Editorial

The recent changes of the political leadership in France and the UK are being presented as a “rupture” with the past, by the new leaders and their political machines. This is not true. The new leaders, like the ones they have replaced, will simply pursue the policies dictated by the needs of capitalism. In France these policies will simply be pursued with more determination, while in the UK they are only likely to be repackaged.

France

The French election, in which there was an 85% turnout, has been extremely useful to the French bourgeoisie. It has allowed Sarkozy to claim that he is the president of all the French and all must rally behind him in rescuing France. Of course, he is the chosen executor of the policies of the bourgeois class and his task is to impose further austerity on the working class. Two of the principal items on Sarkozy’s agenda are to:

• Exempt all overtime above the 35 hour week from taxes
• To create a single labour contract.

The first is a means of lengthening the working day and will undoubtedly be followed by revision of the statutory 35 hour week. The second is aimed at simplifying the legislation governing the labour market to give the employers more freedom of action. This is usually called “flexibility”. Imposing “flexibility” on the French working class means that last year’s battles over the Contract Premier Embauche (CPE), or first employment contract, will be renewed. However, this time a more radical reform is to be carried through and this time the French ruling class can claim that it is the will of the electorate.

The French bourgeoisie are looking to Germany as a model of what needs to be done to restore the health of French capitalism. Within the last 5 years, Germany has returned to growth and profitability through three principal factors. The first, and most important, is the reduction in labour costs which decreased 10% in the decade 1995 to 2005. In addition, workers rights under the social security system have been reduced producing a saving of 3.3bn Euros for the German state. The second factor is the restructuring of industry which has produced more efficient corporate structures and cut jobs. The third factor is moving production abroad. Germany is once again the worlds leading exporter and the German bourgeoisie boast that almost half of the value added to German exports is added abroad. Germany has embraced globalisation. The German economic institute in Kiel, the IfW, recently published findings showing that the central role in restoring German competitiveness was “wage moderation.” Achieving this wage moderation has, of course, meant going through a period of high unemployment, which rose to 5 million in 2005, and plunging wages.

While Sarkozy appears ambivalent about globalisation where it threatens French industry, he made clear in the election campaign, that he intend to implement wage reduction and restructuring. To do this will entail major battles with the French working class, such as those fought by the Thatcher government in Britain in the 80s. Sarkozy faces problems in carrying this out and the populism he showed during the campaign indicate he does not intend to carry out a frontal assault. His strategy appears to be to divide the working class through vilifying the immigrant section of the class and the unemployed while at the same time appealing to French nationalism.

However, as can be seen with the renewal of the battle over the CPE these are not new policies of the French ruling class. They are what the previous administration has tried to do but failed to complete. They are the policies required to restore the profitability of French capital and mean that further major attacks on the French working class are being prepared.

UK - at last the end of Blair

While there is a temptation to welcome the departure of such a sanctimonious hypocrite as Blair, changes in the personnel of the ruling class are not of great relevance to the working class. A smooth succession to a Brown leadership is underway and Brown has shown he endorses the principal items of the Blair project. Blair has proved a faithful servant of the British capitalist class since his election to leadership of the Labour Party in 1994. He transformed the Labour party into a party able to carry forward the requirements of capitalism in the present period and take forward the principles of Thatcherism when the Tory party was in a state of collapse. This entailed supporting the main economic developments of the 80s such as reduction in real wages while increasing exploitation rates, privatisation of the economy and globalisation of production. He has also supported the interests of British imperialism abroad. It needs to be remembered that the Iraq war, for which he is criticised today, was the 4th war he took Britain into, the others being Kosovo, Sierra Leone and Afghanistan. He is not criticised for the earlier wars, which were equally illegal, because they are seen as furthering the interests of British imperialism. The real crime, of which Blair stands accused by the British ruling class, is betraying Britain’s long term interests in the Middle East through helping to start the Iraq war. As Blair prepares to make his final bow and shuffle off the stage he is trying to dictate the achievements for which he should be credited. One of these is the peace settlement in Northern Ireland. As with many of the other developments for which Blair likes to credit himself, the real causes of this settlement are not so much with the personnel of government as with the developments within capitalism itself which have prepared the ground for this.

Northern Ireland Settlement

Economic developments in Northern Ireland, the Irish Republic and the UK have cut away the economic interests on which the ideologies of Irish Nationalism and Unionism rested. This, and not the supposed brilliant negotiating skills of Blair, is the real reason for today’s devolution of power. This is the reason that we now see the radical representative of Unionism, the “No Surrender” Paisley, forming an administration with, former IRA commander, Martin McGuinness and both men meekly pleading for investment in the province. The settlement is basically an accommodation with the Republic and a recognition that the economic future of the North lies with the South and with the EU rather than in the union with the UK.

Since Britain joined the EU in 1973, the British ruling class has been trying to extricate itself from the “Irish mire” and so end the economic and military costs of holding on to the province. The backward nature of the Northern Ireland economy means that the province costs the UK treasury £6bn annually. In addition there is the cost of keeping some 8500 troops stationed there. There are still more troops in Northern Ireland than in either Iraq or Afghanistan and the British ruling class would dearly like to move these troops to other places. With the collapse of the Russian bloc in 1989, the military importance of Northern Ireland to NATO diminished and the US was prepared to throw its weight behind moves towards a settlement. The political problems which the UK faced, and which have taken so long to resolve, were the consequences of the entrenched positions of Irish Nationalism and Unionism which still possessed a lease of life even when their economic basis crumbled. This is the reason for the 9 years which have elapsed since the Good Friday Agreement was ratified in 1998 and the present power sharing devolved government.

The relative decline in the economic fortunes of Northern Ireland can be traced in statistics, but a telling commentary is provided by the following description made by Michael Moore, the professor of finance at Queen’s University in Belfast. He remarked that,

crossing the border from north to south is like going from Checkpoint Charlie from east to west Berlin in the Cold War. ⁽¹⁾

The GDP per head of the Republic is now $43 600, the second highest in the EU, while that of Northern Ireland is $26 900, only 80% of that of the UK. In Northern Ireland the state sector accounts for 67% of the total economic output whereas in the Republic the equivalent figure is 27%. In Northern Ireland 530 000 people are economically inactive, which represents 27% of the population whereas the UK average is 21%. Perhaps the most significant decline is that of the heavy engineering industry, particularly the shipyards and aircraft manufacturers which formed the basis for linking the province to the rest of Britain and the ideology of Unionism. The region of Belfast where these industries were located used to employ 35000 workers at the start of the 70s whereas today only about 500 are employed here. All these statistics point to the economic backwater which the province has become and the need for the local bourgeois factions, whether they be Unionist or Nationalist, to find a way forward.

The success story of the republic has been a great influence on Northern Irish bourgeoisie. Since 1987, when it decided to become a Celtic version of Singapore and reduced corporation tax to 10%, the Republic has thrived. Growth rates in the Republic were 10% annually between 1995 and 2000 and 7% between 2001 and 2005. The Republic is now the 2nd largest source of investment into the North. This is the reason that Paisley and McGuinness see the future as linked to the Republic and can jointly call for investment from the Republic. A further benefit of devolution is the advantage it brings from the EU. Northern Ireland should now receive 1bn euros from Brussels in the current 7 year grant period, together with 370 million from the “peace fund” and 200 million from the “cross border fund.” Now that the province has achieved devolved status Northern Irish politicians will be able to negotiate directly with Brussels over the grants they receive and the amounts given. Hence, there are material motives behind moves to link the two parts of the island and to achieve to move to devolved status within the UK.

What is seldom mentioned in discussions about the Irish Republic is that the opening of the country to international capital in 1987 meant the death of Irish Nationalism as an ideology. The Irish state no longer provided protection for Irish capital. Its future lay in prostrating itself to international capital. Its future lay in globalised capitalism. The ideologies of both Nationalism and Unionism have collapsed as their foundations have been undermined. For the capitalist factions of Northern Ireland the lure of international capital and globalisation appear as the best possible future.

(1) See Independent 3/4/2007.