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The EU Commission Plans for Rearmament and a Clean Industrial Deal

From the series European news

Following the European elections which took place on June 6th - 9th, the leaders of the Member States met on June 27th at the European Council. Ursula von der Leyen was nominated as president of the next European Commission, after she was chosen as the European People’s Party’s (EPP) Spitzenkandidat (“leading candidate”). The agreement also included the election of former Portuguese Prime Minister Antonio Costa as president of the European Council, and the appointment of former Estonian Prime Minister Kaja Kallas as High Representative of the Union for Foreign Affairs and Security Policy. Subsequently, on July 18th, Parliament elected von der Leyen as president of the Commission by an absolute majority, with 401 votes out of 719 MEPs.

On September 17th, von der Leyen presented her team of commissioners to the European Parliament and, two days later, the Council adopted this list of candidates. From November 4th to 12th, par liamentary committees held hearings to scrutinise the candidates: unlike in previous years, none were rejected. Finally, on November 27th, Parliament approved the new college of commissioners with 370 votes and, on November 28, by a qualified majority vote, the Council appointed the European Commission with a mandate lasting from December 1st, 2024 to October 31st, 2029. Thus the von der Leven II Commission was born.

Imperialist democracy

It is not easy to bring order to such a complex political process. It had been obvious for some time that the revision of the Green Deal in the face of the automotive crisis, along with the question of European rearmament under the impact of the war in Ukraine, had become the central issues of political confrontation, behind the smokescreen of agitation about law and order aimed at reassuring an ageing public frightened by immigration. The dates listed above constituted the main stages of the battle between groups and fractions of the ruling class to influence the plurality of superstructures of European impernalism, in which national, confederal, and federal powers combine. It is in this way that European imperialist democracy tries to achieve the pluralist centralisation of the interests of the most important fractions, regions, and corporate groups, which are thus expressed within a general line of the European bourgeoisie. Of course, nothing guarantees that this process will be fully effective, and indeed the dialectic of imbalances and rebalancings remains the rule. The revision of the Green Deal is weighed down by war-related high energy prices and China’s irruption into the electric car market, but also by the need to redress the imbalance generated by the bidding war, between the European Parliament and the Council, on the targets and deadlines for the reduction of emission. Euгоpean rearmament has been delayed for two decades, since the Gulf War of 2003 divided the Union between Old Europe and New Europe and stalled plans for a common defence discussed at the Convention for the European Constitution.

On November 27th, in the European Parliament von der Leyen laid out the general line proposed by her new Commission around the three pillars of the Draghi report on the future of European competitiveness. The first pillar concerns bridging the innovation gap with the US and China through investment and by strengthening the single market by removing barriers between the 27 national markets.

The second pillar concerns adjusting the Green Deal, launched in 2019 by the first von der Leyen Commission, to better harmonise decarbonisation and competitiveness. To this end, in the first 100 days of her mandate, von der Leyen, a German Christian Democrat, will present a Clean Industrial Deal, and has announced a strategic dialogue on the future of the automotive industry in Europe.

The third pillar carries the label of economic security, but also includes European rearmament. For the first time the Union has a defence commissioner, the Lithuanian Andrius Kubilius. In her speech, the Commission president pointed out the direction to follow: “Russia is spending up to 9% of its GDP on defence. Europe is spending on average 1.9%. There is some thing wrong in this equation. Our defence spending must increase”.

The search for a centre of gravity

With a Lithuanian as Commissioner for Defence and Space, an Estonian at the head of European diplomacy, and a president who invokes rearmament while brandishing the Russian threat, the new Commission risks reproducing the old imbalance between Old Europe and New Europe, giving voice to the anti-Russian and pro-American tropism of the Nordic and Baltic countries and Poland. We hypothesised at the time that the Franco-German axis between Paris and Berlin, caught off guard by the war in Ukraine, intended to use the conflict as a catalyst for European rearmament, exploiting the Atlantic moment generated by the war. It is unclear what impact the current political weakness in France and Germany will have and to what extent Germany intends to prioritise the rebuilding of its national war machine. The fact remains that the Atlantic Alliance is the only context in which the strategic autonomy of the Union can proceed, with a view to renegotiating the terms of Atlantic reciprocity with Washington within NATO.

This intention is clearer in the Draghi report, where the element of competition with the United States is explicit. His report can also bank on the support of the most important representatives of Europe’s monetary powers, as shown by the recent, and unusually political, interventions by the presidents of the French, German, and European central banks.

The voices of the monetary powers

Christine Lagarde, who succeeded Draghi as president of the ECB, has said that Donald Trump’s threat of imposing tariffs on European products is “a big awakening”, and that it has the merit of serving as “an accelerator of a reset that we need” [Financial Times, November 29th]. Instead of responding to Trump’s threats, Lagarde advises European political leaders to negotiate with the “cheque-book strategy”, offering to buy more goods from the US, e.g., gas and military equipment, because there would be no winners in the event of a trade war. At the same time, Lagarde encouraged the EU to move forward “quickly” on two elements of the Draghi report: the creation of the Capital Markets Union and of a “single supervisory authority”, like the Securities and Exchange Commission (SEC), the US capital markets authority.

In an op-ed published at the end of November in Le Monde and the Frankfurter Allgemeine Zeitung, Joachim Nagel and François Villeroy de Galhau, presidents of the Bundesbank and the Banque de France respectively, call on France and Germany to take a “strong common position [...] in the face of growing threats to Europe”. “The result of the US presidential election” could reinforce geopolitical tensions and should serve as “a wake-up call”. “The reports by Mario Draghi and Enrico Letta provide, in our view, the roadmap”, they continue. New common European debt is not a prerequisite for moving forward “at this stage”, the two presidents write. They conclude: “The war waged by Russia against Ukraine brutally shows us that economic integration does not guarantee peace. [...] We call for a much more European approach to defence policies, through joint arms purchases and a higher common defence budget”.

The spectre of Trump

From these speeches, the Trump factor emerges clearly. In addition to threats of a trade war, the president-elect also promised a quick end to the war in Ukraine and threatened again not to defend NATO countries which have insufficient military spending. Allies would be asked to spend between 3% and 5% of their GDP on defence [Financial Times, December 21st].

In this context, the planning of “interposition troops” or “peacekeeping forces” which European countries would send to Ukraine is gaining ground. Although an agreement on security guarantees for Kyiv still seems far off, change is in the air. President Volodymyr Zelensky, interviewed by Le Parisien, admitted that Crimea and the Russian-occupied part of the Donbas cannot be reconquered militarily, and that Kyiv will have to rely on the “diplomatic route”. The hypothesis of a Korean solution, an armistice along the current front line turned into a frozen conflict, whereby Kyiv would be guaranteed by a European force, is gaining ground.

European defence

At the same time, representatives of major European military companies, including British ones, met for discussions on board the British aircraft carrier HMS Queen Elizabeth during a port call in Hamburg [Frankfurter Allgemeine Zeitung, November 25th]. A deliberate symbol, one might think, designed both to signal the Union’s rearmament plans and London’s involvement in them.

As far as the financing of joint defence projects is concerned, the EU Member States are discussing a common fund of over €500 billion. This would imply the creation of a financial vehicle managed by the European Investment Bank (EIB), which would issue bonds backed by national guarantees from the governments involved. Participation in the fund would be voluntary and would also be open to non-EU countries such as the UK. According to Financial Times sources, “The Netherlands, Finland and Denmark”, which historically have been opposed to any form of joint debt, “are supportive of the idea”, while Germany’s position “is uncertain and will depend on its elections in February” [Financial Times, December 6th].

According to Handelsblatt, the only countries opposed to a European defence fund financed by common debt are Germany and the Netherlands [December 19. As for Denmark, in early December, Prime Minister Mette Frederiksen hinted at a change in her government’s position, which now sees joint borrowing as an opportunity to strengthen European competitiveness and defence. As the Danish government, she said, “we are looking at state aid, joint debt and the EU budget with new eyes and new glasses. It is a new era” [dr.dk, December 1st]. This is the second significant change of position in Denmark after the country decided by referendum on June 1st, 2022, to abolish its opt-out of European defence which has been in force since 1993.

The rearmament of the Union is already happening. On the one hand, an interposition force in Ukraine may pre-figure a European army, but on the other it may trap it in a strategic opposition to Moscow, perpetuating the Atlantic moment triggered by the war.

Lotta Comunista, December 2024

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