In These New Times

A new paradigm for a post-imperial world

If you can’t beat them, join the euro!

Posted by seumasach on July 20, 2010

Cailean Bochanan

20th July, 2010

As David Cameron and Barak Obama meet in Washington there is a lot of silly talk about the so-called special relationship being over. Britain may be the junior partner as Cameron puts it, but is nonetheless a crucial one. There will be no divergence over core issues such as covering up the scale of the disaster in Afghanistan or covering up the scale of the disaster in the Gulf of Mexico. Nor will the much noted divergence between London and Washington over stimulus versus austerity lead to sparks flying. Britain and the US remain joined at the hip and the only puzzle to emerge out of these talks will be why exactly the special relationship remains so enduring, for better or for worse, richer or poorer.

Most of us had some sense that the transatlantic connection had something to do with economies based on “financial services”. The last couple of years have made it much clearer what these “services” amount to. But it is the events of the past months which have clarified more than anything what the Atlantic alliance is really about. Britain and the US, or, rather, the City and Wall Street have combined in a bid to undermine the euro and derail the european project. We have been engaging in a currency war whose scarely veiled goal has been to boost the dollar and the pound by knocking out the leading rival to  reserve currency status. In the process the dollar and the pound have been confirmed as joint pillars of the atlanticist system, the twin pillars of anglo-saxon financial hegemony. Logically, the pound should simply be merged into the dollar, but that is hardly realistic from a political point of view. The pound continues to exist as the weak link in the system: the junior partner. So whereas the US can continue to call the bluff of the markets, expanding credit like there’s no tomorrow, knowing that, for China and others, divesting from  the dollar is the Samson option, there is no logical reason for the pound to stay afloat given the unrivalled levels of indebtedness of Britain at personal, corporate, local and national government level. For the sake of the alliance the pound must be saved since its decline would lead to irresistible pressure to join the euro and one of the twin pillars of the empire would be gone.

Of course, it didn’t all have to end in tears if the anti-euro assault had succeeded. The alliance was right to spot the weakness inherent in the Eurozone and right to expect the response of the European elite, still dreaming the American dream, to be dithering.  Only German Christian Democrats responded appropriately with Merkel’s ban on naked short selling while leftists governments in Greece and Spain failed to get to the heart of the matter, the speculative attack by hedge funds operating largely out of the City, and, instead, limited themselves to hacking at the limbs.

Anglo-America understood as well that this was about politics, about war and that they disposed, as usual, of the weapons of mass destruction: the rating agencies, the hedge funds and the media. They also had a trojan horse, the European left, within the enemy camp. Why, then, did it fail as it now seems clear it has?

The West has been slow to pick up on multipolarity and they had failed to see that the success of the European project was key element in the new multipolar framework. Were China and Russia really going to stand by as Europe and the euro were knocked out of the equation? How then could they break out of the dollar straightjacket? Was it in their interest to return to a cold war against a consolidated, unified West led from Washington and London? Russian diplomacy, in particular, is aimed at drawing Europe out of the Atlanticist sphere of influence whereas a fragmented Europe would be one under US/UK tutelage. Russia has made concessions elsewhere in order that romance should finally blossom between Angela Merkel and President Medvedev. And with what chivalry have they deferred to Europe in allowing a European peace-keeping force in Kirgyzstan, their own back yard!

So, in  the end, the anti-euro campaign was more like a bit of guerrilla warfare  which brought some temporary gains for the dollar and the pound. Now it’s back to reality with Britain in the eye of the storm. If anyone doubts that thinking the euro is thinking the unthinkable, read the British press or dwell on the fact that not a single political tendency from the far right and the Tory little englanders to the no longer-smirking Blairites (or Millibandites) and the far left backwoodsmen dares to come out in any serious way for the euro. Visceral opposition is the norm, it unites the British race. One of the great things about the new coalition is that it effectively defangs the only possible exception, the Lib-Dems: any pro-European sentiment is now definitively disenfranchised.

So with all escape routes sealed the slaughter can begin. The British people are to be sacrificed to shore up the Atlantic alliance. They have yet to learn of the ruthless and predatory nature of the British elite: it will be a crash course. What makes it all the more horrific is its utter futility. No amount of cutting can alter the fact that, with Anglo-American power ebbing away by the hour, the complete and utter bankruptcy of Britain lies exposed and the pound can only fall.

It is this recognition of the hopeless state of British finances, largely hidden up to now with an accountant’s slight of hand, that has made me hesitate to call for our adoption of the euro. How is it possible for Europe to add the burden of British debt to its own? But it is a mistake to look at things from the point of view of economics alone. We live in a moment of history where geopolitics trumps mere economics. For Europe it might just be better if we weren’t there , but we are and our full engagement with the European project is strategic necessity for Europe and a lifeline for ourselves. The problems of Britain are those of Europe carried to the ultimate extreme and can be resolved inside Europe. Together we must learn that prosperity is the fruit of labour, our own labour and not some God-given right of the West, of the white man. A service- based , consumer economy is mere fantasy and finance must be at the service of the reconstruction of industry and agriculture, of the real economy.

The unanimity of British society against the euro, reflecting the complete triumph of the ruling class point of view,  should suggest that this can be the focus of any putative opposition. There is now, for the first time in history a complete disconnect between the interests of the British people and our financier elite. Suddenly, it is becoming clear that the perspectives of the latter have nothing to do with any British national interest. The need for an opposition is then an urgent one and given the ravages of thirty years of Thatcherism, the near complete destruction of our economy at the behest of oligarchy only reconstruction within a European context provides a way out.

2 Responses to “If you can’t beat them, join the euro!”

  1. smeddum said

    If Estonia is anything to go by, one would think joining the Euro would be an inevitability and the desire to join would have political representation, beyond the governmental silence promised to the conservatives by the Lib Dems. It reminds me a little of
    Trotsky’s crisis of leadership idea except this is much worse. The pound is a cornerstone of British nationalism and fear upsetting the applecart on this one is widespread from right to left. One just wonders how long it will take for economic realities to kick in.

  2. Nestor Makno said

    I have for some time argued that the UK needs to be in the Euro. Excellent read and I believe pretty close to the reality we face.

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