This article is a somewhat expanded version of an a paper I presented, on behalf of the Socialist Labour Party, to the May Day International Seminar in Brussels organised by the Workers’ Party of Belgium (PTB)


PTB). Although the paper was presented on 3 May this year, the present version makes reference to certain events and data which belong to the weeks following 3 May. The reader may find it irksome and have difficulty reconciling to the fact that, while speaking on 3 May to an international gathering, I give myself the indulgence of referring to events which took place subsequently, in the manner of Biblical prophecies. Keen as I am to give the reader of the present article the most up-to-date information, I have allowed myself this unusual licence. Footnotes would have been a way out, but some of the footnotes would have been so lengthy as to be clumsy in a newspaper article. It is to be hoped that the reader will, in view of this explanation, not judge me too harshly. All the same I offer my apologies for any confusion caused.


By Harpal Brar, National Executive Committee member of the Socialist Labour Party and its Economics Committee Chair.

Concluding part

[Continued from the previous issue of Lalkar]


Common European security

Before answering the last question, that of Britain’s special role in NATO, and the political and military contradictions between the UK and Germany, it is necessary for me to refer to the fourth assumption which underlay the British Defence Strategic Review, and, in connection with this assumption, to present a brief survey of some of the important recent developments, which will not, I very much hope, be viewed as an unnecessary diversion from the subject.

The last assumption of Britain’s Review was that there will be no integrated European defence beyond a more effective European Security and Defence Identity (EDDI) in NATO through the West European Union (WEU). This assumption was merely the continuation of a long-held policy. Successive British governments have doggedly blocked steps towards a common European foreign and security policy, which might result in the establishment of an independent European defence entity, on the grounds that it will be a rival to NATO and be inimical to British imperialism’s special relationship with US imperialism. Britain, however, is finding it increasingly difficult to sustain this stance in the face of the determination of the leading members of the European Union, notably France and Germany, to push ahead with their plans for a common European security and foreign policy.

Despite steep cuts since the fall of the Berlin Wall, Europe’s defence expenditure is significant, amounting as it does to 60% of the US Defence budget. But this huge expenditure is not matched by the level of military force achieved from this spending. Europe is thus determined to get more for its money. Britain has, at long last, been converted to this view. Tony Blair, of all the people, dropped Britain’s long-held opposition to a common European defence policy, thus making way for last December’s St Malo agreement between France and Britain on defence co-operation. According to the St Malo Declaration, the European Union (EU)

«must have the capacity for autonomous action, backed up by credible military forces, the means to decide them, and a readiness to do so, in order to respond to international crises. »

In short, the European bourgeoisie is limbering up to fight what Delors called the

« the resource wars of the 21st century, »

i.e., a fight for the redivision of the world, backed by credible armed forces, which can rival those of any other imperialist bloc. Since the collapse of the USSR and the east European socialist countries, a huge area, with vast mineral wealth and possessed of a very highly-educated and scientifically-trained workforce, is suddenly up for grabs, whetting the appetite of the various imperialist powers and blocs. They are all, without exception, salivating at the prospect of grabbing the largest and the juiciest part of this dazzling prize. And these questions, despite the declarations of the foreign ministers, heads of government and heads of state, of the various imperialist countries, that there prevails perfect harmony, and complete unanimity of view, among them, cannot, in the final analysis, be decided in a peaceful way. The fact is that the imperialist powers, formally allies under the NATO alliance, are hopelessly divided, for their interests are opposed to each other. They are allies and enemies of each other at the same time. They cannot help falling out with each other any more than the capitalists on the floor of the Stock Exchange can help making a fast buck at each other’s cost, or than thieves can help fighting each other over their booty. In the words of Lenin,

« the imperialist powers cannot take any serious step in any political question without falling out among themselves, »

(Speech delivered 5 May 1920 at a Joint Meeting of the All-Russian CEC, the Moscow Soviet of Workers’, Peasants’ and Red Army Deputies, the Trade Unions and the Factory Committees).

The Kosovo crisis has brought to the surface the cracks, indeed the deep divisions, in the NATO alliance. While pretending to be united, each of the principal imperialist powers – the US, Germany, Britain and France – is furiously pursuing its own separate agenda and trying to undercut its rivals with whom it is in formal alliance. A war within a war is taking place not only for the carve-up of the Balkans but also for the carve-up and domination of the vast region, endowed with fabulous oil, gas and other mineral wealth, stretching from the Middle East to the shores of the Caspian and Black Seas. This life and death struggle of the imperialist powers over the dazzling riches of this huge area alone, and not any humanitarian concern for the plight of the Kosovars, provides the key to understanding the reasons for the carnage visited on Yugoslavia by the NATO neo-Nazi alliance.

Since these questions are not decided in a peaceful and gentlemanly way over a drink, each side has to build a credible force to confront the other. Hence the St Malo Anglo-French Declaration ; hence the Toulouse Franco-German Declaration. At the NATO Summit in April this year, the EU members of that military alliance were successful in having the idea of a European defence initiative written into NATO’s ‘strategic concept’. The Franco-German Toulouse Summit of 29 May 1999 went much further. At the end of the Summit in Toulouse, Germany and France spoke of

their « determination to contribute all their weight so that the EU equips itself with the necessary autonomous means to decide and deal with crises. »

In other words, the parties to the Declaration pledged to use all their weight to ensure that Europe acquires the necessary military and intelligence means to cope with international crises without direct US involvement. The events in Kosovo, says the

Financial Times

of 31 May 1999,

«have convinced the French that Europe must now proceed to act independently of the US SINCE THE EU HAS INCREASINGLY A DIFFERENT SET OF PRIORITIES FROM THAT OF WASHINGTON … »

(my emphasis).

Following the coming into force on 1 June 1999 of the Amsterdam Treaty, which created the post of High Representative, the EU’s first foreign policy supremo, the EU’s Cologne summit, held during the first week of June, appointed the revolting Spanish social-democrat Mr Javier Solana, to this post. He has impeccable credentials for this kind of filthy work. As Secretary-General of the war-mongering neo-Nazi NATO alliance, he has supervised NATO’s extension eastward to the borders of Russia and presided over NATO’s genocidal war of aggression against tiny Yugoslavia.

It will be Solana’s job to help fold the Western European Union (WEU) defence organisation into the EU by the end of 2000, as well as to get the EU states to boost their defence effort in intelligence, military transport and command and control – areas in which, as the war against Yugoslavia ahs highlighted, the EU is dependent on the US.

The requirements for, and obstacles in the way of, a common European security policy.

To begin with there is the membership mismatch between NATO and the EU; and the membership of the WEU, the security organisation which is to be folded into the EU matches neither. While Turkey, which is a loyal, not to say servile, member of both NATO and the WEU, will be out in the cold as it is not a member of the EU, neutral countries – Austria (which kept NATO warplanes out of its air space), Sweden, Ireland and Finland – being members of the EU will be able to exercise an effective veto on European security policy.

Undoubtedly the EU faces formidable difficulties in pursuing the enterprise it has embarked upon. While setting itself the objective of creating an independent defence identity, it has, for the time being at least, to pretend that its efforts in this direction are in no way designed to undermine NATO, for the EU leaders are fully aware that during the latest Balkans War, it is America’s military power which dominated the campaign ; that it is the US B-2 Stealth bombers that flew all the way from Missouri to shed their deadly payload of smart bombs on Yugoslav targets ; that only the US has satellite-guided bombs, ‘Jstars’, airborne battlefield reconnaissance and other sophisticated weapons ; and that it is the US that can fire Cruise missiles, with the partial exception of the British Royal Navy, whose few missiles are made and loaded in the US. Thus, now is not the time to upset the US. Precisely for this reason, however, the Kosovo crisis has added a sense of urgency to the question of common defence by underlining how dependent collectively the EU member states are on the US for sophisticated defence technology, for command and control, and for what the general like to call ‘strategic lift’.

« Kosovo has rewritten the rules of western security and governments must summon the political will to face this, » writes the reactionary journalist Philip Stephens euphemistically in the

Financial Times

of 21 May 1999. He scolds the EU for not recognising that the US

« no longer has the will to play the role of the continent’s leading power. »

In plain language, it amounts to saying that old unity displayed by the entire western imperialist bloc in the face of the mighty USSR has, since the collapse of the eastern bloc, made way for

« visible tensions in the Atlantic relationship. »

So Europe

must « reconfigure its armed forces »

and reclaim a

« significant part of the peace dividend. »

i.e, increase defence spending.

George Robertson, Britain’s war-mongering Defence Secretary, concurs. The conflict in Kosovo, he says, has made it ‘glaringly obvious’ that Europe must make more of an impact.

While not necessarily matching US weapon for smart weapon, the European defence project necessitates the harnessing of research expenditure so as to enable Europe to produce technologically sophisticated equipment of the type available to the American armed forces. This means acquiring « stand-off » weapons, which enable European aircraft to fire at targets from a long distance, combat search and rescue capability to save pilots following any crash ; and more transport aircraft.

In order to acquire this enhanced capacity, Europe could spend more on defence, especially defence research, in which area Europe spends $10 billion a year, as compared to the $36 billion a year spent by the US. Substantially increased spending in defence being unlikely owing to public opposition, the other three options are as follows :

First, a smarter spending of existing budgets. In this regard, defence ministries across Europe are keenly studying the UK’s Strategic Defence Review, with its emphasis on the deployment of flexible forces with appropriate equipment and attempts to improve defence procurement.

Second, collaboration across national boundaries on defence projects, which will be very testing indeed in view of the long line of flopped or stagnating efforts at Europe-wide collaborative procurement. While proclaiming that it is committed to a common defence policy earlier this year, Britain pulled out of Horizon, the troubled £7 billion 3-nation naval frigates project.

Third, Europe could embark upon upon the road of restructuring her overcrowded defence industry as a further means of squeezing better value for money out of procurement :

« If we are going to punch our weight as a continent, »

says Britain’s Robertson,

« we will have to do something about the fact that we are guarding all this overcapacity. »

Rationale behind rationalisation of European defence industry

The compulsion for the rationalisation/restructuring of the European defence industry is underlined by the fact that, while the combined EU military expenditure amounts to 60% of the USA’s, the EU is littered with a large number of armament manufacturers. For instance, whereas the EU has 12 contractors for missiles, the US has just three. The answer, therefore, is to consolidate, downsize through privatisation and mass sackings, and create two or three (preferably one) giant European producers, capable of not only supplying the European armed forces with sophisticated weapons to match those of the US, but also of being able to compete against US giants – Boeing, Lockheed Martin and Raytheon – in the European, American and international arms markets.

Difficulties facing restructuring

The immense difficulties in the way of such restructuring are only too clearly revealed by the circumstances surrounding the acquisition in January of this year by BAE of GEC’s defence arm – Marconi – for £8 billion – a deal which overnight turned BAE into the world’s third largest defence company, and which

« left the British government stunned and French and German rivals seething on the sidelines. »

(Financial Times

23 January 1999).

Up to then, BAE had been expected to merge with Germany’s DASA whose board, as BAE must have fully realised, would be left fuming if it struck a deal with Marconi. However, the Chairman of BAE, Sir Richard Evans,

was « determined that neither Thompson

[of France]

nor Lockheed

[of the US]

should seize this prize, wrap themselves in the Union Jack, and compete against BAE in its home territory. »

The BAE board decided to

« put its best foot forward »

and sent an offer of £8 billion to GEC, being convinced that

« in the complicated multi-dimensional game of restructuring Europe’s defence industry, the first to move would capture the richest pickings, »


those « coming late risked being marginalised. »

(Financial Times, 23 January 1999).

The very greed which is the motive force behind the drive to rationalise and restructure also constitutes a major hindrance to the creation of the Euro-military industrial complex (MIC), to be known as the European Aerospace and Defence Company (EADC), which will supply the planned Euroforce with technologically sophisticated weapons. The bare-knuckle struggle over who will control, lead and dominate the Euro MIC has intensified dramatically since the acquisition of Marconi by BAE, which has made BAE three times as large as any other European defence company. BAE now has stakes a a wide variety of ventures with European partners, including Airbus, Eurofighter, missiles, sonar, and space. It has a strong presence in the US where it has an impressive workforce of 18,500. It owns 35% of Sweden’s Sab. In fact, with its latest acquisition, BAE will become a large-scale systems contractor for land, sea and air-based defence projects, so that it can no longer accurately be described as an aerospace company.

If the Marconi deal is not blocked by the regulators, and it is most unlikely to be blocked, BAE will emerge as a formidable force in the global defence market – a development that US imperialism does not much relish. The US views with alarm the prospect that restructuring of the European defence industry might bring forth a smaller number of larger groups, including BAE, which, with Marconi under its belt, will be easily of a size to rival the biggest defence companies in the US.

German imperialism had hoped and expected to lead the lucrative arms trade, through DASA’s planned merger with BAE as a prelude to a full-scale 3-way merger, to create a German-dominated MIC. Instead DASA was left standing at the altar by GEC who sold its defence arm, Marconi, to BAE. No wonder, then, that DASA was furious.

Undoubtedly, for the moment at least, BAE’s move has significantly retarded the process of re-structuring the European defence industry. Only time will tell whether Europe’s large defence companies, in addition to domestic-national mergers will look across the Atlantic for their partners. Meanwhile the restructuring of the European defence industry, notwithstanding the setback caused by the BAE-Marconi merger, is taking place, even if at a slower pace. On 11 June DASA absorbed Spain’s aerospace group CASA – a deal which could open the way for reforming the Airbus consortium into a single corporate entity, an idea which BAE and DASA have been promoting for quite some time. CASA out of the way, and Aerospatiale Matra having recently been privatised, the prospect for the Airbus to be knocked into a single company with a centralised management structure look better than ever before. Thus, « although national sensitivities – and sheer complexity – stand in the way of a ‘big bang’ restructuring, the latest [CASA-DASA]

deal shows that reshaping of the overcrowded industry is steadily taking place, »

observes Alexander Nicoll in the

Financial Times

of 14 June 1999.

Three or four significant aerospace and defence groups are emerging in Europe instead of the single company that was being talked about only seven months ago. Industry executives and analysts do not believe that number is sustainable. With CASA out of the way,

« the next scramble is for the aerospace assets of Finmeccanica of Italy. With BAE, DASA and Thomson all seeking a deal over Alenia, its subsidiary, Alberta Lina, Finmeccanica’s head, could be the most courted man at the


Air Show.


Financial Times

, 14 June 1999). Further restructuring will have a lot to do with the two main French defence companies, Aerospatiale Matra and Thomson-CSF. The latter, following its failure to merge with Marconi last year, is perceived as a candidate for a merger with another European or even US company, the outcome of which will influence the shape and direction of the European defence industry, as well as its relation to the US defence giants.

In the crowded global market for the merchandise of death, an all-out war is taking place within Europe, and between Europe and the US, for a place under the sun. In the words of the

Financial Times

, « the first to move would capture the richest pickings” » and those

« coming late risked being marginalised. »

And, we can be sure that in order to be the first to be at the banqueting table, each of the contesting parties, without the slightest scruple, will use every trick, every subterfuge, every single ruse, deceit and chicanery, and every act of slyness and skulduggery.

What is happening in the defence industry is merely a specific illustration of the following observation made by Lenin more than 80 years ago :

« Monopolist capitalist associations … first divided the home market among themselves and obtained more or less complete possession of the industry of their own country. But under capitalism the home market is inevitably bound up with the foreign market. Capitalism long ago created a world market. As the export of capital increased, and as the foreign and colonial connections as ‘spheres of influence’ of the big monopolist associations expanded in all ways, things ‘naturally’ gravitated towards an international agreement among these associations, and towards the formation of international cartels.” » (

Imperialism, the Highest Stage of Capitalism


The division of the world between two or three giant monopolies, however, by no means precludes REDIVISION if the relationship of forces undergoes change consequent upon uneven development, war or bankruptcy.

This internationalisation (globalisation in current terminology), so to speak, of capital, far from bringing peace under the conditions of capitalism, only serves to prepare the ground for a most ruthless struggle (today peaceful, tomorrow warlike) between the monopolist capitalist associations, and capitalist states, for a division of the world. In Lenin’s words,

« the FORMS of the struggle may and do constantly change in accordance with varying, relatively specific and temporary causes, but the SUBSTANCE of the struggle

[for the division of the world]

its class CONTENT, positively cannot change while classes last … The capitalists divide the world, not out of any particular malice, but because the degree of concentration which has been reached forces them to adopt this method in order to obtain profits. And they divide it ‘in proportion to capital’, ‘in proportion to strength’, because there cannot be any other methods of division under commodity production and capitalism. But strength varies with the degree of economic and political development… »


Imperialism, the Highest Stage of Capitalism


Parallel to, and in connection with, certain relations between capitalist associations, based on the economic carve-up of the world,

« certain relations grow up between political alliances, between states, on the basis of the territorial division of the world, of the struggle for colonies, of the ‘struggle for spheres of influence’ »



The consolidation and restructuring within national boundaries and across them is proceeding at breakneck speed. The economic division and redivision of the world is going on at an ever-accelerating pace under our very eyes and certain relations between capitalist monopolies are growing up on the basis of this division. And in connection with it and parallel to it, certain relations are growing up between the capitalist states – between the US and the EU, between the US and individual powerful members of the EU, between each of these blocs and Japan, between all of them and Russia. The substance of the struggle taking place is the division of the world, with each of the contenders jockeying for the top seat at the imperialist banquet, not

« out of any particular malice, »

but because the extreme degree of concentration of capital forces them to resort to this method as a means of obtaining maximum profit.

In the light of the foregoing, it is possible to hint – only to hint – at the answer to the question asked of me. Following the collapse of the USSR and the eastern bloc, developments in the EU are forcing the British bourgeoisie to choose between its special relationship with the US and its relationship with its EU partners, notably Germany and France. The crisis in Kosovo has only added urgency to this question. Although the British bourgeoisie is divided on this question, all the same, the dominant sections of British financial capital, represented by the City, want Britain to join the single currency and play its part in shaping a common European foreign and security policy. Britain’s Labour government, being the most servile lackeys of British monopoly capitalism, is doing everything possible to make it a reality. Hence the St Malo Declaration and the decisions of the Cologne Summit. The contradiction between Britain and Germany arises out of the desire of each of them, possibly with the assistance of France, to dominate the European Military Industrial Complex, which is beginning to take shape. In the end, one of them must emerge victorious. In the event of Britain losing to Germany, it is anybody’s guess whether the British bourgeoisie would philosophically accept its defeat, or whether it would break up the EU in a clatter of nationalist jingoism and join forces with US imperialism. For the present, however, it is intent, while contending for the top position, upon joining other EU members in creating a common security policy, and a restructured European defence industry to back it up.

As of the moment, it is difficult to give a more definitive answer to the question asked of me for, in the words of J A Hobson

, « the situation is far too complex, the play of world forces far too incalculable. »

to render any single interpretation of the future a certainty. Events, however, are moving in the direction of the creation of a new imperialist bloc centred around the EU for the purposes of the joint suppression of socialism by the European bourgeoisie in Europe, the joint suppression and super-exploitation of the oppressed nations abroad, and for challenging US and Japanese imperialism.


The proletariat of the European countries have nothing to gain from this project but mass redundancies through rationalisation (of course we are not speaking here of its privileged stratum – the labour aristocracy) and slaughter in imperialist wars. Notwithstanding the soothing assurances of Social Democracy, the European enterprise, with its common Foreign and Security policy, backed by a powerful Military Industrial Complex, well under way, is not about easy travel, foreign holidays and consumer choice, or eliminating war in Europe, as the bourgeoisie and its ideologues would have us believe. On the contrary, its sole purpose is to strengthen the European bourgeoisie for an unprecedented war against the working class in Europe and the oppressed nations abroad, and to prepare it for a cut-throat trade war, spilling over into a titanic military conflict, against rival imperialisms.

Instead of hitching itself to the war chariots of the bourgeoisie, the proletariat of the EU, if they wish to be loyal to their own class interests, if they wish to march along the road to their own social emancipation, are duty bound to oppose their own bourgeoisie and work for its overthrow. As the European proletariat ponders over the momentous developments taking place, as it deliberates questions of war and peace, let is realise, and grasp, the significance of the following, never to be forgotten, words of V I Lenin, that

« it is impossible to escape imperialist war, and the imperialist world which inevitably engenders imperialist war, it is impossible to escape that inferno, EXCEPT BY A BOLSHEVIK STRUGGLE AND A BOLSHEVIK REVOLUTION. 

» (The Fourth Anniversary of the October Revolution, 14 October, 1921).

This is the message that must permeate the working class movement.



Just as we go to print, the International Institute of Strategic Studies (IISS) has launched its annual Military Balance publication. Time does not allow me to include in a meaningful way some of its conclusions. I would, however, like to draw the attention of the reader to the following facts, which are self-explanatory.

According to this report,

The Military Balance 1999/2000

, of the $55.8bn international arms export market, the US continues to be the largest exporter with $26.5bn of arms sales, accounting for 48.6% of the global arms exports. France, with sales of $9.8bn in 1998 (up from $7.4bn in 1997), overtook Britain and is now the second largest exporter of arms, accounting for 17.6% of the global arms exports. On the other hand, British arms exports declined from $10.9bn in 1997 to $9.6bn in 1998, representing 16.2% of global arms sales.

As regards imports, Saudi Arabia, with purchases worth $10.4bn, remained the largest importer in 1998, while Taiwan came second with purchases of $6.3bn.

Thus, while the three biggest imperialist countries – the US, Britain and France – account for a whopping 82% of the export trade in the merchandise of death, just two of the puppet regimes – Saudi Arabia and Taiwan – account for nearly a third of the global arms imports.

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