Wim Duisenberg, president of the European Central Bank (ECB), commented that the fall of the euro against the dollar "does give me some concern that a further movement in this direction would contribute to undermining the confidence in the euro of the public at large. Unjustified, but still it is a public perception," the Financial Times of London reported November 26.

The German government's decision to bail out the bankrupt construction company Philipp Holzmann AG is one factor contributing to the drop of the euro relative to the U.S. dollar and Japanese yen. Tens of thousands of jobs were threatened if the company went belly up, at a time when unemployment averages 10.5 percent. As thousands of construction workers protested in the streets, Social Democratic chancellor Gerhard Schröder negotiated a government-backed rescue package for the company.

Although Schröder was able to get parliamentary approval the next day for cuts in pensions as part of a $16 billion austerity package, the decision not to allow such a big company to fail had a negative impact on capitalist investors around the world.

The week before, Schröder denounced in nationalist terms the attempt by British Vodaphone AirTouch to take over the German telecommunications and engineering group Mannesmann. The buyout "would threaten Mannesmann's particularly German corporate culture," he declared.

This resistance by the German government to the kind of merger that has been the pattern in the United States and United Kingdom in the last decades also put question marks on the performance of the German economy in the minds of capitalist investors internationally.

In Tokyo, Deutsche banks spokesperson Kenneth Landon talked about concerns among Japanese investors that "politicians will not allow restructuring to proceed unhampered" and as a result "Europe looks less attractive compared with the restructuring and M&A [merger and acquisition] activity in Japan." Japan has been hardest hit among the imperialist powers by the worldwide economic depression since the beginning of the 1990s.

The economic growth rate in Germany—which has by far the biggest economy of any country in the European Union—is not expected to exceed 1.5 percent this year. In France the economy grew 3 percent in the third quarter of 1999 compared to a year earlier, and the growth rate for the Netherlands was 4 percent.

This spring, soon after the launch of the euro, the ECB lowered interest rates by 0.5 percent, but in early November restored them to 3 percent. This is much lower than the U.S. rate of 5.5 percent, which is one reason the U.S. dollar is more attractive than the euro. The ECB is now under pressure to raise interest rates further, which could derail the weak upturn in the capitalist business cycle in Germany and the rest of western Europe, deepening social crises there.

Meanwhile, French president Jaques Chirac and British prime minister Anthony Blair met in London November 25 with their foreign and defense ministers and chief military commanders and called for the creation of a "European crisis-intervention force." They said the European Union should put up a force of between 50,000 and 60,000 troops and 300–500 aircraft that could be deployed quickly, separate from the U.S.-dominated NATO command structure, and be sustained in the field for at least a year.

The scheme also involves rounding out logistics, command, and intelligence capacities in which the imperialist powers in Euorpe lag behind Washington, as was shown in the recent war in Kosova.

British and French officials said their aim is not to set up a European standing army, but they would make their respective general staffs available to command any EU-led operation. London declared it was ready to provide British forces "for specific operations" to the existing five-nation Eurocorps, led by France and Germany.

Blair and Chirac expressed hope that the EU summit meeting in Helsinki on December 10–11 would endorse their plan.

The statement aroused concern in Washington, as it calls for the creation of an "autonomous" EU military capacity. In a recent speech Deputy Secretary of State Strobe Talbott said autonomy could split NATO by leading European countries to consult among themselves first in a crisis, rather than with all of their partners in the alliance.

Carl-Erik Isacsson is a member of the metalwokers union in Södertälje, Sweden.  
 
 
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