Poland, the Czech Republic, Hungary, Slovakia, the former Soviet republics of Lithuania, Latvia and Estonia, the former Yugoslav republic of Slovenia, Cyprus, and Malta are all scheduled to formally become members in May 2004.

The expansion brings the EU to 25 countries. With a combined gross domestic product of more than $9 trillion, rivaling that of the United States, the union has been touted as a potential competitor to the North American colossus. In reality it is dominated by the largest imperialist powers, particularly Germany and France, and is marked by deep divisions and frequent tensions.

The fractious character of the bloc burst through even while being hailed as proof of progress toward a united Europe. For months leading up to the meeting Paris and Berlin --themselves frequently at odds -- on one side and London on the other had been fighting it out over how to finance the expansion.

At the center of the dispute were the deep differences over "reform" of EU farm policy, that is, the extent and character of the government subsidies that give agricultural products from France and elsewhere a competitive edge at home and abroad. The subsidies primarily benefit large capitalist farmers.

This debate has been at the center of the rivalries among the imperialist powers within the EU, with each one jockeying to strengthen its position at the expense of its rival.

The fight over this issue led to a sharp exchange between British prime minister Anthony Blair and French president Jacques Chirac in late October following an EU meeting in Brussels.

Blair was livid that Chirac and German chancellor Gerhard Schroeder had "pre-cooked" a deal that would maintain substantial farm subsidies that Britain wants to substantially reduce. An editorial in London’s Financial Times described the Franco-German deal as "sordid" and "squalidly arrived at." It added that France--the world’s biggest agricultural exporter after the United States --would be the principal beneficiary of the deal. Chirac responded by postponing a traditional year-end meeting with Blair.

The compromise set the framework for the amount of funding the new members of the EU would receive. The largest of them, Poland, led an effort to hold out on joining until they received increased financing to upgrade their infrastructures. Under the agreement the new member countries would receive an additional $430 million in farm and other subsidies. The total package would amount to $42 billion between 2004 and 2006.

That is only 25 percent of the amount these countries would receive under the rules for current members. It would rise to 40 percent of that level by 2007, and then increase in 10 percent annual increments until attaining parity in 2013.  
 
Turkey rebuffed
The meeting also rejected the Turkish government’s long-standing application for EU membership. Ankara has tried to become a part of Europe since 1959 when it applied to join the European Economic Community, the forerunner of the EU. Its population of 67 million, mostly Muslims, roughly equals the combined total of the 10 countries admitted from eastern Europe.

Turkish prime minister Abdullah Gul accused the EU leaders of "discrimination" and "prejudice." Former French president Valéry Giscard d’Estaing--the head of the commission to draft a constitution for the EU--earlier said that Turkey was "not a European country" and that inviting it in would mean "the end of Europe."

The U.S. administration lobbied EU officials hard for Turkey’s admission. President George Bush and Secretary of State Colin Powell both made phone calls to EU officials on Turkey’s behalf.

French Industry Minister and former president of the European Parliament, Nicole Fontaine, accused the Bush administration of "interfering" in European business. She was followed by another French official, Pascal Lamy, who is also the EU trade commissioner. Fontaine said, "It’s certainly not up to the president of the United States to interfere in something...which mainly concerns Europeans."  
 
Imperialist war against Iraq
In part, U.S. support for Turkey’s application comes out of Washington’s push to strengthen the two countries’ military ties and to take advantage of Turkey’s proximity to Iraq. The Pentagon is seeking permission from the Turkish government to move tens of thousands of U.S. troops through its territory in any military attack. Recep Tayip Erdogan, the leader of the ruling Justice and Development Party, recently visited with President Bush to discuss cooperation in the war in preparation.

The Turkish regime has interests of its own to defend in Iraq and is also making plans to send its own soldiers into the north of the country to prevent a revolt by Iraqi Kurds.

The daily Hurryet newspaper reported December 17 that Turkey is planning to deploy 65,000 to 70,000 troops in northern Iraq if there is a massive U.S. assault. According to a December 17 New York Times report, Turkish officials are concerned that Iraqi Kurds could seize the northern cities of Mosul and Kirkuk, a major oil production area.

Turkey is also a member of the North Atlantic Treaty Organization and has used its control of NATO assets to block EU efforts to develop a European force that could function independently of the US-led and dominated NATO.

Turkey’s army is bigger than that of any EU member, while its military budget is exceeded only in Britain, France, Germany, and Italy.

Following the EU meeting the December 16 Financial Times announced that agreements had been reached with Turkey to allow the EU access to NATO assets. It also reported that the EU plans to deploy its first military mission, in Macedonia, early next year.  
 
Social crisis
Every step at extending the EU brings the conflicting interests of the ruling classes within it into sharper relief, on issues that include farm trade, military matters, and monetary policies. To date Britain has declined to participate in the EU’s most ambitious project--the adoption of the euro as a common currency.

A full page analysis article in the December 4 Financial Times opened by stating, "As some of its member states flirt with recession, the European Union’s ambitions to become the world’s most competitive economy by 2010 are looking increasingly hollow. Nowhere is this more obvious than in the quest to create an EU-wide single financial market to compete with the U.S." The article is replete with examples of how this plan has run head-on into the competing interests of the capitalist rulers of each European country.

Pedro Sobles, EU Commissioner for Economic and Financial Affairs, hinted at the rivalries when he noted, "National governments, market operators, regulators, supervisors, all have an incentive to promote their own model." Theresa Villiers, a British Conservative Member of Parliament, put it more bluntly, stating, "There is a lack of political will and entrenched protectionism in some member states."

The deepening capitalist crisis is also putting strains on the EU. In September anger erupted among the smaller members when it was revealed that Germany, France, and Italy would be given two extra years to bring their budget deficits down into line with EU requirements. They argued that this showed there was one rule for the big countries and another for the rest, and explained that it would undermine the budgetary rules of the "stability and growth" pact underpinning the euro.

The French government outright defied a directive from the European Commission to cut its deficit next year by 0.5 percent. French finance minister Francis Mer stated, "For 2003 we decided there were other priorities for France--for example, increases in military spending."

A few months ago the Italian government revised its projected growth downward from 3 percent annually to 2 percent. But this month it issued a new projection of 0.6 percent. Confindustria, the main bosses’ organization, projected the more conservative figure of 0.4 percent.

The government is basing next year’s budget on a projected growth rate of 2.3 percent. Confindustria expects it to come in at under 2 percent. The European Union put the Italian growth at 1.8 percent and expects Italy to have a budget deficit of 2.2 percent of gross domestic product.

The main rules of the pact require that countries run a balanced budget and not exceed a deficit of 3 percent of gross domestic product. It is expected that Germany will overshoot the 3 percent deficit this year.

The EU’s three biggest economies, together making up three-fourths of the newly merged economy, have no room to borrow, cut taxes or increase spending. And because they no longer have a central bank, they cannot devalue their currencies or cut interest rates.  
 
 
Front page (for this issue) | Home | Text-version home