BREXIT: Theresa May humiliated at Salzburg summit

Protestors against Brexit at the Tory conference in Birmingham 2018

The outlook for the Conservative Party looks increasingly bleak. Prime Minister Theresa May’s Chequers agreement,1 foisted on her divided Cabinet at a meeting on 6 July 2018, was not well received by the EU’s Brexit negotiators, or by significant sections of her feuding party. The EU’s chief negotiator Michel Barnier said the demands contained in the agreement were not a firm basis for negotiations with Brussels and fell foul of the EU’s red lines and founding principles. Boris Johnson, who resigned as Foreign Secretary shortly after the agreement was announced, crassly derided May’s Brexit strategy as ‘wrapping a suicide vest around the British constitution’. The arch-Eurosceptic Jacob Rees-Mogg, head of the 60-strong European Research Group MPs, said it was ‘absolute rubbish’ and we ‘should chuck it and have a Canada-style free trade agreement’. DAVID YAFFE reports.

Walking into a trap

An informal summit of 27 EU leaders took place in Salzburg, Austria, on 19-20 September to discuss, among other issues, Brexit. After May had publicised her Chequers agreement to give the UK access to the single market for goods and agriculture, the EU had tempered its public criticism to avoid giving ammunition to her Eurosceptic critics at home. May’s advisers thought this might continue and the EU would use the Salzburg summit to offer some encouragement on continuing with her compromise Chequers Brexit plan. May even stayed behind for a press conference after the summit hoping to build on such encouragement. How wrong they were! This hubris led only to the public humiliation of the British Prime Minister. She had walked into a trap.

The President of the European Council Donald Tusk rejected the core of the Chequers agreement – an EU-UK free trade area for goods and agriculture – thoroughly damaging May’s Brexit strategy. Tusk said: ‘There are positive elements in the Chequers proposal but the suggested framework for economic cooperation will not work, not least because it risks undermining the single market.’ The French President Emmanuel Macron, one of the strongest critics of the Chequers plan, forcefully drove the point home: ‘Brexit shows us one thing: it’s not easy to exit the European Union, it’s not without cost, it’s not without consequences’. He went on to say that the Leave victory in Britain’s 2016 EU referendum was ‘pushed by those who predicted easy solutions’, adding: ‘Those people are liars’. Tusk made it clear that, without significant progress on the Irish border issue (avoiding a ‘hard border’ on the island of Ireland) by the October EU leaders’ summit,  he would not call a summit in mid-November to ‘finalise and formalise’ a withdrawal deal. This is essential if the UK is to retain the benefits of the single market and customs union for a further 21 months after leaving the EU on the 29 March 2019. Tusk’s position vindicates the stance of Michel Barnier as well as the Irish government, which feared that the Irish border question was being used by Britain as a bargaining tool to put off committing to an acceptable withdrawal deal. A few hours earlier May had informed the Irish Taoiseach Leo Varadkar, at a private breakfast meeting, that she thought it was impossible to reach a compromise by the October summit. Now the EU has set down that summit as the deadline for a resolution of the Irish border issue. EU leaders were instructed to boost preparations for a no-deal Brexit.

At the post-summit press conference May showed her fury in terse exchanges with the media. She went into denial mode insisting that the Chequers plan provided the only ‘serious and credible’ deal to create frictionless trade between the UK and the EU, including at the Irish border. She warned that she was ready to lead the UK out of the EU without an agreement. She insisted that there was no prospect of Brexit being reversed in a second referendum. Britain is leaving the EU on 29 March 2019, she said, and she would bring forward proposals to resolve the default Irish ‘backstop’ question agreed in December 2017 as part of the ongoing withdrawal deal.2

The next day May tried to regain the initiative with a statement from Downing Street. She accused EU leaders of failing to show ‘respect’ to Britain and warned the EU to shift its position or risk a breakdown in Brexit negotiations. Tusk had in fact mocked the Prime Minister on social media, posting a picture of her being offered a cake with ‘no cherries’ in reference to what he regarded as her cherry-picking Brexit strategy. May made it clear she rejects the Norwegian and Canada-style free trade solutions, as the former would retain too much Brussels jurisdiction and the latter would require a physical border in the north of Ireland. She restated her opposition to a second referendum. However May’s fundamental problem is within domestic politics, as she desperately battles to cling on to her premiership and keep a feuding Tory party in power. ‘Chequers goes pop’ tweeted Jacob Rees-Mogg soon after May’s mauling at the Salzburg summit. And Keir Starmer, Labour’s Brexit Secretary, said: ‘It had been clear for weeks that Theresa May’s Chequers’ proposals cannot deliver the comprehensive plan we need to protect jobs, the economy and avoid a hard border in Northern Ireland. She needs to urgently drop her reckless red lines and put forward a credible plan’ (The Guardian 21 and 22 September 2018). That she is resolved not to do.

European Union, imperialist rivalry and Brexit

The decision of US President Donald Trump to pull out of the 2015 Iran nuclear deal and impose further sanctions on Iran and countries and companies trading with Iran, an expression of his ‘America first’ nationalism, represents a serious threat by US imperialism to a European imperialism potentially weakened by the growing conflict over Brexit. A significant response to this development came from Jean-Claude Juncker, President of the European Commission, in his last State of the Union speech to MEPs in Strasbourg on 12 September. In it he proposed to turn the euro into a global reserve currency that would rival the dollar as part of a drive to reduce its dependence on the US. He said it was ‘absurd’ that Europe pays for 80% of its energy import bill – worth €300bn a year – in US dollars when only roughly 2% of EU energy imports come from the US. ‘It is absurd that European companies buy European planes in dollars instead of euros’. An initiative was needed, he said, from the European Central Bank to promote the international use of the euro. 

This demand signals Europe’s alarm at Trump’s moves to use the dollar as a weapon of foreign policy to punish US imperialism’s rivals. The EU has said earlier this year that it will switch from dollars to euros to pay for Iranian oil imports in response to the conflict with the US over the Iranian nuclear deal. On 21 August, Germany’s Foreign Minister Heike Maas said: ‘It is indispensable that we strengthen European autonomy by creating payment channels that are independent of the United States.’

In his speech Juncker outlined the steps to be taken to create from the EU a European imperialism able to stand up to the US. He said: ‘The geopolitical situation makes this Europe’s hour: the time for European sovereignty has come. It is time Europe took its destiny into its own hands. It is time Europe developed what I coined “Weltpolitikfähigkeit” – the capacity to play a role, as a Union, in shaping global affairs. Europe has to become a more sovereign actor in international relations.’

As we have consistently pointed out, the parasitic character of British capitalism has made it increasingly incapable of withstanding the economic and political challenges of US or European imperialism as an independent global imperialist power. The Brexit conflict is essentially a dispute between sections of the ruling class over two necessarily, totally reactionary outcomes for British capitalism – staying as part of a European imperialist bloc or leaving and becoming an offshore centre for usury capital under the umbrella of US imperialism.3 In addition, Brexit is creating serious obstacles to sustaining the City of London as a leading global financial centre and with it the material basis for the standard of living of the more privileged sections of the British working class.4 In this context it is not surprising that Trump’s ‘America first’ nationalism and the growing US conflict with Europe are driving the opportunist tendencies in the British Labour movement towards staying within or as close as possible to a European imperialist bloc.

Corbyn supporter Paul Mason expresses this development clearly when he says:

‘If Brexit was a crack in the superstructure of globalisation Trump has aimed a wrecking ball at its foundations. As the world fragments into conflicting trade and finance blocs it is imperative for both geographic and cultural reasons for Britain to attach itself as closely to Europe as possible.

With Trump in power, being inside the single market has become the only logical option for a Labour government, even if that might make some of its plans for state ownership, state aid and workplace regulation more difficult to achieve.’5

This was, in essence, the position that was adopted at the September 2018 Labour Party Conference. The composite motion that was passed not only called for a relationship with the EU that guarantees full participation in the Single Market, but also rejected a no-deal Brexit and supported all options remaining on the table, including campaigning for a public vote (second referendum) if Labour could not force a general election. Keir Starmer, introducing the motion, made it clear that the question of a public vote should be an open one with remaining in the EU an option. In addition any deal signed by the May government with the EU had to satisfy six tests which Starmer set out in 2017. These include a strong and collaborative future relationship with the EU, delivering exactly the same benefits as currently exist for members of the Single Market and Customs Union. Like Ken Livingstone in 1991,6 Labour believes that ‘on its own the sovereign nation state is no longer up to the job of dealing with many pressing issues…’, recognition, in effect, that the status and privileges of the better off sections of the working class can only be sustained by membership of a European imperialist bloc.

For the present May is sticking to her Chequers plan. Rees-Mogg with his pro-Brexit European Research Group would reject any deal based on that plan. He and Boris Johnson are calling for a Canada-style trade deal. Michael Gove, Secretary of State for the Environment, no doubt in a bid to emerge from the chaos of a Brexit breakdown as a possible Prime Minister, has put forward the idea that if May were defeated, Britain could park itself in the European Economic Area – like Norway – until a longer term solution could be found.  May has not only ruled out such a possibility but made it clear to the hard-line Conservative Eurosceptics that a no-deal Brexit would be better than a Canada-style trade deal that would split the north of Ireland from the rest of the UK. The outlook for Theresa May seems terminal and with it the likelihood of her Tory Party remaining in government.

Fight Racism! Fight Imperialism! 266 October/November 2018


1 See David Yaffe ‘Brexit Tory infighting shatters government illusions’ FRFI 265 August/ September 2018 on our website at https://tinyurl.com/y9h3v3cx for discussion of the Chequers agreement.

2 See David Yaffe ‘Brexit the end game approaches as imperialist rivalries intensify’ FRFI 264 June/July 2018 on our website at https://tinyurl.com/y98hlj36 for a more detailed discussion of the default ‘backstop’ solution. The information on the informal Salzburg summit is mainly taken from Financial Times 21 September 2019.

3 David Yaffe ‘EU referendum: the position of communists’ in FRFI 251 June/July 2016, on our website at http://tinyurl.com/z7cpcz7

4 In July Deutsche Bank shifted half its euro clearing activities to Frankfurt. The bank could eventually move about three-quarters of its estimated €600bn assets to Frankfurt. During the past 12 months, 10 foreign banks have moved operations from London to Frankfurt lifting the total number of ‘Brexit banks’ to 25, including Goldman Sachs, Citi, JPMorgan and Barclays. There are now 8 ‘Brexit banks’ in Paris and 15 in Luxemburg, Dublin and Amsterdam (Financial Times 25 September 2018).

5 Paul Mason ‘I’m backing a second Brexit vote – so should Jeremy Corbyn’ The Guardian 24 September 2018.

6 See EU referendum: the position of communists op cit.

 

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