Analyseeinheit
Internationale Politik

International
Policy Analysis Unit

Werner Kamppeter

Lessons of European
Integration

April 2000

European
history is an almost incessant stream of blood, misery and destruction –
within Europe itself and elsewhere in the world. We Europeans were always prone
to generate ever new situations of conflict and to solve them by violent means.

Unbelievable
as it may seem against this background, we now have enjoyed half a century of
unprecedented peace and prosperity. We can be certain, at least in Western
Europe, that all conflicts are resolved peacefully, that is without recourse to
military force and to the menace of military force. In fact, we have developed
a new culture of conflict management: we follow accepted procedures that lead
to negotiated solutions.

The
process of European integration was central to the formation of the European
peace community. Because this process can be credited with converting the
belligerent Europe of the past into a non-aggressive and stable peace
community, many of the institutional, democratic and economic deficiencies of
the EU necessarily appear in a much milder light. On the other hand, it would
be very worth while to find out whether other regions in the world could learn
any lessons from this experience.

Dr. Werner Kamppeter

International Policy Analysis Unit

Friedrich Ebert Foundation

D-53175 Bonn, Germany

Fax: (xx49)(0)228.883-625

e-mail: [email-masked]

Analyseeinheit
Internationale Politik

International Policy
Analysis Unit

Werner Kamppeter

Lessons of European
Integration

April 2000

Contents

1. European integration Why it happened and how it happened

The First Europe: The Cold War, the German Problem  and Supra-nationalism

_____

The Limits of Hegemonic Power

Alliances Against Germany: Counterproductive
__

Jean Monnet: Supra-national Integration of Equal Partners
____

The Decline of Supra-nationalism
_

NATO, the Anglo-Saxon ‘special relationship’ and the German-French Axis

The Second Europe: The Common Market

Lessons to be learnt?

2. Benefits of Integration
_______

Political Objectives and Market Efficiency
_____

Economic Benefits: Economies of Scale?

Better Chances for Economic Development?
__

Comparative Economic Performance of the EEC/EC
_____

The EU as a Policy Maker

Advantages and Disadvantages of Size
__

Lessons to be learnt?

3. Institutionalised Dialogue and other Roads to Peace
__

References
_____

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If  there is a constant in
European history, it is war. Our political systems and the people at the top of
them were somehow prone to generate ever new situations of conflict and to
solve them by violent means. European history is an almost incessant stream of
blood, misery and destruction – within Europe itself and elsewhere in the
world. Furthermore, the width and depth of this stream increased with the size
and the strength of centrally organised states and with the development of
military technology.

Against this historical background Western Europe
and, to a lesser extent, Eastern Europe have enjoyed half a century of
unprecedented peace and prosperity. Almost two generations have not been
involved in a war nor have they experienced the misery it causes. The absence
of war is in itself an amazing and precious achievement. Yet, an even greater
achievement is, what might be called, a new
culture of conflict management: Of course there are still conflicts and
plenty of conflicting interests, but we follow accepted procedures that lead to
negotiated solutions.

We can be certain that all conflicts are resolved
peacefully, that is without recourse to military force and to the menace of
military force. Military force has simply ceased to be part of the tactical and
strategic games that are played within the European Union (EU). In this sense
we can say that the EU has become a peace
community: It is characterised not only by the absence of war, but by the
absence of the possibility of war among its members.[1]
Small wonder that the neighbouring countries of the EU have, apart from the economic
benefits they expect, such a strong interest in joining the club.

If you ask people in the EU, a vast majority will
agree that a war among the member states has ceased to be a possibility. If you
ask them how this was achieved, most of them will cite European integration as
being the most important factor. Even if you ask those who are highly critical
of the ways and means of European integration, most of them would probably
agree that the danger of an intra-EU war has practically vanished – and still
many of them might give credit to the European integration process for it.

Yet Europe has not only stopped to cause havoc
within itself, but also to other countries. After centuries of conquest and
subjugation of the world, Europe seems to have lost its imperialist drives.
With very few exceptions the European colonies were relinquished. Neither the
European Community nor its member countries initiated any military conflicts
outside Europe. Of course some countries gave military support to the US during
the Vietnam War, yet the price they paid in terms of the legitimacy of their
political regimes was a high one.

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From the perspective of past European behaviour
this is quite astonishing, because the havoc caused inside and outside Europe
increased with the size of its centrally organised states and with the
development of military technology. For both reasons one could have expected an
aggressive and destructive Europe on an unprecedented scale. That it was not
the case can be explained by the Cold War and the difficulties that the EC
member governments had in agreeing to common foreign policies. As the Cold War
came to an end and as the EU is trying to establish a unitary policy framework
for a Common Foreign and Security Policy (CFSP) there are some fears that
Europe might return to its former behaviour and impose its will on others by
military intervention and threats.

If the process of European integration can be
credited with converting the belligerent Europe of the past into a
non-aggressive and stable peace community, then many of the institutional,
democratic and economic deficiencies of the EU necessarily appear in a much
milder light. On the other hand, it would be very worth while to find out
whether other regions in the world could learn any lessons from this process of
integration.

"To learn from history" is an old and
controversial issue. Historic circumstances are never interpreted in the same
way. If one wants to draw any lessons from them, one has to abstract from the
concrete events as such or to generalise. Depending on one’s preferences and
cognitive biases, which can never be entirely subdued or avoided, one mentally
derives these abstractions and generalisations. There is always the danger of
teleological constructions: Because Europe after half a decade of integration
has become a peace community (itself a mental construction), one looks for all
the elements in history which contributed to this end, that is, reinterpreting
them in the light of the final outcome – and excluding or overlooking many
other elements which in their time were of much greater importance than is
admitted within such a perspective.

It is, for instance, commonly assumed that the
basis of European integration was economic integration (as will be shown a
largely exaggerated and even false claim). As European integration was a
success in pacifying formerly belligerent nations, it is then argued that other
regions should integrate economically too.

Such inferences about European integration are not
warranted and even false: European integration was from the very beginning an
essentially political integration. Economic integration was at times
instrumentalised to that end, but its overall contribution to the pacification
of the European continent was and remains limited.

In order to avoid easy
generalisations and possibly unfounded lessons derived from them, we will look
first with some detail at the historic events and constellations that
surrounded the initial efforts of European integration during the early
post-World-War-II years and the 1950s –and try to draw some lessons from this
experience. Then we will change the focus and ask what benefits can be expected
from integration. In the final section, at a primarily conceptual level,
different routes to integration will be briefly discussed.

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1. European integration

Why it happened and how it happened

The First Europe: The Cold War, the German Problem and Supra-nationalism

The most central historical condition that set the
stage for all the efforts to integrate Western Europe militarily,
institutionally and politically was of course the Cold War. The anti-Hitler
coalition of the USA and the USSR fell apart soon after the War was over. The
ideologies and the economic and strategic interests of the two superpowers
proved to be too conflicting.[2] The economic and political collapse in western Europe could have
made it easy prey for Stalin.[3] The situation in 1946-47 seemed so tense that Washington felt that
"the development of a strong European economy was the most urgent
priority" and the Marshall Plan, "a massive design for European
recovery, was launched accordingly, in June 1947. ... fortunately for them (the
Europeans, WK), the original American plan for a post-war world economy of free
trade, free convertibility and free markets, dominated by the US proved
unrealistic".[4],[5]

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This economic and military reconfiguration of
Western Europe as a part of the anti-Soviet alliance required some sort of a
union of those countries.[6] But it also had realistically to rest on German economic strength
and on the re-armament of Germany within Nato. As a result "from Marshall
aid onwards, the United States began to see the economic recovery of Germany
and later its military contribution to Western defence as vital to the European,
and by extension, world balance."[7]

Such a policy had not only to reckon with the
opposition of the Soviet Union but also of both Britain and France. The British
still saw themselves as a world power, while the French saw themselves as the
prime victims of German aggression and dreamed of a strong France and a weak
and partitioned Germany. With them, as well as with most other Europeans, the
idea of a rearmed and economically strong Germany naturally aroused feelings of
fear and even horror. How could it be guaranteed that German economic and
military prowess would not in the future become a menace again for France and
the other European countries? Such fears were not calmed when in Germany hopes
to reverse the division of the country and to regain territories lost to
Poland, the Soviet Union and Czechoslovakia were repeatedly voiced.[8]

The perceived strategic needs of the Cold War and
the "German problem" became a major American dilemma. How could it be
solved? Basically three options existed: a. imposition
of a solution through American hegemonic power; b. alliances against Germany; c.    reconciliation
and co-operation among the Western European countries.

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The Limits of Hegemonic Power

The United States was of course the
hegemonic power in Western Europe. However the exercise of this power involved
serious limits. If it was not handled with great care, it could easily lead to
the escalation of conflicts among the European countries and therefore weaken
the alliance. Besides the long-term consequences of American involvement and
its duration were difficult to predict.[9] The political, military and economic dependency on the US and the
imposition of American policy aims by sheer power were bound to breed
resentment against the US hegemon.[10] What about the possibility of a unified and neutral Germany – that
eventually might remerge as a continental power?[11] Or what about a German-Soviet alignment – which even the US policy
makers considered to be a serious possibility up to the early 1950s.[12]

Naturally, France's sense of vulnerability was
shared by other countries in Europe, especially the smaller ones. As a result
France wanted "guarantees to insure German demilitarization" and
"extensive powers to control the production and distribution of Ruhr coal,
coke, and steel in order to promote its economic self-interest and insure its
security."[13] Precisely these guarantees the US hegemon would not or could not
offer without endangering its own objectives.[14]

Clearly, European complexities and animosities
could not be easily domesticated by hegemonic power, even under Cold War
conditions.

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Alliances Against Germany: Counterproductive

European alliances against Germany were also
tried. The first one was established by the Treaty of Dunkirk.[15] It served as a model for the Brussels Treaty, which was to become
in 1954 the Western European Union (WEU). The five signatories (France, GB,
Benelux) "pledged themselves to mutual armed assistance against the
Soviet Union and Germany."[16] On the one hand US officials were delighted by Bevin's – the
British foreign secretary – initiative to organise Western Europe into a viable
block.[17] Yet, on the other hand, it was quite clear that such a treaty could
not be in the American strategic interest. As George Kennan put it in a letter
to George Marshall: "The general adoption of a mutual assistance pact
based squarely on defense against Germany is a poor way to prepare the ground
for the eventual entry of the Germans into the concept."[18] Both thought that it was far more important to design a security
system that would co-opt German power against the Soviet Union, instead of one
that ostracised Germany and made a rapprochement
with the Soviet Union even more likely.

Jean Monnet: Supra-national Integration of Equal
Partners

The third approach to the German problem, that of
reconciliation and co-operation among the western European countries, had been
proposed early on by Churchill in his famous speech at the University of
Zürich. A peaceful Europe could not be based on feelings of hate and vengeance.
Instead it required trust among the European peoples and a sort of United
States of Europe. As a first step, a partnership between Germany and France
ought to be formed.[19] The reconciliation of these two countries was a necessary condition
for a united and internally peaceful Western Europe. But how could both be
achieved?

This approach was tried with varying success in
various cases, among them the Organisation for European Economic Co-operation
(OEEC), the Council of Europe, the European Coal and Steel Community (ECSC),
the European Defence Community and its political twin the European Political
Community, Euratom, the European Economic Community (EEC) and the

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European Community. The spiritus rector behind
the creation of these institutions was Jean Monnet, 'Mr Europe', as he came to
be called in the 1950s.[20]

The first case was that of the OEEC, that is the Organisation
for European Economic Co-operation.[21] Its main task was to distribute the funds of the Marshall Plan. The
Americans insisted that the West Europeans should agree among themselves on the
amount of their collective request for aid and present a long-term plan to the
US Congress. This raised for the first time the question of integration versus
sovereignty. France assumed the initiative. Jean Monnet, who enjoyed ample
confidence among the American leadership and officials[22], heavily influenced the French proposal for the OEEC. It contained
the "functionalist"
institutions typical of Monnet's projects: a small and independent
executive committee with real decision-making power composed of distinguished
Europeans with no official governmental connections; an executive body headed
by a Director General; and an assembly of government representatives deciding,
in this case, under the unanimity rule. The Americans wanted to go further
limiting national vetoes in the assembly.

Yet, most of the European countries, led by
Britain, wanted neither planning nor limits on sovereignty nor middlemen
meddling in their relations with the United States. The OEEC that emerged was
predictably inter-governmental. And because of its inter-governmental character
Monnet lost all interest in it: In his thinking it was not an institution at
the service of European integration. "The
co-operation among nations, as important as it may be, does not solve anything."[23] National sovereignties remained unaffected, decisions which one
did not like could be ignored, discipline was too lax, while the common
interest was too imprecise.[24] The failure to build a strong system led to unrestrained
competition for as large a part of the share as possible.[25] For him strong system was one which sought the fusion of the interests of the European peoples and not simply the racking up of some balance of
these interests.[26]

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A second, somewhat more successful case was the
Schuman Plan. Jean Monnet was its architect. It led to the establishment of
the European Coal and Steel Community (ECSC).

1.  The strategic situation at the time was the
following: The US had decided that German coal, steel and its industrial
capacity were needed in the defences of Western Europe. The three Western
occupational powers were united and the Federal Republic was formed. Germany
was clearly on the way to become a sovereign nation again. French policy toward
Germany was in a shambles and the anxieties were correspondingly large. Even
though the US did not talk openly yet of German rearmament, the issue was on
everybody's mind. Acheson had asked Schuman, the French foreign minister, to
propose a new German policy for the three allies (for the Foreign Minister's
meeting in London in May 1950).

Another big problem was the Saar. France
had annexed it to shift the balance of power in coal and steel in its favour.
To the German government the Saar was German. If the French succeeded, the case
for reunification with East Germany would be undermined. Because of the Saar
the first official visit of Schuman to Bonn in January 1950 "was a
disaster". "The reciprocating engine of hostility could spring to
life again any time."[27]

2.  Against this background it was necessary to
develop a strategy based on sound concepts. Schuman had no idea what to propose
to Acheson and Bevin in London, although he had pondered deeply and consulted
many people."[28] How to deal with the contradictory need, on the one hand, to integrate
Germany as an equal partner within the logic of the Cold War and, on the other
hand, to control the resurgent heavy industry of the Ruhr, the potential base
for a new German military might? The Ruhr Authority, which had been created for
the second purpose, was humiliating for Germany and therefore an unstable
arrangement. Germany could be expected to get rid of it sooner or later. The
Saar problem was even more delicate.

Monnet had pondered these problems for
about a decade.[29] The discrimination of Germany had to end.[30] "Peace can only be based
on equality."

[31]

Under this assumption he proposed to place the coal and steel
industries of France and Germany under a supra-national autho

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rity. The rule of
law of the common authority would reign. France and Germany would limit
sovereignty in favour of that authority.

[32]

Other countries could join if they so desired. Coal and steel would
stop being German and French coal and steel, there would be only European coal
and steel, and both would be enmeshed like cogwheels ('engrenage' was the vogue word for this process, much favoured by
Monnet). One could expect that the High Authority, as it was to be called,
would not tolerate unilateral rearmament efforts of Germany. If the French and
German coal and metallurgical industries were fully integrated, Germany would
not be able to wage a war against France or other countries.[33] A French take-over of the Saar's economic resources would stop
making sense under such an arrangement. A harmonious settlement would become
possible (as it did).

3.  The setting out of sound concepts and
principles in the Schuman Plan, which were greeted with enthusiasm by Adenauer[34], was an important political first step.[35] As a next step the institutional framework and the tasks to be
assigned to it had to be laid down. The tasks had to be more or less
'technical', such as the promotion of a common market in coal and steel, the
encouragement of competition, joint modernisation and export programs, the
standardisation of freight rates and the harmonisation of working and living
conditions etc.

In contrast the institutions were eminently
political. The High Authority was
given extensive powers including the right to levy taxes, to influence
investment decisions, and also to impose minimum prices and production quotas
in times of 'crisis'. For Monnet, who became its first president, the High
Authority was endowed with real authority and he wanted to exercise it without
reference to national governments. This was of course not easy, and relations
with the inter-governmental Council of
Ministers were complex and not always smooth. Relations with the Consultative Committee, which had only
advisory capacity and was dominated by industry, were awkward too. In
contrast, the High Authority and the Common
Assembly became natural allies, as the latter viewed itself as a
supra-national European institution. Finally there was the Court of Justice whose decisions were generally respected.[36] Clearly the ECSC was an institution with strong supra-national
traits.[37],[38]

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4.  The tasks and the institutional framework,
that is 'function' and 'form' in functionalist theories, were only loosely
related.[39] That was no accident, since the integration of the two sectors was
only partially an end in itself.[40] Unsurprisingly, in strictly economic terms the ECSC could only be a
partial success too, and it was a partial success only during the very early
years.[41] It soon outlived its economic purposes.[42] The main purposes of the ECSC was eminently political. Economic integration was instrumentalised
for political reasons – and not the other way around.

5.  In terms of the underlying political purposes
the ECSC was rather successful, especially during the initial years. Firstly,
the political emphasis on European integration

made compromises possible that would not otherwise have been reached.
Secondly, the new system for

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ced the
member states into constant negotiations with one another. Therefore,
interestingly, economic union in fact
increased rather than reduced the need for inter-governmental negotiation and
agreement![43] Thirdly, the rule of law was firmly established. Rulings of the
Court were never challenged or ignored. Fourthly, the problem of the Saar fell
into place almost without effort because steel balances had stopped to be a
yardstick of relations between France and Germany.

"(O)n balance, the new Community represented a major shift in relations between the member
states towards a confederal norm. It gradually lowered tension all round,
raised trust and in this sense laid the foundation of a new Europe."[44] In this sense the Schuman Plan was more than an answer to an
impasse of French foreign policy and more than a deal between France and
Germany. On the other hand, even though it was the only truly supra-national
institution, it was never as supra-national as it was intended to be or liked
to present itself. With its own loss of effectiveness in the economic field, it
was overshadowed more and more by the EEC, which had much less executive power[45] and was much more subject to agreements between governments,
particularly after de Gaulle's return to power. Finally, in 1967, the
institutions of the ECSC were integrated with those of the EEC.

The Decline of Supra-nationalism

Another, less successful case of supra-national
integration was the European Defence Community (EDC). The pattern of
the creation of the ECSC was repeated. A perceived threat to French security -
after the Korean war had broken out, the US considered it indispensable to
rearm Germany - led to a French proposal of a supra-national European army along
the lines of the Schuman Plan. Again Monnet worked in the background, although
less than with the Schuman Plan. Again Britain stayed apart. The Pleven Plan,
as it was called, proposed a European Army under the Atlantic umbrella run by a
European Minister of Defence and a Council of Ministers, with a joint
commander, common budget and common arms procurement. Yet, this Plan was
clearly discriminatory against Germany: for Germany it was to be the army, for all the others an army; a German Defence Minister, a
German General Staff and German full divisions were not foreseen. After
difficult negotiations, in the course of which some of the more glaring
discriminations were diluted, the EDC treaty was signed in May 1952.[46]

Once it was signed, the European Political
Community came on the agenda.[47]
A constitutional commission was formed in order to draft a
constitution for a European Union. The blue

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print contained a directly elected
European Parliament, a Senate elected by parliaments of member states, an
Executive Council of five members with a President to be elected by the Senate,
who was to be responsible to the two chambers; a Council of Ministers from
member states to serve as a liaison between the European executive and member
governments; and a European Court of Justice. The EPC was to be the roof for
the ECSC and the EDC. The three would have formed the core[48] of a European state with a federal constitution. It would have been
the triumph of supra-national aspirations.

Yet these aspirations received a deadly blow when
the French parliament in August 1954 did not ratify the EDC.[49] De Gaulle's influence had made itself felt.[50] The underlying reason was national sovereignty.[51] For de Gaulle the proposal to integrate the French and German armed
forces was "plain idiocy".[52] The British government, characteristically, was all in favour of
European integration and a European army, yet only as long as it did not
include the British.[53] US officials, although not publicly, had "found the Pleven
Plan totally unacceptable", because it made German rearmament contingent
on the creation of a new set of European institutions. This made NATO totally
inoperable, precluded US participation in a European defence force and delayed
German rearmament for the indefinite future.[54]

Unsurprisingly, the US had stayed on their track
of strengthening NATO. Once the EDC had failed, France found that it "had
to swallow the very German national army inside NATO, which the EDC had been
intended to avoid."[55] Germany, as a full Atlantic ally, was placed under a NATO
integrated command headed by an American and it was placed under similar
restrictions as the ones foreseen in the Pleven Plan.[56] This 'double containment'[57]
strategy was

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bound to mollify French (and American) anxieties. Even
though, it "was a curious paradox, that to create a credible NATO to
defend Europe against the Russians to the East, both Britain and the US had to
commit their forces to the north German plain to reassure the French that a
rearmed Germany would not turn its guns once more against its neighbour to the
West."[58]

Whatever the small print, after the failure of the
EDC military defence and security were again under the firm control of the
American hegemon. Bipolarity and the position of the hegemon became even more
firmly established when the Warsaw Pact was created shortly after the accession
of Germany to NATO.

This left the European integration in an
uncomfortable situation, because this "first Europe" of an already
declining ECSC and a failed EDC

"was in many ways a security Europe, not an
economic one. ... The shared characteristic both of the ECSC and the European
Army was that they were primarily addressed to German power. Each had economic
aspects, but neither was economic in essence. ... the EDC proved that it was
dangerous, even impossible, to pursue further European union by direct security
or political means."[59]

Monnet had come precisely to this conclusion: the
EDC crisis had proved that the sources of power lay in the nations, channelled
through the governments, not the Community in Luxembourg.[60]

The demise of 'security Europe' not only meant
that the US and NATO assumed full leadership in matters of military security,
but also that supra-national concepts became less attractive. In fact, the
watering down of the supra-national concepts of the Schuman Plan had already
begun during the negotiation of the EDC treaty and been accentuated during the
EPC talks.[61] The departure of Jean Monnet from the presidency of the High
Authority - he was the High Authority
- in 1955 further undermined its supra-national character.[62] Besides, the political climate in France, and, partly as a
reaction, elsewhere changed. Monnet did not escape unscathed from the wreck of
the EDC and became for the first time a publicly controversial figure. The idea
of a Europe in some sense above the nations was no longer stated in the open.
"The governments rejected anything or anyone that threatened, like
Monnet, openly to compete with their monopoly."[63] National sovereignty had won a decisive battle against
supra-nationality.

The future masters of Europe were the governments
of the member states. Nevertheless the supra-national institutions created
under the leadership of Jean Monnet - the High Authority, the Consultative
Committee, the Common Assembly and the Court of Justice - did not disap

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pear.
They became under new names the core institutions of the European Economic
Community (EEC) and its successors, that is the European Community and the
European Union.

NATO, the Anglo-Saxon ‘special relationship’ and the
German-French Axis

With the demise of 'security Europe' and the
reaffirmation of NATO American leadership in matters of military security was
clearly established. NATO became a necessary condition for stable and peaceful
relations among the European nations. Yet it could not be a sufficient one
because the demise of supra-nationality left the doors open again for rivalry
and conflict among the European nation-states; doors which could not be closed
easily by the American hegemon. Instead, unwillingly or not, the United States
contributed to the conflicts which came to afflict the alliance and the
relations between France and Great Britain in particular.

In the first place the United States continued to
cultivate a special relationship with Great Britain in nuclear and strategic
matters.[64] This intensified de Gaulle's suspicion of the Anglo-Saxons. As a
result, "(t)he closer Britain cleaved to America, the more de Gaulle
leaned to Adenauer."[65]

Second, America's behaviour towards its NATO
partner France was at times humiliating and hard to bear. General Norstad
refused to inform President de Gaulle, for instance, about the deployment of
nuclear weapons in France! This difficult relationship culminated in France's
withdrawal from the North Atlantic Alliance and the request for all troops to
leave French soil, in 1966.[66]

Third, the US humiliated both France and Great
Britain at Suez, a plot they had prepared secretly with Israel, yet without
American knowledge. In the aftermath of this crisis Western European leaders
asked themselves "whether America would stick by them through thick and
thin - particularly in the days before an American election" one of which
was due then.[67]

Fourth, Kennan, Dulles and others had suggested,
even in public, to unify, demilitarise and neutralise Germany. This American
fashion for theories of German neutralisation was a stunning shock, not only
for Adenauer, and, unsurprisingly, inclined him towards France.[68]

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In other words: In the back of the NATO alliance
an Anglo-Saxon special relationship and a German-French axis were nurtured.
Franco-German unity was to become the core of further European integration and
of the domestication of the 'German problem', which, in the perception
especially of France, had become more acute.[69] Britain was consistently excluded[70], even though it had always had affinities with the idea of
liberalising trade. Finally, the evolving strategic position of Europe also
contained the seeds of European opposition against the American hegemon, i.e.
of the notion of a European world power, which was to get stronger with "a
growing gap between the overwhelming military, and therefore political
domination of the alliance by Washington, and the USA's gradually weakening
economic predominance.[71]

The Second Europe: The
Common Market

This was the background against which the second
'economic' Europe evolved. Its central pieces were the European Economic
Community (EEC) and Euratom. Again Monnet worked busily, yet even
more hidden, behind the scenes as with the earlier projects of European integration.
Unlike other leaders, Adenauer for example felt embittered and depressed,
Monnet could not be disheartened by the failure of EDC/EPC.[72]

Monnet, of course, would not abandon his
overriding aim of supra-national institution building. His intentions leaned
more and more towards a new Community in a new sector, civil nuclear power.
Such a proposal had several advantages: First, nuclear power was believed to be
the basis of a new industrial revolution, yet its development required amounts
of investment beyond the means even of the larger western European nations.
Second, just like the integration of coal and steel had provided the material
for the great symbolic burial of old feuds in Europe, nuclear power could
provide the basis for Europe's great symbolic entry into the modern world.
Third, the French inferiority complex which had played havoc with the EDC ought
to be irrelevant, because France's nuclear effort was larger than those of all
its Community partners put together. Fourth, joint regulation could also ensure
that Germany's nuclear development would remain strictly civilian.[73] Finally, no limits would be put by the new organisation

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on the efforts of French to develop nuclear weapons. Hence, it seemed that the new
Community would be based on a set of sound economic, symbolic, tactical and
strategic reasons. In terms of the institutions to be formed the approach was
similar to the Schuman Plan.

Eventually Spaak proposed Monnet's programme for
the new Community for civil nuclear power (and for an extension of the ECSC to
all of energy and transport, including airlines). To Monnet's great surprise
the German government was not interested in the new Community, while Erhard,
already credited with the German Wirtschaftswunder,
was openly opposed to it. A meeting with German officials established the basic
fact of the coming negotiations, namely that Germany would not swallow Euratom
without a general common market.

Monnet in fact had pondered about the creation of
a common market and came to the conclusion that time was not ripe for it.[74] He had a substantial reason that is still put forward nowadays: In
his opinion it was not possible to dissociate a common market from federal
social, monetary and conjuncture policies. If a common market was formed
without this common framework, it "would
be so near free trade, lacking institutions as to undermine his political
purposes." (emphasis added).

In fact, right after the failure of the EDC
pressure for a Free Trade Area in the OEEC was put forward by Britain, the
Benelux countries and Scandinavia. Erhard too favoured such a solution. Monnet
and Spaak however ignored these pressures. Instead, they agreed that the
priority was to integrate Germany and that only supra-national Communities
could achieve this. A Free Trade Area with Britain clearly would have been an
inter-governmental affair (or even less), while France would have been a
hyper-reluctant member of such a scheme. Hence it would have weakened
integration.[75] Adenauer largely sided with Monnet and Spaak.

Because of the prevailing contradictory attitudes
- Adenauer against Erhard - Bonn offered an "amazing spectacle" in
1955-56. But in France the situation was even more complicated: to champion a
common market in public would have been political suicide; a Free Trade Area
was unthinkable; supra-nationality was too controversial to be discussed; and
the Atomic Energy Commissariat feared that Euratom could block France's road
to nuclear weapons. On top of that, Monnet had become practically a persona non grata in Paris. Only the Benelux
countries presented a more coherent picture. They tried to force the issue by
presenting a memorandum in which they combined the 'sectoral' with the
'general', i.e. the common market approach.

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Expectations were extremely low when the foreign
ministers' conference began in Messina in June 1955. Monnet did not attend
because of a French veto[76], neither did Adenauer, for fear of failure. Nevertheless, after
cumbersome negotiations[77] a compromise was struck that was to lead directly to the Rome
treaties of 1957: Germany agreed to something less than free trade, i.e. a
common market with an institutional core shaped along the lines of the ECSC;
Belgium swallowed certain supra-national traits and sacrificed its preferences
for British-style inter-governmentalism; the nuclear-power community gave
France a chance to stay in the process, while it was stripped of most aspects
that could have interfered with French sovereignty in nuclear matters. Monnet,
the personification of the supra-national principle was partially eclipsed. The
institutional core of his approach was confirmed at Messina, although it was to
be much more inter-governmental in character.

At Messina the Community of the six was
reasserted. Other groupings might have seemed, in nuclear power especially, to
make more sense. Yet the main purpose was not to create 'functionalist'
institutions which could solve in a pragmatic and efficient manner specific
problems, but to navigate the endangered European ship through hazardous
straights and into more promising waters. In fact, Messina became a classic
case of "European packaging":
Propositions, which are not viable, because there are contradicting national
positions attached to them, can become viable once two or more propositions are
negotiated simultaneously.[78] A larger and more diverse negotiable mass makes it easier to
compromise in a process of give and take. Such packages from now on became a
common feature of the processes of European integration. Yet packaging, even
though it helped to further integration, also reaffirmed the role of the
nation-state as the interests that entered these packages were always
"national" (whatever that meant in reality) interests.

Lessons to be learnt?

In order not to step into the trap of deriving
lessons from superficial generalisation, the process of integration of Western
Europe until the foundation of the EEC has been looked at in detail. Looking
back, what were the most salient features of the period studied?

1.  European integration began
under very specific and rather complex geo-strategical, political and economic
conditions after World War II. The Cold War created a favourable setting for
integration. It may have been a necessary condition, but it was by no means a
sufficient one.

2.  The "German problem" was especially
delicate: The economic and military potential of Germany had to be developed
again, yet this potential also had to be restrained.

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3.  Integration was favoured by the US hegemon.
Yet the hegemon was not always clear and coherent, and could do rather little
when the Europeans either did not agree with it or did not agree among
themselves.

4.  After two world wars, everybody dreamt of a
peaceful and prosperous Europe. There was probably only one person – Jean
Monnet – who had a clear vision (yet no grand design) of the future of Europe
and, more importantly, a recipe of how to go about it. Furthermore, he was
fortunate to have gained the trust of the political establishment in the US,
Britain and France during the war years.

5.  A close look at the events reveals that there
was much muddling-through. Outcomes depended as much on contingencies as on
open or hidden political games. There were advances and setbacks. The process
itself was path dependent. Outcomes therefore could not be predicted. In the
end it was often just luck, when in spite of all difficulties some compromise
was struck that took integration one step further ahead (at Messina for
instance).

6.  At the time of the signing of the Treaties of
Rome (1957) the signatory countries (not to speak of Western Europe as a whole)
still had a long way to go to become a peace community – it was not even clear
that it could become one.

It is obvious then that very specific historical
conditions and contingencies reigned at that time. No grand design and no
grand, rational strategy towards integration existed, nor would it probably
have had a chance to succeed. Jean Monnet, certainly a gift from heaven for
European integration, did not have a grand design but a method that well fit
the path dependency of integration – and he had the right connections. Without
him European integration would not be where it is today, but even with him it
could have taken a different route. Things cannot be otherwise – unless one
believes that history is some sort of a teleological construction.

Hence, what could be learnt then from the early
years of integration in Europe? Historical conditions across time and place do
not tend to appear twice. Hence there is little to be learned from historic
experience as such. What could be of interest however is, apart from his and
other peoples’ perseverance, Monnet’s method of integration. Using his own
words, it can be summarised as follows:

All countries
must be equal partners: "Peace can
only be based on equality."

1.  "The fundamental principle is the delegation of sovereignty in a limited, but
decisive area. ... The co-operation among nations, as important as it may
be, does not solve anything. What ought to be sought is a fusion of the
interests ... and not simply the maintenance of the balance of these
interests."[79]

"This proposition has an essential
political message: to drive a wedge into the bastions of national sovereignty
that is small enough to be acceptable and deep enough to move the States
towards the necessary unity for peace."[80]

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2.  Creation of institutions: A small and
independent executive committee with
real decision-making power composed of distinguished personalities with no
official governmental connections; an executive
body headed by a Director General; and an assembly of government representatives.

3.  Such an institutional set, a. creates
transparency among member countries, b. is based on the principle of 'everybody
controls everybody', c. forces the member states into constant negotiations
with one another, and d. allows for compromises, which could otherwise not be
reached. Such institutions fulfil the criteria of a peace community.[81]

Under Monnet’s leadership there was a strong
emphasis on supra-nationalism. It had to be scaled down. The member states
regained some sovereignty. The balance between supra-nationalism and
inter-governmentalism has been shifting since then in one or the other
direction.

Nowadays we have for the whole of the EU only one
set of Monnet-type institutions (European Commission, Council of Ministers,
European Parliament, European Court of Justice, ...) and not several sets as he
had had in mind (ECSC, EDC, Euratom). Over the years the need for negotiation
and agreement became ever larger. The Council of Ministers, the most powerful
organ of the EU, has become a very complex "consensus seeking
machine"[82]. The European Commission and the European Parliament are closely
integrated into this machine. Initiatives, consultations and decisions involve
frequent and time-consuming to-ing and fro-ing among the Commission, the
Parliament and its Committees, the Council and its working groups, the Coreper
(Permanent Representatives Committee), the conciliation committees of the
Parliament and the Council. Outside the EU there are a number of other
institutions too, where the respective member governments are in permanent
contact and dialogue (NATO, OSCE, OECD, ...), and there are many bilateral fora
as well. Thus, every week hundreds of institutionalised dialogues are taking
place in Brussels and elsewhere in Europe.

The secret
of the success, in terms of the formation of a peace community, of this sort of
institutionalised, permanent, multi-level dialogue is that civilised forms of
social intercourse have become deeply ingrained. Over many years government
officials have been spending a lot of time in meetings, committees,
negotiations, luncheons etc. with officials from other European countries and
of European institutions. This intensive social intercourse together with the
institutional and political need to permanently negotiate has given rise to a
new culture of conflict management in Europe, spoken of at the beginning. Here
is the essence of our peace community.

The ever increasing need for negotiations has been
due to several factors:

1.  The
Treaties of the EC and the EU are vague and often lend themselves to extensive
interpretations.

2.  Even though
the EU possesses strong and exclusive competencies only in a few policy

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areas,
almost any political and governmental issue has a European dimension and
therefore needs to be discussed at the European level.

3.  ‘National
interests’ are usually at variance.

4.  Negotiations
lead to compromises. Compromises always leave some degree of dissatisfaction
and therefore bear the seed of new negotiations. In case of packaging,
dissatisfaction is particularly likely to remain high: several issues, which do
not lend themselves to a solution separately, are linked and an overall
compromise is found in a complex process of give and take.

5.  Stepwise
solutions and path dependency easily lead to incoherences with respect to solutions
found in the past and in other policy fields.

6.       Circumstances
change and make past compromises inadequate or obsolete.

Naturally, one can have
doubts as to the efficiency and the democratic legitimacy of such all-pervading
institutionalised dialogues. In a sense they are the perfect means to produce
second-best and third-best solutions. On the other hand this kind of give and
take occurs at the national and sub-national level too. Our political systems
have long been transformed into systems where most outcomes are the result of complex
negotiations which involve, just like in Brussels, not only government
institutions, but all sorts of organised interests as well.[83] That is of course no
excuse, because interest-group politics and dealings of governments’ elites
behind closed doors[84],[85] do not accord well with
democratic principles. Here, not only the EU, but also its member states suffer
from a democratic deficit.

There
could well be a dilemma here. Immanuel Kant argued long ago that democracies do
not fight wars against each other.[86] The reason he gave is that
the citizenry abhors the costs and miseries of war.[87] The ‘functionalist’
integration of government elites makes war structurally impossible. Therefore
it is an even better way to secure peace. Yet, the democratic controls of these
government elites are weak. If they were stronger, the mass media’s peculiar
perception of ‘national interests’, for example, would be propelled to the
negotiating tables. Tendencies of a re-nationalisation of European politics
(which are becoming stronger in any case) would be reinforced and the
integrationist force of institutionalised dialogues would be weakened. A proper
relationship between Monnet’s engrenage
– the enmeshing of govern

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ments in Community institutions and the transfer of
national sovereignty to them – and democracy can not be established easily.

This
difficulty is illustrated by Ralf Dahrendorf's lack of faith in Monnet:
Political decisions ought not to be taken through functionalist tricks, but in
principle politically, that is by elected governments and parliaments.[88] He would start, as he has
repeatedly expressed, with a European Constitution, that clearly delineates
the competencies of a European government and of national governments and
defines citizens’ rights etc. It would be discussed extensively by the European
publics and parliaments and thus would gain legitimacy and acceptance. It is
clear, unfortunately, that this route would not have led anywhere in the early
years of European integration. This, of course, does not mean that it could
not be implemented elsewhere. One wonders however, under which historical
circumstances the desire for such a grand scheme of integration could be
strong enough in the potential member countries of a union to initiate such a
dialogue and to take it to a happy conclusion. Furthermore, one wonders to what
extent the dangers of an institutionalised and hermetic dialogue could really
be avoided in such an undertaking.

2. Benefits of Integration

Economic growth and social justice are the two
most important positive sources of legitimacy[89] – in contrast to the negative sources of nationalism and of
external or internal enemies. There is no doubt that during the "Golden
Age" (1950-73) high rates of economic growth, reductions in income
inequalities and the expansion of social security systems all were important
sources of legitimacy for the governments of the EEC countries. During the
Golden Age it was easy to find satisfaction in the idea that those economic
benefits had something to do with European integration. Yet, when growth
slowed, and unemployment and inflation accelerated after 1973 this sort of
satisfaction, unfortunately, has become much more difficult to achieve. The
European publics became less optimistic and more critical. Thus the costs to
consumers and taxpayers of the Common Agricultural Policy has become a
recurring topic in public debate. Equally, the deregulative measures carried
out in the course of Delors’ Internal-Market-1992
project were widely perceived as undercutting social and environmental
standards and even as a contributive factor to unemployment. Therefore, the
hitherto perceived basis of legitimacy of the EC – economic and social
benefits for all – has been suffering.[90]

The political record of the EEC/EC in terms of
creating a peace community is amazing. Its economic record is therefore open to
some doubt at least. What is the relationship between political and economic
integration? Does political integration increase economic welfare in the

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integrating countries? Or to be more precise: What economic or other benefits
can one expect from regional integration? Can such benefits be observed in the
case of European integration?

Political Objectives and Market Efficiency

The economic benefits of integration have, especially
after the creation of the EEC, whose centrepiece is the Common Market, always
played an important role in public discourse and in the official presentations
of the EEC/EC and their member governments.

It is worthwhile to remember however that, in
fact, the real purpose of the ECSC, Euratom and the integration of the Common
Market was not the improvement of economic conditions, but always political
integration. After the failure of EDC and EPC it became clear that direct
political integration was not possible. As a consequence, the development of
common economic institutions and economic integration were deemed to be easier
as intermediate steps toward political integration.[91]

Therefore, even if the EEC economic policies did
not produce the expected economic benefits, they could still make sense, if
they led in the end to higher levels of integration and co-operation among the
member countries. In other words, even if higher levels of integration and
co-operation led to losses in economic performance and incomes, these losses
could simply be the price that had to be paid for the creation of a more
peaceful Europe. To put it more bluntly: Why should one expect at all that
economic-political integration leads to peace and economic prosperity?
Should we not undertake measures intended to improve peaceful co-operation
because they are unlikely to produce economic benefits?

·
The formation of the ECSC is a case in
point. Soon after it was established its steel and coal industries were turned
into protective cartels.[92] They received ever more subsidies – to the detriment of consumers
and taxpayers.[93] Nevertheless, without the ECSC the relations between France and
Germany, and the EU as such, would not be what they are today.

·
The same can be said of the infamous
Common Agricultural Policy (CAP): Its blunders in terms of the principles of
economic liberalism are well known. Yet, in terms of political integration, it
was a central part of the development of the EEC and a cornerstone of European
integration. In spite of its hideous costs (it still absorbs half of the EC
budget and puts a heavy burden on taxpayers and consumers[94]), it continues to be an integrationist success: A

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European cartel
which has served the interests of its members more or less well (especially the
larger farmers and agro-industry), while generating a permanent need for
negotiations and reforms – precisely because of its structural defects and its
enormous costs.

·
During the "Golden Age"
(1950-73) it was popular to associate the then prevailing high growth rates and
the rising standard of living with European integration. This, of course, gave
legitimacy to European integration. In fact, the economic performance of the
EEC, even though it was quite remarkable in absolute terms, was not superior to
that of other OECD countries. During the "crisis decades" (Hobsbawm)
that followed, the relative performance of the Community declined notably.

It is safe to conclude that European integration
involved costs to taxpayers and consumers and that it did not improve the
economic performance of the member countries. To repeat, that is no argument
against integration, because the purposes of integration were political. In the
case of the ECSC and CAP, economic efficiency and political integration could
not go hand in hand. Equally, the below-average economic performance of the EU
can probably be attributed to the logic of political integration and the size
of the EC/EU.

By contrast, economic integration that aims to
improve economic efficiency can have negative effects on political
integration. CAP is a fully regulated policy area, which stabilises agricultural
markets, gives preference to EC producers (truly a "fortress Europe")
and requires EU-wide solidarity. By comparison the Internal Market 1992 project is a "gigantic operation of
deregulation", which tends to eliminate national regulatory power but does
not establish a comparable regulatory power at the EU-level.[95] This has led to, in the opinion of many observers and interest
groups, a race to the bottom for social and environmental standards, consumer
protection etc. Such claims may be exaggerated. But one wonders all the same
how deregulation should be able to make a contribution to political
integration. The main advantage of the market mechanism is precisely the
independence and autonomy it gives to economic actors. The market does not
create political or other kinds of communities.

Hence, to perceive European integration only in
terms of market efficiency and the benefits derived therefrom, is short-sighted
and even wrong. Pure and simple economic integration can undermine political
integration and its legitimacy.

Economic Benefits:
Economies of Scale?

At a council meeting on 31 October 1949 of the
Organisation for European Economic Development (OEEC), the body which
implemented the Marshall Plan, Paul Hoffman, the OEEC administrator, delivered
a plan for "the integration of the European economy", which circumscribed
very clearly the purposes of the Common Market. He said:

"The substance of such integration would be
the formation of a single large market within which quantitative restrictions
on the movement of goods, monetary barriers to the flow of payments,

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and eventually all tariffs are permanently swept away. The fact that we have in the
US a single market of 150 million consumers has been indispensable to the
strength and efficiency of our economy. The creation of a permanent, freely
trading area comprising 270 million consumers in Western Europe, would have a
multitude of helpful consequences. It would accelerate the development of
large-scale, low-cost production industries. It would make the effective use of
all resources easier, the stifling of healthy competition more difficult."[96]

In view of American mass production technologies
and of the trade conditions at that time, the vision of Paul Hoffman made a lot
of sense. After all, as Adam Smith had recognised, the division of labour is
limited by the size of the market. And after the war the national markets were
very small and trade protection was high. Therefore the benefits of the
division of labour and of economies of scale could not be fully taken advantage
of, and that hampered improvements in productivity and incomes. The formation
of a customs’ union – elimination of all internal obstacles to trade, yet
maintenance of common tariffs and other trade regulations – could make much
sense under these conditions. In fact, trade among the EEC-countries during
that period increased somewhat faster than production.[97]

Nevertheless, the Common Market for many years was
a far cry from being truly liberalised. Roughly 30 years (!) after the Treaties
of Rome Jacques Delors launched the program "Europe 1992" which aimed
at the "completion of the internal market". It did not have too much
effect on intra-EC trade, yet it helped to create, at least transitorily,
expectations of optimism and growth (after a prolonged period of
Euro-scepticism). Investment, especially intra-EU foreign direct investment,
increased - and made national oligopolies somewhat more European.[98] Foreign direct investment from outside the EU increased too,
mainly driven by the (largely unjustified) fear of investors not to be
admitted later into the "fortress Europe".

Yet, one wonders if the vision of Paul Hoffman has
still much relevance nowadays – because world trade is largely liberalised: In
a world of GATT and WTO where free trade prevails, the size of the market
cannot be really improved by regional integration – the biggest market simply
is the world market. With it no regional formation could possibly compete in
terms of the potentials of the division of labour and of large-scale
production.

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This is corroborated by the fact that some of the
smallest countries are among the ten most prosperous ones: Singapore, the US,
Switzerland, Hongkong, Norway, Japan, Denmark, Belgium, Austria and Canada.
Seven of the first ten have less than 10 million inhabitants. They all are
internationally open, market economies: The size of a country or of a union of
countries does not seem to be a necessary condition for prosperity.[99] Therefore we conclude that arguments about economies of scale and
customs’ unions have ceased to be relevant (if they ever were).

Better Chances for Economic
Development?

After the war Europe did not develop in an
environment of a free-market economy. As has been mentioned in the first
section (see especially footnote 4), initially the US wanted, in order to help
her own industry, to create a free-trade regime in Europe (but not in the US!).
Only under the pressures of the Cold War did the hegemon changed its plans.
Instead, a systematic effort was made to rebuilt and modernise the European
economies – and to make them, against the promises of socialism in Eastern
Europe, socially a success too. All that involved huge efforts by the European
governments to create the necessary infrastructural and institutional
conditions for a modern economy. Naturally, the European economies were allowed
to protect themselves against superior competitors from America in the areas where
they deemed that necessary and desirable. Otherwise, how could they develop?

Hence, one can say that in Western Europe
comprehensive, national development strategies were developed, which allowed
for the protection of industries against superior North American competitors,
while the EEC provided a larger market in a world that was still segmented by
high tariff barriers.

In this there could well be a lesson for other
countries and regions. In fact, such strategies have been tried, particularly
in Latin America (Andean Pact, Central American Economic Union, Mercosur,
NAFTA). Unfortunately these efforts were not as successful as in the European
case. Possibly there was too much emphasis on economic integration and free
trade, and too little on political integration and on national and regional
development strategies and institution building. However, easy generalisations
and critique should be avoided. They should be based on in-depth analyses of
these experiences.

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Comparative Economic
Performance of the EEC/EC

Let us turn now to the economic
"fundamentals" and see whether the historical evidence supports
claims of a superior economic performance of the EEC/EC.

Take first the "Golden Age" of post-war
economic growth (1950-73). During that period the performance of the EEC in
terms of growth, inflation, investment and employment (Tables 1-6; see below)
was not superior to the other OECD countries – to the contrary it was usually
inferior. As Maddison and others have shown, the Golden Age corresponded to a
secular trend, which was largely shaped by institutions, technology, human
capital formation and by the adoption of American Fordist, i.e. mass-production methods. The OECD countries were
involved in a process of catching up with the more advanced United States and
Canada, where, correspondingly, growth and capital formation advanced at a
somewhat slower pace.

The tables 1-6 clearly indicate that the
performance of the EEC countries during the Golden Age was not as brilliant as
that of the other catching-up countries of the OECD.[100]

·
During the "crisis decades"
(Hobsbawm) that followed the Golden Age, the relative performance of
the EEC/EC did not improve at all. Instead it declined notably: Its GDP growth
was consistently lower and its rate of inflation higher than in most reference
countries and country groupings (Tables 1-2).

·
The investment and employment creation
gap became notorious, while unemployment rose to record levels (Tables 3-4).
Over the whole period from 1960 to 1994 employment growth was scandalously low.
Over two decades jobs were created almost exclusively in the public sector,
very few in the private economy.[101] In
recent years job growth is somewhat higher, but still far below that in
reference countries, while unemployment reached new record levels. The
situation is particularly severe for the young and for persons above 45 as well
as for certain regions in the EU-member countries. [102]

·
Finally, EC governments accumulated
public debt at a much faster pace than most other OECD countries. As a result
the interest payments on public debt have become an ever larger burden (Tables
5-6).

Hence, judging by the empirical evidence, it is
probably safe to conclude that the integration and the economic policies of the
EEC/EC did not generate additional economic benefits of any

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significance that went beyond the ones of the Golden-Age period. It is therefore no accident that
the EEC is entirely ignored in Maddison's discussion of the causes of growth
(1991) as well as in other research on the Golden Age.[103]

On the other hand, in the struggle against the
problems of the Crisis Decades that followed, the EEC/EC hardly proved more
resourceful than the other non-integrated OECD countries. To the contrary, it
is difficult not to conclude that the EEC/EC’s performance was deplorable.

It may be disheartening to hear that the
performance of the EEC/EU has been relatively poor. In absolute terms,
especially during the Golden Age, it was of course quite good and there was a
considerable improvement in living standards in almost all parts of the
community. That the performance was relatively poor is no argument against
integration. To repeat: If the purpose of integration is political, it can be
perfectly acceptable that a price in terms of (relative) economic performance
and benefits is being paid.

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Tables on the Economic Performance of the
EEC/EC

(12 member countries; 1960-1994)

Please note: Shaded areas
indicate better performance than EEC/EC

1.  Growth of Real GDP

1960-73

1974-79

1980-87

1987-94a

1995-98a

EEC/EC

4,7

2,5

1,7

2,2

2,4

United States

4,0

2,4

2,6

2,4

3,4

Canada

4,8

2,7

2,6

1,9

2,7

Japan

9,6

3,6

3,8

3,1

1,3

Australia

5,2

2,7

2,9

2,7

4,2

Switzerland

4,4

-0,4

2,1

1,3

1,1

Austria

5,0

2,9

1,6

2,8

2,4

Finland

5,0

2,3

3,3

0,4

4,6

Norway

4,3

4,9

3,3

2,2

3,8

Sweden

4,1

1,8

1,8

0,5

2,5

Iceland

5,2

5,6

3,8

0,5

4,3

Total smaller OECDb

5,2

2,4

2,2

2,4

3,5

Total OECD

4,8

2,7

2,5

2,4

2,7

a    EU-15

b      Number of countries varies

2. Inflation (GDP)

(yearly averages in per cent)

1960-73

1974-79

1980-87

1987-94a

1995-98a

EEC/EC

4,8

9,7

7,2

4,4

2,3

United States

3,6

8,0

5,0

3,4

1,8

Canada

3,8

9,2

5,9

2,6

1,3

Japan

6,0

8,1

1,7

1,3

-0,4

Australia

4,2

8,9

8,3

3,8

1,6

Switzerland

5,4

3,7

4,0

3,4

0,6

Austria

4,6

6,0

4,5

3,3

1,7

Finland

6,8

12,6

7,8

3,7

1,8

Norway

5,5

8,2

7,7

2,8

2,4

Sweden

4,8

10,6

8,3

5,4

1,7

Iceland

14,7

38,7

41,4

10,7

3,3

Total smaller OECDc

5,0

9,4

8,4

14,9b

12,8

Total OECD

4,3

8,6

5,4

5,4

4,0

a    EU-15

b      Includes
high inflation countries Mexico (average 29.8%) and Turkey (average 70.8%)

c      Number of countries varies

[Seite der Druckausg.: 29]

3. Employment growth

(yearly averages)

1960-73

1974-79

1980-87

1987-94a

1995-98a

EEC/EC

0,25

0,1

0,1

0,17

0,7

United States

2,0

2,5

1,6

1,3

1,7

Canada

2,8

2,9

1,8

1,0

1,9

Japan

1,3

0,7

1,0

1,3

0,25

Australia

2,7

0,8

1,9

1,5

2,0

Switzerland

1,4

-0,9

0,7

1,0

0,4

Austria

-0,06

0,5

-0,1

1,2

-0,03

Finland

0,25

0,7

0,9

-2,5

2,0

Norway

0,6b

2,1

1,4

-0,6

2,5

Sweden

0,8

-1,0

-0,6

-1,4

0,33

Iceland

2,2

2,2

2,9

-0,6

2,2

Total smaller OECDc

0,9

0,6

0,7

1,2

1,8

Total OECD

1,1

1,1

0,9

0,9

1,2

a    EU-15

b    1960-68

c         Number
of countries varies

4. Standardized Unemployment Rates

(yearly averages)

1960-73

1974-79

1980-87

1987-94a

1995-98a

EEC/EC

2,5

4,8

9,7

9,7

10,5

United States

4,4

6,7

7,6

6,1

5,1

Canada

4,5

7,2

9,7

9,5

9,2

Japan

1,2

1,9

2,5

2,4

3,5

Australia

1,8

5,0

7,7

8,7

8,4

Switzerlandc

..

..

0,6

2,1

3,9e

Austriac

1,8

1,6

3,5

3,7

4,4

Finland

2,1

4,4

5,1

9,7

13,5

Norway

1,7

1,8

2,4

5,2

4,3

Sweden

1,8

1,9

2,7

4,8

9,2

Total smaller OECDcd

4,1

6,3

11,0

8,7

8,4

Total OECD

2,9

4,9

7,5

7,0

7,1

a         Germany,
France, Italy, U.K., Belgium, Ireland, Netherlands, Portugal, Spain. Value for
1994 includes Finland and Sweden

b    EU-15

c         "Commonly
used definitions" of unemployment in some cases;

d         number
of countries varies

e    1995-97

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5. Net Lending of Government

(surplus (+) or deficit (-) as a percentage of
GDP; yearly averages)

1960-73

1974-79

1980-87

1988-94a

1995-98a

EEC/EC

-0,35

-3,3

-4,5

-4,5

-3,4

United States

-0,6

-1,4

-3,4

-2,7

-0,2

Canada

-0,2

-1,7

-5,1

-5,6

-1,1

Japan

+1,0

-3,4

-2,3

+1,1

-4,3

Australia

+1,4

-2,0

-2,0

-1,7

-1,4

Austria

+0,7

-2,1

-3,0

-3,7

-3,1

Finland

+3,0

+2,8

-0,1

-0,6

-1,9

Norway

+4,1

+2,1

+5,7

+0,6

+5,5

Sweden

+3,7

+1,3

-2,9

-2,6

-2,3

Iceland

+1,9

-0,5

0,0

-3,3

-1,1

Total smaller OECDb

1,5

-0,9

-2,9

-4,0

-1,7

Total OECDc

-0,2

-2,3

-3,5

-2,9

-2,0

a         EC-15, excluding Luxemburg, including
Norway

b         Number of countries varies

c         19 OECD countries

6. General Government Net Debt Interest Payments

(as a percentage of nominal GDP)

1979

1985

1990

1995

1998

EEC/ECa

1,9

3,8

4,0

5,1

4,1

United States

1,1

2,1

2,2

2,2

1,7

Canada

1,7

4,0

5,3

5,6

5,0

Japan

0,8

1,9

0,8

0,6

1,2

Australia

0,8

3,2

2,7

3,5

1,9

Austria

1,8

2,8

3,2

3,6

3,7

Finland

-1,0

-0,9

-1,7

0,9

2,0

Norway

0,1

-1,2

-2,1

-0,6

-0,7

Sweden

-1,1

3,0

0,1

2,7

2,8

Total smaller OECD

1,2

3,0

3,3

4,0

3,0

Total OECDb

1,4

2,7

2,7

3,1

2,6

A negative sign means higher
interest receipts than payments

a    EC-15,
excluding Luxemburg, including Norway

b    22 countries

Sources of
Tables 1-6: OECD, Economic Outlook (various issues), OECD 1989, 1995

[Seite der Druckausg.: 31]

The EU as a Policy Maker

The EC and EU-Treaties name many policy areas, yet
in only very few of them does the EU have exclusive or strong competencies.
This does not really matter much, if one looks at it from the point of view of
facilitating institutionalised dialogues across the EU and beyond it. In each
of the many policy areas the member countries are involved in continuous
dialogue. As the treaties lend themselves to extensive interpretations,
practically any issue in the fields of government and politics can be taken up
at the level of the EU.

In a sense the ineffectiveness of these dialogues
and their curious dynamics – you solve one problem and you find seven new ones
– are a guarantee of their permanence. Effective negotiations with good
results in little time, even though they are of course desirable as such, therefore
are not necessarily a sign of progress of integration. Negotiations are
cumbersome – and that is precisely the point.

In spite of that queer logic, in some areas the EC
has proved to be a relatively good policy maker. The aim to create a monetary
union helped a great deal to bring down inflation rates and new government debt
in most member countries (unfortunately at the price of lower growth rates and
higher unemployment). For the member governments it was convenient to have the
EU, because they could put the blame for their unpopular policies onto the EU –
or the Bundesbank.[104]

In recent years, the European Commission has shown
its teeth in competition policy and has been able to make points against member
governments, which often want to protect their turf. It has taken some
spectacular decisions by imposing record fines on several firms and by blocking
or conditioning some mergers. Equally, in some cases it forcefully intervened
against subsidies by member governments for private enterprises. These
accomplishments have been made possible by European integration. They also led
to some functional spill-over, as most member countries did not even have
legislation on competition in the past.

The strengthening and the centralisation of
competition policy at the EC level, in spite of many limitations, produced
results which would not have been achieved by most member countries by
themselves. It made it more difficult for national governments and for the EC
itself to pursue active industrial policies. "Even if the economic fashion
were to change in the foreseeable future, an interventionist policy would be extremely
difficult to pursue for political and institutional reasons."[105]

Therefore, EC competition policy, as is its task,
has pushed us toward more market efficiency and more effective decision
taking: the rule of law tends to prevail. That has strengthened the EU as a
formal institution, i.e. its character as a state. However, there are some
downsides

[Seite der Druckausg.: 32]

too: more, and particularly stronger rules, leave less room for
compromising and negotiating, and therefore reduce the need for
institutionalised dialogue. On the other hand, the application of stronger
rules can lead to fierce opposition by the affected interest groups and member
countries, and therefore arouse anti-EU feelings and weaken the cohesion of the
Union. The basic problem, here as elsewhere, is that it is unclear to what
extent the EU has the legitimacy to assume state functions.

In regional development policy, which after
agriculture receives the second highest share in the EU-budget[106], the EU has played an important role, and has made efforts to orient
its policies along objective criteria and follow less the desires of
governments and politicians. There are enormous differences in income among
countries and regions of the EU. The difference in per capita income between Hamburg and the Portuguese Norte, the poorest region of the EU, is
in the order of 10 to 1. Unemployment in the poorer regions is often well above
the EU average. The basic purpose of the regional funds is to support the
development of backward regions and the transformation of regions in industrial
decline (among them, for example, east Germany). Other purposes are to fight
long-term and youth unemployment and to develop rural areas. Even though all
governments try to get as much money back as possible, there still is a
considerable transfer of resources from the richer to the poorer members of the
EU.

Without the EU, transfers of such magnitude would
obviously not exist.[107] Nevertheless, when compared with the magnitude of interregional
transfers within nations[108], these transfers are quite small and amount only to a small
fraction of the GDP of the EU-15.[109] In fact, the scarcity of these funds, for many observers, is a
matter of concern with respect to the stability of the monetary union.
Cumulative differences in economic growth and asymmetric regional shocks could
turn out to be the Achilles’ heel of monetary union and cause problems for the
cohesion of the EU.[110]

[Seite der Druckausg.: 33]

To these limitations one might add that the
results of EU regional policy generally have not been very satisfactory.[111]

Nevertheless, it reflects a veritable effort of a common
EU-economic policy. Unfortunately, the magnitude of the transfers depends on
the willingness of the richer member countries to sacrifice some of their
resources. Their insufficiency with respect to EMU may soon become apparent.
Eastern enlargement of the EU and the programs for the Mediterranean countries
also will seriously test the willingness of member countries to put forward the
necessary means.

On the other hand, there are a number of areas too
where the EU should be active but isn’t. There are tax havens within the EU
from which companies and private investors obtain immense benefits at the
expense of the treasuries of the member countries – and therefore of the ones
who in fact pay their taxes. Incredible as it may seem, the EU through its
regional policies has actually supported the creation of such tax havens.[112]

Hence, with the exception of a few policy fields
the EU is not a very effective policy maker. Yet, in terms of integration this
need not be a serious defect.

Advantages and
Disadvantages of Size

We have already seen that large countries or
economically integrated regions do not necessarily do better economically than
small countries. Within a large economic area cumulative differential
processes of economic growth are more likely than in smaller ones. To maintain
minima of social coherence and political legitimacy, it is necessary to
ameliorate differences in development potentials and to provide income support
to needy people and deficit-ridden public institutions. For these purposes all
developed countries operate complex transfer systems. Depending on its level,
the political integration of countries requires solidarity of the richer toward the poorer countries. This can be
considered a disadvantage of size

On the other hand, there
are some economic advantages of size too. The main one is the sturdiness it confers to the economy: A
large country is not much affected by changes in the value of its currency as
most economic activities are related to the home market. A large country like
the US can get away, even for extended periods of time, with seriously
distorted economic fundamentals and questionable economic policies (for
example, the huge and still growing US current account deficit and her bubble
economy). Equally, a large country is barely affected by economic and political
crises in other countries, so long as they are considerably smaller.[113]

One can
expect then that the EU with the full implementation of the European Monetary
Union will be able to reap the benefits of economic sturdiness. Furthermore, to
the extent that the Euro will be held a reserve currency, the benefits of seignorage will accrue to Eurolandia.

[Seite der Druckausg.: 34]

The
sturdiness of a large economy, of course, means that even minor changes in its
economic performance or policies can have serious repercussions in smaller economies. The latter’s autonomy
is smaller, they have to be more flexible, must avoid structural rigidities,
and can not easily afford policy mistakes.[114] Benign neglect is not an
option for them.

Benign
neglect of the smaller countries is but one option for a large country. For
example, the US has actively meddled in the economic and general affairs of
both Mexico and Nicaragua. Economic
dependency makes small countries vulnerable and politically dependent too. The dominant power has many means and
ways to put on the pressure and even to inflict punishments. It can allow
itself to be arrogant. It can use the small neighbouring countries as a valve
to diffuse political pressure at home.[115] And it can defend its
so-called national interests (usually large companies and organised interest
groups) abroad.

One can
consider the possibility of such behaviour an advantage of size. Whatever view
one prefers, the EU is well experienced in this field. A harmless example is
when it persuaded , in the course of the project "Europe 1992",
non-EC capital to be invested within its frontiers. Yet there are less harmless
cases too: In negotiations over fishing rights with Morocco and other countries
in North and West Africa the EU repeatedly and shamelessly imposed unequal treaties
upon them. Another case is the dumping of its heavily subsidised agricultural
surpluses into Africa and Eastern Europe resulting in large damages to the
local production.

In fact,
in most cases such ruthless external
behaviour of the EU was the result of internal compromising among member
countries and their interests, and the inability of the EU to find rational and
sustainable solutions to some of its problems. That is one of the downsides of
the institutionalised dialogue of the EU. In other words, in a number of cases
we have integrated further by inflicting considerable damage on small or
politically weak countries.

If the EU
had a unitary, single EU foreign and security policy[116], such an export of internal problems might be
amended in the name of coherence. But to what purpose would we want to have a
coherent foreign and security policy? Would we want to be fair to the small and
weak countries in our periphery? Would we be ready to support their development
efforts financially, through technical assistance etc.? Would we throw open our
doors for their exports and for training their people –even though some will
find ways to stay? Or, would our main interest lie in the stabilisation of an
hegemonic order in our backyard, preventing emigration to the EU and
maintaining political regimes to our liking.

Currently,
the signs are ominous: After the Kosovo war many voices are demanding, for
instance, a Rapid Deployment Force
for the EU – in order "to provide ourselves for stability

[Seite der Druckausg.: 35]

on our
continent".[117] Where exactly on our
continent?, one naturally asks. Where does it end? Don’t we really mean our
‘sphere of influence’? Or even the world? "Where there is European capital
, there are European interests" could well become one of our measuring rods.
For an economic giant that feels like a political dwarf, it would not be
without logic to move in that direction.

The EU as
a regional power is not the only
issue affecting the process toward a Common Foreign and Security Policy. The
other issues are its relations with the
dominant power – the US and its role in the power games of the 21st
century given the emergence of China and the possible re-emergence of Russia.

There the
danger is that we could relapse into the old European balance-of-power games[118], yet on a world scale. We
know that size "not only leads to power, it is power".[119] The primary causes of war
during the 19th and the 20th century in Europe were the size and the economic
and military capabilities of some countries. EU aspirations to rise to
superpower status could give way to a new Cold War. They could also challenge
other countries to rise to similar status. Systems with four or five great
powers are even more unstable and dangerous than systems with only two powers .

Hence,
the EU faces a dilemma: If it aspires to become a world power, it accelerates
or even sets in motion a spiral of mutual distrust, conflict and re-armament.
If it resigns itself to the role of a subservient political dwarf, it will be
reproached for not harnessing, in spite of its size and economic importance, US
unilateralism; for not preventing further humiliations; for not defending its
interests effectively; and for not mediating conflicts in other parts of the
world.

Clearly,
neither option is desirable. Could this unpromising dilemma situation be
avoided?

·
First, one might note, of course not
in the spirit of justifying existing unipolarity, that such an arrangement is
less unstable, less dangerous and potentially less destructive than multipolarity.[120]

·
Second, one might remember Jean
Monnet’s method of engrenage and
institution building: Are we not already involved in the process of developing
international rules and laws and of transferring sovereignty to international
bodies? Will this in the end not be more effective to limit inter alia hegemonic power?

Such an
approach makes things easier for the smaller countries too. They can, more than
large countries, benefit from international rules and institutions – at least
as long as these are

[Seite der Druckausg.: 36]

not made or controlled by superpower interests. The EU
itself offers an excellent example: The smaller member countries enjoy the same
rights as the larger ones and possess much recourse against the infringements
of their interests by the latter (which still try, of course).

To
conclude, there are some economic advantages of size but there are
disadvantages too. It is cumbersome and it costs money to maintain a sufficient
degree of social and political coherence in a large economic area. Some of the
most prosperous countries are small.

The
political advantages of size are, to put it mildly, ambivalent. There can be
much scope for unscrupulous behaviour against politically weak countries. The
desire to become a countervailing hegemonic power evokes the dangers of a new
Cold War and of balance-of-power games, an old, and as we (still) believe,
eradicated European disease. Monnet’s approach could help to restrain the power
of states, even of hegemonic ones.

Lessons to be learnt?

Summarising
the results, of this section, we find

1.  In the
case of the EEC/EC, economic integration was a means to the end of political
integration. Political integration did not depend on economic or other
benefits of integration. In terms of the political priorities even welfare
losses can be justified as the price to be paid for political integration.

2.  Economic
integration was always a matter of negotiations and packaging: it can hardly be
expected that such procedures lead to an optimisation of economic welfare.

3.  As long
as world trade was not liberalised, a case could be made in favour of a
customs’ union on the basis of economies of scale. Now it is difficult to make
such a case. The economic benefits derived from the liberalisation of the
internal market of the EC have not been large. Further benefits on this ground
cannot be expected in the future, because by now there are only a few intra-EU
restrictions left.

4.  European
integration was in any case not an exercise in free-market economics, but, especially
during the early post-war years and much of the Golden Age, a comprehensive
development effort. At that it was quite successful. This could be a lesson
for other countries and regions. Russia and other Eastern European countries
have learned the hard way that free markets without such a comprehensive
development effort destroy rather than create the conditions for economic
growth and prosperity.

5.  The
specific contribution of EEC economic integration to the high growth rates and
the high levels of welfare achieved during the Golden Age (1950-73) was
probably negligible. Nevertheless growing prosperity during this period
conferred legitimacy on European integration.

6.  During
the crisis decades that followed the Golden Age, the EC did not offer much
resilience. To the contrary, its economic performance was remarkably inferior
to most other OECD countries.

7.  Policy
making remains a matter of the member countries in most policy areas. In a few
areas

[Seite der Druckausg.: 37]

the EC has shown a certain effectiveness and it has induced improvements
in policies of member countries. Ineffectiveness does not have to be a
disadvantage in terms of the more fundamental, political purposes of
integration.

8.  The size
of an integrated economic area makes it more robust against developments in
other countries and regions of the world. If an economic union has a single
currency, this currency is likely to become a reserve currency and to confer
seignorage gains to the union.

9.  Size also
confers power that can be exercised on the international stage. Spill-over
effects of internal compromising of the EU have already caused considerable
damage to small and weak countries. A coherent and common EU security and
foreign policy (which remains in the realm of dreams[121])
could concentrate, for example, on the stabilisation of political regimes in
the periphery of the EU (of course, in the name of democracy and free market
access for our companies!) and on controlling immigration from there.

10. The power conferred by size can also be used
to countervail hegemonic power. Such an exercise of power evokes the dangers of
a new Cold War and of balance-of-power games, an old European disease, which we
(still) believe to have defeated for good. The alternative is international
institution building in the spirit of Jean Monnet. Engrenage could well be more effective in containing US hegemonic
unilateralism.

3. Institutionalised Dialogue and other Roads to
Peace

As a result of
the process of European integration, Europe has been enjoying a long period of
stable peace. Military might and menace play no role in the relations within
the European Union. That is an enormous achievement in view of the bloody
history of our continent.

There had not been a grand design for this.
Instead the process took place under rather difficult historical and political
conditions. It was path dependent to a very high degree, i.e. it could not be
planned in advance and its progress often enough depended simply on good luck.
With hindsight, probably the most important element in this process was the
creation of institutionalised dialogues in an ever larger number of policy
fields both within and outside the framework of the EEC/EC/EU. This led to what
has been called at the beginning of this paper a "new culture of conflict
management" in Europe.

Negotiations within the EU are a rather cumbersome
and slow affair – and that is precisely the point: a permanent need to meet,
consult, negotiate, travel, plus the pleasures of the excellent cuisine in
Brussels and of friendships developed over the years. The persons directly
involved in these processes of institutionalised dialogue probably were not
even aware that they were part and parcel of a new architecture of peace for
Europe – in their own mind they were struggling to define or to defend their
country’s positions.

[Seite der Druckausg.: 38]

Neither effective negotiating nor economic
efficiency were essential for integration. To the contrary: the logic of
political integration – the permanent need to negotiate – often runs counter
to effective decision taking and economic efficiency. Nevertheless, one is
always waging a battle to improve both ... Therefore it would be certainly
misplaced to judge the process of integration in terms of the effectiveness of
political decision-taking or of the economic benefits it generates (or does not
generate). Pure logic and historical experience indicate that peace can hardly
be gained without political compromising and economic sacrifices.

The European way toward a peace community was
unique, as all historical processes are. Generalisations are inherently very
difficult and are always cognitively biased. Therefore one should tread this
territory with the greatest of caution. Personally, I found that something can
be learnt from Monnet’s approach, that is supra-national integration and the
creation of a multiplicity of institutionalised dialogues. In spite of many
defects, this is where the EU has excelled. An integral part of Monnet's
approach was to get the priorities right. This is where the EU does not excel
and looking at the present and future challenges it faces these fears are not
easily dispelled.

If the ulterior aim is to create a stable order of
peace, one can ask, besides the peculiar way taken by Western Europe, what
other means could be used for that end. I can see nine alternatives, the
advantages and disadvantages of which are briefly discussed. They are arranged
in order of their potential contribution to the formation of a stable peace
community.

1.  Treaties
of non-aggression: Their purpose is to prevent wars, but they are treaties
of convenience for the signatories. They are not really based on trust and
they are not intended to build trustful relationships among them. Whether and
how they are observed, will depend on all sorts of circumstances. They cannot
eliminate the possibility of war.

2.  Power balance politics: As we know from
European history in particular, this is a dangerous game and one that gets
easily out of hand. The Cold War was a special case with only two powers:
Without nuclear deterrence on both sides, it might not have been stable for
such a long time. Historically, the succession of one dominant power by another
was usually achieved through war.

3.  Hegemonic power: The main purpose of a
hegemonic power is not peace as such, but other interests. These however might
suffer from military conflicts within the hegemonic sphere.

During
the Cold War there were hot wars which reflected either the inherent logic of
the Cold War or the idiosyncrasies of the hegemon.

If there
are several hegemons or would-be hegemons, a durable peace cannot be expected.
The ability of the hegemon to prevent wars by its military prowess depends on
internal power coalitions and on what public opinion is ready to bear. Hence,
it cannot be relied upon.

Hegemonic
peace always depends to a certain extent on force, coercion and submission. Its
inherent asymmetry contains the seeds of opposition and rebellion, and
therefore potential instability. Once the hegemon’s clout becomes less
impressive, opposition to the harsh dis

[Seite der Druckausg.: 39]

cipline it imposes is almost
unavoidable.

When the
period of 'peaceful co-existence' began in the early 1960s, demands for
political reform started to flourish, the European integration progress almost
came to a halt and France began to reassert herself vis-à-vis the United
States.

4.  External federator: In order to induce
countries to form a 'Union' the common enemy must be perceived to be very
strong and menacing. The 'Union' would then make the greatest effort to build
up its military potential. As long as there is no fear of 'guaranteed mutual
destruction' these efforts might even increase the likelihood of war.[122]

5.  Economic interdependence: There are good
arguments as to why trade should foster peace; yet there are arguments too
against this proposition.[123]
There is strong historical evidence against it: Just before World War I foreign
trade as a share of GDP in the European countries had already reached levels
comparable to the ones of the 1990s. The world economy was highly integrated
then, yet this still could not prevent the war. The causes of the war were not
economic. Yet, as has been stressed by Carr (1968) the process of the
socialisation of the nation-state, i.e. the domestication of capital and its
political subordination, was already far advanced. The laissez-faire,
single-world economy was replaced by a multiplicity of national economies.
Capital and government came to live in a symbiotic relationship and national
enterprises were an integral part of the war efforts.

Economic
nationalism has not disappeared. Even nowadays we tend to perceive, for instance,
Japan and other East Asian countries as competitors. And much of the talks on
globalisation are driven by fears that capital dissociates itself again from
the nation-state. Under these circumstances, it is hard to believe that
economic interdependence is a promoter of peace.

6.       International treaties: Such treaties
deal with conflicts of interest between nations and therefore define the rights
and responsibilities of the parties involved. They do not deal with common
interests, but with the separation of interests. If circumstances change, the
conflicts can remerge.

7.       International co-operation: It involves
at least some elements, which the parties have in common. Hence, it can
strengthen bonds among them and can even expand into areas other than the ones
originally signed for.

8.  Political integration: Some common
interests and even some common good ought to be present in cases of political
integration. The more areas of policy making are incorporated into the politics
of the Union, the stronger the inner bonds become.

The
question of the legitimacy of political integration cannot be neglected. If it
remains a matter of the political and governmental elites, and if the results
of integration as perceived

[Seite der Druckausg.: 40]

by the citizenries are not satisfactory, it can
breed opposition. Hence even political integration can be reversible. In any
case, it requires continuous management of potential conflicts.

9.  Social integration: European integration
has been an affair of the European elites. Because of the prominence of
supra-national integration and institutionalised dialogue, it could not be
otherwise. Nevertheless, it would be wrong to identify European integration
only with the political and governmental elites.

In fact
everyday life of the European tribes has become quite Europeanised and
internationalised. Quite a number of Europeans do not live in their country of
origin but in some other country of the EU or elsewhere in the world. A vast
majority of the people have spent time in other countries of Europe for
holiday, business or study. Tens of millions are on the move every summer.
There are no more border controls. Trains and motorways form integrated
European networks. Young people spend a school or college year in other
countries. You can watch at least some television programs from other EU
countries everywhere and so on. Social intercourse across countries has become
quite intensive and we take pleasure in it. We still might make jokes about the
others (just as we do about the people from the neighbouring town or village),
but basically we perceive each other as equals. The times when the European
tribes hated each other seem very remote and almost incomprehensible.

That
means, social integration, through unfettered travel, tourism, exchange
programs, city partnerships, sports leagues, language learning, curricula with
information on other countries and peoples etc. is of primary importance for
the development of a peace community, as well as for its permanence and
acceptance by the citizenries. Once one has found out that the
"others" are just human beings like oneself, the mental constructions
of "strangers" lose their vilifying basis and cannot easily be
manipulated anymore by nationalist demagogues.[124]

Alas, this may be too
optimistic a view. Certainly, wars among the members of the EU have become
impossible. Social integration was both a result and a cause of this
elimination of the possibility of war. Unfortunately that does not mean that
social and ethnic conflicts have disappeared. To the contrary such conflicts
are becoming more frequent and widespread, particularly within cities and
regions. The ethnification of politics can, as in former Yugoslavia, even lead
to military conflict. The biggest future challenge for Europe could well be internal peace – especially in times of
rising economic and social inequalities.

[Seite der Druckausg.: 41]

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[1]   Zielinsky,
1995, p.18. Boulding defines as stable peace a situation "in which the
probability of war is so small that it does not really enter into the
calculations of any of the people involved." (1989, p.13).

[2]   The
Cold war "was about the balance of power, a war of the German succession,
and at the same time it was an ideological confrontation." (Walker, 1994,
p. 5).

[3]   "The
CIA estimated that a swift economic collapse might catapult the French or
Italian Communists to power. ... If the United States did not act vigorously,
the French, Italian, or Greek Communists might win power legally or seize it
violently." The same report of Sept. 1947 emphasised that the
"greatest potential danger to U.S. security lies ... in the possibility
of the economic collapse of Western Europe and of the consequent accession to
power of elements subservient to the Kremlin." (Leffler, 1992, pp.189f.).

[4]   Hobsbawm,
1994, p. 240. To expect another Great Slump after the end of World War II was
not at all far-fetched. Paul Samuelson (1943, p. 51) spoke of the possibility,
in the US, of "the greatest period of unemployment and industrial
dislocation which any economy has ever faced". The main concern of
American policy-makers right after the war was the prevention of such a slump.
They wanted to achieve this by the combination of traditionally high US tariffs
and of a drive for the vast expansion of American exports. For the latter
reason they wanted to impose a free-trade regime – yet only on others (Kolko,
1969). "Aggressive expansion was plainly in the minds of American
policy-makers as soon as the war was over. It was the Cold War which encouraged
them to take a longer view, by persuading them that helping their future
competitors to grow as rapidly as possible was politically urgent."
(Hobsbawm, 1994, p. 275). Walker (1994, p. 2 passim) argues that the Cold War
was the major engine of the Golden Age of high growth and rising prosperity
(1950-73). And Hobsbawm asks (1994, p. 276) what would have happened to the
German economy, if its recovery had depended on the Europeans, who feared its
revival. How fast would the Japanese economy have recovered, if the USA had not
found itself building up Japan as the industrial base for the Korean and the
Vietnam War? 1949-53 and 1966-70 were the years of peak Japanese growth.

[5]   The
original American plans for the world economy were attacked by Molotov during
his speech at the Paris peace conference in October 1946: "It is surely
not so difficult to understand that if American capital were given a free hand
in the small states ruined and enfeebled by the war, as the advocates of the
principle of 'equal opportunity' desire, American capital would buy up the
local industries, appropriate the more attractive Rumanian, Yugoslav and all
other enterprises, and would become the master in these small states. Given
such a situation, we would probably live to see the day when in your own
country, on switching on the radio, you would be hearing not so much your own
language as one American gramophone record after another or some piece or
other of British propaganda. The time might come when in your own country, on
going to the cinema, you would be seeing American films sold for foreign
consumption. It is not clear that such unrestricted applications of the
principles of 'equal opportunity' would in practice mean the veritable
economic enslavement of the small states and their subjugation to the rule and
arbitrary will of strong an enriched foreign firms, banks and industrial
corporations? Was this what we fought for when we battled the fascist
invaders?" (Walker, 1994, p. 46).No doubt that these words "have an
oddly prophetic ring today" (ibid., p. 45). In a sense it demonstrates how
difficult it is to foresee historical developments and to construct
causalities.

[6]   The
Americans henceforth (since autumn 1946) "envisaged a Western economic and
a Western geopolitical entity as their pre-eminent concern". (Charles
Maier, according to Leffler, 1992, p. 120). "U.S. goals were to promote
the recovery of Western Europe, check Soviet influence, thwart Communist gains,
and lower occupation costs." They would have preferred "a single
Europe modelled on the USA in its political structure as well as its
flourishing free enterprise economy."

[7]   Duchêne,
1994, p. 182. See also Hobsbawm, 1994, p. 241.

[8]   Adenauer's
first objective was the restoration of national sovereignty for Germany. The
integration into Western Europe and the Western hemisphere to an important
extent was a means to that end. The opposition leader, Kurt Schumacher, wanted
a united and, if necessary, neutral Germany. He spoke in "disturbing tones
of traditional German nationalism" and denounced Adenauer as the
"Chancellor of the Occupation, of the Allies" (Walker, 1994, p. 91)
and as showing "indifference to the fate of 18 million East
Germans."(Leffler, 1992, p. 320).

Adenauer's
position in turn was equally clear, at least rhetorically: Germany's defeat
should not mean "that it must renounce forever the right to regain lost
territories beyond the Oder-Neisse. If we were to opt for the West, as he
preferred to do, he had to be able to convince his domestic opponents that he
was neither compromising long-term German sovereignty nor relinquishing hope
for unification nor territorial rectification." (ibid., p. 454). "In
France, German rhetoric could easily be interpreted as ingratitude and
illustrative of German aspirations to regain a position of preponderance in
Europe." (ibid., p. 320).

[9]   Cf.
Duchêne, 1994, p. 371.

[10]  France
was forced to accept the tri-zonal fusion of Germany in the summer of 1948. As
a result Georges Bidault lost the French Foreign Ministry. He was felt to have
given too much away. (Duchêne, 1994, 398, p. 185).

[11]  A
neutral Germany "was not an outlandish proposition; in 1954, just such an
agreement was reached over Austria" (Walker, 1994, p. 91). "Many
Germans still felt that they had much to gain from remaining neutral in the
East-West struggle" and "that formal association with NATO would kill
prospects for the eventual unification of their country." (Leffler, 1992,
p. 409). George F. Kennan advocated in 1952 a unified, neutralised Germany
(ibid., 461). In 1958 he repeated this proposition. Adenauer received a
stunning shock when Dulles in a letter to him implicitly proposed a unified,
neutral and demilitarised Germany in July 1958. Adenauer's reaction was to
turn to France and accept de Gaulle's concept of Western Europe (Walker, 1994,
121f.).

[12]  At
that time the "greatest worries (of US officials) related to the poor
state of Europe's defenses and the uncertainty over Germany's loyalty to the
West." (Leffler, 1992, p. 383). A few months earlier Charles Bohlen, then
serving as the US minister in Paris, explained: "as soon as Germany
recaptures her freedom of manoeuvre she will inevitably begin to play the West
off against the East with the very real danger of coming to rest on the side of
the Soviet Union. This is the nightmare of the West European nations ... and it
should be ours as well."(ibid., p. 345). President Truman time and again
expressed his reservations about German rearmament (ibid., p. 389). French
fears were more concrete: "if Germany is resuscitated, her resources and
technical proficiency would be used by the USSR against France." (ibid.,
p. 202). More precisely France had "apprehensions about the long-term
ramifications of a powerful Germany that could act independently or in concert
with Moscow." (ibid., p. 207). Earlier, Stalin too had expressed fears of
a revived and powerful Germany. Yet he had opposed dismemberment because he
worried about German irredentism (ibid., p. 154).

[13]  Leffler,
1992, pp. 202 and 207. These demands were contained in documents of early 1948.

[14]  Because
such extensive controls of Germany would have weakened the cohesion of Western
Europe and, as was mentioned, because the US needed the Germany’s economic
strength and her rearmament.

[15]  From
the British point of view the Treaty of Dunkirk had more than a German
dimension. It also reflected the fear of the foreign secretary Ernest Bevin
"that French unhappiness with Anglo-American policy in Germany might drive
the French into the arms of the Kremlin." (Leffler, 1992, p. 153). That
shows too how complicated and open to all possibilities European politics were
at that time.

[16]  Duchêne,
1994, p. 186. Later, in 1954 Germany became a member of the WEU. The Treaty of
Brussels, modified the same year, still contained an implicit security
guarantee against Germany. Cf. Zielinski, 1995, p. 103.

[17]  It
"was the greatest British commitment in Europe at the time and encouraged
hopes of further integration." (Duchêne, 1994, p. 186).

[18]   Leffler,
1992, p. 203. "Without German rearmament ... the WEU did not pose credible
military deterrent to the Soviet Union." (Frankel, 1993, p. 60).

[19]  Delivered
on Sept. 19, 1946, reprinted in Gasteyger, 1994, pp. 39-40. Churchill wrote in
a newspaper article in 1946 that European integration was "(t)he only way
to prevent war" (according to Edwina Currie in her address to the
Deutsch-Englische Gesellschaft, Bonn, 9.9.93). On the other hand, Churchill
did of course play a role in the initial escalation of the Cold War. Cf.
Leffler, 1992, pp. 107-110.

[20]  For
a comprehensive presentation and analysis of Jean Monnet’s very impressive
life, the multiplicity of his initiatives and his "method" to
develop and push them through, see Duchêne, 1994.

[21]  The
following analysis is based on Duchêne, 1994, p. 168-9.

[22]  Monnet
acquired the confidence of British and American leaders and officials when,
under his initiative, the Allied Maritime Transport Council was formed, which
co-ordinated military and civil supplies of the Allies during 1917-18. Even
more important was the period 1939-43 when he actually lived in the US and
played a leading role in the British Purchasing Commission (as a British
Citizen provided with a passport signed by Churchill!) and in gearing the US
economy into war production. Keynes believed that Monnet "had shortened
the war by one year"; for others he was an "Unsung Hero of World War
II" (title of an essay by Robert Nathan) and "one of the real
architects of our victory" (Lord Halifax). (Duchêne, 1994, chapters 1 and
2, passim).

[23]  Monnet,
1976, p. 456 (emphasis added, WK). "La
coopération entre les nations, si importante soit-elle, ne résout rien."

[24]  Monnet,
1976, p. 394-5.

[25]  In
later years, whenever Monnet said of something that it was "an OEEC
affair", he meant nothing would come of it. Duchêne, 1994, p. 169). On the
other hand, it must be noted that Monnet successfully linked the Marshall aid
to the Monnet Plan, and played a crucial role in it. Monnet's position was so
strong that the "Americans would not give their approval to any proposal
which Monnet didn't feel fitted in with his plans." (According to A.
Hartman, who worked at the time with the Economic Co-operation Administration
mission in France; ibid., p. 173).

[26]  Cf.
Monnet, 1976, p. 456. (emphasis added, WK).

[27]  Duchêne,
1994, pp. 190, 197.

[28]  Monnet,
1976, p. 422 (Duchêne's translation, 1994, p. 199).

[29]  In
1941 Monnet expounded something like the Schuman Plan for coal and steel to
Paul-Henri Spaak (Duchêne, 1994, p. 182). Monnet developed a scheme rather
similar to the Schuman Plan in 1943 (ibid. p. 126-8). In the summer of 1947
Monnet held numerous discussions with the senior American in Europe,
Under-secretary William Clayton. "Their intensive review of the German
policy led in the end to the Schuman Plan" (ibid. p. 168), even though,
more immediately, it was an initial sketch of the International Ruhr
Authority. All this happened less than two months after the announcement of the
Marshall Plan in whose preparation Clayton had played an important role. It is interesting to note that Clayton had
prepared at the end of May a famous memorandum to Acheson, which was an
important stepping stone for the Marshall Plan which was announced a week later
(Leffler, 1992, pp. 158-62).

[30] In
the memorandum Monnet wrote for Schuman, he qualified his solution as one
"which would remove for the Germans the humiliation of endless controls,
and for the French the fear of a Germany without controls." (According to
Friend, 1991, p. 17; Zielinski, 1995, p. 107).

[31]  Monnet
in conversation with Schuman (emphasis added, WK). He continued: "We lost
peace in 1919 because we there (in Versailles, WK) introduced discrimination
and the spirit of superiority. We are on the way to commit the same error
again." "Nous avons manqué la
paix en 1919 parce que nous y avons introduit la discrimination et l'esprit de
supériorité. Nous sommes en train de commencer les mêmes erreurs."
(Monnet, 1976, p. 410; translation WK).

[32]  "This
proposition has an essential political message: to drive a wedge into the
bastions of national sovereignty that is small enough to be acceptable and deep
enough to move the States towards the necessary unity for peace." "Cette proposition a une portée
politique essentielle: ouvrir dans le rempart des souverainetés nationales une
brèche suffisamment limitée pour rallier les consentements, suffisamment
profonde pour entraîner les Etats vers l'unité nécessaire à la paix."
(Monnet, 1976, 429; translation WK). For him nationalism was the demon to be
exorcised (Duchêne, 1994, p. 371).

[33]  Leffler,
1992, p. 349. "The interdependence of production thus established will
make all war between France and Germany not only unthinkable, but physically
impossible." (Schuman, acc. to Wise, in: Zielinski, p. 108).

[34]  After
Monnet had explained the Schuman Plan to Adenauer the latter said:
"Monsieur Monnet, I consider the realisation of this French position as
the most important task that awaits me." "Monsieur Monnet, je considère la réalisation de la
proposition française comme la tâche plus importante que m'attende. Si je
parviens à la mener à bien, j'estime que je n'aurai pas perdu ma vie." (Monnet,
1976, p. 450; translation WK).

[35]  The
Schuman Plan was thought to be "so vague on essential details" by the
Belgian Foreign Minister that "it was impossible to speak definitely about
it". Macmillan called it "a plan to have a plan". (Duchêne,
1994, p. 209).

[36]  Based
on Duchêne, 1994, p. 240 passim.

[37]  Britain
did not participate in the negotiations of the Schuman Plan nor join the ECSC.
They did not want to commit themselves to a supra-national High Authority. On
this point Monnet was inflexible. Later Britain launched the Eden Plan which
was a "bizarre attempt" to subordinate the new community to the
inter-governmental Council of Europe (Duchêne, 1994, pp. 209, 237). After
protracted negotiations Britain became an associate member of the ECSC in a
sort of inter-governmental extension. (Duchêne, 1994, p. 261 passim.).

[38]  The
reason why Britain, in the perception of Jean Monnet, did not join the ECSC is
remarkable: "Britain has no confidence that France and the other countries
of Europe have the ability or even the will effectively to resist a possible
Russian invasion. Britain believes that in this conflict continental Europe
will be occupied but that she herself, with America, will be able to resist and
finally conquer. She therefore does not wish to let her domestic life or the
development of her resources be influenced by any views other than her own, and
certainly not by continental views." (after his London talks in 1950;
Monnet, 1976, p. 400; translation Walker, 1994, p. 93). For Tsoukalis (1993, p. 16) this was one of several
"complete misjudgements by the government in London."

[39]  Alan
Milward (Tsoukalis, 1993, p. 17) has referred to the ECSC "as a
protoplasmic organization which could take virtually any shape the High
Authority and the member countries would eventually wish to give it." Flexibility and suppleness are after all the
main weapons of legal documents in the battle against time. Monnet
insisted repeatedly, that the purpose of the ECSC was political and moral, not
economic. Adenauer agreed on this and said to him: "J'envisage comme vous
cette entreprise sous son aspect le plus élevé - elle appartient à l'ordre de
la morale. C'est la responsabilité morale que nous avons à l'égard de nos
peuples, et non la responsabilité technique que nous devons mettre en œuvre
pour réaliser un si vaste espoir. L'accueil en Allemagne a été enthousiaste,
aussi nous ne nous accrocherons pas à des détails. Cette initiative, voici
vingt-cinq ans que j l'attends." (Monnet, 1976, p. 449).

[40]  Hence
it is difficult to agree with Mitrany (1975, p. 69) when he writes: "The
ESCS and Euratom were straight functional bodies and could get on with their
allotted task without offending the position of other countries, while
remaining open to possible links with them." He argues that
"functional arrangements have the patent virtue of technical
self-determination: the range of their task can be clearly defined, and that
in turn determines the powers and resources needed for their performance (p.
68). This hardly corresponds to the realities of the ECSC.

[41]  Cf.
Duchêne, 1994, Ch. 7, for the convoluted evolution of the new institutions
within a difficult setting. Trade across frontiers in the common market for
steel doubled as a proportion of steel consumption. That was certainly an
important success. On the other hand, the steelmasters were colluding within
the common market, "where the treaty powers of the High Authority were in
no doubt whatsoever." (p. 248). "The High Authority failed to take
firm hold of its field. The managers of the twenty major steel firms were left
largely undisturbed." The governments continued to condition coal and
steel. (p. 252).

[42]  The
ECSC was unable to face the coal crisis of 1958/59. The member states were too
divided between coal-producing and coal-consuming countries to agree. Gaullism
was matched in Germany by ill will towards sectoral integration. The basic
industries, used to cartel planning under government patronage, wanted to
break the High Authority. Erhard prophesied its end within 3 years. Cf.
Duchêne, 1994, pp. 393, 317.

[43]  Louis
Lister, according to Duchêne, 1994, p. 252 (emphasis added, WK).

[44]  Duchêne,
1994, p. 252.

[45]  Significantly,
instead of the High Authority the EEC just had a 'Commission'.

[46]  In
Germany the SPD voted against the EDC as it had voted against the ECSC on
grounds that both treaties hindered German reunification (Duchêne, 1994, p.
285).

[47]  The
Pleven Plan proposed to rivet (rattaché) the European Army to the political
institutions of the European Union (Monnet, 1976, p. 505). According to Duchêne
(1994, p. 234) Monnet and others saw the EPC more of a way of reasserting
civilian control over the military than as a step to a federal union. The
emphasis in Monnet's Mémoires (pp. 579f) is much more on the latter aspect,
however.

[48]  For
a complete 'European state' essential elements like common legal and social
systems were lacking. The EDC/EPC had a common military command, yet,
paradoxically, no common foreign policy. See Woyke, 1984, p. 227.

[49]  In
fact, the French government had signed the EDC treaty only under the condition
that no immediate attempt should be made to ratify it. "The EDC was
rotting before the ink was dry." (Duchêne, 1994,

p. 233).

[50]  In
Nov. 1953 de Gaulle launched a personal attack against "the
inspirer". "The 'Europe of Jean Monnet' now became the ritual red
rag to the more militant opponents of the EDC." Duchêne, 1994, p. 254.

[51]  When
the EDC was touched off the agenda of the French National Assembly the
triumphant majority burst into the Marseillaise
(Duchêne, 1994, p. 254). Cf. also Zielinski, 1995, p. 101.

[52]  In
the same interview with the New York Times he said: "I will do everything
against it. I will work with the Communists to block it. I will make a
revolution against it. I would rather go with the Russians to stop it."
(Walker, 1994, p. 97).

[53]  As
Churchill (ibid.) put it, "I meant it for them, not for us". He also
spoke of "EDC tomfoolery" (Duchêne, 1994, 245) and of a "sludgy
amalgam".

[54]  Leffler,
1992, p. 389f.

[55]  Duchêne,
1994, p. 398.

[56]  By
the simultaneous accession of Germany to NATO and WEU a system of arms controls
was devised, in fact if not in form, for Germany. Nevertheless membership of
both organisations was perceived in Germany as an enhancement of its national
sovereignty. (Zielinski, 1995, p. 104).

[57]  In
the words of the famous saying of Lord Ismay, the purpose of NATO was "to
keep the Soviets out, the US in, and the Germans down".

[58]  Walker,
1994, p. 98.

[59]  Duchêne,
1994, p. 256.

[60]  Duchêne,
1994, p. 259.

[61]  Duchêne,
1994, p. 256.

[62]  Monnet
announced his resignation in November 1954, apparently because he had fears
about the fate of the ECSC - and because he felt that he needed all his time in
order to mobilise support for the Community in the member states. Already in
October 1952 Spaak had confided to MacMillan that if the EDC failed, the ECSC
would collapse too. (Duchêne, 1994, p. 259).

[63]  Duchêne,
1994, p. 258.

[64]  Their
special relationship also had to do with British bases in the Middle East and
Asia and Britain's "role as a surrogate of American interests"
(Walker, 1994, p. 191).

[65]  Walker,
1994, p. 123. Britain, for instance, received Thor missiles from the US, which
were the only nuclear missiles that could reach the Soviet Union at that time.
They were to be manned by British troops, and a dual key would be required to
fire them, one held by the Americans, the other by the British (ibid., p.
119).

[66]  One
should not overestimate this move however, as Hobsbawm (1994, p. 241) has
pointed out: "The most that an allied or client state could allow itself
to do was to refuse complete integration into the military alliance without
actually leaving it."

[67]  Walker,
1994, p. 121.

[68]  Walker,
1994, pp. 121f, 124. As an immediate result of the Suez crisis the British air
force in Germany was halved and the army reduced by 20%. Adenauer was shocked
when MacMillan explained this to him.

[69]  Because
of the new anxieties generated by German national rearmament, integration
seemed more than ever the way to harness Germany to safe purposes. Adenauer
himself expressed the gravest misgivings that no one could guarantee that the
lethal combination of Ruhr magnates and German military would not reappear (in
a famous midnight chat with Spaak and Joseph Bech which was overheard by Lothar
Ruehl, the correspondent of Der Spiegel; Duchêne, 1994, p. 267).

[70]  A
month after Kennedy offered Britain, in order to accommodate its nuclear
pretensions, the Polaris submarine missile system (which had not been offered
to France and infuriated her), de Gaulle talked of Britain as the
"American Trojan Horse inside Europe" and cast his veto against
British entry into the Common Market. Logically enough he continued: "The
end would be a colossal Atlantic Community dependent on America and directed by
America, which would soon swallow up the European Community. A week later he
signed the Franco-German Friendship Treaty. (Walker, 1994, 181, p. 202).

[71]  Hobsbawm,
1994, p. 241.

[72]  Cf.
Duchêne, 1994, p. 258 passim.

[73]  Cf.
Duchêne, 1994, p. 265. In bringing Germany into NATO, Adenauer unilaterally
renounced the manufacture of nuclear weapons. French and American politicians
wondered how long this self-denying ordinance would last. At times, in private,
Adenauer himself talked as if the renunciation might be temporary (ibid.). In
fact, in November 1957 France, Germany and Italy had agreed to produce atomic
weapons and their delivery systems. The United States were kept in the dark. In
extreme secrecy these three countries signed another agreement in April 1958 on
the common construction of a gas diffusion plant in Pierrelatte. After his
return to power de Gaulle stopped this co-operation in June 1958. He wanted
force de frappe to be an entirely national project in order to be able to use
the bomb as an exclusively French diplomatic tool. (Schmitt, 1995)....
von 1964 bis 1969 wehrte sich die Bundesregierung dagegen, den
Atomwaffensperrvertrag zu unterzeichnen. Friedrich Zimmermann, März 1968:
"Der Aufbau eines eigenständigen Europas wird behindert, weil ein
künftiges Europa keinen Zugang zu der wahren Verteidungswaffe, der Atombombe,
mehr hat." Alfred Seidl, Bayernkurier, Aug 1973: "Sollten die Staaten
Westeuropas innerhalb einer angemessenen Frist nicht zur Errichtung einer
nuklearen europäischen Streitmacht unter Einschluß der Bundeswehr kommen, dann
wird jede Bundesregierung gezwungen sein, ihrerseits die Ausrüstung der
Bundeswehr mit Kernwaffen in Erwägung zu ziehen." J. Gottschlich, Deutsche
Finger nah am Drücker, TAZ, 7.9.

[74]  Cf.
Duchêne, 1994, p. 269 passim. on this paragraph.

[75]  Spaak
"preferred collusion by France and Germany to conflicts between
them." (ibid., p. 271).

[76]  Monnet
was under a double French veto: to continue as president of the High Authority
and as a chairman of any inter-governmental conference on new initiatives of
European integration (Duchêne, 1994, p. 280).

[77]  For
details, see Duchêne, 1994, pp. 279-83.

[78]  See
Weidenfeld, 1994, pp. 18-19.

[79]  Monnet,
1976, p. 456 (translation, WK). "Les propositions Schuman ... sont
révolucionaires ou elles ne sont rien. Leur pincipe fondamental est la
délegation de sourveraineté dans un domaine limité, mais décisif. ... La
coopération entre les nations, si importante soit-elle, ne résout rien. Ce
qu'il faut chercher, c'est une fusion des intérêts des peuples européens, et
non pas simplement le maintien de l'équilibre de ces intérêts."

[80] Monnet,
1976, p. 429. "Cette proposition a
une portée politique essentielle: ouvrir dans le rempart des souverainetés
nationales une brèche suffisamment limitée pour rallier les consentements,
suffisamment profonde pour entraîner les Etats vers l'unité nécessaire à la
paix." Nationalism was for him the demon to be exorcised (Duchêne,
1994, p. 371).

[81] As
is argued by Zielinski, 1995, p. 109, specifically for the ECSC (applying his
criteria of symmetry, symbiosis, homology, transcendency).

[82]     Weidenfeld/Wessels,
1998, p. 56.

[83] Scharpf,
1993.

[84] Most
negotiations take place in the Council of Ministers, that is in committees and
working groups composed exclusively of public servants. Once a compromise has
been reached, often after long periods of negotiations, national parliaments or
the European Parliament, to all intents and purposes, cannot challenge these
compromises. See Working Group ..., 1997.

[85]  Which
has grown far beyond what the Treaties of Maastricht and Amsterdam allow for.
For instance, the Council of Ministers ought to consist of only two councils;
in fact, there are around 20.

[86]  For
a careful analysis of this topic, see Zielinski, 1995, pp. 30-43. Kant spoke of
the constitutional republic ("republikanische Staatsverfassung"),
which comes close to what we call democracy nowadays (ibid. p. 35).

[87]  Kant
(1947, p. 13) argues that the citizens would have to decide to bring the
distress of war upon themselves: to fight themselves, to bear direct costs of
war as well as the costs of mending the war damages, the payment of war debts.

[88] Dahrendorf,
1995, p. 29.

[89] One
might add political participation, an area where the EU certainly does not
excel.

[90]  Cramon
Daiber, 1994, p. 67. die bisherige
Legitimation ... materieller Wohlstandsgewinn für alle .. bereits jetzt nicht
mehr tragfähig

[91]  Cf.
Arnold, 1993, pp. 55-56: The EEC was not established in order to overcome
economic difficulties. Very much to the contrary, the prosperous economic
development of those years was to be made fruitful for the politically
motivated integration process of Western Europe.

[92]  Ironically,
"one of the main objectives of the Treaty of Paris had been precisely to
avoid the reappearance of such a cartel." (Tsoukalis, 1993, p. 42).
Cartels had existed before the war.

[93]  Subsidies
for coal mining in Germany, for example, were in the order of 80000 DM per
person employed in 1994 (15th Report on Subsidies of the Federal Government;
German economic research institutes; according to Nahrendorf, 1996).

[94]  These
costs amounted to 142.2 billion dollars for the EU (OECD data, Economist, June
5th, 1999, p. 123), i.e. 380 dollars per capita. Quite a sacrifice
for a family of, say five members.

[95]  Arnold
(1993, p. 63) goes as far as to say: "The economy of the EC becomes
largely stateless".

[96]  Walker,
1994, p. 87.

[97] This need not mean much, however,
in terms of consumer welfare and development (Olson, 1987, p. 243): 1. In
separate studies Kreinin and Truman found that the formation of the European
Community added 2 per cent or less to its members manufacturing consumption. 2.
Bela Balassa found that the creation of the Common Market led to only 0.3 per
cent increase in the ratio of the annual increment of trade to that of GNP. 3.
"Many economists have estimated or concluded that the degree of protection
is not of overwhelming importance for the level of development or the rate of
growth of a country. ... (They) also regard changes in the degree of protection
as relatively unimportant in comparison with the size of the welfare state, or
the quality of monetary and fiscal policy, in explaining economic performance."

[98]  The
EC was not unsympathetic to such processes of concentration. Viscount Davignon,
the EC Commissioner for industrial affairs, promoted the "corporate search
for extensive networks" and the creation of the Round Table of European Industrialists, "which has acted both
as a powerful lobby behind the scenes and a means of promoting closer ties and
co-operation among the heads of some of the largest firms. Such moves were
arguably not unrelated to the wave of mergers, acquisitions, and co-operation
agreements across national borders ..." (Tsoukalis, 1993, pp. 50, 51)

[99] Martin Wolf, Financial Times, Sept.
1, 1999, p. 12; based on the latest edition of the Human Development Report
(UNDP). The fact that some of these countries are members of the EU does not
invalidate the argument. It would, if the larger EU-members were at least as
well off as the smaller ones (which they are not). The question remains: Why
are smaller countries generally able to generate higher incomes than the larger
ones?

[100]   The
data for the period 1960-73 include the 6 countries, which joined the EEC/EC during
the 1970s and 1980s. The underperformance of the EEC is not due to inclusion of
these countries. With the exception of the U.K. their performance in terms of
GDP, investment and employment growth was normally better (in some cases
considerably better) than that of the original 6 countries.

[101]   Southey,
1995. In 1994 almost 50 per cent of the unemployed of the EC-12 had been
without work for more than one year. About 22 per cent of the 15-24 year-olds
were unemployed. (ibid.).

[102]   According
to Eurostat in September 1999 there were 12,8 million unemployed in the EU.
This represents 10 per cent of the workforce. These figures disguise enormous
differences between regions and age groups. Unemployment runs between 25 and
30 per cent in some southern regions in Spain in Italy. In Eastern Germany it
now stands at more than 18 per cent. Youth unemployment is 24 and 33 per cent
in France, Spain and Italy. (Barber, 1999).

[103]
Marglin/Schor, 1991. The relative stability of Cold-War international order
(and of the EEC/EC, as it was an outgrowth and an integral part of that order)
can be considered a necessary condition for the successful economic development
of Western Europe and elsewhere (see the section "The First Europe"
above). The post-war boom no doubt contributed its share to the stability of
that order. What has been analysed in this section is whether European
integration as such improved economic performance, so to speak, above the trend
of the times. And there the answer tends to be in the negative.

[104]   "Even
if anyhow France has to adjust its economy to international competition, Europe
is an easy scapegoat." (Moreau Defarges, 1995, p. 3).

[105]   Quotations
in this section are taken from Tsoukalis, 1993, p. 115 passim. The final point
coincides with a central argument of Arnold, 1993.

[106]   For
the period 2000-06 the so-called Structural Fund will amount to Euro 195
billion (152 billion for 1994-99). To this Euro 18 billion of the Cohesion Fund
should be added. The member countries are required to co-finance the projects
(normally 50%).

[107]   After
the Portuguese revolution, the death of Franco and political turmoil in Greece,
the unity of the Western Alliance was menaced. To retain these countries firmly
integrated into the West was the political payoff of their admission to the
European Union and of the costs of their integration.

[108]   In
the US 30-40 percent of the cyclical variations of regional incomes are
compensated for by the federal government (Sachs/Salas-i-Martin, 1992; see
also: Bayoumi/Masson, 1996). In Canada, 8 percent of the federal budget goes
to needy provinces (MacCullum, 1997). In Germany (Geske, 1999, p. 488) the
financial transfer system (Finanzausgleich) alone moved DM 56,8 billion in 1998
(3% of GDP); to this the amounts transferred by other systems would have to be
added.

[109]   The
total EU-budget is limited to 1,28% of the GDP of the member countries. The
share of the Structural and the Cohesion Fund in the EU-budget is approx. 31%,
or 0,4% of the EU-GDP. Only part of these funds are actually net transfers to
certain member countries. Most of the money takes a round trip through
Brussels.

[110]   See,
for example, Belke/Gros, 1998; Eatwell, 1994.

[111]   EC
regional policy has reduced notably the ability of member governments to pursue
their own regional policies and obliged them to modify and to discontinue
existing programs. (Engel, 1995, p. 16.).

[112]   Working
Group ..., 1997b; Kamppeter, 1997.

[113]   Olson,
1987, p. 244.

[114]   Possibly,
together with the smaller costs of maintain social and political cohesion, that
explains the on average better performance of smaller economies.

[115]   Such
pressure can even be based on paranoid fears; see DeMause, 1987.

[116]   It
still remains in the realm of dreams: It is subject to unanimity. The member
countries have the greatest difficulties to agree on common positions and are
extremely reluctant to give real competencies to Mr Solana.

[117]   See
for instance, Weizsäcker, 1999.

[118]   Justi,
1758, is an early book on balance of power theory – with some very decisive,
even modern criticisms of it. "The teaching of the balance of power among
the free powers has caused enough bloodshed, misery and misfortune in Europe.
Too often it has been used as a pretext for unnecessary wars. It has rendered
millions of human beings to the slaughterhouse, and many more millions driven
into extreme poverty and wantonness" "Das Lehrgebäude des Gleichgewichts unter den freyen Mächten
hat genug Blutvergießen, Elend und Unglück in Europa angerichtet. Es ist genug
der Deckmantel zu unnötigen Kriegen gewesen, die Millionen Menschen auf die
Schlachtbank geliefert, und weit mehr Millionen andre in die äußerste Armuth
und Dürftigkeit versetzet haben." (Vorbericht, p. 3; translation
WK).

[119]   Kohr,1957,
p. 27; see particularly, chapter 2.

[120]     Furthermore,
the internal basis of the hegemonic power erodes in time. See Huntington, 1997.

[121]   Because
the member countries of the EU find it very difficult to agree on common
positions. Furthermore they are extremely reluctant to delegate real
competencies for foreign policy and security matters to the EU, and to
concentrate these competencies in one pair of hands.

[122]   On
the other hand, a society can be stabilised internally, either because internal
conflicts are projected onto the external enemy or because the conflicting
parties dampen their demands and behaviour in order not to weaken their country
– or are forced to do so by the government.

[123]   Cf.
Hirschman, 1982. See also the last sentence of the quotation of Justi in the
final footnote.

[124]   Justi
(1758, pp. 90/91) explains this wonderfully: Some members of a people cross the
mountains or a large stream. They meet people unknown to them. "If they
find that these unknown people do not cause them any harm, their fears will
disappear and they will socialise among themselves. It is therefore fear and
the drive to socialise what the peoples are inclined to in their natural state;
by no means it is their enmity. ... As long as two peoples do not offend each
other in the basic principle of their own interest and their own happiness,
the drive to socialise will not be hindered. ... However, when one nation
becomes an obstacle or causes damage to the other's proper interest, then a
fountain of enmity and war is struck. Such an occasion will present itself all
too often in the interchange and in the deeds of the peoples, particularly with
respect to commerce." Which is also a belated comment on the peace-generating
qualities of economic interdependence. (einige
Mitglieder eines Volkes überqueren die Berge oder einen großen Strom und
treffen auf ein ihnen unbekanntes Volk) "Finden sie, daß ihnen dieses
unbekannte Volk nichts Böses zufüget; so wird die Furcht verschwinden, und sie
werden sich gesellschaftlich zueinander thun. Die Furcht und der Trieb zur
Gesellschaft ist also dasjenige, worzu die Völker in ihrem natürlichen Zustande
geneigt sind; keinesweges aber zur Feindschaft, .... So lange also zwey Völker
einander in dem Hauptgrundsatze des eignen Interesse und der eigenen
Glückseligkeit nicht beleidigen; so wird dem Triebe der Gesellschaft kein Abbruch
geschehen. ... So bald aber eine Nation der andern in ihrem eignen Interesse
hinderlich und schädlich fällt; / so ist die Quelle der Feindschaft und der
Kriege vorhanden; und diese Gelegenheit muß sich bey dem Umgange und Handlungen
der Völker, und inbesonderheit in Ansehung der Commercien (!) nur gar zu oft
erreignen."