LAST week French President Emmanuel Macron chose the Berlin Global Dialogue meeting to argue for an even more deregulated European Union.

France and Germany were traditionally united in insisting on a level playing field and competition rules to prevent the weaker and less industrialised economies of the EU from “unfairly” competing on pay, conditions and labour standards.

These two dominant EU powers have often had conflicted interests in guarding the inviolability of the Maastricht and Lisbon treaties, but today they are at one with former European Central Bank (ECB) boss Mario Draghi in formulating a new competitiveness model.

Macron warned that “our former model is over. We are over-regulating and underinvesting. In the two to three years to come, if we follow our classical agenda, we will be out of the market.”

For his purposes the market is the global arena which, he says, both the United States and China are squeezing out the European Union.

It is a quarter of century since the EU began the overhaul of its machinery and strengthening of its federal institutions.

The issue raised by opponents of the process was that these measures would weaken national sovereignty and existing democracy by shifting decision-making powers away from national electorates to supranational bodies.

That explained opposition to the 2001 move to establish a formal “constitution for Europe,” an idea which first the French electorate, then the Dutch, rejected. A reformulated proposal fell when the Irish people rejected the treaty in 2008. It took a year of arm-twisting and concessions before the Irish were induced to change their vote.

The Lisbon Treaty, like its Maastricht predecessor, met sharp opposition from within the trade unions not least on the question — central to trade union concerns — of workers’ rights.

At the 2008 TUC Congress the Communist Party’s TUC daily broadsheet Unity! made the point:

“The European Court of Justice (ECJ, a core EU institution), has ruled in the Viking, Laval, Ruffert and Luxembourg cases that, in different ways, business rights trump trade union rights to take industrial action and bargain collectively for their members.

“The court is effectively saying the rights to the free movement of goods, capital, services and labour override trade union rights everywhere. ECJ rulings are also being used to open up health services to competition and to create a single market for healthcare across the EU. 

“Under the Lisbon Treaty, the ECJ would become the supreme court of the EU over and above national courts and would have the power to act like the US Supreme Court. 

“The alleged rights conferred on us by the treaty’s Charter of Fundamental Rights are not fundamental at all but can be varied or restricted in the interests of a ‘common organisation of the market’ or to advance ‘objectives of general interest pursued by the Community’.” 

Today, the failure in capitalist market terms of the EU’s neoliberal model is driving the latest Draghi proposals.

“Labour market flexibility” (ie weakened workers’ rights); “deregulation” (principally of the labour market); and “liberalisation” (the treaty-driven pressure to privatise public services) have proved insufficient to enable an EU weakened by Britain’s exit to compete with China and the US. In their different ways both — the US with its large capital markets and China with its state-directed investment and strict control of the finance sector — are bigger players in the global market.

Macron’s comments are in lockstep with the thinking of Draghi, who was commissioned last year to write a report on EU “competitiveness.”

As the market maestro of the ECB, Draghi is the high priest of fiscal responsibility. He is caught between the inescapable logic of the EU’s neoliberalism and the need to compensate for the signal failure to generate sufficient economic growth, maintain global levels of profit and head off the social explosions generated by the regressive failures of the EU’s variously decaying welfare states.

As befits his technocratic image, Draghi focuses principally on measures to raise productivity. His tools to rectify the failure of capitalists and financiers to invest in the productive branches of the economy are, predictably, further deregulation and less oversight of private-sector behaviour.

The failure of parasitic finance capital to be deployed productively is attributed to the over-regulation of capital markets. Draghi proposes measures to coerce private savings into the same venture capital markets that are currently failing, plus an annual public investment programme to underwrite private-sector activity.

This is thinly garnished by a perennially neglected skills and training strategy and forever delayed EU-level measures to drive up R&D.

So, not much change. Having identified weaknesses and failures in the present system, Draghi advocates more of the same.

Where there is a change of mood and pace is in the sense that the collective economic interests of the European bourgeoisie lies in a more muscular foreign policy in which the economic elements are more closely tied to military measures including strengthening the military production sector. This — and the consequent boosting of the political weight of the military/intelligence nexus — is to be tied to an integrated military procurement strategy and a massive €500 billion (£419bn) boost to “security,” including border security.

Nato’s expansion eastwards has produced a problem within the EU, which is expressed in the increased dependency on expensive US energy — which has replaced the cheaper Russian energy upon which EU states previously relied — and which has become unavailable due to the sanctions policy and the sabotage of Germany’s pipeline link.

This, coupled to Germany’s (and the wider EU’s) submission to US strategies towards Russia and China, entails a forced dependency on European purchases of the very US armaments sector in which British capital is so heavily invested.

Draghi reports that for the 12 months up to mid-2023 63 per cent of all EU defence procurement went to US companies.

US President Joe Biden’s “military Keynesianism” that is boosting the US economy can barely work in the EU where arms purchases are disproportionately from the US. The combination of the militarisation of the economy and public-sector spending — allied to the post pandemic strengthening of the EU’s fiscal rule — will drive a renewed period of austerity.

Serious obstacles await Draghi’s bid to unify European capital markets even though the outlines of this approach — more powers for the EU’s securities watchdog along the lines of the US Securities and Exchange Commission — are endorsed by his successor at the ECB, Christine Lagarde, and fit neatly with Ursula Von Der Leyen’s concentration of powers at the European Commission.

Politically such deep changes, which would require referendums in some EU member states, revive precisely fears of an insurgent popular sovereignty which sharpened criticism of the EU 20-odd years ago.

The alternative to such a throughgoing constitutional change — institutional and technical changes that weaken national prerogatives and make the European Securities and Markets Authority closer in structure to the ECB and more the property of the Brussels bureaucracy and its eurofederalist tendency — is preferred.

On workers’ rights, even the compromised and incomplete Brexit which the Boris Johnson election victory left us gave our labour movement a more precisely defined domestic arena in which it can win concessions on trade union and employment rights.

But the ideological battle in the wider movement to win an understanding that, in or out of the EU, austerity is the chosen mechanism for British big capital and the banks to maintain their position continues.

Sir Keir Starmer’s strategy to capture Labour succeeded precisely on the basis of illusions about the EU. While public opinion means even Starmer is obliged to tread carefully where relations with the EU are concerned, there is little difference between the economic strategy favoured by Westminster Labour and the EU’s ruling circles.

Our continent stands before a new period of austerity and a seriously enhanced danger of war, even nuclear war. Not least among the reasons for this lie in the willing submission of the European bourgeoisie, most especially Britain’s, to accord with US policy, even when this directly affects their interests.

To the extent to which Britain is outside the EU it has an opportunity to devise an alternative strategy that might avoid austerity. But this is impossible when tied to US foreign policy, bound up in the Nato/EU “defence” posture, and committed to military confrontation with Russia and to a political and economic confrontation with China where constructive co-operation would bring substantial economic benefits.