European “Green Deal” — Devil in the Detail

In November 2019, the European Commission adopted its “European Green Deal”. The target is to make the European Union (EU) carbon neutral by 2050. More concrete details will follow. This project, introduced by Commission President Ursula von der Leyen, is presented as the answer to nearly every problem the EU is facing: the environmental crisis, the economic crisis and the various political crises.

Empty promises and false solutions

By Sonja Grusch, SLP — ISA in Austria

(Originally published on , the International Organisation of which the Socialist Party is a part of.)

In November 2019, the European Commission adopted its “European Green Deal”. The target is to make the European Union (EU) carbon neutral by 2050. More concrete details will follow. This project, introduced by Commission President Ursula von der Leyen, is presented as the answer to nearly every problem the EU is facing: the environmental crisis, the economic crisis and the various political crises.

Though there is currently not enough detailed information to judge what all the effects will be, what can be said for sure is that none of the agreed targets will be reached.

European Green Deal: a “feel good” project

The EU project is in crisis — this information is not new, as the whole concept was doomed to fail from the start. Under capitalism, there is no possibility, in the long run, of different nation states overcoming their differences, establishing a genuinely level playing field and staying together for good. This is due to the role that nation states and governments play within this system, in serving first and foremost the interests of their own national capitalist elite.

For quite some time, especially for the dominant European powers, the benefits of subordination to the framework of the EU have outweighed the cost. Acting as a unified economic block against Japan, China and of course, the USA brought benefits that made it worthwhile to have less power over questions of monetary and fiscal policy. But with the return of the severe economic crisis in 2007, the straitjacket of the Maastricht criteria and the Lisbon treaty, which limits the ability of nation states to safeguard their respective national capitalists, has become a problem. This is the background to the nationalist music increasingly coming from the established capitalist politicians and parties. When they, as well as the far right, say “our people first” they always mean “our companies first”.

On top of these centrifugal forces in the EU are the effects of decades of neoliberal policy combined with of the 2007 crisis: poverty, unemployment, and massive problems in social services. The times are gone, when even relatively large parts of the working class had a relatively good and secure life in Europe. The future is far from bright and millions in Europe fear for the future. Although this is a result of the contradictions of capitalism, the EU itself was, and is seen as responsible by many in Europe. The brutal policy of the EU against Greece, forcing big parts of the Greek working class into poverty, has added further to this picture.

And now, with the climate crisis, millions of youth, and not only youth, are out on the streets. They see the subsidies given to the nuclear, coal and steel industries, the tax privileges for airlines and the dominance of agro business in the EU. They demand changes. So the EU needs to react, in order to prevent a further collapse in support. The ruling elite are using the generally positive pro-European feelings, especially amongst young people, in an attempt to overcome its own crisis of legitimacy. That is the propaganda dimension of the EU’s Green Deal.

Already last year, the EU parliament declared a “state of climate emergency”, which could well turn out to be a useful propaganda measure. As climate change makes parts of the world too hot to inhabit, and more and more regions run out of water and the ability to feed the people living in them, hundreds of millions of new refugees will have to flee their homes. Estimations speak of some hundred million extra refugees as sea-levels rise, of over 600 million who cannot be fed and up to 3 billion people without access to safe drinking water. The “refugee issue” is already highly polarising in Europe and the “state of climate emergency” could be used in racist and dictatorial ways to block refugees from entering fortress Europe, a process that may well be accelerated by the Coronavirus. The ruling class in the EU can — and most likely will — use the climate crisis to further attack democratic rights and to suppress protests of the working class and the youth arguing that “everything has to be subordinated to this danger to humanity”.

A “catch up” project

The “old continent” has a problem: it lags behind economically. Economic growth is low, even lower than in the rest of the world. Investment in China and the USA is more dynamic. China, once known for making cheap copies of western products, is today leading in new technologies like solar panels, e-cars and others. The conflict around Huawei reflects the leap in innovation China has made in the last period. And China goes further: with the Belt-and-Road-Initiative (BRI) it is aggressively expanding to other regions of the world, not least to Europe.

China’s Investments in Central and Eastern Europe doubled in 2019. As overall Foreign Direct Investment (FDI) in the region dropped in the same period, the influence of China is magnified further. Greece was the first country outside of the former Stalinist Eastern Bloc to sign up to the BRI, and recently Italy became the first G7 country to do so. China’s increasing influence has economic, but also political effects: for example, the EU was blocked from protesting against China’s territorial demands in the South China Sea.

Since the start of the crisis in 2007, the EU has hoped for a boost in investment, which is vital, especially in shrinking markets and with increasing competition, if companies are to be more profitable and kick others out of the market. But not even low interest rates, currently at historically low, even negative levels, have led to more investment. As long as there is dynamic economic growth, even those companies with older or less advanced technology can survive and make profits. But such a boom period is not on the agenda.

So this is one of the reasons behind the European Green Deal. The market for “Green Capitalism” is estimated to be worth up to $4.4 trillion in 2025 and Europe’s capital wants to get its share. It is no surprise that it is a German president of the European Commission pushing in this direction, as it is the German car industry that is heading towards a serious crisis and is looking for German federal or EU money to overcome it. With China leading in electric cars, Europe is again lagging behind. It is not for ecological reasons that von der Leyen and the (German) car industry are pushing the electric car. Their aim is not to reduce the number of cars overall, but actually to increase it by adding more electric models to already existing conventional vehicles.

The EU is actually speaking frankly when it states: “change is most needed and potentially most beneficial for the EU economy, society and natural environment. The EU should also promote and invest in the necessary digital transformation and tools as these are essential enablers of these changes.” Not only are benefits for the economy defined as the first priority, but also “digital transformation” is presented as THE tool. New technology has, and will have, a place in limiting climate change and its effects but it can not, in itself, solve the problem. However, to catch up with innovation is one of the main hopes of European capital to help deal with the economic crisis.

The EU also tries to use the climate question to justify protectionist measures, with the perspective “that the price of imports [should] reflect more accurately their carbon content”. It is not just because of poor labour conditions and wages in neo colonial countries, and also China, but also lower environmental standards, that enable them to produce cheaper goods.

The problem about the whole idea of boosting investment and the economy is that it will not work. The real amount of money that will be used seems to be much smaller than the propaganda tells us. Up to 2030, investments worth one trillion euro shall be “mobilised” — that makes 100 billion per year. This is despite the fact that the EU itself explains that it needs investment of up to 260 billion per year to meet its ecological needs.

Around half of this money is supposed to be financed by private funds. The plan says that the European Investment Bank will offer new credits to finance “green projects”. But it remains to be seen if private money is interested in these credits, given that they are already reluctant to take on more debt despite the current low interest rates. The plan also claims that money will be provided by national governments. Again, given the reluctance of many countries not to give more money to “Brussels”, there is a big question mark over this.

The money coming directly from the EU will not be “fresh” money but mainly a re-labelling of existing funds. It remains to be seen from where “fresh” funds would come from, as a significant section of EU representatives are against taking on “new debts”. Some countries want EU money as a payoff to accept the Deal — such as Poland, which argues it needs support as 80% of its energy comes from coal. Companies are also demanding public money to finance changes in their production — or merely to survive, given the increased competition.

In this way, there may be attempts to use the EU Green Deal to weaken some of the spending and debt restrictions put in place after 2007, believing that there will be greater tolerance if done in the name of the climate.

The head of the EU parliament’s Budget Committee, Johan Van Overtveldt is more than sceptical, saying: “Where the money should be coming from remains extremely unclear. We are against the recycling of promises and money. We don’t back creative bookkeeping and financial adventures.”

A “token” project

How good is the European Green Deal for the climate? Is it worth it, given all the other problems associated with it? As mentioned above, it is highly unclear how much money will actually be mobilised “for the climate”. But even if one looks at the plans that are already in place for the environment, they are at best too little and in many cases, the wrong measures altogether. In reality the plans are really unclear. The EU has published no more than general headlines and targets to be met, without explaining the concrete steps that are needed.

In the paper on “sustainable mobility” it says “Transport accounts for a quarter of the Union’s greenhouse gas emissions and these continue to grow. The Green Deal seeks a 90% reduction in these emissions by 2050.” It then states that road transportation counts for 71.7 % while trains only account for 0.5 % of emissions. But then there are no concrete measures mentioned to boost transportation via rail — or to reduce road transportation.

Much more concrete is the target to increase the number of public recharging and refuelling stations — which means that cars and lorries will still be on the streets but with some replaced by electric cars, which are also not without a number of ecological problems. The same approach is seen in the following: “Transport should become drastically less polluting, especially in cities.” But then there are no concrete measures mentioned in relation to public transport in the chapter which follows!

Each EU country is expected to take responsibility: “National budgets play a key role in the transition.” But this will come into conflict with the fact that, in the current difficult economic situation, under capitalism the rule is “every one for himself!” And that means that national governments will wait for others to take the first steps, and look for loopholes and exceptions to attract investments.

While it is already quite obvious that the concept of emission trading has not worked to reduce the production of CO2, the EU will be “working with global partners to develop international carbon markets as a key tool to create economic incentives for climate action.”

A lot of hot air

The “European Green Deal” represents the recognition by the ruling class that “something has to be done” and is an attempt to channel the pro-environment mood that exists so that it benefits big business. Not only is it an attempt to apply useless “market mechanisms” to help the climate, but actually they are exploiting the climate issue to introduce economic measures that, at the end of the day, only benefit big business and are even harmful to the environment.

What is true is that there needs to be a European and worldwide answer to the climate crisis. But this cannot be provided by the capitalist institutions of the EU. A completely different united Europe is needed, united on the basis of real democracy, in which the people who create the wealth, the working class, decide, united with a democratically planned economy based on the needs of all parts of nature — human beings included.

These needs include the right to a decent living, a proper paid, safe job and a life free from poverty, war and oppression. Such a society could not only use all the intellectual capacities of mankind to find solutions for a decent living and a clean environment, but also ensure that this is provided not just for a small elite, but for all people living on this planet. This means massive public investment in free public transport, sustainable construction, a reduction in working hours without loss of pay. And these are just some of the possible measures.The introduction of already existing technologies, currently unused as they are not profitable, and new technologies will ensure that the necessary changes in production and distribution will lead to a better, sustainable and secure living for all. We call such a system socialism.

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