The European Union (EU) is in the midst of a deep crisis and its rulers are desperate to hold their project together.
If Britain left the EU, it could bust it open. Five years of harsh austerity and billion pound bailouts haven’t solved the eurozone crisis.
With the global economy verging on another slump and the EU’s trading partner China mired in stagnation, it wouldn’t take much for it to explode once more.
Top accountants PwC warned recently that the Greek debt crisis could flare up again and spread to other countries.
Nor were Fortress Europe’s barbed wire and border walls able to stop one of the largest migrations of refugees fleeing the West’s wars and poverty.
Border controls are even being reimposed within the EU’s Schengen space.
To contain this crisis even such pro-Europeans as German chancellor Angela Merkel have been willing to negotiate new terms for Britain’s membership.
But David Cameron’s sabre rattling has more to do with a political crisis within the Tory party.
Once a fringe group, the eurosceptics now call the shots.
The Tories’ friends in big business and the City of London are desperately trying to overcome British capitalism’s long-term crisis of profitability.
The Tories are also hoping to outflank Ukip on the right by using the EU referendum to ramp up racism against migrant workers.
Cameron’s proposed deal is a thoroughly reactionary document that makes it easier for the Tories to attack migrant workers.
He boasted that he’d won “an emergency brake that will mean people coming to Britain will have to wait four years until they have full access to our benefits”.
This falls short of what he wanted—a blanket four-year ban on migrants claiming any benefits.
To spin himself out of his disappointment, Cameron also claimed migrants who hadn’t found work within six months would have to leave. That’s not even in the deal.
The “emergency brake” only applies to in-work benefits such as tax credits—and it depends on agreement from the EU council.
It’s still not clear whether or for how long the Tories would be allowed to apply it, and it would only affect a minority of EU migrants. If applied four years ago it would have hit just 84,000 households—compared to the 718,000 EU migrants who arrived in just one year.
Far from a drain on the welfare system, this is a tiny amount of money from people who contribute more in tax than they receive in welfare.
But the plans would still force migrants on low wages into poverty. They fuel racist scapegoating and chip away further at the idea of universal benefits.
As well as scapegoating migrants, Cameron hopes to bolster British capitalism’s global position.
While most capitalists want to remain in the EU, they are also debating how they can most effectively push their interests within it.
Despite buzzwords about “competitiveness” the deal has nothing to do with helping small businesses and farmers.
It’s about defending the City of London from regulations so it remains the world’s premier casino.
The deal reinforces the EU’s neoliberalism. It doesn’t go far enough for many right wing Tories.
But the EU has made clear that it isn’t willing to make anymore fundamental concessions.
Labour leader Jeremy Corbyn dismissed the negotiation as a “Tory party drama” with no real consequences.
But Labour is defending the EU on similar terms to Cameron.
Last year all the Labour leadership candidates said they wouldn’t share a platform with Cameron. Now Blairite Chuka Umunna has said he would.
Labour right winger Caroline Flint congratulated “the prime minister on his progress in tackling what voters for all parties see as unfairness in the freedom of movement—not to work, but in some cases freedom of movement to claim benefits here in the UK”.
For good measure she also attacked refugees.
“If we left the European Union, would it put at risk our co-operation with the French authorities in Calais to protect UK borders?” she asked.
Even some on the left and in the trade unions are aping the arguments of the right. They argue that bosses use free movement of labour to undermine wages.
Corbyn himself said, “What the prime minister calls the strongest package ever on the abuse of the free movement does not actually begin to tackle the real problems around the impact of migration on jobs, wages and communities”.
Migrant workers don’t drive down wages—and they can be part of struggles to push them up. But scapegoating helps bosses avoid resistance as they attack pay and conditions.
The Tories’ splits are rooted in real divisions within the ruling class about how to deal with Britain’s long term decline as a world power.
The overwhelming majority of capitalists rely on the EU for their profits.
This is different to the period after the Second World War when bosses’ profits still came from the old Empire. Britain initially refused to join the European economic project.
But after Britain was humiliated during its unsuccessful invasion of Egypt in 1956 there was no denying Britain’s imperial decline.
Tory prime minister Harold Macmillan applied to join the EU’s forerunner in the hope of carving out a new imperialist role for Britain.
It was another Tory prime minister, Edward Heath, who finally brought Britain into the then Common Market in 1973.
A minority of Tory MPs dissented, such as the notorious racist Enoch Powell. But opposition mainly came from the Labour left.
Tories overwhelmingly supported European integration—including Margaret Thatcher during the early 1980s.
But the failure of her government’s economic policies provoked a split. After a deep slump in 1987 the chancellor Nigel Lawson pinned the pound to the German currency.
He hoped to stabilise Britain’s economy and rebuild the shattered manufacturing sector. But many Tories saw it as “German domination”.
These right wingers saw the future of British capitalism in the City—an offshore casino gambling with the rest of the world’s money.
At first Euroscepticism was a minority. But it became a lightning rod for discontent and frustration in the party.
This mood grew on the backbenches and the grassroots. After their defeat in 1997 the Tories consistently chose Eurosceptic leaders.
The old pro-EU Tory establishment became the new tiny minority, with the party now reliant on Euroscepticism to whip up support.
The majority of the left has lined up on the Remain side, because it sees the EU as a guarantor of workers’ and migrants’ rights.
Activists point out that Ukip and the Tory right will use racism as part of the Leave camp.
But many are lining up with the right in the Remain camp.
Left wing Green MP Caroline Lucas has spoken alongside former M&S boss Sir Stuart Rose. Cameron’s deal is supposed to make the case for the EU—and it is a bosses’ and racists’ charter.
He is campaigning to Remain on the basis of more attacks.
Socialists must put forward an alternative to the austerity and racism of both the EU and the Eurosceptic right.
That means arguing to break with the EU on a socialist and internationalist basis.
A vote to Leave would send shockwaves through the Tories and cause a political crisis—the left must be in a position to shape it.
State capitalism in Russia is republished
South African state murdered strikers
How ordinary people won Indian independence