BY CARL-ERIK ISACCSSON
STOCKHOLM, Sweden - The euro -the attempt at a common
currency by 11 of the 15 member states in the European
Union - came into being January 1 at a time of heightened
competition between rival capitalist powers. The strengthening
of U.S. imperialism relative to its competitors in Europe,
which had been the trend since the early 1980s, has peaked.
One result is that a debate has widened among the rulers of Sweden, Denmark, and the United Kingdom over whether to rapidly join in the euro. Stockholm, Copenhagen, and London have formed a sort of "dollar-pound" block within Europe, and chose not to take part in the euro from the start this year. The prospect of serious competition between the euro, the U.S. dollar, and the Japanese yen has led many to rethink this stance, fearing their own bourgeoisie will be sidelined.
Swedish prime minister Goran Persson announced January 6 that he wants to hold a special convention of his Social Democratic party early in the year 2000 that could take a stand on Sweden's participation in the common currency. A national referendum later that year could make it possible to join the common currency in 2002.
Persson noted that there is a similar shift in view among many in the ruling class in Britain and Denmark that "has an impact on us, but it doesn't determine what we will do." Echoing a phrase often used by British prime minister Anthony Blair, Persson declared, "Yes, if it is good for our country we will join EMU [European Monetary Union]. That is what we will now discuss with the Swedish people." The Swedish Social Democratic party has recently signed the pro-EMU common election manifesto of the social democratic parties in Europe for the European parliament this summer. Bourgeois public opinion as registered in polls in the big-business press has also changed. In December 1998, just before the euro took effect, a poll in the conservative daily Svenska Dagbladet listed 44 percent opposed to rapid adoption of the euro in Sweden, and 39 percent for. One month later, the numbers are reversed with 45 percent in favor and 38 percent against. A similar shift has occurred in Denmark.
One example of why figures like Persson and Blair feel pressure to sign on to the euro was the announcement January 11 by the four-nation European consortium Airbus that it won nearly half of the world market for big commercial jets, gaining market share over its U.S. rival, Boeing.
Economy in Germany slows down
Meanwhile the German economy, the largest in the euro-zone
with about 36 percent of the area's output, is showing signs of
a slowdown or even recession. In December 1998 unemployment
climbed over 4 million for the first time since the social
democratic government was elected last fall. The number of
jobless workers was 251,300 higher than in November, and the
national unemployment rate rose from 10.2 to 10.9 percent.
Although it is 324,300 fewer than in December 1997, it is the
sharpest December rise in unemployment since the reunification
of Germany in 1990. In the East unemployment rose to 17.4
percent, and in the West it's at 9.3 percent.
"Despite recording annual growth last year of 2.8 percent, the strongest since reunification, Germany is in the grip of a downturn so pronounced that private researchers suspect that the economy may actually have contracted in the final three month," the Financial Times of London reported January 15.
Foreign orders for German products fell 4.2 percent in November. Over the last year there has been a sharp falling off from the peak annual growth in foreign orders of 23.1 percent in September 1997. Growth in industrial output slowed sharply to 0.5 percent in November compared to November 1997, down from the peak of 7.8 percent in January last year. The French and Italian economies are also slowing down.
In a sign that the employers won't have an easy time convincing workers to sacrifice in the name of defending the euro, IG Metal, the 2.7 million-member metalworkers union in Germany, is demanding wage increases of 6.5 percent this year.
Finance ministers from Europe who met with their Asian counterparts in Frankfurt January 15 were concerned about the financial crisis in Brazil, expressing hopes that the impact won't be as severe as when Moscow defaulted on its foreign debt last year, and that the newly launched euro would buttress financial stability in Europe. They particularly worry that a general crisis in Latin America would hurt the U.S. economy, depressing U.S. demand for European exports at a time when the German economy is slowing down.
Concerns over the fluctuations in exchange rates between the dollar, the euro, and the yen were also expressed at the meeting in Frankfurt. The social democratic governments in France and Germany now fear the euro will be too strong against the U.S. dollar, thus hurting exports from Europe to the United States and fueling unemployment. Similar concerns are expressed by the Japanese government. They favor managed exchange rates between these currencies, a proposal that U.S. federal reserve chairman Alan Greenspan and European central bank president Wim Duisenberg both reject.
Carl-Erik Isacsson is a member of the metal workers union in Sodertalje, Sweden.