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      Brexit EU Imperialism

      By David Yaffe

      Below is an excerpt of an excellent article originally titeled "EU referendum - The position of communists" published in the U.K based "Fight Racism, Fight Imperialism" newspaper. It was originally written before the Brexit referendum took place, but has also been updated to include "post-Brexit vote" analysis. For space reasons we could not print the entire article. We encourage you to read the article in its entirety at: http://www.revolutionarycommunist.org/capitalist-crisis/4349-eu-referendum

      The 2016 referendum

      The background to the current referendum is the ongoing eurozone crisis and the deep splits in the Conservative Party over Europe, splits exacerbated by the challenge of the United Kingdom Independence Party (UKIP), its anti-EU stance and racist immigration policy. The overall exposure of UK banks to debt in the so-called ‘peripheral’ countries in Europe, the weight of banks and financial services in the British economy and the importance of the financial derivatives market for the City of London make Britain very vulnerable to a run on eurozone banks. That is why the British ruling class is so concerned that Europe should address the deepening debt crisis throughout the eurozone. On the other hand it is determined to protect the parasitic and speculative activities of the City of London from European oversight and control. So the British government continually demands safeguards for the City of London as the price for accepting European measures, such as a eurozone banking union, to address the crisis in the eurozone.

      On 23 January 2013, Prime Minister David Cameron announced, in his Bloomberg speech, that he would renegotiate the terms of Britain’s membership of the EU and follow this with an in/out referendum on Britain’s membership by the end of 2017. He did this in a futile attempt to appease the eurosceptics in his party, outflank UKIP, and strike a populist pose to improve his party’s prospects in the next general election. It was a spectacular gamble which has created quite serious problems for the British ruling class.

      On winning the 2015 General Election, Cameron set about renegotiating terms of Britain’s membership of the EU in the in- terests of stabilising his party. Key changes will mean:

      A seven-year term for the emergency brake to restrict EU migrants in the UK claiming in-work benefits. It will cover individuals for no more than four years.

      Child benefit payments indexed to the cost of living for children living outside the UK for all new arrivals to the UK, extending to all workers from 1 January 2020.

      Any single non-eurozone country able to force a debate among EU leaders about ‘problem’ eurozone laws – though they will not have a veto.

      An unequivocal opt-out stating that EU treaty ‘references to ever-closer union do not apply to the United Kingdom’.

      Having achieved these changes he felt confident enough to bring forward the date of the EU referendum to 23 June 2016.

      These measures did not appease the eurosceptics in his party. They do not, in fact, represent a significant change on the existing relationship between the EU and Britain. The outcome of the referendum is uncertain, all the more so since the disarray in the Conservative Party resulting from the 2016 Budget and the recent ‘Panama Papers’ revelations about Cameron’s wealth and his dead father’s investments in tax havens.

      The ruling class is fundamentally split on the question of the EU referendum. The dominant sections of the ruling class are pulling out all the stops to ensure British people vote to remain in the EU. The Bank of England, the IMF, the OECD, large corporations and international banks, the CBI, and Blackrock – the world’s largest asset manager – and leading European politicians have waded in pointing out the economic risks of Britain leaving the EU. The former MI5 boss, Manningham-Buller warned of the risks to our security and safety. US President Obama joined this chorus during his visit to London in May when he made it clear that it was in US interests that Britain remained in the EU saying that: ‘The United States sees how your powerful voice in Europe ensures that Europe takes a strong stance in the world, and keeps the EU open, outward looking, and closely linked to its allies on the other side of the Atlantic. So the US and the world need your outsized influence to continue – including within Europe’ (The Guardian 22 May 2016).

      US companies have $558bn invested in the UK, with around 7,500 companies employing 1.2 million people. London’s status as a financial market capital is built on ‘passporting rights’ that allow companies based in Britain to conduct business across the EU. This is why London has become the favoured headquarters of many US and international firms. In addition EU companies have accumulated investments of £741bn in the UK, some 60% of the total Foreign Direct Investment in 2014 (Financial Times 22 April and 16 May 2016). Britain’s exit from the EU (Brexit), the Remain advocates argue, would threaten these investments and undermine the flow of inward investment.

      The government’s use of two Treasury papers on the impact of Brexit has raised the decibels to unprecedented levels. The first warned that the economy would be 6.2% smaller than current projections by 2030, costing every household the equivalent of £4,300 a year. The second reported that, following convulsions in financial markets, the economy would be tipped into reces- sion with the loss of between 520,000 and 820,000 jobs. Wages would fall between 2.8% and 4.0%, the pound would go down between 12% and 15%, public borrowing would rise between £24bn and £39bn, house prices would be lower by between 10% and 18% and much more in this doomsday scenario.

      Faced with this onslaught, the Brexit campaign, led by former London mayor Boris Johnson and Justice Minister Michael Gove, dismissed all these warnings and reports as exaggerated spin. They argue that an independent imperialist Britain can go it alone and negotiate new advantageous trade deals with the rest of the world. They have talked up the increased costs of remaining in the EU, but have essentially fallen back on exploiting xenophobic fears of increased immigration putting ever greater strain on public services and employment.

      Finally, stepping into the gutter, they have claimed that Turkey’s future membership of the EU will allow millions more to enter the UK within eight years, endangering UK security because of the ‘high level of Turkish criminality'.

      What attitude should communists take to the EU referendum?

      It is important to say something about the character of a United States of Europe under imperialism. Lenin, in an article ‘On the slogan for a United States of Europe’, written in August 1915, makes what are still indispensable points today. He wrote that under the economic conditions of imperialism, that is, the export of capital and the division of the world by the ‘advanced’ and ‘civilised’ colonial powers: ‘A United States of Europe under capitalism, is either impossible or reactionary’. And later he says of course ‘temporary agreements are possible between capitalists and between states’. In this sense ‘A United States of Europe is possible as an agreement between the European capitalists...but to what end?

      Only for the purpose of jointly suppressing socialism in Europe, of jointly protecting colonial booty against Japan and America...’

      In FRFI over many issues we have pointed out the process by which the European powers are taking steps to create a European imperialist bloc. We have spelt out the devastating impact it is having on the working class of the peripheral EU countries in the eurozone. There will be no let-up in the desperate conditions facing millions of ordinary Europeans as the dominant European countries push forward their programme step by step to create a federal European imperialist state. It would suppress progressive developments in the member states while confronting the economic challenge of the US and other imperialist powers and compete with them to divide up the spoils from the plunder and looting and super-exploitation of the oppressed nations.

      In this referendum we are being asked to choose between two different paths for British imperialism as promoted by two factions of a divided British ruling class – an imperialist Britain within an imperialist EU or an imperialist Britain outside of it as a junior partner of US imperialism.

      As we have repeatedly argued, Britain is going to have to make a choice to be with Europe or with the US. Either way the power of the City of London will be severely curtailed. As one European diplomat noted: ‘Britain is at a crossroads... Will it be the centre of finance in Europe, for Europe, which is what it is now? Or does it go offshore? Some people have the illusion that it could be a Greater Guernsey. That is not a good way to go.’ The commentator Will Hutton similarly remarks that Britain out of Europe would be a sort of Greater Guernsey suffering an economic rundown.

      The deepening eurozone crisis is inexorably confronting the British ruling class with choices it does not wish to make.

      Sections of the Labour Party and the Trade Union Congress are calling for Britain to remain in the EU, under the guise of protecting workers’ rights supposedly guaranteed by the EU, against the austerity drive of the Conservative government. This opportunist support for European imperialism is only a cover for their own abject failure to fight against austerity at home in Britain.

      Left and right social democrats, including the Communist Party of Britain, the SWP, and Counterfire, have joined together with the rail union RMT and other organisations to promote Lexit – the Left Leave Campaign. The Socialist Party and TUSC have taken up a similar position. They claim to be promoting a ‘working class, left-wing, internationalist case’ for voting to leave the EU. These opportunists say they are against austerity and fighting capitalism. A vote to leave the EU, they say, will lead to a ‘hopelessly fragile’ Conservative government and a ‘crisis of our rulers’, opening up ‘greater space for the left’. In reality they will be voting alongside UKIP for an independent imperialist Britain which will continue to plunder and loot oppressed nations throughout the world.

      We reject totally taking sides in what is essentially a dispute between sections of the ruling class over what would be for Britain necessarily totally reactionary outcomes – part of a European imperialist bloc or becoming an offshore centre for usury capital under the umbrella of US imperialism. The only principled communist position is to call for a boycott of the referendum while exposing the reactionary intentions of those on either side. This is the way forward in building an anti-imperialist movement in this country, and it opens the path for communists to link-up with those other forces in Europe fighting against European imperialism.

      Fight Racism! Fight Imperialism! #251 June/ July 2016

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