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Herr Kohl's New Economic Order | The Nation

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Herr Kohl's New Economic Order

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Nineteen ninety-three, with its single market and its important steps toward monetary and political union, was to have been Europe's momentous A 1 year. But crumbling walls alter perspectives and timetables. With Chancellor Helmut Kohl successfully rushing the Germans into reunification, the size, shape and future of Europe are being determined now. At first, the eastward drive of the Federal Republic, its new Drang nach Osten, raised the question of whether it might find the framework of the European Economic Community too narrow and constraining. Those fears were then superseded by a much larger concern: Would a reunited Germany dominate the community as the mark already dominates the currencies of Western Europe? Or to put it another way, can Germany play the same role in the Common Market that Prussia used to play in the German Zollverein--that of a unifier, a federator?

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Daniel Singer
Daniel Singer, for many years The Nation's Paris-based Europe correspondent, was born on September 26, 1926, in...

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It is a battle royal, and it foreshadows many more like it in the struggle for the economic mastery of Europe.

These problems now come to the surface because of the dramatic shift in the balance of forces in Europe. The Warsaw Pact, though not yet disbanded, is vanishing. With the huge arsenals of the United States and the Soviet Union, the smaller ones of Britain and France, and so many weapons still in the pipeline, it is inaccurate to talk of the end of the cold war, at least in military terms. But the ideological contest, for the time being, is over; Russia no longer claims to be forging an alternative, a radically different kind of society. The political climate has altered beyond recognition, and only the pundits of the Western left, like mandarins still protected by a mental wall, act as if they are unaware of the upheaval, the risks involved and the opportunities offered.

No Repeat of Rapallo

Whenever Germany turns its attention eastward, Western commentators revive the ghost of Rapallo. But the international context today is entirely different from that of 1922, when the Soviet Union and Germany surprised the world by announcing their economic and military pact. Then, the two countries were the outsiders of the postwar settlement, the outcasts of Versailles. Now, the Soviet Union is staging a historic return--not a very triumphant one, despite Gorbachev's great diplomatic skills--into the capitalist concert of nations. And Germany, far from being an outcast, is the pillar of the Western establishment. The past nine months have confirmed the obvious fact that this economic giant will not remain a political dwarf for very long. Indeed, they have revealed spectacularly how dominant a position Germany occupies in Europe.

For a brief spell late last year, the bullying Kohl seemed to be getting too big for his boots. When he produced his ten-point reunification plan without consulting anybody and stubbornly refused to recognize the Oder-Neisse Line as Germany's permanent frontier, both Paris and London showed signs of impatience. At the beginning of this year, Washington came to the rescue. Did the Germans give some guarantees about the U.S. economic and military presence in Europe after 1993? Or did Bush simply decide to back the likely winner? Whatever the deal. the United States gave Kohl its wholehearted support, which allowed him to go on dictating the pace of events unperturbed by the objections of his European allies.

In fact, he could even afford to spare their finer feelings. Having dragged his feet long enough to prove his "nationalism'' for domestic electoral purposes, Kohl could now follow the advice of his Foreign Minister and resign himself to the inevitable recognition of the Oder-Neisse frontier. Second, since the French were arguing that German reunification should be coupled with a more rapid integration of the European Community, the Chancellor was ready, even eager, to oblige. It was under pressure from Kohl and French President François Mitterrand that the community decided to hold two major intergovernmental conferences in Rome this December: one devoted to economic and monetary union and another, still rather vague, dealing with political unity and a new Constitution for the community. The Twelve will then have a couple of years to work out a blueprint for a future federation.

France's basic motive for linking reunification to a speeded-up process of European integration is to make sure that Germany, in search of its Eastern destiny, does not change sides. The flaw in the French argument is that Germany's financial strength, industrial power and geographical location will allow it both to dominate Western Europe and to preside over Eastern Europe's conversion to capitalism. Indeed, the former could clearly help the latter.

Kaiser Mark the Federator?

The Common Market is the combined product of the cold war and of farsighted capitalist vision. It has now lasted for a third of a century, presiding over a great deal of economic integration. But the realization of a single United States of Western Europe, which was the vision of its founders, is still very distant. Until now, it was believed that there could be no federation for want of a federator, each of the three potential candidates having proved unwilling or unable to carry out the task.

The United States, the original sponsor of the whole European operation, was content to talk of the "two pillars of the Atlantic Alliance" as long as one pillar--the Ameri- can one--was incomparably stronger than the other and a united Europe could be seen as a junior partner. As soon as it became obvious that a closely knit Europe would be a serious economic rival, Washington changed its line. The French bid for leadership was an illusion that lasted only as long as Charles de Gaulle's skill and charisma could conceal the economic imbalance between France and West Germany. The Federal Republic was, on the face of it, the only serious contender, yet it could not bid for the leadership of an independent Europe as long as it accepted the division of the world into two blocs and its own dependence on the U.S. nuclear umbrella. But those two handicaps may now be in the process of disappearing.

West Germany has always been something of a primus inter pares within the European Community. Other European currencies have been aligned with the mark, and the Bundesbank has shaped financial policy and determined interest rates. As a rule, new projects within the community are proposed by the French, elaborated by the Brussels Commission, opposed by the British and then settled when the Germans say how far the projects should go.

There is, then, a French-German a x i s of a sort within the community, but the weight of Germany is predominant. And what was true of the Federal Republic on its own will be even truer of the new Germany, with its nearly 80 million inhabitants. Reunification may cause mass unemployment and play havoc with the lives of millions of East Germans, but it will be, on balance, beneficial for German capital, which will be better quipped than ever to play a crucial role in the West and to venture further in the East.

It probably will not be German social democracy that colors the future of Western Europe. What is being built now is the Europe of Konrad Adenauer and Ludwig Erhard, the German model of big business with Christian Democratic blessing. France illustrates the pattern. Earlier this year a statistical study revealed that in the 1980s. with France ruled for the first time in its history by a directly elected Socialist President, the earnings of labor stagnated while those of capital rocketed. Perturbed by the publication of this news, and by undeniable popular discontent, Mitterrand made a public fuss about the need to do something for those with the lowest incomes. His sentiments were duly echoed by his Prime Minister and Finance Minister, yet all of them, their assistants and the pundits also insisted that one must proceed very cautiously. If higher wages squeezed profits, French firms would not be able to compete, and if capital were taxed, it would simply run away. (On July 1, eight of the twelve European Community countries removed all remaining restrictions on the movement of capital.)

Deregulation, the free movement of money and labor--anything that facilitates for capital its task of exploitation--is enacted with ease in the community. The E.C.'s Social Charter and any measures designed to reduce inequalities and help the downtrodden meet resistance and are marginalized. Unless something drastic is done, this is the kind of Europe that Herr Kohl and his fellows are shaping for the end of this millennium.

Who's Afraid of the Warsaw Pact?

The last obstacle on the road to German unity, as mapped out by Kohl, was the potential Soviet veto on a reunified Germany's right to become a member of NATO. Stalin transformed Eastern Europe primarily for reasons of security, not out of revolutionary conviction. The Russians, with their terrible memories of the last war, have every reason to demand guarantees against its repetition. They also have the legal right, as one of the four victors, to veto any final settlement. That is why frantic efforts were made to induce them to accept the Kohl-Bush version of Europe's future.

The NATO summit, held in London July 5-6, broke all records for Madison Avenue diplomacy. It was hailed as an epoch-making turning point, whereas the only concrete measure it produced was the decision to remove U.S. nuclear artillery shells from Europe. Since these could now be used only against, say, President Vaclav Havel's Czechoslovakia or the Hungarians (who are now eager to join NATO), it was hardly a concession likely to stir Soviet generals. The rest was fiction. The pledge to refrain from the use or threat of force is already binding on all members of the United Nations. The promise to treat nuclear arms as weapons of "last resort" was not coupled with any commitment not to use them first. And one could go on.

Nevertheless, the Russian leaders have greeted as steps in the right direction the general declaration that the Soviet Union is no longer the enemy, and the vague suggestion that the Conference on Security and Cooperation in Europe (which groups thirty-five European nations with the United States and Canada) may have a greater role to play. Some Western commentators saw this reaction as proof that what Soviet President Mikhail Gorbachev needs at this stage is a lot of economic aid and a little window dressing. Others went further, claiming that Moscow really wants Germany in NATO so that the Americans will keep it in check. But that is going too far. Even in the worst of circumstances, it would take Germany quite some time to become a direct military threat to the Soviet Union. What the Russians have always feared is a Germany bent on revanche, playing a crucial part in the Western alliance and triggering American nuclear arms. That should have prompted them to keep Germany out of NATO.

On the other hand, the extent of the reappraisal of Soviet strategy was shown in Eduard Shevardnadze's significant speech to the 28th Communist Party Congress. Turning on military critics of the Gorbachcv line, the Soviet Foreign Minister reminded them that the country could not afford to spend a quarter of its budget on defense. He estimated the "peace dividend" for 1991-95 at about 250 billion rubles (a figure he could not easily justify when it came to question time) and stated plainly that "a ruined country and an impoverished people" needed neither an army nor a defense.

Shevardnadze went further, claiming that the Soviet Union could have "no future outside integration into the worldwide system of economic and financial institutions and ties." He sees the Soviet Union taking its place among other economic centers "alongside Europe, the U.S.A., Japan and the Asia-Pacific region." It was here that one could hear the language of peaceful coexistence, as preached by Nikita Khrushchev and Gorbachev. Whereas Khrushchev was looking for rules under which each system could peacefully prove its superiority, Gorbachev is seeking a place for the Soviet Union in the capitalist world system. German membership in NATO seems to be the price of admission, and the Soviet leader finally paid it in Zheleznovodsk during Herr Kohl's Caucasian journey. (The package includes a ceiling of 370,000 troops for a united Germany and, presumably, the prospect of substantial economic aid for the Soviet Union.)

A Farewell to Arms?

Questions about Western intentions are even more numerous. For years the arms race has been both a mechanism of economic management and an instrument of foreign policy. The United States has always tried to retain its position as the dominant nuclear superpower in order to dictate the rules of coexistence, and above all to prevent the spread of movements of national liberation. While the Cuban "missile crisis" of 1962 strengthened the U.S.'s hand, the Vietnam War showed the limits of its international power.

Soviet foreign policy, one must never tire of repeating, was not subordinated to the interests of world revolution. After the early Bolshevik days, the very opposite was true. Nevertheless, the Soviet Union could often appear--and sometimes even acted--as the protector of national liberation movements. To people rebelling against capitalist oppression it appeared from a distance as a model and a leader. It is this ambiguous position as headquarters of an alternative world that Moscow now shows every sign of being ready to give up.

Western reactions to this offer vary. There is general agreement among Western leaders that Gorbachev's venture is heading in the right direction and should be encouraged (Shevardnadze has now confirmed that the sweeping changes in Eastern Europe were no accident but part of a policy). But there are differences on how best to prod him on. The Germans, with their stake in an immediate deal, and the French are in favor of giving Gorbachev the benefit of the doubt and substantial loans--$15 billion to $20 billion to begin with--to ease his perilous period of transition. The British and the Americans are for treating Russia just like Eastern Europe, granting it credits only if it gives open proof of its conversion to capitalism, duly tested and approved by the International Monetary Fund. Indeed, President Bush would also like to make such credits conditional on Moscow ending its military aid to Cuba.

Much more is at stake now than this sordid bargaining. The world has a unique opportunity to scrap its nuclear arsenal and reduce its military expenditures, not cosmetically but drastically. On the other hand, throughout the postwar period the arms budget has been the main engine of the West's economic "miracle." In the hour of their apparent triumph, it is not clear whether the Western powers have either the imagination or the capacity to alter radically their system of rule. Can they--if not in the Third World then at least in Europe--switch from a military posture to the more subtle policy of conquest through capitalist penetration?

Our Kulturkampf

So many question marks remain because what is now being built, on the ruins of Yalta, is an entirely new order, a new framework for solving international conflicts. The extraordinary thing about this new order is that it is being imposed entirely from above. Last year the Eastern Europeans reminded us that people can be the actors in their own drama. Today the Western Europeans observe crucial changes with the passivity, though not the passion, of television viewers watching the soccer World Cup (won, appropriately enough, by the Germans). The passivity is all the more remarkable since the events just described suggest tremendous scope for a radical movement.

In the first place, there is now the opportunity for an unprecedented campaign for disarmament, both nuclear and conventional. Given the talks on Germany, this could begin with a proposal to remove nuclear weapons from central Europe and--why not?--neutralize the whole area, It should then extend to mass demonstrations against the nuclear midgets (France and Britain) and, above all, the nuclear giants (the Soviet Union and the United States). The campaign should demand the abolition of atomic weapons, a drastic cut in all military expenditures and the rapid transfer of these huge resources to such purposes as genuine aid to the Third World and the salvation of the earth from ecological disaster. If our politicians fail to make more than marginal reductions in military spending, they will reveal themselves as what they really are--the servants or accomplices of the armorers.

The second line of action, in Europe, is dictated by the proposed integration of the European Community. The labor movement has internationalism thrust upon it. If they do not oppose the offensive of capital by common action across national frontiers, the already weakened labor unions will be committing political suicide. Although defensive measures to protect working people are not very revolutionary in themselves, they could create quite a stir in the current ideological climate, in which deregulation is the gospel, private is beautiful and profit virtuous. By describing the utter collapse of the Soviet model as the final failure of socialism the establishment has managed to greatly reinforce that mood.

Not so paradoxically, the events in Eastern Europe should soon spur the Western left into action by depriving the Communists of the remnants of a model and the Social Democrats of a bogy and an excuse for inaction. The left must now say independently what its own solutions are. Admittedly, it may take some time to reinvent a project based on the principle that power flows from the grass roots. Meanwhile, we should react against the overwhelming international campaign that aims to persuade us all that capitalism is our ultimate destination. It is our Kulturkampf to preserve the spirit of resistance, to battle against the odds in order to convince an increasing number of people that there is, and must be, an alternative to the alienated world of commercialized culture and faceless corporations, to the Europe of Wunderkohl and company.

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