West and East

West and East

In Maastricht twelve members of the European Community reached another stage on the road toward some form of union, notably with the pledge to introduce a common currency, the ecu, before the end


In Maastricht twelve members of the European Community reached another stage on the road toward some form of union, notably with the pledge to introduce a common currency, the ecu, before the end of the millennium. In Byelorussia, the hosts, together with the Russians and the Ukrainians, in principle set up a Slavic commonwealth; in practice, they shattered not Just the Soviet Union but also links going well back into czarist times. Capital is thus strangely working in two opposite directions. In the West, while consolidating its rule, it gradually obliterates the frontiers of the nation-state. In the East, on the contrary, it opens its reign with a dangerous revival of nationalism. But the two trends have one point in common: Everywhere Europe is now being shaped from above, without the active participation of the people.

The third stage of the so-called Economic and Monetary Union, involving both a common currency and a Joint central bank based on the German model, could be introduced in 1997, if seven of the twelve members pass the convergence tests (low inflation, budget deficit below 3 percent and public debt below 60 percent of the gross domestic product, etc.). But it will definitely be introduced by 1999, even if a smaller number qualify. Britain was gwen the right to opt out but not the right to veto.

The road toward political union, with a common defense and Joint foreign policy, is much less clearly defined. So is the Social Charter, which is supposed to provide some guarantees for workers, such as equal pay for women. Yet even the minimal social legislation required proved too much for Maggie Thatcher’s heirs. In a dangerous precedent, on this issue too the British were allowed to opt out.

This European summit was true to form, with artificial suspense and dramatic confrontations well into the night. But like its predecessors, it ended in compromise because big business, which has inspired the movement of European integration from its start in 1958, is well aware of the advantages of a large market for achieving economies of scale or a more efficient division of labor, and wants to crown the whole edifice with a financial structure.

If the virtues of a vast common market are so evident, why do the former members of the Soviet Union wreck their close economic ties by putting up tariff barriers and coming new currencies? The argument-repeated time and again by a Mikhail Gorbachev fighting desperately to preserve both the union and his own presidential post-seems obvious: After decades under Moscow’s fist, the republics resent the very idea of central power. When the Communist Party collapsed, an instrument of coercion and cohesion went with it; so far, only nationalism has been able to fill the void. Ukrainians and Byelorussians reject the center, while Boris Yeltsin sees an opportunity to rid himself of a hated rival. The “Slav” republics unite on ethnic grounds (following Solzhenitsyn’s prescription) and on economic ones, since the Muslim republics of Central Asia have a much lower living standard. With the prospect of privatization, the leaders of all republics want to preside over the distribution of wealth. Last but not least, many seem to act as if the present chaos breaking up the union could not make things any worse. That is where they are mistaken.

Both meetings must be viewed as episodes in unfolding crises. The nature of the E.C. has been changing. Some of the prerogatives ceded by individual nation-states have not been taken over by a central authority in Brussels, and the European Parliament in Strasbourg is no more than a talk shop. These developments have contributed to the process of deregulation and of the Americanization of Europe. Neither the modest Social Charter adopted in Maastricht nor a central bank with a German accent will reverse this trend and eliminate the E.C.’s bias in favor of big business. Meanwhile, the rise of unemployment and the spread of uncertainty about the future in a changing Europe have led to the revival of right-wing populism and of xenophobic movements like the National Front of Jean-Mane Le Pen in France. The disease is actually spreading, although it will probably not reach epidemic proportions as long as the economic climate is not catastrophic. For now, it is not.

Things are different beyond the Elbe. There drastic deregulation is combined with the advent of capitalism. If the Polish medicine is now applied to the countries that hitherto formed the Soviet Union, the consequences will be disastrous. In any case, an iron fist will be required to suppress the popular unrest caused by the spread of poverty and unemployment. Will the present republican leaders, and Yeltsin in particular, establish their own dictatorial rule, or will they be swept aside by more Jingoistic newcomers or by some Bonaparte waiting in the wings?

Europe is in danger. In the abstract, what is now needed is a development of democracy, a more active participation of the people in running their own affairs. In more concrete terms, this is not quite enough. With socialism discredited through guilt by association and the nationalist ghost now occupying the European stage, populist movements may well be led astray. What is badly needed in both halves of Europe is a rapid elaboration of progressive alternatives to capitalist rule. In the West, the situation is urgent. In the East, it is dramatic.

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