These developments reflect the impossibility of erasing national boundaries by declaring a “union” of capitalist states. In reality, the EU is not a union but a grouping marked by shifting state alliances and conflicts as the wealthy billionaires that rule each country compete over markets, capital, and labor.

The outcome of the recent EU summit also highlighted the sharpening competition among the strongest capitalist powers in the European Union and between these governments and Washington. This is also registered in the weakening of the euro against the U.S. dollar.

British prime minister Anthony Blair, who assumes the six-month rotating EU presidency July 1, insisted on reducing EU agricultural subsidies as a condition for approving a new budget. The subsidies largely benefit big capitalist farmers, especially in France. While erecting tariffs and other trade barriers against goods from semicolonial nations, agribusiness in the EU dumps these cheap agricultural goods on the markets of semicolonial countries, decimating the livelihoods of peasants in those countries. A 2002 agreement between EU member governments set farm subsidies through 2012.

The proposed EU budget, which British officials vetoed at the summit meeting, would also have reduced the $6 billion rebate to the United Kingdom—funds returned to London each year from its contributions to the European Union.

French prime minister Dominique de Villepin shot back that Blair’s proposals were unacceptable. “Do we want to renounce our place as world champions for exports of foodstuffs? Most certainly not,” he said. The British rebate, he added, is “an obsolete legacy, no longer with any purpose.”

Neither French nor British officials, however, pointed to the facts behind the conflict. Paris is the world’s sixth-largest agricultural producer and the second-largest agricultural exporter, after the United States. France is also the EU’s top farm producer, accounting for about one-third of all agricultural land in the European Union. The United Kingdom, on the other hand, is a net importer of foodstuffs, as British agriculture produces only 60 percent of food for domestic consumption.

The summit decided a “period of reflection” is needed on the future of the EU constitution after voters in France and the Netherlands rejected it in late May and early June. Departing EU president Jean-Claude Juncker called the November 2006 target date for all 25 EU nations to ratify the document “no longer tenable.” Government officials in the Czech Republic, Denmark, Poland, and the United Kingdom have since announced indefinite postponements on ratification votes.

Meanwhile the EU currency, the euro, continues to weaken against the dollar. The euro has fallen 3 percent to $1.20 against the dollar since the French referendum on May 29 and 11 percent from its December peak. Italy’s labor and welfare minister Roberto Maroni, a member of the rightist Northern League, has called for a referendum on returning to the use of the former Italian currency, the lira. The euro replaced the currencies in place in most EU member countries in 2002. The British rulers have refused to give up on their national currency, the pound sterling.  
 
 
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