Even though the French referendum resulted in a narrow yes
to the Maastricht treaty, the treaty is in deep trouble. No way has yet been
found around the Danish no in June, and unless the Danes change their minds the
treaty falls. More importantly, the exchange rate mechanism of the European
Monetary System, which is at the heart of Maastricht's provisions for economic
and monetary union, is in crisis. Last week's orgy of speculation ended with
the pound and the lira dropping out of the ERM.
At the very least, it now seems inevitable that the
timetable for economic and monetary union in the Maastricht treaty will have to
be revised. Most commentators reckon that, as the dust settles, the way that
the ERM operates will be changed, with the German Bundesbank insisting on a
reduction in its responsibility for propping up other countries' currencies.
Many predict that some sort of "two-speed" arrangement for monetary
union will replace the Maastricht approach, with the core economies of France,
Germany and the Benelux countries moving rapidly to a monetary union which the
rest will join at some point in the future or perhaps not at all.
In the circumstances, it is hardly surprising that many left
opponents of the Maastricht treaty in Britain have the scent of blood in their
nostrils. There is a widespread belief even among supporters of closer European
integration that Maastricht will force austerity on the whole of the European
Community and will do little to democratise EC institutions. What's more, the
treaty seems to be even more vulnerable to a British no - either by way of a
referendum or through defeat of the government's Maastricht Bill in the House
of Commons - than it was after the Danish referendum, in June.
So is there any reason Labour should not go in for the kill?
Unfortunately for those who like their politics simple, there is.
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Maastricht is essentially a compromise among the French,
German and British governments. The French gave way on German demands that the
proposed European central bank be independent and that the convergence
criteria for economic and monetary union be austere in the extreme; the
Germans gave way to French and British insistence that the deal on political
union did not give very much power to the European Parliament. (The British
also got their opt-outs on monetary union and the social chapter.)
Immediately after the Danish no, it was at least possible
that a renegotiated European union treaty would take account of the Danes'
worries about EC democracy by including far greater powers for the European
Parliament and would address their fears about the future of the welfare state
by beefing up Maastricht's social side and ending the British social chapter
opt-out.
If Labour had then swiftly announced that it was opposing
Maastricht with the goal of replacing it with such a treaty and if it had
persuaded other EC social democratic parties to back its position, there might
just have been a hope of Labour acting as a catalyst for a renegotiation on a
more social democratic basis.
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In reality, however, nothing of the sort happened.
Proponents of an anti-Maastricht pro-Europe position failed to win a majority
in the Labour Party, let alone other social democratic parties, which all lined
up in support of Maastricht. They argued that although the treaty was not
perfect, it did contain enough - the social chapter for 11 out of 12 EC
countries, the extra powers for the European Parliament and the regions, the
commitment to social solidarity – to make it worthy of support. The
opposition camp in most EC countries was left to the
xenophobes.
Meanwhile, it became clear over the summer that, if
Maastricht fell, what came next would almost certainly be worse, particularly
on political union. In the aftermath of the Danish vote, it was not the German government's
position of strengthening integration by moving quickly to give more power to
the European Parliament that gained ground among EC governments as the
favoured next step. Rather, it was the British government’s idea of watering
down integration by maximising "subsidiarity" (code for continuing
to carve up as much EC business as possible in closed intergovernmental
meetings) that made the running, a tendency that has been reinforced by the
close French referendum result.
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Whether or not Maastricht survives, there is now a real
danger that, instead of making even small steps towards a Europe-wide
democratic polity, governments will now pander to popular nationalism,
dramatically slowing the pace of political integration. If Maastricht falls,
it is likely that what replaces it as a pan-EC agreement will be little more
than the status quo ante with a very different ERM and, perhaps, Germany,
France and the Benelux countries going it alone with an economic and monetary
union of their own.
This would effectively rule out the Europe-wide strategies
that are now Britain's best hope for effective long-term counter-cyclical
economic management. Britain might gain temporarily from its current outsider
status, allowing the pound to devalue and interest rates to fall outside the
ERM. But, in the end, the past two decades show that it is impossible in
modern capitalism for a medium-sized country to get lasting benefits from
"dash for growth" policies.
The upshot is simple: if Labour is serious about
Europe-wide alternative economic strategies, it has to be committed to
European union - and the Maastricht approach to European union, however flawed,
is the only one on offer. Labour should be arguing for a devalued sterling to
be returned to the ERM (if not at once). More important, it should not vote
against the Maastricht Bill when it eventually finds its way to the Commons.
There will be plenty of opportunity to address the democratic deficit and to
push for left European economic and social policies after ratification. Without
ratification, the democratic federal Europe that the left desperately needs
will become once again a distant dream.
