Disunite Europe and the Currency of its States
"We have the Euro, a single currency for the whole of Europe. We gave up our money sovereignty against a continental sovereignty. We built a more independent and united Europe. We founded the greatest unitary world market. We accepted the American challenge".
Just a moment. Let's not exaggerate. Let's turn our eyes away from celebrative brochures, illustrative leaflets, news ads, TV spots, chinking coin kits and let's go back to our abstract little schemes, that is to say free from the Capital apology and its owners.
Nowadays no business field is not finance field, too, or, if minor business, not linked with the financial world. No matter what, alongside business capitalists are money capitalists. If a single capitalist sums up both characters, the result is the same. Marx already pointed out that the real starting and "reflux" point of capital value in the shape of money is money capitalist. The more capitalism matures towards its most complete form, the more financial capitalism dominates the scenes. No matter how money is handled, in the last resort, the circulating mass belongs to the financial section that is organised and concentrated in the bank world. Though surplus value is created in the production and food the inflated flux that is going back to the money capital sector, "it is the way this anticipate its capital that determine the constant final reflux". Each capital has its owner, that is obvious; this is society of private property. However this is not the case of money capital, as it does not belong to its original owner that is gaining interest but to a particular sector of capitalistic economy so called credit sector. It is from here that it is put back into the market and whoever needs it must pay a price for it.
It does not appear that in the various different countries their respective National Banks have been eliminated. A Central European Bank is now open, still with neither normative nor executive functions: no mandatory order towards national banks is issued except for the one fixing a single interest rate for the whole Euro area. Still, each country has its own development level. Spain, Greece and especially Ireland cannot be certainly compared to Germany and the single rate has already caused imbalances. What can be advantageous for some countries can be harming other countries as regards to money policies: for example, Ireland ended up with lower rates while it was expanding thus its economy became boosted up and inflation surged whereas Germany, going through a crisis, would need even lower rates in order to sustain its economy. BCE President was criticized for his uncertainties, still "no-one can make any sense out of twelve different economies within a monetary area", the Economist comments.
What belongs to each country is its circulating mass within its boundaries. This mass once in local currency has now been changed into its equivalent called Euro. However, and this is the most important thing, the way each central bank anticipates its capital to determine the final flux is still a sovereign and national one. Economy is not only regulated by rates but by a whole legal system that is now heavily imposing rules everywhere.
Going into more details, productive ability and exchange internal relations (in practice how much and what can be bought with the same amount of money) vary from country to country. As a matter of fact, one Euro cannot buy the same goods in the same quantity in all different countries, nor can single goods be produced at the same cost, which means at the same value as a whole.
Therefore operation Euro is limited to what follows: national currencies reflected in paper and metallic coins have been simply redesigned. A side that is the same for everyone and another "nationalised" one. Internal trades are still been carried out like before; prices are the same as before; international transactions are registering a compensation between import and export like before. Can the design on paper or metal (the only difference) establish that a national currency suddenly becomes international? Of course not, and not just for us but also for the bourgeois. Let's take the dollar, for instance. It is an exquisitely national currency with a massive international use. Without either theories or small ad hoc drawings.
If that is the case, and this is the case, the currency so called Euro does not exist as single currency of a single supranational entity. National currencies still exist, like before. What is important is the process of unification, of course – they says – not the single particulars; it is also the fact that this process will lead to a totally free human and capital circulation and that little by little monetary unity will lead to a political one, too. If we were facing a unifying national revolution like the one forming Italy or Germany, we would agree. Then currencies were brought to a real unity, but territories also were united under a single capital, a single market and a single power pivot. What happened was exactly the opposite of what they would like to happen now: the united national political power of Italian and German bourgeoisies had carried on an obvious need of a single currency with them. Europe is not even near to such revolution that cannot certainly come from the good will of the bourgeoisies in power. On the other hand, they don' t even have such good will; they have their motherland. And let's not underestimate the fact that they have an international tutor whose name is United States of America.
Two years ago exactly, on the 24th March 2000, a meeting of government leaders was held in Lisbon. The American economy was at its peak.; Wall Street and Nasdaq were exploding under the new economy. Europe could feel his competitor’s breath on his neck. The "American challenge" was back in fashion. The old continent decided to go by it: "Europe must become an economy based on knowledge, the most dynamic and competitive one in the world", the final considerations of the summit read. Economy should have grown a medium 3% a year for the following ten years. 20 millions extra jobs would have be created. Bureaucracy would have be eliminated; there would have be an increase in research and Internet would have be in all houses and offices. United currency was on the doorstep. System Europe would have be competitive with the Unites States, at last.
In the meantime, the 11th September came along. Its attack revealed that the Unite States were already suffering from recession and all European hopes were shattered by a known though removed reality: all world economies are interdependent, still the US one can count on a special factor that is their unitary and dominating power over the world finance. Monetary capital mostly belongs to America. It leaves from there, it become invested and comes back there with a premium. America has control over the reflux of the world capital: D - D', where D' is all American. That is why, after the 11th September, it could afford to address a huge sum of it in support of its economy. A true "Soviet" intervention rather than Keynesian.
The ex-currencies of the 12 represented around 20% of the world monetary movements against the ones dealt with in dollars. The Euro has not changed the above percentage. On the contrary, the Dollar has taken away grounds belonging to the Yen and the Mark. The relative efficiency of the whole American system proved higher than the European one: despite recession, no decrease in consumption had taken place since 2000; unemployment had not increased much considering America's huge flexibility and there had been an increase in productivity (2.5% a year) against the stable European one. However, in this case, productivity is not calculated as capital from each own worker or how many goods he produces, but from the relation between the global internal profit and the number of US workers. American financial sector, to which a relevant part of the world monetary capital belongs, does not produce goods but profit. It does not matter where capital-profit comes from, what matters is that is coming there. In this case, we have to talk about relative efficiency.
Interest rate is according to Marx an under-category of profit rate: during long periods and on the average they correspond. If the Unites States lower their official interest rates 11 times in a year, and at the same time they keep their profit rate and relative productivity high, that means that someone else is making up for the difference. This "someone else" cannot be but the non-American proletariat: it makes profit for its own capitalists who divert part of it to America. For example: Argentina has a foreign debt mounting to 155 billions of dollars mostly to the American bank system; well, the payment of all interests on this debt is mostly profit made by the Argentinean proletariat in favour of the US credit system.
Europe cannot compete with the United States on this grounds, no one can. The credit world system has now become historically consolidated around structures such the International Monetary Fund, the World Bank, The World Trade Organisation that are for obvious reasons extremely "sensitive" to American politics as the United States play a huge specific role in them. Consequently, the Dollar is the spoken language of this system when communicating with the various countries making an appeal to it. It is and it will not be the Euro. The situation in Germany is symptomatic: as an absolute economical power, it is third in the world after the United States and Japan (as regards to the internal purchasing power, it comes fourth and China is second). No such thing as the German language has a say in such system. No German monetary capital comes back in with a premium after travelling the world via this system. Instead, there are German net export goods towards other countries, especially the United States that will receive a good deal of its production, which goods will be paid in dollars not in Euros. As far as international compensations are concerned, dollars can go anywhere they like but the Euros will go back to Germany. They will be counted as German internal currency. The main European countries are in the same situation though not as dramatic as Germany.
Europe has no petrol while the United States have petrol and, most of all, they trade it. All the petrol bought by the Europeans represents a surplus value flux towards the international financial system that will not come back to Europe. That is exactly the opposite of what happens to whoever produces and trades petrol (and also has all technologies to extract it) that is to say the Arabs and Americans. Europe is left out of the petrol-capital monetary movement as nothing belongs to her. Each country buys for itself; it is not the central bank that is buying petrol. And each Euro that goes out will not come back with a premium but as someone else's money expecting to be honoured with goods or quality currency, which is dollars. If not even buying petrol with dollars from the beginning by changing the national Euros.
The United States can count on a unitary system, a huge territory, a large population, an entire continent at their disposal with all its wealth and low cost workforce outside the laws of a Union. Plus an incomparable military power. An extremely robust base to handle all accumulated monetary capital and do their best possible in order to raise profit under the sign of their currency.
United Europe has a far smaller territory, a further large and concentrated population. It holds scarce control over his Eastern neighbours, none at all on the Mediterranean, now become internal American see after the Second World War, as all troops dislocated on its countries’ coasts and the warning on site VI Fleet constantly remind us. It has no unitary system so that business holdings are able to manoeuvre all governments towards their own interests that is to say in competition with businesses from other countries. Thus, in France, a peculiar state policy for electricity is in place while in Germany state help is relevant as regards to the car industry; the European commission against monopolies condemns both policies though, while being ignored, only causing them to become angry. There is not a single state centre the Euro can belong to as monetary capital D later becoming D' with premium. On the other hand, how could that be? Via which mechanism? Perhaps by activating surplus value drainage from the United States towards Europe? That would be like turning all inter-imperialistic relations upside down as if Europe would take over the role of the United States thus causing the latter to become a second-class power.
The Euro, the way it is described to us, does not exist for now and perhaps will never exist. Europe, even though reaching a political unity, could not afford internal freedom of action as much as the American capital can. Its market is clogged with far two many business doubles, banks, insurance companies, facilities, etc. As a first result, an effective union would produce something like what happens during the great industrial fusions: that is the rationalization of redundant structures. Instead of a further 20 millions employees, there would be 20 millions less. Its population is far too concentrated, agriculture has a good yield but productivity is low due to a lack of space for a rational use of mechanization. For historical reasons, the structure of the force-labour market is more rigid. A true political unity would blow the European capitalism that would have to face an internal social revolt and a US made external financial war.
And most probably a non-exclusively financial war