furthermore Maastricht means more austerity, thus a deeper recession and additional reasons for financial chaos. MAXIME DURAND*
W HATEVER the outcome
of the French referendum on the Maastricht Treaty on European union, the rise in support for a "no" has revealed the true face of Euro-democracy. When the weight of forged evidence is not enough to get a conviction, the establishment looks for the hand of the devil.
If we are to believe the kind of articles appearing in the French press at the end of August, the danger of a vote against Maastricht on September 20 was the direct cause of the fall in the dollar, while the prestigious pro-government daily Le Monde devoted a whole front page to a concocted catastrophe scenario.
In fact, the dollar's fall and its effects on the European currency started even before the opinion polls, and its causes lie elsewhere.
The current economic buzzword is deflation. It is used to describe a sluggish world economy which is refusing to respond to any of the remedies promoted by the various economic gurus. On top of this is the vast weight of the debts accumulated on all sides during the 1980s. It thus looks as if the crisis of the system - meaning its inability to regain a minimum dynamism
The leftwing "no" to Maastricht
THE French and Euro-establishments have been pulling out all the stops to get a "yes" vote in the September 20 referendum in France on the Maastricht Treaty on European Union. An unending
— has set in for the long-term.
The economic stupor takes place in a context of disorganization that is enough to explain the fall of the dollar. High German interest rates are drawing in capital; everyone wants to own deutschmarks rather
FRANCE parade of Eurocrats, experts and celebrities have predicted the than dollars. The resulting rise in the mark direst catastrophes. One of the highlights has been the stagethrows the European monetary system offmanaged "debate" between pro-Maastricht French president Franbalance; the British pound, falling sharply çois Mitterrand and the Gaullist advocate of a "no" vote, Phillippe against the mark, comes within a hair's
Séguin, before a hand-picked audience of eight "yes" and six "no"
breadth of devaluation, while the defence of the strong franc rules out any cut in
The choice of Séguin was significant; apart from being tipped
French interest rates. The monetary disoras a possible member of a future Mitterrandist centre coalition, his der strengthens the obstacles to growth, presence told the public that the opposition to Maastricht comes already stifled by austerity policies.
exclusively from the right. Furthermore, there were no left critics
The moral of all this is that the system of Maastricht - from the Communist Party, the Greens, the far left does not need bad opinion polls for it to or the anti-Maastricht current in Mitterrand's own Socialist Party slump into depression and that the good health of currencies is obtained at the
But there is, in fact, significant support for a "no" to Maastricht expense of jobs. In France we have a from the left, an opposition based not on fear of foreigners and strong currency and high unemployment.
appeals to national sovereignty, but on the treaty's anti-working class and pro-austerity content. The Ligue Communiste Révolutio-
The president speaks naire (LCR - French section of the Fourth International) has been at the centre of efforts to explain why workers and all progressive
Would the measures envisaged in the minded people should reject the treaty; it has also fought hard to
Maastricht Treaty improve things? In his ensure that the left opposition remains untainted by nationalism big TV appearance to defend the treaty, and xenophobia. Throughout France the LCR has helped to build
French President Mitterrand used a new joint meetings to put forward the case for a leftwing "no", drawing argument: a single market set up by the in lett Socialists, Greens, dissident Communists and other far left
Single Act alone would be incomplete; it currents. Its campaign culminated in a big rally in Paris on Sepwould be one of a poorly controlled liberalism. It would be highly dangerous to have
The next issue of IV will report on the results of the referendum a single market without a single currency.
and give a more detailed account of the progress of the leftwing
If this is true, Mitterrand (and a series of
Eurocrats) should resign for incompetence, since in 1988 he went into battle for the
Single Act and has been praising its merits ever since. The basic swindle is well- known from business: they sell you the basic gadget cheap, but you then find that all the accessories needed to make it work are very expensive.
In fact there is no reason to suppose that the single market would be incompatible with the existing European monetary system. The margins of fluctuations are not great and the financial experts have a fair grasp of the risks. Furthermore they have been at pains to assure us that the possibility of a "no" vote has already been taken
As for the single currency, the present mechanisms preserve a degree of flexibility that has been tested to the limit during the recent excitement. It is hard to see how a more rigid post-Maastricht system could have coped with the fall in the dollar without exploding into pieces.
We should thus distinguish between the political and economic significance of the
September 20 referendum. On the political level, a French "no" would bring the unity process grinding to a halt. As Hervé Monet put in the Le Monde on September 8, 1992,
"negative developments could be expected in the short term". However "it is certain that a 'yes' would mean a better immediate situation"
supporters. - in the audience. tember 17. "no" to Maastricht in France. *
On the other hand the economic effect of a "no" would be a return to the status quo ante; the capitalist governments have nothing else on offer other than austerity whatever the result.
The pro-Maastricht camp is predicting all kinds of catastrophes if they lose this referendum. In fact, however, the argument can be turned against them. No study demonstrating the benefits of Maastricht has yet been published. This is for the good reason that they are all bad and are thus being kept under wraps. Only one IMF study has slipped out. Claude Soula comments in le Nouvel Observateur (August 6, 1992) on "this little semi-official study" and its conclusions which he finds "hardly surprising; in fact a child could have reached them; when states go on a strict diet... growth slows and unemployment rises". This is what is hidden under all the pro-Maastricht Euro-guff.
Indeed the whole single currency project is the expression of a form of bizarre fetishism which sees money as the final cause and effect of economic life.
The Maastricht plan for convergence of the economies of the EC states means trying to achieve a rapprochement between economies as different as those of Germany and Portugal. If this were to be achieved at the level of the overall economy, then monetary union would pose few problems (at least from an economic point of view). But Maastricht puts the cart before the horse, proposing that monetary union should be the engine of economic convergence. Even those economists who are most enthusiastic about Maastricht envisage an incomplete monetary union, without the southern European countries. Which makes you wonder about the point of signing a treaty that everyone in the know agrees cannot be implemented
This brings us to the heart of the matter; the Maastricht Treaty is a sort of plebiscite on austerity; approval of the treaty will be taken as a mandate for continuing and toughening the austerity policies already in operation throughout Europe. The drastic plans recently announced in Spain and Portugal are related to the demands of "convergence" and foreshadow the catastrophes planned for the continent's workers. For them, a "no" vote is simply a sensible defensive reaction. * 1992 issue of the French revolutionary Marxist 5 • This article first appeared in the September 10, weekly Rouge.
The twilight of
International Viewpoint # 235 • September 28, 1992
ECONOMY
AS the disastrous consequences of super-free market policies become been influential since the Reagan/Thatcher era.