ALLIANCE Number 33: June 1999:


PART 6: The Real War Aims of the USA-Led NATO Imperialists in The Balkan War of 1999

Sections Of Marxist-Leninist Left Take Only A Partial View
 Claims of the Imperialists -"Humanitarian" Intervention In The Balkans
The Overall Strategy Of The War
Setting The War Stage: Ensuring A "Failed Negotiation" - Casus Belli

The USA's Need to "Degrade" and render the United Nations Irrelevant
A Desire to Open Serbia’s Monopoly, and to enforce a "free market"
The Inter-imperialist Struggle Between NAFTA and EEC Imperialism – The Hijack of the EEC
The Oskar Affair
The European Commission And Exposure Of Its "Corruption".
The Euro’s Poor Performance In International Trading
The Anglo-German Accord
The Nature of The "Temporary Truce" - the EEC And Its' Army Debate



Launching The War


The war was launched under totally false claims. In this section of Alliance 33, we discuss the real underlying war aims. We also briefly show how the NATO allies effected their goals, by sabotaging the Rambouillet talks.

It is quite clear that the essential policy of USA imperialism in the Balkans was formulated some time ago. The Wall Street Journal, identified it as one of deferring to Milosevic at every point:

"In 1991: the Berlin Wall fell, Milosevic was fomenting Serb uprisings in Slovenia and Croatia. Slovenia quickly declared its independence, and Milosevic attacked Slovenia. Few recall that a waiting, prepared Slovenian army repulsed the Serbs and has been thriving economically and peacefully ever since. ... Slovenia saved itself before the West's policies began in earnest. The rest of Milosevic's targets weren’t so lucky. In August, Serb tanks attacked Croatian villages. And on Sept.25, the U.N. imposed its famous arms embargo on Yugoslavia. In June, George Bush's Secretary of State, James Baker, had gone to Belgrade and threw support behind a unified Yugoslavia, in other words, behind Milosevic. This policy was of a piece with the Administration's support of Mikhail Gorbachev and opposition to the Soviet Union's breakup, expressed in a Baker address in the Ukraine that quickly became known as the Chicken Kiev speech." The arms embargo cut off arms to everyone except Milosevic and the Serbs. His targets were weakened irreparably. .. Milosevic undertook the shelling of .. Dubrovnik. Then in May 1992, the Serbs began the three and one half-year bombardment Sarajevo, a place whose name is now a symbol of the West's ineffectualness. On May 14, a State Department spokesperson used the term "ethnic cleansing." Two months later came press reports of Serb death camps for Croats and Muslims. In December, Milosevic was elected Serbian president, ... Clinton inherited all this in 1993. He announced in May that he'd decided to use air power to end the war. In hindsight, the escape hatch qualifier "in principle" deserved more attention that it got. Then, in what in retrospect is the most valuable and ironic policy decision of this conflict, the Clinton Administration in March 1993 tacitly allowed the shipment of arms from Iran into Croatia and Bosnia. The military balance quickly turned as Bosnian and Croat forces counterattacked successfully. By year's end, the U.S. had formally lifted the arms embargo. The next big event, of course, was the Dayton Peace Accords of December 1995. This came as the Bosnians and Croats were winning, and without Dayton, Milosevic might have fallen in a flood of Serb refugees engulfing his state. It is no small irony that the man most associated with that deal Richard Holbrooke, left Belgrade yesterday, rebuffed by the same Slobodan Milosevic. Nearly 10 years after Secretary of State Baker tried to keep the peace by keeping Milosevic in power, another American Government was asking the same haughty dictator to agree to the umpteenth "truce" offered him by the Western powers." Wall Street Journal; "Review & OutlookThe next Kosova"; p. A26; March 24; 1999. As the vocal bourgeois liberal critic and campaigner against the NATO bombing – John Pilger - put it, the self-same leaders of the Western Alliance who bombed Milosevic had once always defend him: "It was the opponents of the bombing who exposed the hypocrisy of Western leaders and their long appeasement of the blood-soaked Milosevic as "the man we can do business with, who understands the realities of Yugoslavia". As recently as last October the British Foreign Secretary, Robin Cook, and other European Union Ministers were arguing Milosevic's case - that his actions in Kosovo were in response to the Kosovo Liberation Army's "terrorism" and its violations of United Nations Security Council resolution 1199. A senior United slates official described Milosevic as "NATO’s indispensable partner in the effort to stabilise Kosovo".
Pilger John; "Moral Sightseeing by the West"; Guardian Weekly; June 20th; 1999; p.3
The general policy of the imperialists with respect to the Balkans can be summarized by one bloody and historic word: "Appeasement". Despite the shrill insistence of the Left parrots of the Milosevic brand of Serb fascism, the West has fought consistently against Kosovan independence. It continues to do so after even this devastating military aggression on the Balkans. Le Monde Diplomatique, congratulates the Western powers in this refusal, because it would "fragment" Europe:
"The European Union is right to refuse to recognise Kosovo's independence. It would be equally irresponsible to encourage the fragmentation of Europe into micro-states and to fan the flames of rebellion in the region (Macedonia is next in line, with a population that is 30% Albanian). At the same time, it is right to demand that Belgrade reconsider its removal of Kosovo's status. What is needed is an agreement granting it the widest possible measure of autonomy within Serbia, that is to say within Yugoslavia. " Le Monde Diplomatique- February 1999; "Leader: Kosovo"; by Ignacio Ramonet
Why did the "appeasement" come to an end, only to be replaced with all out war? And why was this time point chosen? To understand the motive forces of imperialism, we cannot restrict ourselves to a Milosevic paraphrase. This is what many sections of the "Marxist-Leninists" restrict themselves to:
Sections Of Marxist-Leninist Left Take Only A Partial View
Le Monde takes the same line as Lalkar and Harpal Brar towards Kosovan independence (see above). Unlike Brar however, Le Monde Diplomatique – recognizes the depth of past racism against the Kosovars. Few unbiased and rational observers disagree that in recent history, Kosovans have suffered extreme oppression and racism. But Lalkar - complains that Pilger somehow unfairly accused Milosevic for humanitarian crimes. Indeed Pilger did so, just as did Noam Chomsky – another liberal intelligentsia who has been only selectively cited by pro-Milosevic Leftists. This selectivity praises Pilger and Chomsky’s condemnation of the NATO bombing, but conveniently overlooks their attacks on the Milosevic led "humanitarian catastrophes" (See Chomsky: Le Monde Diplomatique: May 1999; p. 1). Particularly good at this selective quoting is the semi-Trotskyite "Workers World" of the USA, which is given a comfortable unchallenged lodge in the "Marxist-Leninist List".

We have already pointed out (See parts 1 & 2 this issue Alliance 33) that the Left was divided upon the matter of Kosova. Equally so is the right also split:

"In France, National Front chairman Jean Marie le Pen joins Communist Party leader Robert Hue in condemning the war. In Britain, right-wing Tory MP Alan Clark (who argues that Britain should never have fought Hitler because appeasement would have paid higher dividends) finds himself in the same company as Old labour Grandees such as former defence secretary Denis Healey and perennial peacenik Tony Benn". Gwynne Dyer "Why the West Finally got Fed up With Serbia"; Globe & Mail; p. D4; April 17th; 1999. Lalkar instead of wasting space enumerating who said what among the media and the Trotskyite Left (Issue July-August 1999; pp 17-18) - should attempt an analysis that shows why Marxist-Leninists should have counseled Kosovars to "turn the other cheek" to Milosevic’ fascism.

Lalkar should also tell us whether they think massacres did occur in Bosnia and in Kosova – instead of glibly parroting Milosevic and instead of focusing solely on the current attacks on Serbs in the Kosova region. Lalkar even has the "moral fibre" to discredit Kosovar claims of Serb brutality, by saying that in war neither side can be trusted. Does Mr. Brar really want further independent corroboration? ………… A brief look at non-Milosevic puppet sources might reveal:

"Boston Physicians Investigate Abuses. The "Boston Globe" reported on 16 June about the findings made by the Physicians for Human Rights after interviewing some 1,180 Kosovar refugees. The NGO concluded that Serbian forces carried out a "systematic campaign of violence and destruction in their drive to expel Kosovar Albanians from the province." One doctor noted: "The level of violence against the Kosovar Albanians was really quite extraordinary. This helps us understand more what the Serb campaign has been about. It wasn't simply to get people out of Kosovo. It was a campaign of destruction." The 148-page report noted that nearly one-third of the respondents said that Serbian forces had burned their homes. Another 23 percent said that they had witnessed the destruction of medical facilities. Half of those interviewed reported that Serbs had demanded money of them. The study concluded that there had been "serious abuses in a very short period of time."
Sat Aug 07 20:34:34 1999; Subject: RFE/RL Balkan Report, Vol. 3, No. 24, 22 June RFE/RL BALKAN REPORT Vol. 3, No. 24, 22 June 1999.
Even the Russian Foreign Minister accept that there were atrocities: "Ivanov Acknowledges Serbian Atrocities in Kosova. Russian Foreign Minister Igor Ivanov published an article in a supplement to "Nezavisimaya Gazeta" on 30 June, in which he acknowledged that Serbian forces in Kosova used "unacceptable measures with the help of which Belgrade tried to solve the problem of ethnic balance in Kosova by itself." Ivanov said that this was "regrettable." He added, however, that both the NATO air-campaign and the "repressive actions in the country" contributed to the "particular internal bitterness in the post-conflict period."
(Fabian Schmidt); RFE/RL BALKAN REPORT; Vol. 3, No. 27, 13 July 1999
As do former Tito-ite Ministers: "Who gave the order for the ethnic cleansing of Kosovo's Albanians as well as for their expulsions and mass executions?...Kosovo's Albanians and the international community will hold the entire Serbian nation responsible for this until the instructors and perpetrators of war crimes are detected and brought to trial." -- Tito- era Yugoslav Foreign Minister Milos Minic, in an open letter to Milosevic on 23 June."
From - Sat Aug 07 2 RFE/RL BALKAN REPORT; Vol. 3, No. 26, 2 July 1999.
But Mr. Brar – the real "pure" scientist of course – does not believe any of these. He is above "mere evidence" – we are sure he would want to see the deaths himself before he believed.

 Claims of the Imperialists -"Humanitarian" Intervention In The Balkans

Pompously, imperialists claimed the war was launched for "humanitarian aims" to protect Kosovars. But this was spurious and should take in no Marxist-Leninist. Even large sections of the liberal intelligentsia saw through this. As Le Monde put it:
"The claim is it was for "moral" or "humanitarian" reasons. These are .. not totally convincing. .. there are just as many "moral" and "humanitarian" reasons to intervene now in Kurdistan. .. or for repairing the injustice done to the Greek Cypriots. Over 160,000 were killed in the brutal "ethnic cleansing" in 1974 .. The Turks are still illegally occupying the northern part of the island and have encouraged over 60,000 immigrants from Turkey to settle there… And what about ..the hundreds of thousands of Palestinians oppressed and expelled by the Israeli authorities? .. Is the plight of the Kurds, Greek Cypriots and Palestinians any less shocking, their cause any less just, than those of the Kosova Albanians? Why is the West (rightly) urging negotiation in their case but bombing Yugoslavia?" "War In The Balkans; A fine mess"; Ignacio Ramonet; Editorial Le Monde Diplomatique; May 1999. Alliance believes that there were at least three real reasons for the recent war of aggression in the Balkans: The goal was to divide-partition Kosova – using a key imperialist tactic to maintain tension in key regions that imperialism wishes to control.

2) A sub-text of the above, is the continued jockeying for the Russian markets and the Far East; the need to ensure a route of oil from the Russian oil fields;

3) The ever present "need" to both test and develop new weaponry and changing military strategies, and the ever related "need" for profits for the arms industries.

The Overall Strategy Of The War
Before the war itself, the Western imperialists refused to arm the KLA, and they refused to countenance independence for Kosova. Instead, the game plan of the Western imperialist was to partition the territory of Kosova. To further enable this, they wished to allow Milosovic to "take" as much land as possible in a land grab, and create a massive refugee crisis. They could then pose as the "liberators" of Kosova and exploit the now incandescent desire for revenge of the Kosovars – to justify a partition and the continuation of foreign NATO troop presence.
To facilitate all this, they staged the farce of the Rambouillet talks in France. It was deliberately allowed to fail. The KLA was made an appendage of NATO by the forcing out of its most principled leaders, in particular Adem Demaci. Then to ensure the Serb refusal of the proposals, a clause was included that was already know to be totally unacceptable to Milosevic- the presence of NATO troops on Kosovar soil. It was known in advance of placing this demand, that the Serbs would refuse. Placing the demand in that form on the table, was tantamount to ordering the air fleet to start bombing.
The USA and the EEC imperialists were enabled to launch NATO’s "Air war". To further encourage the massive displacement of the Kosovars and the Serbian land grab, the NATO leaders also declared loud and often that they would not use land force. It was quite clear that the Milosevic led fascists would quickly accelerate the depopulation of Kosova, and create a massive refugee wave. The editor of Le Monde Diplomatique, Ramonet, got it right:
"In theory, the aim of the bombing was to destroy Milosevic's machinery of repression, but Belgrade's reprisals against the Kosova Albanians were entirely predictable. "
War In The Balkans; A fine mess"; Ignacio Ramonet; Editorial Le Monde Diplomatique; May 1999.
Finally the so called "End game" was already prepared. It was to be a partitioned state, along the lines of Bosnia.
Le Monde asks, noting the many human disasters of the war: "In the light of this fiasco, it has to be asked why there was such a hurry to start the war?" Le Monde answers correctly by saying : "The reasons are political, not moral"; and that: "For reasons of their own, the EU and the US are each pursuing highly specific aims that have not been made public."
"New world order"; Leader Editorial; Ignacio Ramonet; Le Monde Diplomatique;
Setting The War Stage: Ensuring A "Failed Negotiation" - Casus Belli

It is not well understood that the Rambouillet talks were designed to fail; and that the Serb leaders had basically agreed to all the conditions except one - the type of force placed in. The imperialists knew that the Milosevic fascists had made it clear they would not accept NATO troops.

That is why we term the negotiations as a "farce". They contained a clause destined to provoke rejection, they became the pretext for the war the imperialists wanted:

"Behind the Rambouillet talks "The (official) motive for the attack on Serbia was Belgrade's refusal to sign the Rambouillet agreement. Yet the Yugoslav leaders had accepted its main provisions. The only outstanding issue was the nature of the force to be deployed in Kosova. And although the Serbs rejected any NATO presence, they had envisaged some other formula.".
War In The Balkans; A fine mess"; Ignacio Ramonet; Editorial Le Monde Diplomatique; May 1999.
The "Le Monde Diplomatique" points out the Rambouillet talks had achieved all stated goals. (The Full text is at: These stated goals had been: to restore Kosovan "substantive autonomy" and "political cultural religious and linguistic freedoms" : "At the start of the crisis there were two main objectives: to restore substantive autonomy to Kosova and ensure that the Yugoslav government respected the Kosovars' political, cultural, religious and linguistic freedoms. The plan at the Rambouillet conference was to achieve these two aims by peaceful means. The Serbs and the Kosovars (including representatives of the Kosovan Liberation Army) had reached a consensus on the two main objectives and Slobodan Milosevic's government had specifically agreed to grant Kosova a large measure of autonomy. After free elections the province would have self-government, its own parliament, president, judicial system."
"War In The Balkans; A fine mess"; Ignacio Ramonet; Editorial Le Monde Diplomatique; May 1999.
Le Monde points out it is therefore perplexing that the Conference failed. "On what issue did it fail?" asks Le Monde. Le Monde answers that it because the Western powers wanted a pretext for war. They tabled an issue that was guaranteed unacceptable to Belgrade, resulting in a "casus belli" – a cause for war: "So why, when the two sides had agreed on the essentials, did the Rambouillet conference end in failure? There was one reason and one reason alone: the Western powers' stubborn insistence (the United States in particular) on a NATO presence in Kosova to monitor the implementation of the agreements. They were well aware that the Belgrade government would object. and its all too predictable refusal was seen as a casus belli. There was no suggestion that other intervention forces might be used or, for instance, the United Nations' "blue berets". The choice was between NATO or war. So war it was."
"War In The Balkans; A fine mess"; Ignacio Ramonet; Editorial Le Monde Diplomatique; May 1999.
To further ensure failure of the Treaty, it was made into a highly provocative document. It provided for the military occupation of not only of Kosova but also all the rest of the Serbian state named Yugoslavia. All NATO personnel were to be placed above the law and immune from retaliation: "6a. NATO shall be immune from all legal process, whether civil, administrative, or criminal." Couched in the most humiliating terms and containing the key clause that would be rejected out of hand – the presence of NATO troops (not even UN troops were considered) – the "failure" of Rambouillet was ably assisted. What lay behind this "enabling of failure" at Rambouillet? The first and main reason is the compelling need of imperialism for new markets, and to assert itself against its’ imperialist rivals.

Part of the dilemma of capitalism is the ever increasing tendency to produce more, but at a lower rate of profit; with the ever more present dilemma of dwindling markets. It is this underlying, inevitable drama that is the backdrop for all of capital’s current war mongering – from Iraq to North Korea to Kosova. IN this regard the diagnosis of many has concurred. It is perhaps best put by the editor of Le Monde Diplomatique, who puts the matter in the context of the relatively recent collapse of Soviet Social Imperialism: "The war between the North Atlantic Treaty Organisation (NATO) and the Federal Republic of Yugoslavia has opened a new chapter in the history of international relations. The cold war ended in 1989 with the fall of the Berlin Wall. The post-war period came to a close in 1991 with the collapse of the Soviet Union. The Kosovo crisis marks the end of ten years of uncertainty and disorder in international politics and the emergence of a new order for the coming century. The present period is dominated by economic globalisation. That process needs to be backed up by a new global security arrangement, and the Kosovo conflict has provided the opportunity to sketch in its main components NATO’s first war has a truly inaugural quality."
"New world order"; Leader Editorial; Ignacio Ramonet; Le Monde Diplomatique;
It is in this overall light that we intend to examine the First Real Reasons For the War. We will trace in this the relative fortunes of the United Nations, and the EEC.

The USA's Need to "Degrade" and render the United Nations Irrelevant

    We previously labeled the UN as a negotiating and bargaining table - a clearing house -where the dominant imperialist nation would hold sway. It is not surprising that as USA capitalism has become renascent, overcoming its decaying rusting economy – that it has expressed frustration at its plans being limited by potentially "troublesome" debates at the UN. It thus got rid of Boutros Boutros-Ghali, and increasingly has exerted policy decision away from the UN. Its’ refusal to pay its debt to the UN is a small reflection of the contempt of the USA towards the UN.

The term "hyper-power" was coined by the French foreign minister Vedrine – to describe the relatively unchallenged dominance of the USA following the fall of the USSR as a rival imperialist state. The final engineering of the USSR state downfall, involved USA economists like Sachs to ensure self-destruction. This of itself allowed the penetration of the USA capitalists hungry for new markets. (We have described aspects of this in our analysis of the Russian state and Chechnya). This "un-balancing", continues to take its toll.  It allows the erst-while nuisance of the UN – the camouflage for imperialist design and strategy - to be discarded like a useless cloth:

"Since the beginning of the 1990s there have been many indications that the US no longer wishes to see the UN play its rightful role. Boutros Boutros-Ghali's mandate was not renewed. Instead, he was replaced as secretary-general by Kofi Annan, reputedly more amenable to pressure from Washington. The Dayton accords on Bosnia were signed under the aegis of the US rather than the UN, as was the Wye River memorandum on the Israeli-Palestinian conflict. The decision to bomb Iraq was taken unilaterally, not by the UN. It would seem that the US no longer wishes to be restricted by the UN. It is no longer prepared to let the organisation's legalistic procedures stand in the way of US hegemony. We believed that the UN and its forerunner, the League of Nations, which have existed for almost a century, testified to an advance in civilisation. It turns out that they owed their existence simply to a stand-off between competing powers of comparable size, none which was able to defeat the others, at least on the battlefield. The balance was upset by the demise of the Soviet Union. For the first time in 200 years, one country - a "hyper-power", to use an expression coined by the French foreign minister, Hubert Védrine - overwhelmingly dominates the world in the five key areas of political, economic, military, technological and cultural power. That country, the US, sees no reason to share or accept limits on its hegemony when it can exercise it without restriction, unchallenged by anyone, not even the UN."
"New world order"; Leader Editorial; Ignacio Ramonet; Le Monde Diplomatique;
A Desire to Open Serbia’s Monopoly, and to enforce a "free market"

Capital will erode all in its path towards an ever increasing market share. In its simplest and crudest, Serbian statehood was a small resistance that would be swept away. The Serbian state – whether under its previous state capital era of Yugoslavia, or later, never was socialist. But it nonetheless operated under special conditions. It had been transformed into a special monopoly market run for the benefit of Milosevic and friends. This was nothing more than the old state capitalism transformed by an extremely narrow oligarchic group into a tight monopoly. Moreover that monopoly was closely linked to elements of Russian capital:

"The Milosevic family and the regime’s leading officials have appropriated for themselves the former state enterprises in the energy, agri-food, tobacco and alcohol sectors, the television companies, and the import-export sector. As directors and managers of these companies, they divert the profits. Investigations by Swiss and Russian courts into the way in some companies are set up reveals a vast network of interest linking the Kremlin and Belgrade. Links established between banks and the main import-export companies during the communist ("pseudo-communist-ed) era have been maintained or even expanded on the basis of highly fraudulent practices. Those networks siphon off huge sums that then leave the country to be used for speculation in international markets."
"Serbia’s Outlaw Regime"; Jean-Yves Potel; Le Monde Diplomatique; May 1999; English version; p. 7.

"The Yugoslav president has set in place a formidable system for securing support that many observers consider an effective shield. According to Radomir Diklic, "Milosevic is interested in power for its own sake. But he allows his principal collaborators to get rich shamelessly and compromise themselves". In Serbia, the demarcation lines between economic and political circles tend to become blurred to the point of farce. For example, the Serb prime minister, Mirko Marjanovic (SPS), is also the chairman and managing director of the energy company Progres. The deputy prime minister, Dragan Tomic, runs Simpo, a company that specialises in the agri-food industry and furniture manufacture. His namesake, Dragan Tomic (SPS), the president of the parliament, is also the director of Yugopetrol. The minister without portfolio, Bogoljub Karic, along with his brother, heads a financial empire that includes banks, a television channel (BK), civil engineering companies and even a university. And the bulk of the country's main entrepreneurs are members of the JUL, the party of Milosevic's wife. " Thomas Hofnung , "NATO Bombing, Economic Collapse; Make or break for Serb regime"; Le Monde Diplomatique; April 1999.

This now allows us to make sense of the clause contained in the Rambouillet documents, on the "free-market" model. Article 11 of Rambouillet, specifies that: "The economy of Kosovo shall function in accordance with free market principles." The NATO imperialists were determined to both open the Serbian market, and thereby deny the Russian capitalists a linked market. IN this regard, the German rival imperialists have been prominent in entering the Eastern European markets. Fortunately for the USA imperialists, German imperialism had recently "bitten off" more than it could chew comfortably with the costs of German reunification.

The Inter-imperialist Struggle Between NAFTA and EEC Imperialism – The Hijack of the EEC

It is true that there were real interests at work for the EEC capitalists in Kosova as well as for the USA. These include the need to ensure the borders of the EEC were stable; to limit the effects of refugees into the EEC, and to limit the penetration of criminal elements into the EEC from the Balkans. The recent disintegration of the Albanian Pyramid scheme under the active guidance of the USA (described by Alliance previously) is a prime example of how state destabilisation on the boundaries creates a crisis situation. Le Monde describes an interesting new version of the concept of "strategic stability" in the light of new technology based on informatics and electronics:

"The EU's aims are strategic, but the meaning of strategic importance has changed. In the past a region was strategically important if its possession conferred an appreciable military advantage, such as access to the sea, a navigable river, high-lying ground or a natural frontier, or if it gave control over key resources such as oil, gas, coal, iron or water, or vital trade routes such as straits, canals, valleys or mountain passes. By this definition, Kosovo is of no strategic importance. Its possession would give an occupying power neither a military advantage nor key resources nor control of a vital trade route. However, in the present era of satellites, globalisation and a "new economy" based on information technology, the old concept of strategic importance no longer applies. For a wealthy bloc like the EU, the strategic importance of a region lies in its potential to cause damage outside its boundaries by exporting phenomena such as political chaos, chronic insecurity, illegal immigration, delinquency and mafia-based drug trafficking. Viewed in this light, two regions have been of prime strategic importance to Europe since the fall of the Berlin Wall. They are the Maghreb and the Balkans. The Kosovo crisis intensified after the implosion of Albania in 1997. As the country plunged into chaos, it indirectly provided the KLA with a ready source of arms and a safe haven for incursions into Kosovo. In those circumstances the "war of liberation", fought over a territory claimed with fanatical passion by two enemies determined to stop at nothing, was likely to be long and cruel. Could the EU afford to live for five or 10 years with a conflict of this kind on its doorstep? And with all the likely knock-on effects in Macedonia and the rest of the Balkans and with tens of thousands of refugees struggling to get into Italy and from there into the rest of the union? The NATO bombing of Yugoslavia was the answer to these questions." ?", International Herald Tribune, 20 May 1999."
"New world order"; Leader Editorial; Ignacio Ramonet; Le Monde Diplomatique;
Alliance believes these are important considerations. However until the secret diplomatic papers are revealed (when the current generation of Alliance comrades for certain are dead!), we feel it is unwise to ignore other interpretations. These revolve on a more explicit Marxist understanding of the nature of inter-imperialist rivalries. Le Monde’s liberalism will take as only so far.

In a previous issue (Alliance 18: Events In Former Yugoslavia : Tito & Roots Of Great Serb Chauvinism October 1995":  See Subject Index of Alliance web-site) we identified a major motive force for the USA Balkan strategy as being the inter-imperialist contradictions between NAFTA and the EEC. We identified this contradiction as the reason why the Bosnians were forced into a severely compromised position; up to the Dayton Talks, which were held suddenly just as the Bosnians were turning the tides of war.

In yet an earlier work (Alliance 3: Crisis In Capital And Its' "Solution" - Free Trade And Protectionism In Developed countries at: we identified the rise of the trading and political-economic blocs of the EEC and NAFTA. We pointed out, that at an earlier stage the British imperialists had acted as hidden agents of the USA and attempted to "scuttle" the EEC. That explained De Gaulle’s intense suspicions of British attempts at entering the EEC. But later as the USA entered a slump, the majority of the British capitalists accepted the need to join EEC.

However it should not be surprising that political currents have changed. Firstly the USA reliance on high tech computer informatics, reversed its prior slump. Secondly, key European leaders –Tony Blair and Gerard Schroder – clearly supports the USA. This is a major change, and Tony Blair is best seen as an "inside" agent for the USA within European ruling class circles. All this had already signaled to the USA, that a united allied war front - with the European powers following the lead of USA imperialism - was possible. Moreover, a severe acute crisis within the EEC – signaled that it was a highly propitious time for the USA to ensure the support of the ruling classes of the EEC countries.

NATO started the war with the assistance of the major European powers, and without any approval from the UN. Although these are led by Social Democrats, only the naïve can expect them to behave in a socialist manner. Le Monde Diplomatique described their behavior as a "collective unwillingness to disturb the inherited status quo":

 "NATO's decision to go to war in Yugoslavia without any mandate from the UN has been supported by Europe's new social democrat leaders – principally from France, Germany, Italy and the UK. In so doing, they have betrayed socialism and revealed the bankruptcy of social democracy in their domestic and economic policies. This is characterized by a collective unwillingness to disturb the inherited status quo."
April 1999; Ignacio Ramonet; "LEADER: Social democracy betrayed";
As noted above, the EEC has, for the moment, been so extremely weakened, as to render its opposition to the USA , on most issues ineffectual. In particular six linked relevant events have brought the EEC to this pass. These are:

The forced resignation of Oskar Lafontaine; the forced "collective suicide" (Guardian Weekly; 28 March 199; p.15) of the Brussels EEC executive led by the discredited ex President of the EEC Commission Jaques Santer; the severe slow-down of the German economy and the consequent depreciation for the Euro of European Monetary Union; the increasing link-up of German capital and industrial sectors and those of the USA; and finally the impact of the "Banana wars" i.e. the intense competition for rights of market entry for foodstuff including bananas.

These events have allowed the temporary hijack of EEC policy-making by the USA.

In the whole saga – a never ending law of Marxist economics is again revealed: -that of the Uneven Development of Capitalism. It is of course improbable that this hijack will not itself foster a struggle against the pro-USA forces in the EEC. But for now the pro-EEC forces led by Tony Blair of the UK, and Schroeder of Germany, control the states of the UK and Germany.

The Oskar Affair

The timing of the "USA assisted" failure of the Rambouillet talks, and precipitation of war, coincides with the pushing out of Oskar Lafontaine from the German Finance Ministry. His departure came only three months after the EEC had launched its new currency the Euro, in January 1999. Oskar Lafontaine had acceded to the Finance Ministry under the Chancellorship of Gerard Schroeder of Germany, but had been a thorn in the side for significant sections of not just German, but pan-European capital:

"The resignation of German Finance Minister Oskar Lafontaine on 12 March ..afforded spectacular proof of the bankruptcy of social democracy and its inability to provide an alternative to the ruling neo-liberal orthodoxy that now finds even the Keynesian approach .. too left-wing. Oskar Lafontaine stood accused by his fellow-socialists of five cardinal sins: wanting to re-launch Europe, advocating a fairer tax system, criticizing the European Central Bank, calling for reform of the international monetary system and, earlier, asking the Bundesbank to lower interest rates in order to reduce the cost of borrowing, stimulate consumption and combat unemployment."
April 1999; Ignacio Ramonet; "LEADER: Social democracy betrayed";
Although both Schroder and Lafontaine are social democrats, Lafontaine adopted a more "leftist" position. The objective basis for his forced resignation, was the split in the German ruling class between the "Keynesian" capitalists and the "supply-siders". In Alliance 3, we discussed that split in the ruling classes of capital, one that has adopted the character of a qualitatively new phenomenon. It sharply reveals the differing interests of industrial capital – those capitalists who tend to favour Keynsian economics; and the financial capitalists – those capitalists who tend to favour supply-side, or monetarist economics. We pointed out this represents a new phase that goes beyond the stage of Lenin’s Higher Stage of Imperialism, where Lenin identified that the two wings had coalesced. We now witness the rupture of the marriage or coalescence of industrial and financial capital.

That Lafontaine represented the views of Keynsian economics is clear:

"Mr. Lafontaine's big idea for combating unemployment was that cheap money and some rise in real wages would boost demand and create jobs. His faith in a neo-Keynesian macro-economic policy was matched by a deep mistrust of the conventional wisdom that Europe's high jobless total primarily reflected structural problems. The Lafontaine prescription has faded from Europe's economic policy agenda.
"Survey - Euro Economy/Pink Book: Advancing On A Broad Front; Structural Reform By Peter Norman: Financial Times ; 28-May-1999; "

"Mr. Lafontaine, once the most powerful figure on the SPD left, .. never fully explained his departure but it ended a power struggle between the finance ministry and chancellery. Mr. Lafontaine's ambitious plans for controlling currency exchange rates and harmonising Europe's taxes tarnished the new government's international image."
"Schroder admits false start"; Financial Times ; 15-Jul-1999

We also previously pointed out that in today’s crisis of capital - with decreasing markets; decreasing rates of profit; and increased competition – that neither Keynsian nor monetarist policies can solve the problems of the capitalist class. It is also unlikely that in the battle to safeguard profits that one faction will lie down quietly. So Lafontaine’s polices are still espoused by some: "Reinhard Klimmt, premier of the Saarland, Germany's smallest state, called for the restoration of the wealth tax on the rich, abolished in 1997. …. Social security and unemployment benefits will be hardest hit, as may pensions, under a separate, but linked, proposal to shore up the creaking state pensions system….. Mr. Klimmt is a confidant of Oskar Lafontaine, the former finance minister and party chairman, who resigned in March. .. the debate has broadened from the wealth tax to Mr. Eichel's spending cuts and the neue Mitte in general, as three more leaders from SPD-governed states and top trade unionists have also opposed the chancellor's plans. Most senior SPD figures have rallied behind Mr. Schroder.";
"Chancellor's challenge: Gerhard Schroder… is facing a threat to his authority that could undermine his attempts to move his party towards the centre of German politics"; Haig Simonian; Financial Times ; 06-Aug-1999.
The "Neue Mitte" so called – is the equivalent of Tony Blair’s "Middle Way". Indeed a specific pact between the British and German socials democrat leaders makes quite clear that they envisage themselves jointly as the leaders of the "New Europe". Meanwhile Schroder’s path cannot reduce unemployment: "The interventionist Oskar Lafontaine, erstwhile SPD leader and finance minister.. argued that the best way to tackle unemployment - by far the greatest concern of voters - was to expand demand. That was popular with the party. Since his sudden resignation in March, the government's main focus has been instead on budget cuts. But there has been no significant dent in the jobless figures. … No fewer than three SPD leaders from the federal states, not to mention leading trade unionists, have now criticised Mr. Schroder's talk of a "new center" …They argue that his fiscal neo-liberalism is too heartless for their traditional supporters…their answer (is-Ed) to reimpose a wealth tax on the richest to balance the budget cuts affecting the poor."
"A summer whine"; Financial Times ; 04-Aug-1999.
German industry and capital has had a difficult time recently in the hot-house of international imperialist competition. The recent poor performance of the German economy is central to the recent weakening of the EEC. From being the "locomotive" (as Richard Marsh termed it– see Alliance 3) – it has been brought low. The Financial Times editorial points out this was unexpected. The causes are in part related to the spectacular costs of German reunification. But uneven development is just that – already there are signs that German capital is going to overcome its recent problems shortly. It remains for German capitalists to tackle what the capitalists call "structural problems". Translated this means "Deal with the high standard of living of the German working class which is cutting into capital’s profits; deal with the debt accumulated by German reunification under Kohl by cutting the living standards of workers; cut taxes on big business": "How the mighty have fallen. From being one of the world's most admired economic powerhouses, Germany recently suffered the indignity of being described by one investment bank as "the sick man of Europe". Battered by the strains of reunification and the Asian crisis, output growth has been sluggish; in the last quarter of 1998, it dropped into negative territory. .. The good news is that growth in gross domestic product in the first quarter of 1999 was better than expected, up 0.4 per cent quarter on quarter... the combination of the global economic recovery and the weak Euro should prop up output. .. healthy export orders figures for April indicate that their effects will soon become apparent. The question is whether these green shoots will turn into a full-blown recovery. Growth this year is likely to struggle to reach 1.5 per cent, too slow to make any dent in unemployment. The biggest obstacle remains the lack of fiscal reform. Germany's taxes on labour are prohibitively high, partly because of the continuing need to cover the costs of reunification, and its tax system is complex. This has undermined Germany's competitiveness, and has tended to discourage corporate restructuring and new business start-ups."
"German growth;" Financial Times ; 10-Jun-1999.
There is little doubt that the Schroder government was left with a difficult task by Kohl’s reunification programme and Kohl’s fiscal solution of privatisation: "Mr. Eichel's problems have largely been inherited from the former Christian Democrat coalition government run by Helmut Kohl. Mr. Kohl's government was reluctant to cut spending .. it turned to privatisation to raise revenues. Last year, almost DM20bn came through the indirect sale of shares in Deutsche Telekom, the state controlled telecommunications group. Even this year's budget included nearly DM19bn in privatisation revenues. There are few candidates for privatisation left now. ... The changes in corporate tax rates could be sweeping. The tax rates currently range up to 60 per cent, and Mr. Eichel wants to reduce them to around 35 per cent. ..."
"Struggling out of the red: Haig Simonian examines the efforts of Gerhard Schroder's coalition government to reduce the huge debt burden that threatens to undermine Germany's economic performance: Financial Times ; 22-Jun-1999."
To placate the German capitalists, in particular the financial wing, it is not surprising that the Schroder and his finance minister, Hans Eichel, have adopted an openly "pro-business" package. "Germany's Social Democrat-led government yesterday .. unveiled a package of wide-ranging budget cuts as well as tax reforms worth at least DM8bn (œ2.6bn) a year to business. Gerhard Schroder, chancellor, said the proposals … signaled a "paradigm change" in German politics.. The financing of German reunification in 1990 meant almost a quarter of tax revenues were being used for interest payments. But yesterday's package also reflected a decisively more pro-business stance by Mr. Schroder's government .. The cabinet approved a budget for 2000 which would cut DM30bn off ministries' initial requirements and reduce federal expenditure overall by 1.5 per cent compared with 1999. Cuts will be focused on the labour ministry, with pensions rising only in line with inflation for two years. …. Separately, corporation taxes would fall to about 35 per cent from 2001, including local trading taxes, compared with existing rates of 60 per cent or more. Overall, the corporation tax reforms would be worth DM8bn a year to business. In a joint statement, Germany's main industry associations welcomed the cut in corporation taxes."
"Schroder hails new package of reforms: German Economy Spd-Led Government In Rare Harmony With Industry On Wide-Ranging Budget Cuts And Lower Taxes: Financial Times ; 24-Jun-1999.
There has been a slight improvement in German prospects recently. This is especially important for the prospects of the EEC – since Germany is estimated at one-third of the total "Euro-zone" activity: "German exporters were hit badly by last autumn's economic turmoil. The economy contracted by 0.2 per cent in the last three months of 1998, before growing by 0.4 per cent quarter on quarter at the start of this year. It seems that this fragile recovery is now beginning to gain momentum. .. The official government forecast of 1.5 per cent growth this year now looks plausible.. This is good news for Europe, since Germany accounts for a third of Euro-zone activity. Together with Italy, almost 20 per cent of the single currency area, Germany has been dragging growth prospects (and the Euro) down. While Italy may remain in the doldrums, Germany's recovery makes it more likely the Euro-zone will top 2 per cent growth this year.. … Germany may no longer be a dead-weight in Europe. But until the government gets to grips with fiscal reform, it will not be a motor for European growth either. "Leader: German mood; Financial Times ; 21-Jul-1999. Having been in effect the past leader of the EEC, and most quarters of capital still aspiring to be the future leader -Germany now must at least appear to conform to some legal stipulations. The constitutional law of both Germany and the EEC, now dictates the "structural reforms" the capitalists bay for. The scale of the debt that was undertaken to save German capitalism by ensuring its future Eastern markets, is certainly large: "Hans Eichel, ..will cut DM30bn (Dollars 15.9bn) from next year's government budget… Mr. Eichel is under legal pressures. He is required to ensure that state borrowings do not infringe constitutional limits, or Germany's commitments under the European Union's stability and growth pact. Under Germany's Basic Law – its constitution - the government cannot propose a budget in which new net borrowings exceed new investment, except in special circumstances such as a recession.... More recently, the EU's Maastricht Treaty has set targets for both government deficits and total debt in relation to gross national product. While the deficit is within acceptable limits, total debt has swollen from just over 40 per cent of gross national product in 1991 to slightly over the European Union's 60 per cent limit last year. ….Growth this year is forecast to fall sharply to around 1.5 per cent, half that of the previous year. Since Germany is the largest western European economy, the poor outlook has had a knock-on effect on the country's neighbours - and helped to depress the Euro. .. The scale of the financial task facing him is daunting. Germany's federal borrowing has risen sharply in recent years, particularly after German reunification in 1990. Total debt has almost doubled from DM314bn in 1982 to about DM600bn at the start of reunification. Since then, it has spiraled to almost DM1,500bn last year. This has led to rising interest costs. At about DM82bn a year, interest payments now account for about 22 per cent of annual expenditure. Debt servicing is the second biggest item in government spending after social security, and swallows up more than double the amount spent on defence, the third biggest item." "Struggling out of the red: Haig Simonian examines the efforts of Gerhard Schroder's coalition government to reduce the huge debt burden that threatens to undermine Germany's economic performance: Financial Times ; 22-Jun-1999." However again – the Law of Uneven development will not allow this state of affairs to rest static. Already signs are growing that the German economy has taken on board some fundamental lessons – and are emulating the USA in its drive for technological mastery of the electronics and cyber markets opening up. Moreover, in a related development, large German and large USA car firms have amalgamated – the Daimler-Chrysler merger. This makes a huge industrial alliance. Marxist-Leninists have not yet adequately appreciated the implications of this for the EEC and the USA. Bourgeois commentators are well aware that the German economy cannot be "written off": "Writing Germany off as an economic phenomenon has become a pastime. .. It is no accident that at the same time as the Eurosceptics purr at the Euro's retreat on the foreign exchange markets there is vibrancy about certain sectors of the Germany … Germany's Neuer Markt - which specialises in e-commerce companies - is proving .. lively…. Institutional Investor magazine reports 'when aging giant [German] companies are trimming payrolls the average Neuer Markt company is adding jobs - a total of 14,000 for listed companies in the last few years'. Issues of cyber company stock on the Neuer Markt have on occasions been 100 times oversubscribed. On a second front, over the past 18 months the UK has effectively ceded its last major car manufacturer to German ownership and .. the Longbridge plant (was) saved was with large-scale infusions of BMW capital. Volkswagen controls Rolls Royce production and the Bentley marque and BMW the Rolls Royce Motors marque. And if this is not a convincing enough, the new Daimler-Chrysler global configuration is proving one of the most successful in a shrinking global car market."
"Corsets On An Expanding Market: The German Economy Is Held In Check By The European Central Bank And By The Restrictions Of Monetary Union The Guardian; 10-Jun-1999.
But no doubt there remain objective problems faced by the German ruling class, the high standard of living and the high wage scales and the relatively good social security – won by the German working class by decades of militant and discipline organisation have created a problem for the German capitalists as they face increased competition. This has forced the German capitalists to adopt a new tactic in relation to their plundering of the former USSR closed markets in the pseudo-socialist states such as Poland. This is part of the "re-structuring" that will inflict savage cuts on the living standards of the German working class: "Serious structural problems, illustrated in the declining figures for output and stagnant employment. German output growth, 1.5% this year, is forecast to be the lowest among the Group of Seven richest economies (with the exception of Japan ..). Similarly, unemployment at 10.9% of the workforce is comparable with France and Italy but more than twice that of the Anglo-Saxon economies.. ... .. Germany is rebounding. It appears to be benefiting from two events. The decline in the Euro has made German exports more competitive. And recovery in emerging market economies, notably the Far East, has increased demand for German industrial goods. … On the macro-economic front the German industrial machine will continue to be held back by a cautious stance at the European Central Bank, which now controls its monetary policy and by the fiscal restrictions imposed by monetary union. …

German firms .. must cope with high labour costs and competitive disadvantage. One way in which German firms are responding to this is to move operations to neighbouring central and eastern European countries, where labour is cheap and flexibility and skills levels reasonably good. This rationalisation and displacement of German production means that for the moment there is an almost permanent bias towards relatively sluggish output and low inflation. German firms have become the biggest source of direct investment in Poland and the Czech Republic; Germany is the prime trading partner of these two countries. Imports from them increased by 86% in 1994-1998 against 26% from other euroland countries. These profound changes in the way that German firms do business together with the corset imposed by European monetary union mean that it will be some time before Germany returns to the top flight in terms of higher output. Moreover, until it reforms labour markets and levies taxes which encourage rather than penalise enterprise, it will lose ground. That said, the negativism about the future of the continent's economic powerhouse audible in recent weeks has been overdone." "Corsets On An Expanding Market: The German Economy Is Held In Check By The European Central Bank And By The Restrictions Of Monetary Union;" Alex Brummer, Financial editor; The Guardian; 10-Jun-1999

In fact – for the ruling class of Germany – the omens at the moment are not too bad: "German business is starting to cheer up. It is about time, too. The Euro’s depreciation and the recovery in Asia have brightened the outlook for exporters. Yet the response to this improving mood music has until now been decidedly low key." "LEADER: German mood; Financial Times ; 21-Jul-1999. This is of course quite different from the omens for the German working class which is on schedule to suffer intense cuts.

The European Commission And Exposure Of Its "Corruption".

Revelations about the corruption of high officialdom occur regularly in capitalist society. There can be no doubt that these are not driven by the high mindedness of the bourgeois press – controlled as they are by the capitalist class. What lies behind these revelations is the on-going inter-capitalist war. This allows us to make sense of the exposure of the corruption of the senior governing body of the EEC, which led to the entire body – the European Commission – resigning en masse. The exposure used the revelations of an auditor, Paul van Buitenen, who had previously been excoriated and abused, by those hit by his "whistle-blowing":

"The committee whose report triggered the former European Commission's downfall in March has called for the European Union executive to break down its culture of secretiveness and to bring in rules to protect internal "whistleblowers". The devastating first report by the committee into allegations of fraud and mismanagement in the Commission of former president Jacques Santer led to the resignation of all 20 commissioners.……… Without naming him, the report contains praise for Paul van Buitenen, the whistleblower whose revelations damaged the last Commission. The Dutch auditor was suspended pending disciplinary action but later reinstated in a new job after the Commission's resignation."
Financial Times ; 23-Jul-1999
Nonetheless the various charges brought were not unknown about the EEC commissioners. It is extraordinary that they took that long to get addressed. The only rational explanation is that the allegations served the interests of those wishing to render the EEC incapacitated during a critical juncture. What were the charges? "The European Commission, the executive arm of the European Union, had a narrow squeak in January, when it faced a censure motion in the European parliament. The charges against it were of lax management, leading to cases of outright fraud, and of cronyism in personnel appointments. It survived the vote thanks largely to promises of a thorough investigation of the allegations, and the drafting of new codes of conduct for commissioners."
"Euro-conduct" Financial Times ; 04-Mar-1999.
One of the most prominent targets was the French Commissioner Edith Cresson. The President of the EEC Commission Jacques Santer, had adopted the policy of a "collegiality" – one that prohibited individual commissioners receiving blame. This was under pressure discarded leaving Cresson to face the music. Amongst the most stalwart anti-USA officials at the EEC have been the French representatives. Edith Cresson was left by Santer to face the music: Any European commissioner found guilty of wrongdoing by the current inquiry into fraud and mismanagement should resign, Jacques Santer, the European Commission president, warned yesterday. His remarks .. leaves Edith Cresson, education commissioner and former French prime minister, looking increasingly isolated. Mrs. Cresson has been heavily targeted by the European Parliament - leading the fight against alleged fraud in the Commission - over an EU research contract awarded to a dentist acquaintance. She has also been pressed to take responsibility for mismanagement by external contractors of an 620m (Pounds 419m) EU youth training programme. Mrs. Cresson vigorously denies any wrongdoing. "
"Any EU commissioner found guilty should quit, Santer warns"; Financial Times ; 04-Mar-1999.
In the meantime the new pro-USA faction of the EEC made their moves. Tony Blair, Schroder and finally the Italian Prime Minister D’Alema moved to nominate their man: Romano Prodi. This left the French President Chirac with nothing else to do but support the named candidate. The other choice left open was Janvier Solano – also a pro-USA man. Blair and Schroder’s stamp of approval was explicit:: "European Union leaders yesterday moved swiftly to fill the power vacuum at the top of the European Commission by unanimously nominating Romano Prodi, the former Italian prime minister, to succeed Jacques Santer as Commission president. Gerhard Schroder, the German chancellor hosting a special EU summit in Berlin, said the decision was a sign that the EU was capable of action after last week's resignation of all 20 commissioners following a damning report on nepotism, fraud and mismanagement in the EU executive body…. Massimo D'Alema, the Italian prime minister, later hinted that the nomination had been stage-managed by Mr. Schroder, Tony Blair, prime minister, and Jacques Chirac, the French president, … A spokesman for Mr. Blair said the prime minister expecting Mr. Prodi to support an agenda of economic reform in Europe. "That is why we pushed for him," he said."
"Summit acts swiftly with nomination of ex-Italian PM to succeed Santer"; Financial Times ; 25-Mar-1999
Blair’s agenda for regaining the top influence within the EEC is also quite naked, and in that he intends to "persuade" the British electorate that the Euro must supplant sterling: "At the Berlin summit… Mr. Blair’s European policy is founded on the assumption that within the next two or three years he can persuade a deeply skeptical electorate (and often Europhobic press) to give up sterling in favour of the Euro. To do that, he has first to prove that Britain has a voice that counts - that it is a shaper of events rather than a victim. … Blair was clear as to the first priority for the summit. The leaders should appoint a new president to serve for 5 1/2 years. And that person should be Romano Prodi, Italy's former prime minister. "that Romano Prodi has all the qualities to be an excellent president of the Commission . . . He is a highly able man and he is a reformer."
"Europe for skeptics: Blair is using the Commission scandal to argue the case for a fresh start and a more prominent role for Britain in the EU, says Philip Stephens: Financial Times ; 23-Mar-1999
 The decision at the Berlin Summit was swift: "It took less than an hour for European Union leaders to appoint Romano Prodi as the next president of the European Commission – …. Javier Solana, secretary-general of NATO, was otherwise indisposed – yesterday more so than ever as alliance bombers flew to Yugoslavia." "Less than an hour to choose Santer's successor Financial Times ; 25-Mar-1999

The Euro’s Poor Performance In International Trading

There is no doubt that the optimistic projection for the future of the EURO by some European analysts was too rosy. So much so that the incumbent President of the European Commission – Romano Prodi raised the prospect of Italy leaving the Euro agreement. Part of the problem is the control of the EEC nations’ money supply – there now being no single "controller" of money supply and money targets. When the Bundesbank had in effect controlled the EEC money policy, things were easier. Now, it is a delicate matter of negotiating matters to do with the interests of each individual Central Bank – as against the polices of the European Central Bank (ECB): "The Euro’s 12% fall since January (suggest-ed) proof that Mr. Wim Duisenberg (president of the European Central Bank) lacks a firm grip... Given different traditions in Europe it was never going to be easy to formulate monetary policy. The ECB has developed a pragmatic "two pillar" strategy .. The first pillar is a reference value of 4.5% for annual money-supply growth.. The second pillar involves .. indicators, such as wages, price indices and business confidence. Placing emphasis on money supply lends the ECB some of the Bundesbank's credibility ..The thorniest issue may be the balance of power between the ECB and the Euro members' 11 national central banks. The national banks employ around 50,000 people, compared with a mere 650 in the ECB's Frankfurt tower. They have retained considerable powers-over payments, currency intervention, policy formulation and more - and .. the majority of seats on the ECB council- 11 out of 17. .. This power imbalance also affects financial supervision. This remains at national .. and the ECB's role in a crisis is left vague. .. If he wants to call the shots, Mr. Duisenberg will need to wrest power from the periphery, just as the Federal Reserve in Washington did in the first half of this century from its more powerful district banks (the central Fed governors have a majority on its policymaking open-markets committee). Yet proud national central banks will be loath to cede either power or staff without a struggle."
"Sailing In Choppy Waters: In Their First Six Months, The European Central Bank And The Euro Have Attracted A Lot Of Criticism. Bigger Challenges Lie Ahead;" The Economist ; 26-Jun-1999
Whatever problems the Euro has had, are quite consistent with the reality of the superior performance of the USA economy as compared to that of the main EEC motor - the German economy: "After touching a high of Dollars 1.1877 on January 4, the Euro reversed direction and drifted steadily downwards for five months, hitting a low of Dollars 1.0254 in early June. It has since regained a little ground, but has shown few signs of climbing back to Dollars 1.10 or higher. .. Part of the Euro’s weakness can be attributed to the war between NATO and Yugoslavia, …. But the fundamental reason for the Euro’s fall against the dollar lies in the different performances of the US and Euro-zone economies.. The US economy performed more strongly in the first quarter of this year than had been expected ... the Euro-zone has failed to match the US performance, and economic weakness has been particularly acute in Germany and Italy, which account for about half the Euro-zone's output."
"Euro fever hits crisis point: The EURO by Tony Barber: The performance of the Euro seems bathetic in the months following its launch but it may have reached a turning point"; Financial Times ; 25-Jun-1999
But there is still enough potential in the EEC and its Euro, for European capital to remain optimistic about its’ ultimate long term future: "Yet as the Bundesbank's outgoing president, Hans Tietmeyer, put it .."There is no reason to write off the enormous potential of the Euro. . . The markets should not be too short-term in their orientation," he said. The European Union's acting commissioner for monetary affairs, Yves-Thibault de Silguy, contends .. "In the first quarter of 1999, Euro-denominated issues accounted for slightly over 44 per cent of total bond issues worldwide," he says, adding that there has also been a threefold expansion in the corporate bond market in Euro since the beginning of the year. ..the Euro is "becoming a major international currency in its own right". ... If European business confidence picks up in response to stabilising east Asian export markets, and Germany starts to recover, the perception of a gap between US and European economic performances is likely to fade away. That should benefit the Euro."
"Euro fever hits crisis point: The EURO by Tony Barber: The performance of the Euro seems bathetic in the months following its launch but it may have reached a turning point"; Financial Times ; 25-Jun-1999.
But long term future is still a way off. Moreover, the real future depends upon who controls the agenda at the top. What is the agenda? All this begs a deeper question: What are the capitalist classes of the EEC up to? What is the relationship of the most dominant European capitalist classes and the USA capitalist class, and the ruling classes of its co-European countries in the EEC? The Anglo-German Accord The meaning of Schroder’s search for the "Neue Mitte" ground – is the embrace of the political agenda and rationale of the British Social democrats led by Tony Blair: "The common agenda for economic reform unveiled yesterday by Tony Blair and Chancellor Gerhard Schroder of Germany is ..littered with New Labour's ideas, most of them identified with Gordon Brown, the chancellor. There is praise for use of the tax system to subsidise low-paid jobs, calls for lowering the regulatory burden on business and a vision of a highly skilled workforce moving from job to job in a world of unfettered markets. It is New Labour to its core.. for Mr. Blair .. it allows him to .. make it easier for the UK to join the Euro. "Joint agenda from Tony Blair and Gerhard Schroder echoes the UK party's notions, Robert Preston and Haig Simonian write: Financial Times ; 09-Jun-1999. There can be little doubt that Tony Blair has re-kindled the old love affair of the Labor Party of Britain with the dominant so called "Yankee" sections of the USA capitalist class. The Communist League (UK) identified in 1074 two major factions: the "Cowboys" centred on oil, aerospace and arms based in Dallas; and the "Yankees" - based on finance and chemicals in New York.
(See "Class against Class" article: "The Watergate Affair- The unmaking of The President;" London 1974; ; On later further splits in the USA ruling capitalist class. See also Progressive Labor Party of USA: (i) tp://   ii) ).

The Independent is skeptical about the anodyne phrasing of the new accord.

"The publication yesterday of the Anglo-German document, The Way Forward for Europe's Social Democrats, marks an attempt by Tony Blair and Germany's Chancellor Schroder to establish themselves as an alliance for EU reform. .. .. "The EU should continue to act as a resolute force for the liberalisation of world trade," it says. Pull the other one. Can they mean the same European Union that is embroiled in a damaging trade war with America about bananas, the result of a short-sighted deal done to oblige the former colonies of some member states, or that is upholding a ban on US hormone-enhanced beef, a matter that free-traders would say the consumer, not the Commission, should decide?
"Europe, The Continent Of Good Intent And Late-Night Compromises?The Way Forward Document Of Blair And Schroder Is Brave Stuff, But Also Contradictory; The Independent 09-Jun- 1999.
The hopes of both Blair and Schroder are to orientate the EEC to a less troubled relationship with the USA. As the Financial Times expresses it, it is clear that the French social democrats, as represented by French Prime Minister Lionel Jospin, are not wholly convinced: "Mr. Blair, said the joint initiative was a demonstration the UK was "a modern nation with influence again" and could "give leadership in Europe". …… British diplomats hope the joint document, based on the good working relationship between Mr. Schroder and Mr. Blair may augur closer co-operation between Bonn and London internationally - notably in the European Union. Some have noted the reserve of Lionel Jospin, the Socialist prime minister of France… regarding the Anglo-German initiative. Addressing a group of French and German students with the chancellor in Berlin this week, he stressed the political scene in France was very different to Britain or Germany. "
Joint agenda from Tony Blair and Gerhard Schroder echoes the UK party's notions, Robert Preston and Haig Simonian write: Financial Times ; 09-Jun-1999.

"But Lionel Jospin, France's socialist prime minister, made clear yesterday that not all European Union governments may want to participate in the Anglo-German initiative. .. Mr. Jospin said: "I think in France we decide for ourselves. And we use our own words and concepts." Mr. Jospin said that the French political landscape was markedly different from the UK and Germany, making in difficult to apply the same principles. "I prefer polyphony to Gregorian chants, in politics as well as in music."
"Blair and Schroder to unveil joint Vision Europe Leaders Will Flesh Out Programme For Centre Left: Financial Times ; 08-Jun-1999

The cosy "footsie-footsie" game between Schroder and Blair had been impeded by the Lafontaine Affair. This gives an indication that the ouster of Lafontaine served the interests of the USA also: "Mr. Blair and Mr. Schroder agreed in November to produce the prospectus but its publication was delayed, first by the intervention of Oskar Lafontaine, the leftwing German finance minister who resigned in March, and then by the Kosovo crisis."
"Blair and Schroder to unveil joint Vision Europe Leaders Will Flesh Out Programme For Centre Left: Financial Times ; 08-Jun-1999.
As we discussed above, the linkage between German industry and USA industry is of significance: "A string of multi-billion Deutschemark deals in recent months has rammed home the fact that even Germany's biggest companies need economies of scale when competing on global markets. Always internationally-minded because of their export orientation, the takeovers by Daimler-Benz and Deutsche Bank of Chrysler and Bankers Trust, respectively, have transformed Germany's biggest industrial and financial groups beyond recognition. Others are following: Deutsche Telekom's international ambitions are an open secret, whatever the outcome of its latest foreign exploits. And Hoechst will not even live on as a trademark once its merger with Rhone-Poulenc is completed. But however international they become, even Germany's most cosmopolitan companies remain dependent on the home market for much of their business."
"Economic growth has floundered: Hans Eichel, the new finance minister, aims to restore economic growth and business confidence with wide-ranging reforms, writes Haig Simonian; Financial Times ; 01-Jun-1999 ;
We believe therefore that there has been a temporary truce possibly even more of a real alliance – between significant sections of German and British capital – with the USA imperialists. The merger and amalgamation of some key sectors of industrial bases indicates that this transnational coalition at this level in imperialism is forcing a temporary rapprochement. The fear of a trade war – that would adversely affect BOTH the USA AND THE EEC – has also forced a temporary truce between EEC capital and USA capital.

This is also seen in the recent negotiations on trade, which adopt now a less confrontational tone. The ostensible reason for the talks at this time was an impasse over the appointment of the new head of the World Trade Organisation that oversees the trade negotiations:

"The US and EU leaders also agreed there should be "one last attempt" to end the deadlock over the choice of a new head of the World Trade Organisation, but said unspecified alternatives would have to be considered if it failed. Ms. Barshefsky said the leaders had not discussed whether to seek a compromise candidate for the job." "
US And EU Promise To Make A New Start Transatlantic Trade Tensions Superpowers Pledge Action To Avert Disputes Over Food Safety And Other Issues: Financial Times ; 22-Jun-1999
But rather deeper issues were at stake in the talks between US President Clinton, Schroder of Germany and the lame-duck "caretaker" President of the Commission (who awaits Romano Prodi’s official take over in the autumn). Amongst others they include the extension of the genetically modified foodstuffs to Europe – a move greatly in the interests of major parts of the USA foodstuffs industry. Corresponding restriction on European meats were subject to "information" the USA sought. The overall emphasis on "scientific" data – masks a clear USA agenda to penetrate the world’s food markets. : "US and European Union leaders yesterday launched a series of initiatives intended to help relieve trade tensions between them, notably over food safety rules, and to prevent future economic and political disagreements damaging their broader relationship. The plans also include a drive to liberalise bilateral trade in services, ..A senior EU official said the meeting's harmonious tone reflected a decision by both sides to try to lower the temperature of their trade disagreements, because they feared imperiling co-operation on the planned launch this year of a new world trade round. Although no breakthroughs were made at yesterday's bi-annual US/EU summit in trade disputes over issues such as hormone-treated beef, bananas and data protection rules, the US expressed particular satisfaction at the discussions on food safety. Charlene Barshefsky, US trade representative, said the talks were the most constructive yet on the subject with the EU, which had reacted "very positively" to US demands that it makes its regulatory system more open and science-based. In an apparent goodwill gesture, Ms Barshefsky said the US hoped to narrow substantially its ban on EU pork and poultry imports, imposed after the recent discovery of cancer-causing dioxin in Belgian livestock. A decision would depend on information that US food safety authorities were seeking from the European Commission and the Belgian government. The US and EU plan to take a first step towards narrowing their differences about genetically-modified foods by conducting a pilot programme in which their regulatory authorities would evaluate in parallel new biotechnology products. Washington hopes the experiment will pave the way for regular exchanges about biotechnology and food safety between scientists on either side of the Atlantic. The US says it hopes the process will strengthen consumer confidence and force the EU to start reforming its food regulations. The US and the EU agreed to try to head off future conflicts by setting up an "early warning system" to identify and trigger rapid consultations on policy, legislative proposals and regulatory proposals by one side which threatened to create problems for the other. They also endorsed an outline framework for negotiating reciprocal liberalisation of trade in services through mutual recognition of each other's systems of licensing, certification and accreditation. Initial negotiations will focus on insurance and engineering and will involve US regulators responsible for these sectors."
"US And EU Promise To Make A New Start Transatlantic Trade Tensions Superpowers Pledge Action To Avert Disputes Over Food Safety And Other Issues: Financial Times ; 22-Jun-1999
The nature of the relationship between the USA and the German and British imperialists is not one of a "comprador" relationship. The term "comprador" is difficult to apply to a relationship between currently powerful rival imperialists, although there are elements of this type of relationship. The relationship is more characterized by a current and probably temporary relative weakening of British and German capitalism.

 The Nature of The "Temporary Truce" - the EEC And Its' Army Debate

Again – this truce is likely to be temporary. Already there are signs of a continued slow but steady progress to an independent European strike and defense force. But even though the Summit Meeting of the EEC in Cologne approved a force, it means less to some countries than others. Currently even Germany is endorsing it. This should be seen as another sign that Germany is currently with Britain – acting on the behest of the USA - likely to weaken its independence:

"(At the) European Union summit in Cologne...Javier Solana, the NATO secretary- general, will be named to the new post of high representative for foreign and security policy. The .. declaration on strengthening security and defence policy to tackle crises and prevent conflicts in Europe will speak of a "decisive step forward" in construction of the EU. Under the pressure of war, the EU has moved with unusual speed since last December's Franco-British declaration on a common defence policy to frame its plans. .. The defence .. testifies to a pragmatic approach to developing the EU by the present generation of leaders.. Gerhard Schroder, the German chancellor and summit host, underscored the need to improve the EU's "capacity for action and efficiency together with its relevance for Europe's citizens and its legitimacy". These sentiments, from a man widely regarded as a eurosceptic until last September's general election, could just as easily have come from Tony Blair, the prime minister, or Jacques Chirac, the French president." Leaders converge on Cologne in spirit of pragmatism: Financial Times ; 03-Jun-1999 Complicating the whole matter for the more determined pro-USA allies such as Tony Blair and Schroder is the apparent flip-flop of Prodi, who has asserted the need for a "Common EEC Defence policy" and a "truly European army". The chagrined Blair responded with allegiance to NATO. This must lead to doubts in Whitehall and Berlin whether Prodi is quite as complaint as they had once thought: "Romano Prodi,.. said a common army would only come after "years and years and years". But he said it was a "logical next step" in creating a common defence policy for the EU after merging national defence industries. He pointed out that transnational defence mergers were already taking place, as in the case of the Italian and British helicopter industries. Mr. Prodi, ..suggested countries could decide not to join a common army, citing neutrality ... But .. it would be "inevitable" that the soldiers of participating states should be called to fight by a European commander and under a European flag. The alternative would be to "be marginalised in the new world history". If individual countries such as Germany, Britain or France declined to join, they would not be strong enough to prevent this happening to them. The UK swiftly rejected Mr. Prodi's proposal. A spokesman for Tony Blair said: "Our view is that NATO is the cornerstone of any defence capability. There is no question of a European army as far as we are concerned." The US is also deeply wary of the creation of any standing European force outside the framework of NATO. Mr. Prodi said a European defence policy made economic sense. Europe spent the equivalent of two-thirds of the US defence budget while its defence potential, in terms of the forces it could put in the battlefield, was "maybe one -tenth" of that of the US. "Prodi says common EU army 'logical'"; Financial Times ; 10-May-1999 To ensure the British capitalists led by Blair have their say, his nominations on the new EEC Commission will act as watchdogs: Chris Patten and Neil Kinnock: "Britain and Spain obtained important portfolios, reflecting the high calibre nominees of London and Madrid. Neil Kinnock, the former Labour party leader and transport commissioner, was named senior vice-president responsible for internal reform of the Commission. Chris Patten, the Conservative former minister and governor of Hong Kong, will be commissioner for external relations. He will be responsible for developing the EU's common foreign and security policy with Javier Solana, the NATO secretary general and former Spanish foreign minister, recently named EU high representative for foreign and security policy. ..Chris Patten, the former British governor of Hong Kong nominated as foreign affairs commissioner, calls for higher defence spending by EU states, to give the EU the proper capacity to take action itself without always having to rely on the US. But he is careful not to suggest the EU could replace NATO, and stops short of talking of a single EU army. ""Prodi's new team breaks old taboos: President-designate surprises with list of proposed European commissioners"; Financial Times ; 10-Jul-1999 The nature of the NATO force has always been clear- a weapon of the USA imperialist. Indeed its’ leg in Europe. We discussed previously in Alliance the USA determination to take back NATO from the EEC imperialist, and how it engineered the fall of Willy Claes – who had dared to turn NATO away from the USA strategy (See ). Kosova allowed the new acolyte of the USA in charge of NATO- Solano – to show USA determination to remain in Europe. A matter that Blair firmly agreed with. The previous goal of NATO – the capitalist defence against the Soviet Union passed with the rise of Soviet Social imperialism. But NATO still had a raison d’être – to defend the markets of Europe for the USA. What of the situation post collapse of the revisionist Soviet State? There continues to be the need for the USA to ensure that Europe remains subordinate: "For the US… Kosovo ..provided an ideal opportunity to wrap up something of prime importance, the need to secure fresh legitimacy for NATO. As a defensive alliance established during the cold war, NATO was designed to withstand attack by a specific enemy, the Soviet Union. After the demise of the Soviet Union in December 1991, the collapse of the communist countries and the dissolution of the Warsaw Pact, NATO ought to have disbanded. And it ought to have been replaced in Western Europe by a specific defence organisation. Opposed to this, Washington is seeking to remain a European power and has done everything it can to strengthen NATO and extend its influence by bringing in three Eastern European countries - Poland, the Czech Republic and Hungary. According to the American political commentator William Pfaff, there is no doubt that NATO was maintained because it gives the US political influence in Europe and blocks the development of a European strategic system to rival that of the US (See William Pfaff, "What Good is NATO if America Intends to Go It Alone?" International Herald Tribune, 20 May 1999." "New world order"; Leader Editorial; IGNACIO RAMONET; Le Monde Diplomatique; But more long term defenders of the EEC agenda to take over the position of "leading imperialist bloc", see the matter as already a forgone conclusion. EEC will have to have its won force to counter the USA. Dietrich von Kyaw was Germany’s ambassador to the EEC for 10 years and before that a leading German policy maker regarding the EEC. The impact of Kosova has simply sharpened the need for the most determined European capitalists to weld a fighting force. He warns that the Europeans must not become the "Hessians" (i.e. simply hired mercenaries) to the USA: "The conflict in Kosovo has made all the difference. It has increased the likely scale of the EU's enlargement to the south and east. That in turn will mean big changes in the way the EU deals with applicant countries and runs itself. The war also underlined Europe's weakness in foreign and security policy compared with the US. … Instead the EU must prepare for a time when it embraces "the whole of the continent, including perhaps Turkey and Ukraine". Since the Kosovo conflict, the EU has felt compelled to offer a perspective of entry for even Albania, the continent's least developed country. "The lesson of the Balkan conflict is that you cannot stabilise countries and ask them for sacrifices without giving their populations the perspective of joining the promised land." The EU must start thinking how to manage enlargement "to more than 30 countries in stages between 2004/ 5 and 2020" without risking "imperial overstretch" and withering away. …" In the meantime, the EU has still to digest the lessons of the Kosovo conflict. "What Kosovo has shown is that we - the French, the Brits and the Germans, whoever - are all, at maximum, second rate. Not as far as numerical strength is concerned. Not as far as courage is concerned. But if we are not careful, we Europeans will become the Hessians (18th century German mercenaries) of the Americans." Europe is therefore right to develop a security and defence identity. "We must be ready in case the Americans are not interested to fight a European war. We never have a guarantee against neo-isolationist developments. Nobody knows how Congress will decide. Nobody knows what sort of US president we might have," he says." "EU must embrace the whole continent': Dietrich von Kyaw"; Financial Times ; 05-Aug-1999

We have certain disagreements with the Progressive Labor Party (PLP) of the USA. However on the whole we continue to be impressed with their overall commitment to a clear scientific approach to the questions facing the working class. In the matter of Kosova, they have identified another factor, that we consider important, as being a real underlying reason for the war.

In broad terms we agree with this and present their analysis, which in full is to be found at the following page on the web: Kosovo?  We present their argument:

 First the PLP identify the valuable resource of oil, and point out both that the USA have engaged in deadly war in the Middle East for this; and that the former Soviet Union has oil resources on the fringes of the "Middle East":

"A ruthless battle for control over oil, the lifeblood of imperialist industry, lies at the heart of Clinton latest atrocities and "humanitarian" lies. ..We already know about the deadly fight U.S. imperialism is waging to keep its hold over Middle Eastern oil. U.S. and British planes are still bombing Iraq on a daily basis to prevent large amounts of Iraqi oil from coming on the market. As "Challenge" has often warned, a future ground war over this issue remains very likely. But the Middle East is no longer limited to Iraq, Iran, Saudi Arabia and other well-known oil producers in and near the Persian Gulf. The Middle East now includes the vast oil and gas reserves of the Caspian region to the North and East in Central Asia. Some of these resources are Russian; some of them lie in former Soviet republics. The oil reserves alone could amount to 200 billion barrels, with a value somewhere between $2 and $4 trillion. This is a prize for which the imperialists will fight to our death." PLP: "Clinton bombing campaign against Yugoslavia has managed only to spread more mass terror than Milosevic could create in his wildest dreams." Second the PLP have identified a key infra-structural component – a pipeline transport to the Balkans: "Oil in the ground or under the sea is one thing. Building the infrastructure to refine and transport it s something else. This is where the Balkans come in. Who will control the pipelines? Will they flow through U.S. competitors Iran and Russia, or will they flow through U.S. ally Turkey? Will they be owned by U.S. or Russian companies? How much of this oil will flow eastward under Chinese control? Who’ll get the biggest cut of the oily profit pie? In any event, the oil that reaches Europe over land has to go through the Balkans. It turns out that Russian, Bulgarian, and Greek companies are building an oil pipeline through the Balkans that could supply one-fourth of Europe needs. In January 1997, these bosses agreed on a 200-mile pipeline linking the Bulgarian port of Burgas with Alexandropoulos in Greece. The structure is to carry 600-800,000 barrels a day and bypass the Bosporus straits (that is, Turkey). Meanwhile, Greek and Macedonian companies are planning a 186-mile long crude oil pipeline to hook up the Greek port of Salonika with Skopje in Macdeonia. "If completed, (it) is expected to transport 200,000 barrels a day at half the current cost" (Sources: U.S. Energy Information Administration, September 1997; May 1995 article by Nicholas Karahalios in "International Politics," a journal specializing in Balkan politics and economics)…….. One pipeline is due to run from Skopje to Kosovo. Kosovo itself also has strategic military value to U.S. imperialism. Journalist Diane Johnstone writes: "Thanks to Kosovo, the U.S. can control eventual Caspian oil pipeline routes between the Black Sea and the Adriatic, and extend the European influence of favored ally Turkey" (Special (extra) "Znet Commentary," 3/24)." PLP: "Clinton bombing campaign against Yugoslavia has managed only to spread more mass terror than Milosevic could create in his wildest dreams." Thirdly: The PLP identify a temporary reason for the EEC imperialists to participate in the scheme of USA imperialism: "So the U.S. is bombing Yugoslavia to prevent Russian and other oil companies from replacing Exxon-Mobil and friends as Europe major suppliers, since if Russian bosses succeed, they can quickly once again become a dominant imperialist force. The threat to Total and Elf, French oil companies as well as to the British-Dutch Shell, explains in part why France and other NATO bosses are going along with the bombing for now, even though they oppose U.S. policy in the rest of the Middle East. The U.S. already has troops in Skopje, which is not only a pipeline hub for Russian oil but also an oil refining center in its own right." PLP: "Clinton bombing campaign against Yugoslavia has managed only to spread more mass terror than Milosevic could create in his wildest dreams." In general we accept this analysis of the PLP. We do however question this being THE only fundamental reason for the war. In addition we would suggest to the PLP, that perhaps they have made an incomplete, analysis by making the following three partial errors:
i) The PLP over-estimates the power of the Russian State currently. This may be seen in the following quote from the same article: "But defining the protection of U.S. oil interests and U.S. superpower status against Russia et al. as a strategic interest, isn’t the same as getting the job done. Clinton bloody Kosovo failure so far is proving this. It may become one of U.S. rulers’ "worst foreign policy flops since World War II" (Walter Russell Mead, "LA Times," 4/4). The Clinton White House tactic was designed to keep Albanian Kosovars in Kosovo to cripple Russian pal Milosevic, to strengthen NATO, to stabilize the Balkans and to keep U.S. ground forces out of combat. So far, the results don’t seem to be working. … There is internal friction in NATO. Every Balkan country is now threatened by imperialism, civil war and/or occupation which could spread to Greece and Turkey.. Another possibility is a Russian-brokered deal that would divide Kosovo between Milosevic and U.S. allies. A divided Kosovo would do nothing to settle U.S. rulers’ oil rivalry with the Russians and would ironically hand the Russian rulers a major political " PLP; same article. We freely acknowledge that this was written in the white heat as the NATO forces thundered over Kosova – and therefore that in quick analyses partial errors may be made. However we suggest that two other consideration also need weighing by the PLP.

ii) They under-estimate the significance of the EEC-USA contradiction.

We believe that the placement of Russia geo-politically, needs to take account of this crucial factor. It appears that the major thrust currently is for links with the EEC capitalists.

"When Finland takes over the presidency of the European Union next month it hopes that member governments will focus as never before on what Nordic members of the enlarged union call Europe's "northern dimension".. .. to ensure that north western Russia, which looks to the Baltic as its main "window on the west", shares in the .. cross-Baltic trade and investment flows. The wider long term aim is to help north western Russia become the locomotive of faster development along a corridor stretching from St Petersburg through Novgorod to Moscow and beyond the capital to the string of populous industrial cities along the Volga river. Although Russia remains a vast expanse stretching across half of Europe and Asia, the bulk of European Russia's 140m population lives in this relatively small part of the country. Integrating western Russia into the Baltic and central European transport and other networks will eventually require billions of dollars of infrastructure investment, especially in improved road as well rail links, and better port facilities. The first steps in this direction are the inclusion of St Petersburg, the surrounding Leningrad region and the Russian enclave of Kaliningrad, formerly Koenigsberg, in projects to create an upgraded "Via Baltica" highway and a Baltic gas and electricity grid. "Baltic Sea Region: Potential Sighted Through 'Window On The West': by Anthony Robinson in Moscow: The first steps are being taken to integrate more closely with potentially one of Europe's most dynamic economic areas"; Financial Times ; 11-Jun-1999. We identified in the split in of the Russian capitalist classes, that Chubais and Chernomyrdin were members of those whose interest lay in allying itself to the Western imperialist powers. We also identified the "Communists" of the Zhuganov faction as representing the interests of a "national" capitalist wing of Russian capital (See Alliance Number 13 January 1995: "Chechnya, Oil & The Divided Russian Capitalist Class"; at It is true as the PLP argue that the Russian oil companies are formidable forces, but they are unable to develop their profiteering visions without recourse to foreign capital. And currently they are closer to EEC capital both geographically but in terms of linkages. In addition the Barents sea and the Arctic provide un-tapped territory thus far, potentially lucrative to both the EEC and Russia: "Russian oil companies are increasingly independent players and so are powerful regional governors. So are millions of private traders and small businessmen who managed to survive last August's collapse of the banking system and rouble devaluation but struggle to survive in a climate of rapacious tax collectors and corrupt officials. ….. The then Russian prime minister Viktor Chernomyrdin headed a strong Russian delegation to the CBSS summit in Riga in January 1998, which included the current prime minister Sergei Stepashin. Yevgeny Primakov confirmed his keen support for greater co-operation in both the Baltic and Barents sea regions when, as prime minister, he discussed EU food aid and other topics with Jacques Santer and commission officials in Moscow last year. The Baltics/Barent Sea connection is shared with Norway, Sweden and Finland which have all been forced to look beyond purely Baltic co-operation by their anxiety over nuclear and other pollution from decaying nuclear submarines and industrial plants in the heavily militarised Kola peninsula. Norway also wants to define disputed national boundaries in the oil-rich but remote Barents sea. For all three the "northern dimension" thus extends well beyond the Baltic to Russia's arctic north. The arctic dimension is also important to Russian oil companies and to Gazprom which will supply Western Europe with arctic gas from the Yamal peninsular in the decades ahead. Gas will be delivered to Germany through a large capacity export gas pipeline through Belarus and Poland while Russian oil companies are still debating whether to build a new port at Primorsk north west of St Petersburg to supply oil from the arctic region of Timan Pechora or merely build new pipelines to the Latvian port of Ventspils." "Baltic Sea Region: Potential Sighted Through 'Window On The West': by Anthony Robinson in Moscow: The first steps are being taken to integrate more closely with potentially one of Europe's most dynamic economic areas"; Financial Times ; 11-Jun-1999. We acknowledge that other articles may ahve taken this matter of the EEC-USA contradiction inot account. For example, : see ( But we argue these need to be synthesise into the view of the Kosvan war.

iii) As an aside, we believe that it is possible that the PLP under-estimate the development of the alternative oil shales industry of oil in the USA itself. In this light - the significance of the oil pipelines we feel might not be so much to obtain access to oil – as in the inverse – to deny its enemies the oil.

We will be happy of course, to further debate these matters. The strategic direction of our common enemy – imperialism – must be understood. The PLP analysis is basically a new and important insight into the ticking of USA imperialism.

        ALLIANCE 33:PART 6.

New technical strides have radically affected the conduct of war. That technological improvements feed into military operations – was noted by Engels:

"Nothing is more dependent on economic prerequisites than precisely army and navy. Armament, composition, organization, tactics and strategy depend above all on the stage reached at the time in production and on communications. It is not the "free creations of the mind" of generals of genius that had had a revolutionizing effect here, but the invention of better weapons and the change in the human material, the soldiers; at the very best the part played by generals of genius is limited to adapting methods of fighting to the new weapons and combatants."
Frederick Engels in Anti-Duhring; Part II Political Economy; in Collected Works Marx and Engels"; Volume 25; Moscow; 1987; p.154-55.
This can be seen in the way the USA led NATO-Allies deliberately planned to test out new weapons and to identify their faults and their limitations. Operation "Desert Storm" in the war of aggression in Iraq allowed the USA to test out certain aspects of the new weaponry. But in this especial regard, the Balkans was also a most callous testing ground.

It was a test ground, where the USA and its allies knew there would be virtually no serious force that could withstand it. It was a laboratory where they tested out both new weaponry, and related to it new strategy. The most obvious one was the one of the "pure air war". Ever since Barcelona aerial bombing performed by the German Fascists as a prelude to the Spanish Civil War, the air force was an integral part of military assaults.

However, the limitations of a pure air-war had been previously exposed especially in the USA imperialist aggression in Vietnam. New technology needed to be tested, that could possibly overcome these previously noted limitations.

For instance, the USA was already aware they lacked an ability to "target in real-time", a deficiency that became apparent from the un-just Gulf War against the Iraqi peoples:

"Allies still lack real-time targeting: Despite lessons learned from the 1990-91 Gulf War, NATO forces participating in Yugoslavia as part of Operation 'Allied Force' have not fielded a real-time targeting capability ­ the ability to pass images of enemy installations and troop formations directly from spacecraft or airborne surveillance aircraft into the cockpit of fighter aircraft or other weapons systems... officials interviewed said US and allied forces remain unable to instantaneously provide "shooters" with radar images and other intelligence gathered by the plethora of allied surveillance and reconnaissance assets and spy satellites. Real-time targeting as well as real-time battle-damage assessment has been a top priority for Department of Defense and ... "We learned our lessons in the Gulf War but not well enough," said a US intelligence official. From target identification to weapons delivery, he said, "three to four hours is the best we can do". One platform, the Joint Surveillance Target Attack Radar System (Joint STARS), at the request of the US European Command (EUCOM), has been slated for an upgrade that would enable it to directly pass a target map via a satellite uplink into the cockpit of a fighter aircraft. Beginning in 1995, EUCOM was spending about $50 million per year on this effort. .. intelligence official said the current operation could be "a test case" for the capability if it is ready. Two Joint STARS aircraft are participating in the operation. .. real-time targeting is .. hampered by.. a dearth of Global Positioning System (GPS)-guided weapons such as Tomahawks, whose co-ordinates can be "redialled" to take updated intelligence information into account. Another limiting factor is space-based intelligence assets, officials said, which have not changed much since the Gulf War. ...The USA hopes to solve some of these problems with the Discoverer II series of small imaging satellites, which will be launched in the 2002 timeframe, officials said."
Bryan Bender Bureau Chief Jane's Defence Weekly;
The Allies also tested out new anti-armor weapons, in a major collaboration with a new hybrid type of company – one that marries the new electronics to the old munitions industry: "Officials expected the US Department of Defense's latest air-dropped anti-armour munition, the Textron-built CBU-97 Sensor-Fuzed Weapon (SFW), to debut during NATO's 'Allied Force' air campaign in Yugoslavia, targeting Serb main battle tanks and other military vehicles. With a significant quantity in the US Air Force's inventory ­ more than 1,200, .. the SFW was likely to be called on in the "tank-busting phase" of the operation to thwart the Serb offensive against ethnic Albanians in the Yugoslav province of Kosovo. .. Each SFW, carrying 10 3.86kg BLU-108 submunitions, each with four independent, smaller SKEET warheads that use passive infrared (IR) sensors to home in on armoured vehicles, can be carried on various aircraft,. ..The SFW, fitted into a 1,000lb (454kg) class delivery system, can be dropped from altitudes ranging from 200ft to 20,000ft; can operate in all weather conditions; and can cover a 6 ha. .. each of the 10 submunitions can dispense their SKEETs to penetrate enemy armour using a copper-plated, 1kg Explosively-Formed Projectile that spins at 1,600rpm. .. This year, the air force and Textron plan to start a SFW pre-planned product improvement (P3I) programme. The project will "incorporate an Active Laser Profilometer into the BLU-108 submunition", according to the company. "Working in conjunction with the passive IR sensor, the profilometer will improve the SKEET's aimpoint, providing greater lethality. And with an improved radar altimeter, a skeet will cover twice as much territory, enabling a single SFW to cover up to a 12ha site." The air force plans to buy 5,000 or more SFWs ..." "New anti-armour weapon should debut over Serbia";
Bryan Bender Washington DC; Jane’s Defence Weekly;
They also successfully tested out a new device to knock out electricity supplies to a geographical area, the so called ‘soft bombs’. The potential of these to devastate civilian life and operations, without instantly creating either human or long lasting material damage – is of major potential importance to an army that does not want to find a "scorched earth" when it lands: "..the US Air Force (USAF) used a classified weapon last week to temporarily turn off power to an estimated one million people without causing permanent damage. F-117A stealth fighters dropped a number of BLU-114/B bombs.. The 'soft bombs' contain cylindrical submunitions filled with graphite filament and charged carbon particles that are dispensed at relatively low-levels to disrupt electric power lines, electricity sub-stations and power generation plants. The filament and particles cling to wires, transformers and transducers, causing the system to trip out. To restore power, affected equipment must be cleaned off or replaced where necessary. Power to affected areas throughout the country was restored within several hours, according to reports. The use of the weapon highlighted NATO's larger set of targets as the air campaign entered its sixth week. Previously, NATO limited the number of targets whose destruction would significantly affect the civilian people and kept to military targets primarily, officials said. Described as a psychological weapon, the soft bomb is based on a cruise missile developed by the US Navy before the 1990-91 Gulf War, officials said. The navy, originally intending to confuse enemy radars with the special filament, learned by accident that the weapons could also be used to severe power supplies." "US 'soft bombs' prove NATO's point"; Bryan Bender JDW Bureau Chief All this has had a huge boost for the armaments industries and arms sales: "It is a fact that some companies have been having a very good war. The conflict in Kosovo promises a tidy boost in profits for the defence sector, a trend the City is happy to capitalise on: since the first missiles struck Belgrade, defence share prices have risen sharply. Not only does war give arms companies lots of free advertising, it also boosts orders for replacements and spare parts. These are some of the winning companies:

· Rolls Royce makes about one-third of its revenues - about £1.3 bn - from sales of military aircraft engines, e.g. for Tornados and Harriers. Nine per cent of sales come from supplying spare parts and servicing engines - the defence "aftermarket". A long air campaign means bigger after market profits and, if Nato aircraft are shot down, extra revenue from selling replacements.

· Cobbam provides out-sourced training for RAF and Navy pilots - a business that inevitably picks up during a war. It also supplies most western airforces with in-flight hardware.

· Nunting, a defence and oilfield services company, is less exposed. But a small percentage of its profits come from the production of BL 755 cluster bombs, which have been used in the conflict.

· Alvis and Vickers would both profit from a ground war, with an increased demand for spare parts and replacement vehicles. Alvis makes light-armoured vehicles like the CV90, the Scorpion and the Stormer. Vickers makes the Challenger tank.

British Aerospace, produces the Harrier and the Tornado, plus missiles, light guns and ammunition. It also recently acquired GEC Marconi's business, which makes cruise missiles' guidance Systems - equipment said to be in short supply.

Unethical investors wanting to make a quick buck out of the war should think carefully - and not just because of moral issues. It can take time for profits to filter through in these companies. Even if new orders are placed, it takes almost a year, for example, to start producing cruise missiles. Plus, the outlook for defence in the long4erm is not necessarily rosy: the UK defence budget is due to fall by 1.5 per cent a year until at least 2002."
Guardian: "The Editor"; 11 June 1999; p. 10. Tom Winnifrith in Personal Finance, June 1999

Lalkar makes a similar point, citing John Waples and Matthew Lynn in a report entitled "The Economics of the Battleground", in the Sunday Times of 19 April. As Lalkar cites this report:

 Launching The War:

 Le Monde is rightly scathing about the so-called "socialism" of the EEC social democrats:

"The decision to go to war, announced on 23 March 1999, was described by NATO Secretary-General Javier Solana, one-time leader of the Spanish Socialist Workers' Party, as a "moral duty". Mr. Solana is supported in this decision principally by the French, German, Italian and UK heads of government, Lionel Jospin, Gerhard Schröder, Massimo d'Alema and Tony Blair - all four of them eminent proponents of social democracy in Europe. They all agreed to the military solution proposed by Washington as the "only way" to break the deadlock in the Kosovo peace negotiations, even though it is common knowledge - confirmed by US experience in Iraq since 1991 - that crises of this kind cannot be settled by air strikes and any attempt to send in land forces to occupy Kosovo would be extremely costly in terms of human life and might extend the conflict to the whole Balkan peninsula. …..Thus socialism, one of the great unifying myths of mankind, has once again been betrayed by the social democrat leaders of Europe." April 1999; Ignacio Ramonet; "Leader: Social democracy betrayed";  A massive force was assembled "NATO Operation 'Allied Force' was launched on 24 March, involving at least 400 aircraft and seven Tomahawk-capable ships. According to NATO's Supreme Allied Commander Europe US Gen Wesley Clark, the air campaign is designed to "destroy" the Yugoslav military unless President Slobodan Milosevic ends his offensives in Kosovo and agrees to a peace plan for the separatist province. "We're going to systematically and progressively attack, disrupt, degrade, devastate" Serb military targets, Gen Clark said on 25 March from NATO HQ in Brussels. "Ultimately, unless President Milosevic complies with the demands of the international community, we're going to destroy his forces."
'Allied Force' applied to Serbia;" Greg Seigle JDW Staff Reporter; Washington DC; Jane's Defence Weekly;
By the end of the war enormous human and physical damage had been done: "Yugoslavia, however, has suffered extensive material losses. The military and industrial infrastructure (including power stations) has been badly damaged or rendered unusable, as have the main transport links (including bridges, railway lines and motorways). All the country's electronic systems have been scrambled and telephone communications permanently tapped. Several thousand Serbian soldiers are said to have been killed. According to certain US generals, the country has been set back 20 years and Serbia could find itself back where it was at the end of the second world war. Fifty years of reconstruction, the work of two generations, have been wiped out in a matter of weeks. The balance of forces between Nato and Yugoslavia is so unequal that it is improper to speak of war at all. This was punishment - punishment such as no country (except Iraq) has ever received. NATO’s strategy was such that Yugoslavia could not fight back because the enemy was always beyond its reach.
"New world order"; Leader Editorial; Ignacio Ramonet ;Le Monde Diplomatique.
The progressive but liberal John Pilger’s scathing epitaph for the war is perfectly true:
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  This Section completed August 1999.