not the Few.

In that Manifesto, Labour stated it would:

We will:

– Bring private rail companies back into public ownership as their franchises expire.

– Regain control of energy supply networks through the alteration of operator license conditions, and transition to a publicly owned, decentralised energy system.

– Replace our dysfunctional water system with a network of regional publicly-owned water companies.

– Reverse the privatisation of Royal ail at the earliest opportunity.

That statement is pretty categorical and laudable.

As they go on to state:

Public ownership will benefit consumers, ensuring that their interests are put first and that there is democratic accountability for the service.

The question then has always been whether they could do that while remaining fully paid-up members of the European Union.

All sorts of opinions have been offered and examples proferred to claim these goals were consistent with EU membership.

Remember back to 2017, when the French Finance Minister (Bruno Le Maire) intervened in negotiations between the South Korean group STX, which held control of the shipyards in Saint-Nazaire but had gone filed for bankruptcy in 2016, and the Italian shipbuilder Fincantieri about the terms of the private takeover of the shipyards by the Italian company.

The Minister reneged on an agreement signed between the two nations on April 12, 2017, which the Italian company sould take control of the Saint-Nazaire shipyards.

Instead, he ‘temporarily’ nationalised STX to deny Fincantieri a controlling interest in the shipyards (see story in Le Monde on Spetember 9, 2017 – Bruno Le Maire à Rome pour déminer le dossier STX – for more detail).

This action was then rushed into the British Brexit debate by zealots looking for every angle on which to undermine the Leave position.

For example, the UK Guardian (aka Remain-lying Central) published the article (October 1, 2017) – Labour Leavers’ claims that EU blocks state takeovers are rejected by experts.

Its headline tells the story.

Reader were assailed with assertions that membership of the EU does not compromise British Labour’s Manifesto, which includes the nationalisation of “water, energy and rail industries”.

The article cited the French decision to nationalise the Saint-Nazaire as being evidence that the EU allows such state interventions.

Yet these views seemed to have not read the Minister’s statements very clearly.

He emphasised that:

Ce constat est d’autant plus vrai que dans l’esprit du gouvernement français, la nationalisation des chantiers de Saint-Nazaire ne saurait être que provisoire.

“ne saurait être que provisoire” – can only be temporary.

In other words, the French were holding out for a better deal from the Italian takeover. It was nothing at all to do with the French government asserting their rights to nationalise and operate the infrastructure on an on-going basis.

Fast track to March 1, 2019, and the French Finance Minister announced at a Franco-Italian business conference in Versailles that the Italian shipbuilder Fincantieri will be allowed to merge with STX France, after several years of wrangling about the terms of the privatisation (takeover) (Source).

Moreover, using this as an example to shore up the Remain justification was fraught because the shipyards produced military equipment which is outside the ambit of the Single Market and competition rules of the EU anyway.

See Article 346 of the Treaty on the Functioning of the European Union – for the exemptions for military purposes.

The point is fairly clear.

If you read the – Railways Act 1993 – which was introduced by the Tory government as part of the privatisation or outsourcing under franchise of British Rail – and its subsequent amended versions (including the Railways Act 2005 – which the Labour Party claims it will repeal if elected, one gets the strong impression of déjà vu.

How? Go to the EU’s Fourth Railway Package – which is part of the Trans-European Transport policy (TEN-T) policy to increase private corporation access to profit from transport operations.

The EU states that:

… the proposed 4th railway package will help create a more competitive rail sector.

It makes it clear that “anyone would be able to bid to compete on a commercially viable EU rail network from 2020 … [and] … From 2026 private companies would also be able to bid for public service contracts that are awarded by governments on lines that are not as profitable” (Source).

In the House of Commons Briefing Paper (Number CBP 7992, July 27, 2017) – Rail structures, ownership and reform – it is clear that the Chinese and Indian models of traditional “Fully integrated, publicly-owned monopoly” railways is prohibited under EU competition policy.

The point often made by Remainers is that the ongoing operations of German Deutsche Bahn and French SNCF rail systems prove that state-owned railways can continue to function under EU rules.

The point is, however, irrelevant in assessing the plans of British Labour.

The EU prohibits a monopoly being reestablished once privatisation or vertical separation (between rail and track) has occurred. If the French government started to break up SNCF then it, too, would be prevented from reversing those decisions and recreating a vertically integrated monopoly.

So Labour might be able to bring some increased public ownership to the railways system but would have to keep strict separations between segments and maintain competitive tendering on infrastructure.

They might claim this is a renationalisation. But, everybody would know it is not and would still incur the massive (wasted) costs of separation.

The so-called Right-wing conspiracy

The other recurring theme is that the progressive Left should eschew support for Brexit because it is a Right-wing driven agenda.

Recently, the Remain-cheer-leader, the UK Guardian published an article (April 6, 2019), from Labour MP Owen Smith – Face the facts, Labour leftwingers: Lexit is dead .

Owen Smith seems to think he has a divine right to the leadership of the British Labour Party except hasn’t found the numbers to confirm that view despite trying.

After the June 2016 Referendum voted to Leave, he wanted another vote.

In his Guardian article, Smith wrote that:

We should have been more passionate in the fight against a leave campaign that was always a project of the right, for the right and by the right.

He also showed an amazing lack of conviction or understanding of what it means to be government in a currency-issuing nation when he denied that there was ever going to be:

… a leftwing version of Brexit … The truth is there can be no leftwing Brexit. It is an oxymoron. It’s irreconcilable with those values of freedom and equality that are at the heart of what we stand for … a leftwing Brexit could never have been born; to me, Lexit is now dead.

So what would a British Labour government do, if Britain was outside the EU? Continue to inflict neoliberalism? That seems the logic that Smith is presenting here.

How is Britain free when its laws are given to it by the unaccountable European Commission and enforced by the unelected European Court of Justice?

And his take on the nationalisation story was that:

In supporting a customs union and a single market alignment, our party leadership is saying it would bind the UK to the very rules the Lexiters are against.

And when the Labour leadership made that explicit a few weeks ago I thought it would probably rank as the single most ridiculous position for a Labour Party to take since Callaghan and Healey duped the voters in their IMF scam in the mid-1970s.

That was the first major step towards neoliberalism, which saw Thatcher then Blair follow.

By tying their fortunes to the neoliberalism of the EU they perpetuate that sell-out of the great Labour traditions.

Owen Smith also wrote that:

Lexit is dead. Democracy is alive. Labour is waking up.

Democracy decreed that Britain leave the European Union. Anything less is a denial of democracy.

But in what way was the Brexit vote a Right-wing project?

Didn’t the Remainers include notable Tories and characters from the Thatcher period Michael Heseltine?

This article by Josh Jackson (April 12, 2019) – Owen Smith’s Mistakes: Lexit Lives On – is worth reading on this issue.

It notes that:

As even a child can see, big business – banks, corporations, financiers, etc – are the most vociferous supporters of the EU.

And concludes:

For a Left Brexit to be dead, the socialist movement itself would have to be dead.

And that movement, in my view, does not include weak-kneed Fabians like Owen Smith.

And then we get the reform argument

The most extraordinary mistake that the Left continues to make, not just in the context of the Brexit debate, but, in terms of the EU as a whole, is that while the EU is clearly problematic, it can be reformed along progressive lines and fulfill the grand desires of an internationalised Left.

We discussed that hope in detail in – Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World (Pluto Books, 2017).

On April 9, 2019, the New Statesman, which has become a defender of neoliberalism, despite its self-styling to the contrary, published an article by Paul Mason – A new Brexit extension is the moment for Labour to finally champion Remain.

It is about as lame as you could imagine.

It claims that the British Labour Party:

… can no longer be bound by the referendum of 2016 — it must fight for a transformed Europe from within.

That’s right, cosmos, deny the democratic intent of the Referendum and fall back to the usual position that the EU is reformable along progressive lines.

It was written before the final European Council meeting in Brussels on April 10, 2019, and its predictions about what would happen at that meeting with respect to the Brexit extension turned out to be completely wrong.

But in anticipation of the outcomes, Mason wanted the British Labour Party leadership to:

1. Beg (“plead”) the EU to be nice to Britain – yes, Britain gets down on its knees to the neoliberal cabal in Brussels and begs.

2. Force the Government to extend beyond June 30, 2019 and fully participate in the upcoming “European parliamentary election”.

3. Support a long extension even if it means the UK no longer has a “vote over budgets” in the EU.

This is a Surrender Manifesto not a progressive vision.

According to Mason, this would give “internationalists and progressives inside Labour and beyond” time to support a “three-point plan”:

1. “Remain, reform and a rewrite of the Lisbon Treaty”.

2. “Commit the Labour Party …to a Remain-reform strategy”.

3. “Labour would campaign to stay in the EU in order to fight its neoliberal strictures” at a general election.

Apparently, British Labour is:

… not, and have never been, a “Leave party”.

I found that a curious claim given that the relationship between the British Labour party and ‘Europe’ has swung back and forth many times.

In the early period of the Common Market, Labour certainly didn’t champion membership.

European ‘membership’ became a British ambition under the Conservatives after the Suez catastrophe in 1956, which most historians believe finally ended Britain’s pretensions to being a ‘superpower’.

This BBC story (July 24, 2006) – Suez” End of Empire – provides some factual background.

With the demise of Prime Minister Anthony Eden as a result of his stand on Suez, his successor, Harold Macmillan sought to join the Common Market in 1963, only to rebuffed by the French because Charles De Gaulle didn’t want to dilute France’s own ambitions (vis-a-vis Germany) to dominate any inter-governmental arrangements that would strengthen Brussels.

Harold Wilson’s Labour government became pro-Europe in 1967 and it was the Tories (Edward Heath) who took Britain in once De Gaulle was gone.

But Labour was firmly split in the second Wilson government about Europe and the Left of the party were clearly anti-EU membership and reflected the dominant majority in the Labour membership.

It was only the likes of Healey and Callaghan, who had become besotted with neoliberalism, that pushed the Parliamentary line that Labour was pro-EU.

When Labour was defeated resoundingly in the 1979 general election, the new leader Michael Foot turned the Labour Party firmly against EU membership.

If you read the famous – Labour Party Manifesto – which they took into the 1983 election and which has been described as “The longest suicide note in history” (Source) – it is clear:

… the European Economic Community, which does not even include the whole of Western Europe, was never devised to suit us, and our experience as a member of it has made it more difficult for us to deal with our economic and industrial problems. It has sometimes weakened our ability to achieve the objectives of Labour’s international policy.

The next Labour government, committed to radical, socialist policies for reviving the British economy, is bound to find continued membership a most serious obstacle to the fulfillment of those policies. In particular the rules of the Treaty of Rome are bound to conflict with our strategy for economic growth and full employment, our proposals on industrial policy and for increasing trade, and our need to restore exchange controls and to regulate direct overseas investment. Moreover, by preventing us from buying food from the best sources of world supply, they would run counter to our plans to control prices and inflation.

For all these reasons, British withdrawal from the Community is the right policy for Britain – to be completed well within the lifetime of the parliament. That is our commitment. But we are also committed to bring about withdrawal in an amicable and orderly way, so that we do not prejudice employment or the prospect of increased political and economic co-operation with the whole of Europe.

We emphasise that our decision to bring about withdrawal in no sense represents any weakening of our commitment to internationalism and international co operation. We are not ‘withdrawing from Europe’. We are seeking to extricate ourselves from the Treaty of Rome and other Community treaties which place political burdens on Britain. Indeed, we believe our withdrawal will allow us to pursue a more dynamic and positive international policy – one which recognises the true political and geographical spread of international problems and interests …

On taking office we will open preliminary negotiations with the other EEC member states to establish a timetable for withdrawal; and we will publish the results of these negotiations in a White Paper.

Where does that fit with Mason’s claim that British Labour has “never been a Leave party”.

Clearly, under the Third Way neoliberalism of Tony Blair, the Labour Party was firmly pro-Europe.

But the grand tradition of the Labour Left in Britain has not been so enamoured.

Mason also justifies his claim that Labour cannot be “bound by the referendum of 2016” because “Leaving was forced on us by a referendum result”.

Imagine that.

The people are invoked to vote for two options – Leave or Remain.

The clear majority vote to Leave.

But here is a member of one of the major political parties in Britain saying that that clear majority “forced” their will on the Party and so they are not bound by the result.

Isn’t that what democracy for all its foibles is about?

Finally, what about the “remain, reform” hopes?

This is the dream sequence that the Europhile Left rehearse on a daily basis to get them through the day.

It is a dream.

The EU have evolved into a core neoliberal institution. Its legal structures embed (Single Market etc) embed neoliberalism in the Treaties.

So we are not talking about a simple change to accession arrangements. The progressive Left would require root-and-branch treaty revision if the resulting structures were expunge the neoliberal, corporatism that is embedded.

The process of changing the Treaties that apply (Treaty on European Union, Treaty on the Functioning of the European Union, Treaty establishing the European Atomic Energy Community, and the Charter of Fundamental Rights of the European Union) is onerous.

This analysis (October 2010) from the Centre for European Policy Studies (CEPS) – How to Change the EU Treaties – provides a factual account of how difficult it is to instigate root-and-branch change to the Treaties.

There are different ways to achieve reform, depending on the nature of the reform being sought.

The sort of reforms Paul Mason might be desiring come under the “ordinary revision procedure (ORP)” specified in the 2010 Treaty of Lisbon.

This procedure applies when “a significant reform to EU Treaties is required”.

But the reality is that even if a proposal gets through the Council, then the European Council, then the European Commission, then the European Parliament (and its Parliamentary Committees), then, if pertaining to monetary policy and, possibly, fiscal policy, the European Central Bank, and then, back again to the European Council, it still has go to an Intergovernmental Convention.

The IGCs are dominated by the President of the European Council – agenda setting, scope of debate, etc.

In some cases, the European Council can bypass an IGC but the scope of the reform sought by the likes of Paul Mason would preclude this short-cut.

And then, ladies and gentlemen, if Europe finally gets the reforms on the table at an IGC a consensus has to be achieved.

And then they have to be ratified by all National governments “in accordance with their domestic procedures”.

Can you ever imagine, in the foreseeable future, the so-called New Hanseatic League, combining with the Benelux states (yes, the Netherlands is in both groupings), to approve a reform motion from British Labour advocating the embedding of the 2017 Labour Manifesto in a reformed Treaty of the Functioning of the European Union?

I cannot. It is pure fantasy stuff.

There was an interesting article by Johannes Jarlebring – Taking stock of the European Convention: What added value does the Convention bring to the process of treaty revision? – which appeared in the German Law Journal (No. 8, 2003. pp. 785-799).

It analysed the experience with treaty revision to date and concluded that while the reform processes have a semblance (“at first sight” of being consistent with Article 6 of the Treaty on European Union that the EU is “founded on the principle of democracy”, the reality is quite different.

He analyses the “Convention” process and concludes the “decision-making procedures” suffer from “serious flaws”, which seriously” undermine “the Union’s democratic credentials”.

These procedures are “characterised by the dominating role of the presidium and the vagueness of the decision-making rules” and:

In sum, the Convention’s qualities in terms of rule by the people are largely reduced by its decision-making procedures. In fact, it is practically impossible to hold the Convention members accountable for the output of the Convention since it is unclear who actually made the final decisions and, therefore, was responsible for them.

He also notes that the IGCs “tend to finish in the middle of the night, under fairly chaotic forms and extreme time pressures” because it is extremely difficult to “reach common accord among governments” who “feel little incentive to engage in negotiations during most of the IGC”.

Conclusion

I remain a supporter of a no-deal Brexit.

Britain has all the currency capacity it needs to attenuate the negative (short-term) outcomes that would arise from that stance.

And, it gives a truly progressive British Labour the necessary scope to introduce its transformative Manifesto, after it ditches its neoliberal Fiscal Credibility Rule.

At present, the Labour Party is claiming to represent the progressive position but at the same time defends the neoliberal central aspects of the EU.

A crazy position to be in – that is, no-where!

Events

Please support the activists that are staging events in May in Britain to support the expansion of MMT awareness in that nation.

Details are available from my Events page.

That is enough for today!

(c) Copyright 2019 William Mitchell. All Rights Reserved.

Bill Mitchell
Bill Mitchell is a Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the University of Newcastle, NSW, Australia. He is also a professional musician and plays guitar with the Melbourne Reggae-Dub band – Pressure Drop. The band was popular around the live music scene in Melbourne in the late 1970s and early 1980s. The band reformed in late 2010.

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