Stepped Up EU Powers Called for by Romano Prodi

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Stepped Up EU Powers Called for by Romano Prodi
European Commission Proposals at a Glance

Deutsche Bank May Make Thousands More Workers Redundant
Some Facts about Deutsche Bank

On May 22, European Commission President Romano Prodi unveiled a submission for an extension of the powers of the EU.

He argued that a newly enlarged EU of 25 or more countries would grind to a halt without fundamental reform. Prodi proposed that the Commission have a new role in driving forward EU policy on sensitive issues such as defence, foreign affairs and home affairs. He also revived the idea of a direct EU tax. He also proposed extending majority voting to tax and social policy, including foreign affairs, security and use of the European army, budget, and justice and home affairs. This is a call for an end to national vetoes and the concentration of these policies under the control of the Commission. In this scenario, the Commission would represent all 15 EU members at key decision-making bodies like the International Monetary Fund and the G-8 group of industrialised nations.

The proposals of the European Commission are for the so-called "two-speed" Europe with the Euro-zone 12 at its heart. The two-tier structure could see eurogroup meetings replacing Ecofin councils of all Europe's finance ministers. Speaking to the European parliament, Romano Prodi argued that Europe's citizens want to see the EU move away from technical regulation to assuming a central foreign affairs role. He called for the Commission to become the "centre of gravity" in making EU foreign policy.

The Treasury distanced itself from Romano Prodi's demands, that the eurogroup – the informal meeting of finance ministers of eurozone countries – should have stronger powers. It said: "The question is whether there is the consensus or the need to change that. We are not convinced there is."

The Treasury also said: "We are against tax harmonisation. We believe tax competition is the way forward. The idea of the Euro-tax was floated by the Belgian presidency last year, and there were not too many supporters then."

A Commission official said the proposed reforms were vital, but admitted: "We know these ideas will be sensitive, particularly for the British because they touch so closely on questions of national sovereignty."

France is also sceptical about many of the proposals, and it was reported that even Germany, traditionally interested in increasing Commission powers, thought that the President was ill-advised to deliver a shopping list of demands.

The plan also runs counter to the thinking of Sweden and Denmark, the EU states outside the Euro. And other member states are sceptical of any move which diminishes their own standing on the world stage.

Tony Blair said: "Quite apart from the single currency, there are a range of issues on which Britain’s voice has to be heard. Whatever people’s views on the single currency, it is essential for this country to wield influence in Europe."

Tony Blair and Jacques Chirac, the French president, have already proposed building the role of the EU council – the forum of national leaders – headed by a president. The ideas are being considered by Valéry Giscard D'Estaing's convention on the future of Europe. His report will finally be submitted to EU leaders at an intergovernmental conference in 2004.

While Tony Blair is interested to see no diminution of the British government’s voice in the EU, in which his aim is that Britain should be a "leading player" in its own big power interests, as well as the Trojan horse for US imperialist interests, the working class and people are opposed to the strengthening of the EU as a big power bloc under the domination of Germany, France and Britain, as well as Spain and Italy. Such a move goes against the interests of the people not only of Britain but throughout Europe, and presents a further danger to world peace and security. There is no such thing as a "people’s Europe" to be attained in any way through the EU. It stands against the sovereignty of nations and peoples, as well as to the common aim of the working class throughout Europe for socialism and a new society. Britain should get out of the EU and the EU should be dismantled.

• End of all vetoes and opt-outs such as Britain’s from EMU.
• A single EU foreign policy. EU foreign policy tsar Javier Solana to be absorbed into the Commission and role merged with external affairs Eurocrat Chris Patten.
• Single EU constitution for an expanded EU.
• A single asylum and immigration policy.
• Commission to have power over national budgets, only to be overturned by unanimous vote.
• Commission to represent the eurozone on the world stage, such as the World Bank and the IMF.

(source: The Democrat, paper of the Campaign against Euro-federalism, May 2002)

Deutsche Bank may announce thousands more job cuts in the coming months, in an aim to cut costs by two billion euros and keep up with faster-paced rivals, an industry source said on Saturday.

The cuts – part of a recent cost saving drive under its new Chief Executive Josef Ackermann – will be carried out over the next two years as Germany’s biggest bank carries out a drive to improve profitability and increase its capitalised market value.

A severe equities market downturn and a dearth of deals has forced a fresh round of cost reductions in the investment banking industry, which had hoped for a revival of activity by the fourth quarter of this year, according to news reports. Deutsche's last round of job cuts came in late May when the bank said it was axing nearly 1,000 positions globally in equities and information technology on top of 9,200 announced last year, the bulk of which have been carried out.

Fresh job cuts are likely to include positions at the bank’s private clients and asset management business (PCAM) in continental Europe which has not announced any job cuts so far this year, the source said.

A spokesman for Deutsche Bank declined to comment.

Deutsche Bank’s core investment banking business, which has made over 6,000 workers redudant in the last 18 months, is unlikely to take the brunt of future layoffs, the source said. Deutsche's high costs and low profitability in retail banking and asset management have weighed on its stock, weakening the bank as pressure to consolidate in Europe grows. It has promised to cut costs by two billion euros (£1.3 billion) by 2003 and hopes to cut 800 million of that this year alone.

The measures came after the bank posted a 70 percent drop in underlying profit in the first quarter amid low profitability at its traditional corporate and retail businesses in its home base in Germany. Deutsche's market value dropped around a third over the last year to some 46 billion euros, which is said to make it vulnerable to a takeover by banking giants such as Citigroup while at the same time making significant acquisitions of its own difficult. The US Citigroup is itself facing the same kind of situation and planning to make workers redundant in Europe.

Deutsche Bank was founded in 1870 in Berlin, "to transact banking business of all kinds, in particular to promote and facilitate trade relations between Germany, other European countries, and overseas markets". From 1873 to the outbreak of the First World War in 1914 its most important foreign branch was in London. When in 1914 the Frankfurter Zeitung told its readers that Deutsche Bank was "the biggest bank in the world", the claim marked its highpoint. Lenin in 1916 used the Deutsche Bank as one of the prime examples of how in imperialism "banks grow from modest middlemen into powerful monopolies having at their command almost the whole of the money capital of all the capitalists and small businessmen and also the larger part of the means of production and sources of raw materials in any one country and in a number of countries". Lenin examined the concentration and centralisation of banking and showed with data about the Deutsche Bank how a bank which stands at the had of a banking group, "and which enters into agreement with half a dozen other banks only slightly smaller than itself for the purpose of conducting exceptionally big and profitable financial operations like floating state loans, has already outgrown the part of ‘middleman’ and has become an association of a handful of monopolists". Lenin also examined in this context the increase of the capital of the Disconto-Gesellschaft. In the context of the world capitalist economic crisis, particularly in Germany, following World War One, Deutsche Bank and Disconto-Gesellschaft, Germany’s two largest credit institutions, merged in 1929. As Lenin wrote, "the twentieth century marks the turning-point from the old capitalism to the new, from the domination of capital in general to the domination of finance capital," the interconnection between the banks and industrial enterprises, the merging of bank and industrial capital to form finance capital. In the year 2000, Deutsche Bank held shareholdings exceeding 5% of the voting rights (and in many cases holding 100%) in 1,892 companies and corporations, from Ireland, Poland, Britain, Singapore, Belgium, France, Portugal, to the US and other countries around the world, including of course in Germany itself.

Under the Third Reich, the Deutsche Bank participated in "Aryanisations", reaching their peak in 1938 by which time the Bank had been involved in 363 of them, by its own figures. Deutsche Bank itself reports: "Even before the Second World War, Deutsche Bank used the aggressive expansion of the German Reich into Austria and the Czech lands in order to acquire new branches in those areas and holdings in banks already operating there. Following the outbreak of war, the same kind of business expansion was pursued in the occupied countries of western and south-east Europe. As a bank with international connections and a branch of its own in neutral Turkey, in the period 1942-44 Deutsche Bank was also involved in the German Reich’s gold transactions. During those years, Deutsche Bank purchased 4,446 kg of gold from the Reichsbank, selling it on in Istanbul. As we now know from the findings of the independent Historical Commission Appointed to Examine the History of Deutsche Bank in the Period of National Socialism, at least 744 kg of that gold came from Holocaust victims." This Historical Commission is currently also investing the activities of the Deutsche Bank branch in Katowice. Deutsche Bank writes: "It has only recently emerged that the Katowice branch and the sub-branches under it had granted loans to construction firms working at Auschwitz, where they were engaged in building the IG-Farben factory and the concentration camp."

In 1945, the head office in Berlin was closed and all branches in the Soviet-occupied zone. In 1947/48, in the Western zones of occupation, Deutsche Bank was split into ten autonomous institutions. In 1952, however, these ten successor institutions were combined to form three joint-stock companies, and in 1957 these three sub-institutions were merged to reconstitute Deutsche Bank AG. By 1976-77, Deutsche Bank had branches in London, Tokyo and Paris, and took over British merchant bank Morgan Grenfell Group in 1989, and in 1990 began to operate in the former East Germany.

Deutsche Bank today is a global financial group. In 1999, it stood as the world’s sixth largest bank with equity capital of $18.517 billion. In 2001, its balance sheet showed total assets of 918.222 billion euros (£593.56 billion). According to its own propaganda: "It sees its domestic market as extending beyond Germany to include the rest of Europe, and it is also represented worldwide at all the principal financial centres." The merger that was about to take place in 2000 with its rival Dresdner Bank to create the world’s biggest bank in asset terms, in line with the need to further increase its size and concentration of capital to become a leading player in the "domestic market" of the EU, was cancelled. The deal would have cost 16,500 jobs. Despite this, job losses have continued, as the bank continues to try and compete in the globalised market. Furthermore, the further monopolisation of the banks has not yet ended, as the rich not only are stepping up their ability to call the tune nationally and internationally, but demand that every pore of society is put in the service of enriching them on a massive and continual basis. In this absolutely cut-throat competition in the conditions of the global market, even banking giants such as Deutsche Bank are frenziedly aiming to ward off competitors and counteract a falling rate of profit, which has become especially true at the beginning of the 21st century. These mega-giants are trying to strip away every impedence to their rapacious penetration to national economies in the name of globalisation.