AS THE Tories reel from one crisis to another over their handling of the coronavirus pandemic that has so far led to over 380,000 deaths and confirmed infections nearing 3.5 million people, they were dealt another blow yesterday when a ‘private conversation’ between the Bank of England and the top UK bankers was revealed.
According to Sky News, Andrew Bailey, governor of the Bank, told the chief executives of the big banks on Tuesday that they had better get ready for the UK to leave the EU at the end of the year with no post-Brexit trade deal.
Johnson and the Tories have been demanding that the EU give them binding commitments that the UK banks, insurers and financial services have preferential treatment in accessing the European Union financial markets.
With Brussels rejecting any talk of binding agreements, the Bank is warning that the entire UK financial system will be suddenly cut off from this market on January 1st, with devastating consequences for the banks. Without a preferential deal they will be restricted to operating under World Trade Organisation (WTO) terms.
The WTO is the international organisation established to regulate trade across the world, establishing rules and enforcing them. It has its origins in the post-war Bretton Woods Agreement established to stabilise world trade and finances to prevent another Great Depression.
British capitalism and its entire financial section will be dependent on an organisation that is collapsing as the Trump administration prepares to break with it.
Since 2017, the US has stopped the appointment of any new judges to the WTO court that arbitrates on inter-government disputes over trade. Without a quorum since 2019, these courts have ceased to function, rendering the WTO toothless.
Now, Trump intends to pull the US out of the WTO completely, claiming that the organisation ‘has been very unfair to the United States for many, many years’ and that it only benefits China.
The WTO, for Trump and the American capitalist class, is another obstacle in its trade war against the deformed workers state of China and its capitalist rivals in Europe and the rest of the world. The American ruling class is pulling up the drawbridge in the fight for survival in the face of the world capitalist crisis.
This is crucial for US capitalism. As it plunges into depression with over 40 million unemployed and with Trump losing control in the face of a massive uprising by workers and youth – the drive to restore US imperialism to its former status of ‘world leader’ has become absolutely imperative.
In its war against China and its capitalist rivals there will be no place for a bankrupt British capitalist system, except as a vassal state taking its orders from Washington and New York and acting just as a dumping ground to be exploited to the hilt.
The other bourgeois alternative being pushed by Labour leader Starmer is for an extension of up to two years on Brexit. Starmer may as well have signed an official peace treaty with Johnson. The Labour opposition leader’s only complaint about Johnson, made at yesterday’s PM questions, was ‘Boy he makes it difficult to support this government.’ Starmer is permanently on his knees!
The only choice that Johnson has today is between climbing down and remaining economically tied to an EU that is crashing under the weight of its crisis or jumping into bed with an equally bankrupt US that will lay waste to British capitalism.
Johnson has signalled his total loyalty to US imperialism this week when the Tories eagerly joined in with Trump in threatening China over Hong Kong and siding with the right wing forces demanding a return to colonial rule, even to the extent of offering UK citizenship to 3 million of them.
When millions of workers voted in the 2016 referendum to break with the capitalist EU, they didn’t vote to become super-exploited by American corporations and banks. What is clear is that for the working class breaking with the EU necessarily means breaking with capitalism.
The only way forward is for the working classes in Britain, Europe and America to mobilise their strength to carry out socialist revolutions to bring down their governments and go forward to workers’ governments that will expropriate the bosses and bankers and build a planned socialist economy worldwide.