‘The creation of the empire of a united Germany showed a new Europe.The keen word of an English diplomatist expressed what was dawning in men’s minds as a new misgiving. ‘Europe’, he said, ‘has lost a mistress and got a master”.In J. Morley, The Life of William Ewart Gladstone, Vol.1. London, MacMillan, 1905.p.991.
“But I do not know, (asked Henry Kissinger), how the President will keep Germany from dominating theEurope he has just described”…”Par la guerre”, he (de Gaulle), said simply. Henry Kissinger, White House Years,Boston, Little Brown, 1979.p.110.
The great transformation in European and world affairs in the years 1989-1992 marked a shift in the dynamics of European integration from one dialectics to a new and untried dialectics. The old dialectics were those of the cold war, with the familar and multiple interactions between the two Germanies, the two Europes, the two alliances and the two great powers. Despite the central part played by nuclear weapons in the drama, the unravelling of the status quo consolidated sometime in the mid-1950s occurred at a leisurely pace, enabling western European peoples and states to build up their own peculiar society. But its dynamics was played out on a world scale at four levels of the global structure, the states, society and economy, whereby the creation of a competitive global market under leadership of the United States as Europe’s prime power accelerated the transformation of societies and states to undermine the communist-party states. The two Europes lay at the heart of the process so that the fall of the Berlin Wall in November 1989 detonated around the world, bringing the countries of central and south-eastern Europe, plus successor states of the Soviet Union, as well as its third world clients, and China and India into a world market where the name of the game is getting access to hard currency markets and the best technology on offer.
With the events of 1989-92, the familiar dialectics between east and west, the two Germanies and the two Europes gave way to a new dialectic prompted by the disappearance of the old structure and its substitution for an indefinite process of open-ended transition to a new world structure whose outlines are visible, but by definition hypothetical. China,India,Russia and Europe are all candidates for world status, but each must struggle with their specific inertias, leaving only the United Statesas a world power, with Japan as a wealthy second.Germany,temporarily the world’s third largest economy, is one half the size ofJapan’s. Yet its unification precipitated the triple moves to integration in western Europe, self-determination inGermany and transition out of the party-states. The military threat faded, to be replaced by a process of simultaneous disintegration of the party-states, their import of western ways and an accelerated integration of the world economy. This was accompanied by a precipitate expansion of Europe’s peripheries to the traditional frontier regions which separate Christian Europe from Islam, and western Christianity from eastern Christianity. Familiar landmarks of the 1945-89 period vanished. Western European leaders improvised as best they could, and sought to reassure themselves and their publics that they were neither prepared to returnEurope to its pre-1945 pasts, nor that the European peoples should be dismayed at venturing into an uncharted future.
Their initial reaction was one of preservation; Only through cooperation could the system of interdependence built up since the 1940s be secured. The novelty lay in the substitution of the structure of bipolarity for the much loser configuration in Europe of a core and a periphery. The fear was that the forces of disintegration and fragmention at work in the Balkans,central Europe or the former Soviet Union would work inwards towards core Europe, while the expansion of core Europe would so accentuate its diversity as to losen the bonds that had been painfully sewn together in the previous decades. There was also a confused sense that the collapse of the Soviet Union, with its dogma of having taken leave of history, would unleash an orgy of figurative fishing exhibitions in Europe’s collective pasts, and especially inGermany where the definition of nationality remained untaintedly that of the Nationality Act of 1914. The Act defined German nationality by the law of blood, in contrast to a law of citizenship predicated, if not always practiced on universal principles. Consolidation of the core therefore required agreement on its geographic limits, on its ideals, on its institutions and on its political and economic relations with the rest of the world. Yet any attempt to define it confronted the realities of differing political imaginations among Europe’s leaders and peoples as to who belonged in which core, and what the criteria for membership or exclusion should be. Defining what Europe’s future should be inevitably precipitated preemptive efforts to enter it now.
The speed and scope of these changes in European and world affairs introduced a vital complicating factor to the multiple dimensions of geography,ideals,institutions and markets inherent to any political arrangement defining core from periphery.The states, and the European Union, face – as Pierre Hassner writes – the double dilemma of identity, `the temporal dimension of continuity and change, and the spatial dimension of closure and overture’ . The general crisis of collective identities, Hassner goes on to write, derives from the non-coincidence of their two dimensions of optimal size and the sense of belong over time. As Burke wrote at the opening of a previous revolutionary period in Europe, a sense of belonging ought not to be considered as nothing better than “a partnership agreement in a trade of pepper and coffee,calico or tobacco..”. It is a partnership “not only between those who are living, but between those who are living, those who are dead and those who are yet to be born”. Partnership is as much a matter of the substance of memory as a set of expectations. In Hassner’s words, the states are not generally aware that the two dimensions of scope and time do not coincide for politics, currency, defence or culture. When they do, their citizens or governments tend to become nostalgic for a lost or threatened unity. The Union then may become a scapegoat, or seek to redeem itself by trying to reproduce a mythical unity as a club of states in the realms of defence or money and economy at the level of a continent.
Any discussion of the idea of the core or periphery in the Europe of the 1990s therefore requires first a sketch of some of the major inheritances which Europe was bequeathed from the period of the cold war. Those inheritances are juxtaposed to other strata of memory, in a Europe after the cold war that is heir also to a pre-1945 world, and that is haunted by fears or admonitions of a return under modern conditions to that past. Yet the end of the cold war fundamentally altered Europe’s acquired position in the world economy, along with its dynamics and the world markets’ varied and changing expectations about how it would evolve. The European Union was conceived as a club of states and peoples, distinguishable from the rest of the world in territory,law or policy procedures. It was also part only of a world market and of a world polity.
Five inheritances from 1945-89.
There were at least five major inheritances for Europe left over from the collapse of the system prior to 1989-92. The first was the continuing interaction between extra- and intra-European developments. The old world structure had been established through a prolonged process, starting in 1943 and the shift in the fortunes of war against Germany,Japan and Italy, and consolidated in its main features around 1955.Its content was informed by the US policy of containment,predicated on recognition by Washington of the impossibility of prolonging the wartime alliance on the grounds of incompatible views of political community. There were two variants to the policy of containment. One stressed US support for European, and then Japanese economic revival. The other proposed political and military preparedness to restrict any geographical or ideological extension of Soviet influence. These two variants bound Asian into European affairs through the two major wars in Korea and in Vietnam, and by the rift which opened up between the Soviet Union and the party-state inChina. The Soviet Union proved responsive to Brandt’s Ostpolitik, enabling it to embark on its own policy of containment ofChina inAsia. Twenty years of Ostpolitik, intended to ease the way to German “unity in free self-determination”, were punctuated by clashes between the powers inAsia. This particular chain was broken in October 1989, when Gorbachev refused to crush the demonstrators in Berlin, as Beijing had done to the students in Tienanmen Square in June; but it was replaced by global market interdependence as European businesses or governments responded to the prospective rapid emergence of China as a great power, and to the continued transformation of Pacific Assia.
The second major inheritance from the old order was rooted in the western European deviation over forty years from the three components to the policy-mix which informed the Marshall Plan’s design for Europe’s reconstruction. There were three key components: governments were to pursue discretionary, but conservative counter-cyclical fiscal and monetary policies; national factor markets in labour capital and products were to be made as efficient as possible; moves were to be made to freer trade and currency convertibility.Western Europe moved to currency convertibility in 1958, and accelerated the dismantling of barriers to trade and capital movements. But in the mid-1960s, cautious fiscal and monetary policies were slowly abandoned in favour of more ambitious plans to stimulate growth. Budgets slipped into permanent deficit, as expenditures grew from about 25% to 50% gdp by the early 1990s. European states furthermore responded to growing competition on product markets by elaborating mutually competitive national industrial policies, while legislation was introduced to facilitate cross-shareholding between national corporations. High rates of employment shifted the balance of power in labour markets away from management towards trade unions. Governments conceded a host of benefits for people in work, providing disincentives for employers to hire. By the early 1990s, western European wage costs numbered among the highest in the world, while unemployment rose unremittingly.
The third inheritance from the policies of free trade and currency convertibility was the huge growth in world and European trade. The larger western European countries’ trade rose from 10 to about 33% of gdp, with 70% or more of trade going to clients within the region. The smaller European countries traded up to two-thirds of their economies, with an even higher proportion devoted to intra-regional trade. By the early 1990s, western Europe was the world’s largest market, accounting for about 28% of the market economies’ combined income, and a key source of hard currency for exporters from the former Soviet bloc, the southern and eastern Mediterranean, andAfrica. It accounted for about one third of exports from the Gulf oil states, and one fifth of exports from North America, Latin America andAsia. Western Europe at the same time had become one of the world agricultural superpowers, along with the United States, dumping its subsidised surpluses on world farm markets, and contributing to the lowering of world farm product prices. Meanwhile, trade imbalances grew within the industrialised countries of the northern hemisphere. Trade frictions multiplied between Japanand theUnited States, as Japanese savings and investment rates remained consistently high, whileUS consumption rates rose and savings rates fell. Within Europe, the Federal Republic ran consistent trade surpluses.World and intra-European negotiations to dismantle nontariff barriers and reduce agricultural subsidies were launched in 1986 with a view to spiking mercantilist guns across the developed world.
The fourth inheritance was the existence by the 1990s of a world market. As Secretary of State Marshall had stated in June 1947, the idea ofUSaid in support of a cooperative regional effort to achieve a rapid reconstruction inEuropewas “the revival of a working economy in the world so as to permit the emergence of political and social conditions in which free institutions can exist”. In 1961, this Organisation for European Economic Cooperation was expanded to include the US,Canada,Australia and New Zealand, followed byJapanandSpain. The OEEC became the Organisation for Economic Cooperation and Development(OECD), tokening the dual trend of western economies to promote national economic growth simultaneously with global market integration. Growth in Europe and the rest of the world was fostered on a tide of low priced oil, denominated in dollars and flowing from theGulf states. The shift of the world onto a dollar standard was accelerated by the US move to external deficit, followed by the continuous run of federal government deficits from the mid-1960s on. Dollar hegemony was consecrated by the oil price rises of 1970-74, and by the related decisions by President Nixon to end the dollar’s convertibility into gold and to end restrictions on foreign loans by US banks. Over the subsequent 20 years,London became the hub of the world’s money markets, whose turnover in the early 1990s exceded commodity trade by a factor of 100 to 1. By the early 1990s, private world financial markets were judge and jury of the world economy.
The fifth inheritance from the old order was the flowering of a specifically European society of states, characterised by a sharing of common interests and values, and by a density of complex political and market interdependences marking it off from the rest of the world. Its shared common values are those of constitutional government, open markets and human rights and duties. This society developed slowly within the confines of the western alliance, based on the Washington Treaty of 1949 and its appendages of NATO and the WEU. Its evolution was accompanied by a contradictory reconcilation betweenFrance and theFederalRepublic, exemplified in the Franco-German Treaty of 1963. Reconciliation entailed French priority in relations with German, but Germany maintained priority in relations to theUnited States and in pursuit of state unity. The institutional fabric which wove the Atlantic into the continental dimension of western Europe betrayed the complex layers of partial accords betweenEurope’s sovereign states, tying them through accumulative treaties to each other and to the rest of the world. The Council of Europe, with its European Convention of Human Rights as a pendant to the UN Convention, was in 1990 the sole inclusive western European organisation; The European Community went through successive enlargements from the six core founders of 1957,to the twelve who negotiated the Maastricht Treaty in the course of 1991. The maturing of the European society of states had come in the years 1974-77, with the creation of the European Council, the signing of the Helsinki Final Act among thirty five states in a geographic zone stretching from Vancouver to Vladivostock, and the institutionalisation of the seven-power annual summits, with their contributions from the ancillary organisations of the United Nations. The Council helped to incorporate the heads of state and govbernment into the EC’s business, with the Commission as the other head of a bichephalous pair.
Memories and glimpses of possible futures
To these five inheritances from the old was added the precipitate move to a prevalence of flux over structure. The structure of bipolarity in pre-1989 Europe had replaced the old European balance of power, with its distinction between the great powers and the rest, engaged in a permanent ballet of alignments and disalignments. The permanent alliances of the cold war confirmed stability, but at the expense of equity. Statecraft operated within predictable bounds. With the end of the cold war, political imagination was called upon to chart ways of reconciling the multiple dimensions of the new Europe. But where were the sources on which a post-1989 political imagination could draw? Historical references were charged with Europe’s divisions, as much as with its unity; the evocation of recent or distant pasts served as blueprints or warnings about possible futures. Yet in the final phases of the cold war, visions of a Europe multiplied, in which suggestions to overcome present divisions were advanced either through commemoration of a common culture or religion, or through the resurgence of distinct state traditions. Chancellor Schmidt at the SPD conference in 1979 had referred to the unity of medieval European culture as embracing “not only Rome and Byzantium, but also Oxford, Prague and the Sorbonne, Cluny and Zagorsk, Bergen and Novgorod”, a statement echoed by Gorbachev’s rendering of a humanist “common European home” or of Pope John Paul’s vision, enunciated at Santiago de Compostella, of Europe’s wounds healed by a return of its peoples to the roots of their Christian civilisation. As Germany’s unity moved closer, references to Europe’s more recent histories became louder, with Prime Minister Thatcher’s Bruges speech in autumn 1988 on Great Britain’s long adherence to the preservation of Europe’s liberties or President Mitterrand’s statement in spring 1989 that his prime purpose was to “guard (France’s) status” as a great power in a changing world. Chancellor Kohl warned against the resurgence of “nationalism”, and in particular of a return to the balance of power. Germanys’ future, he repeatedly stated, lay in a sharing of sovereignty under the mantle of supranational institutions, coupled with “the definitive rejection of the 19th century order in Europe, which proved incapable of ensuring durable stability”.
A further ingredient of Europe’s new situation was the transformation of the world’s and Europe’s military system, as the cold war came to an end and the Warsaw Pact crumbled. At theLondonsummit of the NATO powers in July 1990, the western allies celebrated the success of their strategy–laid down in the early years of the alliance and recorded in the Basic Treaty of 1955, whereby the western allies committed themselves to both the security of the West and the unity of Germany. With the disappearance of the common enemy, though, Europe’s security problem became analagous to that confronted by theLeague of Nationsin the inter-war years: what mandate for which purpose to be executed and decided by whom and in which institutions were the peace-keepers or peace-makers to punish an errant state, if error there was? Security for Europe was no longer to be defined in terms of containing an external enemy by military means and its local allies by political or economic inducements; it was to be achieved within a Europe, defined in the CFE Treaty of November 1990 as covering the central area of NATO and the former Pact, but in effect ranging over the balance of forces in a wider Atlantic and continental context. Within this core area, a key concern forGermanyas a non-nuclear state was international agreement to prevent the proliferation of nuclear weapons, while in the Balkans or theCaucasusdemands for self-determination deteriorated into war.
On a global scale, western Europe’s acquired position as the core of the world market was fundamentally altered by the fall of the Wall of Berlin. Its reverberations around the world accelerated the pace at which four-fifths of humanity with per capita incomes one sixtieth of those of developed countries were incorporated into the global market. The collapse of the party states under Soviet control, the path of accelerated growth taken by the Chinese communists and the loss of India’s soft currency markets precipitated upwards of about 3 billion people onto a world labour market. Their entry marked a challenge to the priveleges accumulated by the rich countries of the northern hemisphere within the confines of the cold war’s political markets under US protection, and announced the end to the apartheid that had come to segregate one rich fifth of humanity from the rest of the world’s population. The European Union accounts for about 6% of the world’s population, 28% of the world product, nearly 40% of transoceanic trade, does over 70% of its trade on a regional basis, is the principal source and target of foreign direct investment in the world, and trades twice as much with developing countries as with the US or Japan. Yet Europe’s high relative wages, the rapid shrinkage in its skill and education advantages and the fluidity of capital goods point to a hyper-competitive world market.Given continued growth rates, China’s economy, it could be calculated, would equalise that of the United States by the end of the 1990s; sometime between 2010 and 2020, with a per capita income only one sixth of a present Swiss, China’s economy could excede Europe’s by a factor of three. On that count, post-cold war Europe’s focus on its internal unification was deeply flawed, and revealed a parochial failure to learn from the tidal wave of change running through the vast area of Pacific Asia. The next century would see Europe reduced to an inconsequential periphery in a world centred on the Pacific and Indian oceans.
By contrast, many of the arguments advanced by the élites who negotiated the Single European Act, launching the internal market, and the Maastricht Treaty, finally signed in February 1992, incorporated Europe’s altered position in a changing world as a central feature of their appeal. Consolidating a large internal market within the territory of the Union was conceived as a pre-requisite for the Commission and the member states together to strengthen their negotiating position on trade with the United States and Japan. The strategy soon confronted two countervailing forces: the anticipation of a large internal market contributed to accelerate inward and outward investment by corporations–an area where the Commission’s powers were practically non-existent; as soon as the European publics became aware in the course of 1988 that their particular habits could be challenged by the creation of the single market, they mobilised to protect themselves or to project their special interests into EC legislation. Opening up the markets within Europekindled parochial concerns and ran parallel to the globalisation of corporate strategies. The growing din of nationalist voices thus preceded the fall of the Wall: legislation on the internal market threatened national standards or traditions; member states and their corporations protected their discretionary powers with regard to investment decisions.
Differences between member states over the organisation of markets translated into disputes over the purposes of the EU’s market strategy, with non-member states and their corporations serving as foils in older European feuds. For Prime Minister Thatcher, the EC’s internal market was one means to spike the mercantilist gunds of Germany’s domestic corporate-government arrangements. “No-one is entitled to have a balance of payments surplus entrenched in the way in which they(the Federal Republic and Japan) run both their economy and also their society”, said Prime Minister Thatcher. In Germany, a more open market for corporate assets brought the prospect and practice of foreign ownership. “If today you restrict or forbid stakeholding for German banks,” echoed Walter Seipp, speaker of the Commerz Bank,”..then you have Jimmy Goldsmith…(to) demonstrate to you how to buy, sell and strip industrial stakes in a market economy on the American model”.
The Single European Act was the last time that European integration could be presented to national European publics as a series of measures designed to improve the functioning of the European economy. Since the rejection of the European Defense Community by the French National Assembly in 1954, the protagonists of European union had sought to skirt the hard core of European patriotisms by adopting utilitarian language. Benefits of economic integration were weighed and measured against the costs, as exemplified in Mr.Cecchini’s contribution. If the internal market programme was implemented, the author enthused, then ” within a view years, this improvement in growth could raise the Community’s gdp by 4 to 7%”. Yet the paradox of the EC’s official style was that, though couched in terms of what Keynes labelled “one of those pretty, polite techniques which tries to deal with the present by abstracting from the fact that we know very little about the future”, it was inhabited less overtly by Keynes’ “vague panic fears and equally vague and unreasoned hopes … (that) lie but a little way below the surface”. The internal market,Delors stated, was a mobilising device, to achieve a wider political agenda for the EC. Yet the conflation of rationality and passion in Delors’ style invited passionate responses.”The Germans are growing increasingly irritated” wrote the Handelsblatt’s international business correspondant,” at what they see as France’s ‘grand strategy” to extract Versailles-style reparations for German unity”.
Indeed, the internal market programme was one of a number of visions waved before the German public in the dying days of the cold war. One was a MittelEuropa, cosily patterned on a Swiss neutrality, with the German Michel figuratively clad in Zipfelmütze, naive and innocent of the calculations of this world. Another vision was “common home”, rapturously endorsed by the German public in summer 1989 at the time of Gorbachev’s visit toBonn. Meanwhile President Bush in May 1989 had offered “partnership in leadership” toGermany, in an Atlantic alliance whose membership would extend, as Secretary of State Baker indicated, to thePacific Ocean. What was Michel to make off all this wooing? Both Mitterrand and Delors answered in October 1989 by proposing a more rapid move to European integration. But trust between Bonn and its western European partners was broken in November, when Kohl–suspecting that his neighbours were less than enthusiastic about the prospect of German unity–announced his own Ten Point programme for a slow and controlled passage to confederation with the GDR. There followed three months, when the reflexes of old Europe returned with a vengeance, as the French President flirted with a reverse alliance with Russia; Kohl failed to allay Polish suspicions that the Oder-Neisse line was permanent; and Britain saw Germany as Europe’s hegemonic power. In April 1990, the passage was passed, as Mitterrand and Kohl “relaunched” the process of intergovernmental conferences, culminating in the Maastricht Treaty.
The ensuing debate could no longer conceal the many national agendas and visions covered during the years of the cold war by the handy veil of the external threat and of utilitarian jargon. Yet Jean Monnet’s method, which had served well enough in the past, was applied one more time.Maastricht was a pure product of European diplomatic traditions and of neo-functionalist methods. One policy area after another was spun into a seamless web, recorded in a Treaty seventy-two pages in length, and equal in complexity to the many other European settlements down the centuries. Yet there was no readily available European culture on which the élites who negotiated the Treaty could draw. National cultures commemorated Europe’s divisions. Regional cultures were awakened to their own claims for self-determination. One historical layer below the nations and regions were the religious wars and settlements of the sixteenth and seventeenth centuries, and behind them the memory of a Catholic Europe under Pope and Emperor. Within each layer, the golden ages of some jockeyed against the nightmares of their neighours. Fleeting moments of European unity aroundRomeor Charlemagne remained too far in the past; recent episodes of unity under Napoleon or Hitler were all too present in popular memories. The builders of the new Europe thus faced a double paradox: they had to build on the European society created after 1945, but the world prior to 1989 had gone for ever; “Europe” had to be created on the basis of a memoryless project for a future beyond the cold war.
Which cores and whose peripheries?
There had been moments in the old Europe of 1945-89 when ideas seemed to challenge structures. Recalling the years immediately after the world war, and while the conditions and terms of the provisional European settlement were still fluid, Secretary of State Dean Acheson could record the creation of the Atlantic alliance with the words of Alphonso X, the Learned, that “Had I been present at the creation I would have given some useful hints for the better ordering of the universe”. Another such period was in the early years of the Fifth Republic, when de Gaulle preempted his nightmare of an Algérie Française leading to a Colombey-les-deux-Mosquées, and united the prayers at Reims of “the first among Frenchmen and the first among Germans”, so that “the works of friendship forever replace the misfortunes of war”.. A further period of change, when cold war structures seemed to shake was in the early 1970s, as Chancellor Brandt negotiated the treaties with the GDR,Poland and the Soviet Union. His strategy to widen the area of freedom through subversive cooperation with the party-states was expressed in the “letter on German unity”: “to work toward a state of peace in Europe in which the German people regains its unity in free self-determination”. The last period of movement encompassed the years of Delors presidency of the Commission, where he described his vision in the words of Geoffrey Howe: “The sovereign nations of the European Community, sharing their sovereignty freely, are building for themselves a key role in the power politics of the coming century”.
Each one of these visions of Europehold their own cores, and their different peripheries. All were born prior to the great transformation of 1989-92. There is the Europe of Charlemagne represented in the Franco-German relation; the wider Europe of which Brandt and Schmidt dreamt, and that in effect displaces Europe’s geographic centre to Berlin; there is the western alliance with its American core, and German ally in Europe; and there is Delors’ hope for a quasi-federal Europe exemplified in aspects of the Single European Act, and preserved in the Maastricht Treaty most evidently in the promises of further revisions at the inter-governmental conference to be initiated in the course of 1996.. We shall briefly sketch each one, and then present the stresses and strains which they introduce to or which inhabit their own cores, and most importantly, which they introduce to relations between France and Germany.
1. Franco-German Europe.
A Carolingian Europe, formed around an inner core ofFrance,Germanyand the Benelux countries, has been a constant vision and practice at the heart ofEurope. A recent embodiment was the Schauble-Lamers paper, presented by the German christian democratic party leadership in September 1994, suggesting the reinforcement of the European Council but also a greater use of majority voting. Prime Minister Balladur placed a French accent on a similar suggestion of a Europe of concentric circles, withFranceandGermanyat the core, adding that the EU should propose a white paper on defense to define “precisely” its security interests and how to defend them in conjunction with NATO. Both of these proposals could boast a long pedigree, stretching back to the Schuman plan of 1950 to subordinate coal,iron and steel industries to a common supranational authority. The idea was immediately welcomed by Chancellor Adenauer as it satisfied German aspirations for equality of treatment, promised an end to allied controls over production, opened a path to reconciliation withFrance, and was a step in the direction of binding the youngFederalRepublicinto the Atlantic alliance. The two proposals for a hard core, or aEuropeof concentric circles could also hark back to the 1963 Franco-German Treaty, with its emphasis on inter-governmental relations.
De Gaulle outlined his view of Franco-German relations in his regular conversations to Alain Peyrefitte. There were four guiding ideas, de Gaulle declared, to form a Europethat was not integrated or supranational. The first was that the “hard core” states of western Europe (who had signed the Rome Treaty) had to move so close in policy as to offset the attraction on the others of the two ‘mastodants” of the Soviet Union and of theUnited States. Eventually, Portugal and Spain could join; Britain, when it had shed the Commonwealth and losened its ties to the United States; Scandinavia, and then Poland and the other satellites once the iron curtain had lifted. The second guiding idea which would determine whether Europe would or would not take shape was whether or notGermany and France could be reconciled. This had perhaps been achieved at the level of élites; but it had not been done in depth. “There will be no European construction if the accord between the two peoples is not the keystone”. The third idea is that each people is different from the others, “incomparable, unalterable”. “They must stay as they are, as their history and culture have formed them, with their memories, their beliefs, their legends, their faith, their determination to build their own future”. The fourth idea is that Europe will only take shape when the peoples “dans leurs profoundeurs” decide to adhere to the project. It would not be enough, de Gaulle considered, for the parliamentarians to ratify. “Popular referenda are needed , preferably on the same day in all those states involved”.
What has become of this vision? The Franco-German engine has consistently proven to be the centrepiece of European construction. All of the major initiatives from the Coal and Steel Community, through to the Rome and Euratom Treaties, the Franco German Treaty of 1963 and its revival in 1974 on the joint initiative of Chancellor Schmidt and President Giscard d’Estaing have been based on Franco-German initiatives. They in turn formed the indispensible pre-requisite for all institutional initiatives, such as the development of the European Council, the Commission’s association with the work of European Political Co-operation or the trend to institutionalise majority voting as the way to overcome resistance among recalitrant member states. French and German accord was indispensible to the setting up of the common external tariff, the CAP, the series of enlargements, direct elections to the European parliament, the launch of the European Monetary System, the internal market and to monetary union.FranceandGermanyfurthermore account for 50% of the EU’s gnp and about 40% of its population. They separately control the region’s key currency and one of the considerable nuclear forces inEurope.Germanyis Europe’s prime industrial exporter andFranceis the number two world farm produce exporter. On a more negative note, when the two fall out,as occurred after Adenauer’s retirement, or in Mitterrand’s first year, little could be achieved.
Furthermore, the iron curtain has lifted, prompting a redefinition of neutrality among the EFTA states and their entry to an EU of 15 member states, while pulling the former client states of theSoviet Unioninto associate relations. Yet the major effect of the Soviet Union’s collapse, as far as French geopolitical calculations are concerned, is thatGermanyhas no equivalent power to its east. It is easily the largest of the European states in all relevant measures, such as population, industrial output, trade surplus, hardness of currency or numbers of orchestras. German unity has been seen in Paris as a threat to France’s status as a great power, and this has been interpreted in contradictory statements by President Mitterrand about the centrality of Franco-German friendship to Europe’s future, while not inviting Chancellor Kohl to the fifty year after celebrations of liberation by the Anglo-American armies. Indeed, both Schmidt and Kohl were prepared to provide the financial substance to oil the works of European construction, and leave the style of Euro-policies to the French President. As Germany moves slowly to define its own external policies in a post cold-war world, one expectation in Paris is for German Chancellors to appropriate more of the style for their own domestic benefit to clarify the message about the principle sources of Euro-largesse.
Nor are public opinions in both countries reconciled in depth to each other. During the French referendum campaign in September 1992 on a vote for or against the Maastricht Treaty, both supporters and opponents of the Treaty reinforced German scepticism about the relationship withFrance. Those campaigning for a “yes” vote urged their fellow countrymen to support the Treaty on the grounds that this wasFrance’s last chance to corralGermanywithin a European framework. If France was to say No, Germany would go its own way, and dominate the continent. The DM would be emperor and king, and France would have no say in shaping either interest or exchange rate policy. It would simply have to accept whatever decision was made inBerlinor inFrankfurt. Better to co-determine policy with Germany within the EU, than to be one among many of German considerations in external policy. The opponents argued that rejection was the only way for France to escape being suffocated by united Germany’s embrace.
On the German side, public opinion was awakened by the Bild Zeitung in December 1991 that Kohl had made an “irrevocable” commitment to hand over the DM for a potage of ecu. The ensuing eruption of national resentment prompted Kohl to up the stakes by insisting on a more assertive German foreign policy.Bonn hurried to “recognise”Slovenia and Croatia, ignoring the arguments of its allies that this spelt claims and counter-claims by competing ethnic and religious groups over Bosnia. The argument of both Genscher and Kinkel at the Foreign Ministry was that Germany had acquired self-determination, and should not deny that right to others who claimed it. This argument in effect laid out a stake for Germanyas the champion of national self-determination. The claim was rapidly augmented by another commitment by Kohl to make Frankfurt visibly into Germany’s Finanzplatz by making it the centre for the European Central Bank.London’s counter-claim foundered when the Bundesbank in August 1992 clearly indicated its preference for the pound sterling’s devaluation, and then meted out the same treatment to the franc in August 1993, but this time after a costly support by the Bundesbank for the franc. Kohl was rewarded in October 1993, when the member states voted 11-1 in favour of Frankfurt as the capital for the ECB.
More seriously still, Kohl pledged in the Maastricht negotiations that the DM would only be handed over if the powers of the European Parliament would be augmented. French politicians suspect Germany of seeking to expand parliament’s powers because the German christian democrats and the German social democrats–now joined by a large body of Labour MEPs–form the hard core of the parliament’s main parties, whereas the French MEPs are dispersed across the hemi-cycle. In a different vein, the German Constitutional Court’s opinion on the Maastricht Treaty links future surrenders of sovereign powers to the filling of the EC’s “democratic deficit”. Further institutional progress is not going to be automatic, unless the EU’s development is compatible with the principles laid down in the Basic Law. The election of a Gaullist President, with a massive majority in the National Assembly, reduces still more the probability of significant increases in the Parliament’s powers. No progress on powers to the European parliament jeopardises the French project to end the Bundesbank’s primacy by creating an ECB.
Not least, Kohl linked the DM’s fate to further progress made in elaborating a common foreign and security policy. Optimally for Germany, all decisions regarding foreign and security policy would have to be adopted by majority voting. But at the heart of French foreign policy stands France’s view of its standing as a great power, with its permanent seat on the Security Council, its mission universelle as the country of the Rights of Man, and its nuclear weapons. Germany has renounced ambition as a great power in the traditional sense, but seeks a permanent seat on the Security Council, and equates its eventual role there with implementing the UN Charter. Above all, Germany voluntarily renounced nuclear weapons by signing the Non-Proliferation Treaty in 1968, and lobbied heavily for its extension in 1995. Yet the heart of French military strategy is nuclear weapons. The ultimate exchange rate in the negotiations over monetary union is thus the price of surrendering the DM for joint planning of the nuclear force de frappe. Joint planning means an end to French discretion in the deployment of nuclear weapons in support of a policy of deterrence from a threat which can not readily be identified. As the French Ambassador to Australia answered in response to questioning as to the identity of a threat to France that justifed the renewal of nuclear testing in Mururoa, in the South Pacific: “Certainly, the fact that we wanted to exclude for good the possibility of any further conflict between France and Germany was at the root of our European policy”.
In effect, what France has asked in the Maastricht Treaty is for Germany to hand over the DM, whileFrance retains its nuclear deterrence. French European diplomacy does therefore not accept German equality. The implication is that Germany retains a number of options: it may seek economic hegemony by retaining the DM; it may seek equality by inducing France to abandon its nuclear weapons; it may acquire a nuclear force of its own, or cling to the US as nuclear protector; or it may accept inequality, and abandon the DM while leaving France its force de frappe. The latter option is not so much a Carolingian as a Napoleonic Europe.
2. A wider Europe.
As soon as it became evident that the people of eastern Germany were voting on their feet for unification, Kohl made clear his view of the need to widen the EU beyond its western core. The European Union had successfully appropriated the name of “Europe”, despite the fact that membership had never been inclusive of all states in the western sphere of influence. In the dying days of the cold war, the EU won a prolonged battle with the moribund party-states to negotiate with each on a bilateral basis. Decompression in central-eastern Europe in 1989 set the scene for the round table meetings between opposition groups and party-states, leading to the dismantlement of the regimes. After forty years under dictatorship, the European countries of central-eastern and south-eastern Europe could now “join Europe”- a shorthand for the combined process of political transition, economic restructuring and marketisation, and entry to the various institutions which represented western society. Participation in the CSCE increased from thirty-five to fifty-two sovereign states in the course of 1991-2. NATO extended its reach eastwards with the creation in November 1991 of the North Atlantic Cooperation Council, incorporating a gathering amount of participant members; the Council of Europe opened its doors to new applicants. President of the Commission Delors, in October 1991, called on member states to prepare for a European Community numbering 24 to 30 over the coming decade.
The end of the cold war transformed the relations of the neutral states to the European Union and to NATO.Sweden had maintained its inherited form of neutrality through the world wars, as hadSwitzerland.Finland as a belligerant against the Soviet Union in the world war had reached its own modus vivendi with the Soviet Union in 1948.Austria declared its own neutrality following the withdrawal of Soviet troops fromViennain 1955. All neutral states had sought to play a part in the prolonged negotiations between East and West, as their contribution to creating European stability under the conditions of the cold war. The transformation of Europe’s security in 1989-90, and the ensuing collapse of theSoviet Union, prompted them to reformulate their neutralities, and to participate in the EU’s discussions on the “political aspects of security”. By contrast to the public opinions of central-easternEurope, their public opinions were not eager to join NATO. But their publics shared the same anxieties that an extension of NATO membership to embrace all of Europe, including perhaps the Baltic states, would have been interpreted as an aggressive act byRussia.
From Bonn’s perspective, there was no alternative to embracing the countries of central-eastern Europe within western society.Bonn’s position from the outset was that it was vital in order to fill the void left by the collapse of the Warsaw Pact and the COMECON, and to help mitigate the interstate or state-society conflicts in the region. The alternative was to build up autonomous institutions, such as attempted at Visegrad between the governments ofPoland,Hungaryand Czeckoslovakia, as it then was. But there was little reason to consider that these weaker institutions would have been better capable of confronting the multiple agenda of transition in these countries, nor that bilateral channels between its member states and the EU or NATO would not have prevailed. But the main consideration for extending the reach of western institutions was political. The countries of central-eastern Europe, and in particular Poland–which had become a Golgotha under General Governor Frank’s infamous government from 1939-45–had been excluded from joining in the Marshall Plan, and in the OEEC, on Stalin’s order. Their peoples’ aspirations for national independence had been contained by the use of Soviet force, and –in the twenty year period of détente from 1970-89–with the support of western loans and of western governments, more concerned to maintain Europe stability than to back local dissenters against the regimes. The western European society had first and foremost a moral obligation to welcome the “other Europe” into their midst.
Paris proved more reserved in extending the membership of western institutions, on the broad grounds that the EU in particular already faced enough challenges of its own, without being burdened by the additional difficulties of enlargement and of transition. Enlargement of the EU, first through the economic area agreements and then through the EU’s enlargement in January 1995 to include Austria,Finland and Sweden increases the EU’s geographic scope, political diversity, economic divergence and institutional imbalances between small states and large states, symbolised by the difficulties in reaching agreement on majority voting. That problem will be alluded to below. Widening to the countries of central-eastern Europe creates a similar set of problems, that may be laid out in matrix form: on one plane may be placed the complex of interstate relations, including the matter of membership of the varied fora in western society; the restructuring of the state following the collapse of the party-states; and the social implications of the transition. On the other plane may be listed the rapid extension of market relations and institutions; the process of political transition out of party dictatorships; and the redefinition of external policies of the states. A third dimension of time may be added, split between one section of the line referring to layers of historical memory, and the other projecting through transition timetables into the future.
Without encompassing all the elements of this matrix, a number of dilemmas may be isolated to illustrate the impact on the discussion of cores. In the longer run, the dream is of the whole of Europe, united in diversity, free of wars and prosperous and open to multiple channels of exchange with the rest of the world. In this vision, the wider Europe becomes its own core to the rest of the world. The path there, however, entails the risk of considerable strain, and even dissolution, of the hard core of relations between France and Germany, through the extension of its scope and the concomitant import of the problems of “the other Europe” into its midst. The attempt to consolidate a “core EU”, or a “hard core of the core” may have served prior to 1989-92 as a means to prod the inner-peripheries of the British isles,Spain, or Greece into more cooperative attitudes with regard to agendas set in Brussels,Paris or Bonn. But after the demise of the party-states, attempts to consolidate a core western Europe threatened to perpetuate if not the exclusion of 100 million eastern Europeans from the mainstream of western society, at least the continuation of their subordinate status. .
There were at least two dimensions to this double fear by easterners of exclusion or subordination, and by westerners of dilution of western institutions. One related to trade. Quite simply, the structure of western European markets had been laid in the early years of the cold war when traditional suppliers from central or south-eastern markets were excluded on account of Europe’s division. Any perpetuation of the division to protect significant lobbies within the EU risked prompting the revival of an authoritarian periphery; the political awakening of sullen rural populations (nearly 40% ofPoland’s employed labour force), or the promotion of an eastern diplomacy of resentment at the self-centredness of EU policy. Nonetheless, while eastern European states have diverted trade abruptly to western hard currency markets, protectionist groups ensconced in the entrails of the EU have provided incentives for central-eastern European countries to move rapidly into higher valued added activities by attracting in foreign direct investment for re-export into western European markets. One paradox of western European conservatism towards eastern European competitors is therefore to maximise their competitive advantage in low wages, high skill potential and as hosts for capital-intensive western companies.
The other dimension related to the post cold-war complexities of ensuring security throughout Europe. The demands of the Baltic states, Poland, Hungary, the Czeck lands, Slovakia, or Slovenia was for as close an incorporation in or association with western institutions as possible. This entailed the construction of constitutional and democratic institutions, reform of the armed forces alongside profound changes in economic structures, and settlement of frontier disputes and the status of minorities through negotiation rather than by force. Croatian and Serbian practices of ethnic cleansing and the revision of frontiers by force left them no alternative to seeking patrons on a bilateral basis.Croatia turned to Germany for sympathy and support, and Serbia looked to Russia. An aggravation of the conflict in the northern Balkans thus risked bringing Russia and Germany into indirect conflict through clients whose actions they did not control. As Germany set prior store to supporting President Yelstin, not least with a view to promoting the dismantlement of nuclear plant or weapons across the length and breadth of the former Soviet Union, the Balkans was relegated to subordinate status in the hierarchy of German-Russian relations. Similarly, the Partnerships for Peace programmes, extended by NATO to the central-eastern European states in the course of 1994; sought to defuse fears in Moscow about the extension of the western alliance’s frontiers to Russia.But they failed either to win acclaim among the former member states of the Warsaw Pact, worried at the potential for militarism in a disturbed Russia, and they reinforced sentiments in the United States about presumed western European pusillanimity.
Widening the EC on the evident grounds that “Europe is much more than the economic Community”, as Kohl stated, was not readily compatible with the other dimension of his strategy whereby “our common aim must be to build up the EC as the kernel of a future European peace order”. A widerEurope would require a further call on German taxpayers’ contributions to facilitate the necessary side-payments in enlargement negotiations, and to transfer resources to prospective and poorer members. But German resources were absorbed in the reconstruction of eastern Germany. That meant that the EU had to call on extra resources from theNetherlands,France or Sweden. In view of national opinions’ reluctance to become net contributors to the EU budget, a widerEurope with larger transfers was likely to create less public support among net donor states. On the other hand, wereGermany to resume trade surpluses, the DM’s role would be confirmed as a key currency and the calls on German financial resources would resume. There were two competing sources of demand: one was from the southern European countries, championed byFrance, and concerned to augment the flow of resources to themselves and to theMaghreb. The other sources of demand came from the ‘other Europe’, and looked toGermany as their champion. A wider Europe therefore introduced a further point of dischord betweenFrance andGermany, as the core countries of the “hard core”.
3. A Europe of states.
Over the twenty years of German détente policy, France edged away from being the champion of state sovereignty and national independence towards being a champion of a pooled exercise of sovereignty within the institutions of the European Union. German diplomacy took the same direction but with a view to moving also to state unity and national self-determination. The achievement of state unity marked the re-emergence of a Europe of great powers, but one where Germanyoutweighed all other western powers in terms of demography, of agricultural potential and industrial and financial prowess.The DM was the continent’s key currency. Germany was the prime provider of aid and investment to the former party-states, and the main target for their post-communist trade. The end of the cold war spelt the winding down of the allied military presence to one third of the Bundeswehr’s manpower, and the withdrawal of Russian troops from German territory in 1994. The prospect beckoned of a MittelEuropa, hingeing on Austro-German cooperation in central and south-eastern Europe. A western-anchored Europe would be centred on Paris, while a wider Europe could be centred eventually on Berlin. Germanychampioned the EC’s rapid enlargement, while nothing within the EC could be agreed on without Germany’s consent. `In these circumstances’, former Prime Minister Thatcher concluded, `the Community augments Germany’s power rather than constraining it’ .
Such a Europe of the states, whose major power is Germany, perpetuates the United States as Germany’s prime ally, partner and competitor. German-American relations have been at the centre of European affairs since the second world war. The Federal Republic, as a net importer of security within NATO, consistently gave priority to relations with the United States over French aspirations to create a `European’ Europe. The Bundesbank emerged as the Federal Reserve’s main counterpart in international financial relations. The Bank held dollars in reserves, but remained opposed to buying up the currencies of its European partners. As the ecu was composed of a basket of European currencies, the same ban applied to its full development as European reserve currency. Germany’s special financial relationship with the United States thus stood as a metaphor for its special relation with the United States on defense: Germany’s security was ensured by alliance with the United States, while the DM-dollar relationship was a function of domestic policy in Germany and the United States, and of the value of the dollar as the world’s key currency. It formed the central relationship on which all other European currencies came to depend.
The centrality of Germany’s relationship with the United States was reconfirmed in the crucial years of 1989-91 when German unity was negotiated between Bonn and Washington with Moscow, while keeping the Poles, Italians, French and British at arms length.The end of the cold war opened the prospect forGermanyof a European peace system, hinging on a continued US presence and a network of institutions, including the EU. This implied keeping defense policy within the domain of the sovereign states,and therefore NATO. This was quite compatible with the German government’s readiness to link, and eventually merge, the Bundeswehr in multilateral or bilateral divisions or corps under NATO command. One inference was whetherGermany’s special financial relationship with theUnited Stateswould continue to stand as a metaphor for its special relation with theUnited Stateson defense. An abandonment of the DM and the creation of a core currency for Europe raised the delicate matter of the terms of the deal struck withFrance, and already alluded to. A core currency would relegate the inner peripheries of the EU in the Mediterranean member states or in Britain to an outer periphery. The other inference was that the United States’ world role after the cold war, and its centrality in any future foreign policy for Germany, set undefined limits around Bonn’s readiness to base security on prior alliance with Paris. ForBritain, the advantage of such an arrangement was to remain an offshore financial centre, and a junior partner to the central German-American relationship.
The heart of the matter is that the United States is unitedGermany’s prime ally in the maintenance of the new European balance. Successive US administrations have played a central role in the restructuring of NATO after the cold war, and have earmarked national forces for inclusion in multinational corps. The US has insisted on retaining the post of SACEUR, despite a reduction of US forces in the European theatre to about 100,000. TheUS has been an indispensible partner in managing the partial extension of NATO into the territories of the former Warsaw Pact, and has been an active supporter of western, particularly German efforts to limit the damage to world stability resulting from a proliferation of nculear know-how flowing from the collapse of theSoviet Union. Both Washington and Bonn have supported Yeltsin’s Presidency on that account.AUSpresence in European security arrangements reassures smaller states against domination by one, or a combination of European powers. It shields France and Britain from a loss of status, and augments for them the significance of retaining their permanent seats in the Security Council.It reassuresRussia, and receives the support of the countries of central-eastern Europe, or Norway and Turkey, all of whom share common concerns about the turbulence around them. It binds theUnited States and Canada, at lesser cost into a European security structure. If Germany for the first time in its history is a satisfied power, that is the achievement of the Atlantic alliance, and in particular of America’s commitment to European security.
The foundation of the argument for a Europe constructed on existing states, most eloquently presented by de Gaulle in the 1960s and also argued by Thatcher in her Brugesspeech of 1988, is that these are the products of a long and complex European history. They are also varied in their forms as republics, or monarchies. Some few are nation-states, such as France, Denmark, Portugal or Ireland. Britain, Belgium, Spain or Switzerland are multi-national states. Their histories ring with their own myths, symbols and celebrations. These particularities are expressed in distinct political imaginations about the role of authority, the use or non-use of force, or the exemptions from laws of general applicability to be granted to this or that section of the population. Their parliaments and executives are constituted in subtly different ways. Their “comparative advantages” have been created over the centuries by policies as much as by endowments. Germany’s apprenticeship system was introduced to Germany in the course of the Kulturkampf, while the educational reforms of the ThirdRepublicestablished an educational monopoly by the state, which excluded or marginalised the development of a parallel system in France. These differences worked through the culture of companies to affect the core of legitimacy and of career development in German or French corporations. In short, their different histories have entered into the inner marrows of the states, which alone have the authority to speak on behalf of their peoples. Governance ofEurope could only be by the states and for the states.
Yet a Europe of the states after the cold war is replete with paradoxes, some overt and imminent, and others implicit and still buried beneath the layers ofEurope’s many complexities. How they are likely to work themselves out, either through reconciliation or through contradiction, lies more in the realm of conjecture than of analysis. We shall identify some of them rather than work through their multiple ramifications, if only for reasons of space.
One overt and imminent paradox relates to Germany’s continued reliance on the US as a prime partner. The incompatibilities betweenGermany’s reliance on theUSas a major security partner, and the relations between the dollar and DM, are continuing to widen. AUSpresence in European security arrangements rests in the last resort on the mood in the US Congress and in US public opinion. While opinion polls suggest continued backing for NATO in US public opinion, NATO stands low on the list of US domestic priorities. These continue to be focused on the problems of a multi-racial society, crime, the inner cities or on competition from the countries of Asia-Pacific. Indeed, the central dollar-DM rate is conditioned by the cloud of public debt overhanging the global financial markets, and by the continued propensity of theUnited States to run trade deficits with the exporters of Pacific Asia. Intra-European exchange rates remain a function of German andUS domestic political and economic priorities. In the period of détente, the German economy’s formula to absorb the revaluation of the DM was to ensure that national pay bargaining yielded wage rises below the increases in productivity. As a result, German labour costs are among the highest in the world. Yet the German economy since 1993, with full government support, has moved to a strategy of cost-cutting, and return to export surplus. As the DM moves up again in the late 1990s against the dollar, German businessmen may be expected to accelerate foreign direct investment or to become ardent supporters of monetary union in order to end the nightmare of an ever rising DM.
A Europe of the states also places economic and psychological strains on Germany, allowing Germany’s national ambitions to linger in the ambiguities of a post-cold war European security structure. State unity meant freer hands for Germany. Bonn cited constitutional constraints on the deployment of troops out-of-NATO area to avoid military participation in the Gulf war of August-February 1990-91. Then, Germany- with Austria- emerged as the champion of independence for Slovenia and Croatia. The Maastricht Treaty’s German opponents vented their resentments at France’s `grand strategy to extract Versailles-style reparations for German unity’. Francewas accused, not incorrectly, of wanting to act as gravedigger for the DM; but France was also accused of entertaining a Napoleonic design for a Europeto be run by the `élites of the grandes écoles‘. These accusations fell on fertile ground, in a public opinion hostile to abandoning the DM, or to having its regulations tampered with by the internal market process. A more assertive Germany in Europe’s counsels was the consequence.
Yet wereGermanyto consolidate a national position as the largest state inEurope, and explicitly assume the laurels of leadership, all praise and supplications would be directed to its representatives. No significant dispute inEuropecould be settled without its say. German governments could chose to disguise the location of negotiations in the pluralistic bargaining process ofBrussels, but that would not alter the reality in such a Europe that the final accord would requireGermany’s seal of approval. Such prominence in an interdependent Europe of states points Germany in two different directions:
* One is that the process of European integration promotes ambitions in sections of German opinion or of interests alienated by the thrust of EU policy, and resistant to Kohl’s policy of conceding sovereign powers once they have been finally restored. Such a strand of opinion and interests may proclaim innocent intent, much as Genscher’s German Michel did in the years culminating in German state unity. But a unitedGermanyprotesting innocent intent is no adequate policy forEurope’s leading power. De facto, German unity challenges French status; united Germany cannot escape contending with the complexities of European political and economic interdependence.
* Another direction for German policy is therefore to consider Europe in the first instance, andGermanyin the second. Any German assertion of national independence runs up against its restricted resources to meet the competing demands of a fragmented Europe. In the last resort, the reason whyGermany having acquired sovereignty is ready to share it is that the scale of the new Europe by far excedes its capabilities.Germany is dwarfed by the scale ofEurope’s intricacies and cannot hope to master them alone. Nor mayGermany’s domestic intricacies be overridden for the sake of “Europe”.
One of these intricacies is that a Europeof the states widens the gap between larger and smaller states and their responsibilities. The larger states have regularly sought to create a presidum of powers, starting with de Gaulle’s proposal for a world council including the United States, Franceand Great Britain; through the various Fouchet plans, the Franco-German Treaty, and the Group of Seven. Just as regularly, the smaller states, championed within the EU by the Netherlands, have promoted majority voting and democratisation through direct elections to the parliament in order to equalise their own influence over policy, and stymy any effective return to a Europeof the powers. But with the EU’s fourth enlargement to fifteen member states, the traditional arguments about democratisation of the EU as a method by the smaller to tie down the larger have been turned on their head. The larger states, including an allegedly anti-federalist British government, have pointed out that the four largest states account for 80% of the enlarged EU population. Under the existing voting system, the eleven smaller or medium-size states may theoretically outvote the larger states, representing the EU’s majority. If the smaller states are to stick to a Dutch position on a weighted majority voting in Council, they are in effect championing a maximisation of small state influence in EU counsels. If on the other hand the larger states champion the criteria of population size, they are taking a mighty step towards the still distant prospect of considering the European electorate as final arbiter.
The apparent meeting point between these two positions of small and large states is an EU characterised by majority voting in the Council, where the smaller states in effect have considerable capacities to constrain the large; and by a further extension in the powers of parliament. Yet decisions in Council in effect tend by custom to unanimity or to agreements to disagree, while any prospect of a European electorate as final arbiter remains in the distance. Meanwhile, the political geography ofEuropeis shaped by the distribution of powers and resources among the states, engaging in their permanent ballets ot alignment and disalignments. Such a Europe is a Europe of states whose future peace and prosperity depends on preserving and consolidating the values of Europe’s society, one of whose pillars is the states themselves and the other of whose pillars is the continued and perhaps extended presence of a reluctantUnited StatesasEurope’s major power.
4. Delors’Maastricht Europe.
It may be objected that Delors had little to do with the Maastricht Treaty’s ultimate form, as it escaped the control of the Commission almost as soon as the negotiations began on the context of the Delors Report on monetary union in late 1989. The Treaty thus contrasted with the Single European Act, the heart of which was delineated in the Commission White Book, presented to the European Council in June 1985. The Commission won ownership of the internal market programme, but lost ownership of the discussions on monetary union and on the common foreign and security policy. Delors seized opportunities to tie liberalisation of capital movements and the internal market legislation to the implicit commitments by the member states in the SEA to move towards monetary union. Without Delors ardent advocacy, the intergovernmental conferences may not have been held. But because the stakes were so high, and touched at the very heart of the member states’ sovereignties and ambitions, the Commission was sidelined. It was not that Great Britain warped the Treaty’s content in the direction of a Europe of the states, so much as the Treaty was the best that the member states could negotiate under the circumstances. Delors helped set the stage for the negotiations; there could be no surprise that the major protagonists–the member states– then proceded to write the script.
Delors’ ideal was to reconcile the historical diversities of the peoples and nations of Europewith the economic and geopolitical necessities to form a European federation. But, as Delors regularly recalled, the European construction had to be created and be driven by the states, with the support of an active Commission and Court. There were many novelties which distinguished Europe’s relaunch in the years 1984-92 from that of 1972, when the Paris summit of October sketched a European Union by 1980, complete with its own social fund, social action programme, an industry and technology policy, a common trade position, and a commitment to full monetary and economic union. This was later elaborated with a statement on a foreign policy “identity”. But crucial details on the balance between intergovernmentalism and EC practice remained vague, and within two years all the major leaders were either dead or out of office. By contrast, the path toMaastricht was taken by a group of travellers of unprecedented political longevity in high office. Many of the details on the balance between integovernmentalism and EC practice had been resolved in the intervening years. The broad vision of 1972 was there to serve as a blueprint. In the changed context of world affairs, the Treaty in effect envisaged the EU as the inner core of a widerEurope, and as one of two pillars in the Atlantic alliance.
The Treaty fell far short of federalist wishes, as indicated by the battle in late 1991 as to whether it should be unified under one Union roof, or support the roof on three pillars. Its eventual complexity, though, was the best that the states could manage under the conditions. Each injected their own preferences into the negotiations, and haggled over details. Whether the ultimate result was seen as laden with federal intent, or as perpetuating a Europe of the states in an open-ended process, the concessions made by all parties to the treaty meant that none was satisfied with the result and all could claim a partial victory while arguing the need to make partial sacrifices. As the concessions had to be balanced by future rewards, and the partial victories opened a prospect of further benefits, none had the incentive to drop out and all had an incentive to stay in “at the heart ofEurope”. The treaty also underwrote a multi-speed, variable geometry Europe of concentric circles and special relations. It left the inner core of states, led byFrance and Germany, to set the agenda for the union’s future developments in any of the three pillars. De facto, the Treaty barely impaired the member states powers to act alone. If progress towards union was the goal, the Treaty left open the way for an inner core of members to make the first move, and provide an incentive to the laggards to join sooner or later. The Treaty thus incorporatedEurope’s diversity into its complex procedures, but provided a timetable for commitments and further amendments.
The heart of the Treaty was the member states’ “irreversible” commitment to achieve monetary union by 1997-99. The gap between signing the Treaty and making the leap was necessary forGermanyto digest the costs of unification; for implementation of the internal market market and its accompanying legislation; or for the member states to adress the budgetary imbalances or labour market rigidities that had been built up since the 1960s. The technical arguments in favour of monetary union included the reduction in transaction costs involved in a multi-currency and highly interdependent trading area. Equally important was the promise that a single currency held a prospect of much greater transparency to customers of pricing differentials across the EU. A single currency would cement the internal market, as producers in member states whose governments were profligate would not be able to seize market shares through competitive devaluations from producers in countries whose governments pursued more virtuous policies. The major arguments in favour of monetary union on its own terms, though, were political: it would be a European System of Central Banks, not the Bundesbank, which in the future would set monetary policy for theUnion. Other member states would gain by participating in monetary decisions. Germany would gain, because the Bank’s mandate was a duplicate of its own and because it would not be making policies for others on a national mandate alone.
Maastricht’s final content prompted those member states pushing for a more federalist content to prepare for the next leap towards fullerUnion in 1996. There were two demands in particular: the one for an increase in the European Parliament’s powers was designed to counter the accusation that the EU process centralises legislation in the EU executive, and deprives the member states’ parliaments of their legislative and other powers.The Parliament would share legislative powers with Council, where–optimally–all domains of policy would be brought under majority voting.The boundaries between the core functions of EU activity and that of the state or regions would be drawn around the principle of subsidiarity. This sharing by the states of their powers in the EU and the shifting of their functions to the regions would be underwritten by the creation of a Council of Regions, which would be expected to develop regional loyalties within the member states, and open channels for local authorities to by-pass national governments through the creation of Union-wide alliances. The other demand was to strengthen the common foreign and security policy, in conjunction with NATO and theUS. A European Union had “to speak with one voice”. Eventually in a federalEurope, all politics would become domestic, by abolishing diplomacy between the member states, the traditional and characteristic feature of European affairs. The Union, not the member states, would be the central protagonist of global politics.
One source of the Treaty’s ambiguities was its incorporation of both temporal –the inherited layers of historical memory and present expectations of differing futures–and spatial dimensions–the attempt to build a territorial club in a world market and polity–of the new dialectics in European and world affairs.On the temporal dimension, the various policy areas already within the EU’s competences, or moving into them,were not compatible with the mental maps of public opinions. The oldest area of common policy was in the trade arena, and the traditional differences between France’s concept of its agricultural identity, and its cultural mission, came into conflict with those of other member states in the concluding months of the Uruguay Round negotiations. Chancellor Kohl figuratively bent over backwards in his eventually successful effort to meet the demands of German industrial exporters for a completion of the Round, and those of the French government to unhitch itself from the hook on which it had suspended itself by drawing on the well-worne imagery and language of “les Anglo-Saxons’ wedded to “le grand large” and to “free trade”. Even more significantly, the opponents in Germany of Maastricht had no trouble in mobilising old images of France, seeking to impose a Versailles-type reparations on Germany, whereby Germanywould surrender the DM as the symbol of its post-war success in return for its unity. Other membranes of convention, to use William Pfaff’s phrase, were touched in Britain, where the Tory party was rent into near internal civil war over whetherMaastricht represented a step to an expansion of British influence and values, or to the surrender of British liberties.
Furthermore, the tensions within Maastricht as consolidating a Europe of the states or as moving to a federation were mitigated in part by the promise of future amendments. The intergovernmental conference of 1996 must link concessions by the French or the British to the Germans on increasing the powers of the European Parliament, and on strengthening the common foreign and security policy. The implicit bargain is that,if satisfaction can be given the German delegation, then the monetary aspects of the Treaty may be implemented forthwith. But this is a bargain struck in inter-state negotiations. Another bargain has yet to be struck between political leaders and their domestic electorates. In Germany, the bargain’s terms would have to be in response to the question: what is the German public’s price for handing over the DM? Were German public opinion to become exigent, as there is every reason for it to be, then France’s strategy to bind Germanyinto a European Union, as sketched at Maastricht, would entail paying an ever higher price. In exchange for the DM, nothing short of a federal Europewould be acceptable. The future ECB had to be located in Frankfurt orBonn. The ECB’s money market operations would be decentralised, and not located primarily inLondon. All central banks would have to be independent. Member states would have to meet the Treaty criteria for convergence.The question of nuclear weapons, their proliferation and their control, could no longer be avoided.
There was another incompatibility between intra-state negotiations and implicit bargains in the Union, and US-German relations and public opinion in theUnited States.France’s bid to Europeanise the Bundesbank pointed by the end of the decade to a European currency rivalling the dollar. Such a move would pull the centre of world finances toEurope, allow the EU to pay for oil imports in ecu, manage a major reserve currency, and provide the EU with an integrated capital market capable of funding major Europe-wide projects or to help in the development of its surrounding peripheries to east and south. Such a European Union would be the United States prime creditor, involving it in probably arduous negotiations for the restructuring of the debt of its former protector. Given the volatily of US public opinion, and the current views in the US that Europe’s democrats and Europe’s wealth are endebted to the generosity of the US this century, the present anticipation of future potential difficulties in German-US relations counsels the German government to pursue a very special relationship with Washington. This is only reinforced by theUSrole for the foreseeable future as Europe’s major power. The point of reconciliation with French preferences for a ‘European Europe’ is to imbue it with an Atlantic dimension. But that Atlantic dimension could entail a price to be paid to theUSin financial negotiations, while the enthusiasm of any French government for an Atlantic Europe may be said to rise in proportion to the prospect of theUSwithdrawing. As French diplomacy in the past decade indicated repeatedly,France’s nightmare is to be left alone in a face-to-face withGermany.
The spatial dimensions of post-cold war dialectics are no more readily compatible withMaastricht’s ambiguities. Each state continues to be the focus of its own network of regional and global relations.Germanynot only has its own very special relationship with the United States, but like other major European states, engages in its own aggressive trade and business diplomacy outside the boundaries of the European Union. Chancellor Kohl in his visit to China in November 1993 clinched a contract to build the Canton metro, from which the French had been excluded on account of their arms sales to Taiwan, and then proceded to accept the Chinese offer to take over the French consulate there, which the French had had to vacate a year earlier. Similarly, President Mitterrand rushed toSouth Africaafter the ANC’s electoral victory in April 1994 in order to be the first to congratulate President Mandela,to pull South Africa into the Francophone family inAfrica, and in the hope of snatching defense contracts from British suppliers. Prime Minister Major was not far behind.A different example of the same phenomenon was the British fishermen’s flying of the Canadian flag in the fisheries dispute of early 1995 between Spain and Canada over Newfoundland fisheries.Spain’s official arguments that theUK should respect the principle of supporting member states against outsiders represented a legalistic argument in the face of powerful sentiments of “kith and kin”.
Global or regional developments therefore operate more as stimulants to differentiate one state from another, than they provide opportunities to “speak with one voice”. A prime concern inGermanyis to stabilise the countries of central- or south-eastern Europe, whereasFrance,Italy and Spain are increasingly preoccupied by the demographic imbalances in theMaghreb. The prospects of growing markets in China and the Pacific beckon European businesses, but present a long term competitive challenge on labour costs and skills to European workfroces. The Hoover factory in Bordeaux may have closed in Bordeaux in order to open in Glascow, but a more significant item of news in 1994 was SKF’s decision to place its most advanced factory for the manufacture of ball-bearings in Malaysia, rather than in western Europe.Conversely, the rise of the yen and the incentive for Japanese corporations to invest outside their home market provides multiple benefits for the UK, as a low wage economy well-equipped with golf courses, but the inward investment to the UK is seen by the French or Italian automobile producers as a threat to their position on European markets. Similarly, a fall in the dollar generally interprets into a rise of the DM, providing a price advantage for non-German exporters into German markets. Rises in world oil prices have and will continue to exert a differentiating impact on European national markets, as in the past.
The seamless web which binds European states together , and into the world system of states, implies that its core members will have to expand their numbers into the periphery in order to retain the consensus on which they function by choice and by method. There are few effective coercive instruments in the hands of theUnion, not least because the states both legislate and execute. There is an imminent rather than an actual division of powers in the political system of the EU. All states retain a de facto veto if their vital interests are at stake. They may resist a consensus for a while, but each state has its own bundle of interests represented so that any set of linkages may be bound into negotiations at any time. The EU is thus a permanent process, whose dynamics derive from the relations among the states and of their external attachments. These ensure a graduated overture to all other European countries, and to all other existing European institutions.It is thus not just that the prospect is of a dilution of the European core into a widening periphery, but also of an ambitiousUnionwhich absorbs as many tasks as possible from other international institutions. Just as the dilutant to the core may only weaken when a consensus is reached on what the cultural boundaries of “Europe” are, so the explosive in the Union is its ambitions to absorb tasks distributed around other institutions in the old world of pre-1989. The danger to the Union is that all disputes from across the whole ofEurope and all member states are internalised within its processes.
Were the core ever to gell into a real Union, it would inevitably have to acquire all the symbols of authority and power, such would be the internalisation of conflicts within a European polity with an ill defined political culture, composed of multiple layers of historical memory.The rift developing among those favouring a more federal content in the EU, is between those who find allies among proponents of states’ rights, and those who seek to drive ambitiously forward and outwards to absorb member states and other institutional functions. Before its would be ever likely to gell, though, the European Union would have to overcome the hard core of resistance it has bumped into in the course of the period 1985-92, which was well expressed by former Commission President Delors in his announcement in December 1994 that he would not run for the French presidency. After ten years of militancy in the Commission’s highest post, he stated that his reason for not running was that there would not be enough support for his ideas inFrance.
Indeed, the danger facing Europe is not the emergence of a dominant Germany, but of a new and wider and deeper Europe. This is not the wider and deeper Europe, initially discussed at The Hague summit of 1969, and at numerous successive occasions. The wider and deeper Europe of yore involved a parallel effort to use the opportunities afforded by a widening of EU membership to deepen the scope and reach of commonly elaborated policies. The novelty is that the widening of Europe in the 1990s has its boundaries merge into the rest of the world; the deepening of Europe through the development of common policies involves a voyage into Europe’s many historical layers which lie one on top of another in the manner of an onion. The top layer is the layer of the states, formed at varying times over the past millenia, with a tendency inherited from the pre-1945 period to a competition between the states through the play of shifting alliances, as well as the distinct but changing structures and purposes of the states. From post-1945 Europe is inherited the complex political and market interdependencies within western Europe, with multiple strands and ties into the rest of the world, and the society established in western Europe on the basis of institutions and values, and now extended at least in principle to the rest of Europe. The end of the cold war has prompted a struggle between the two, one pulling backwards to the renationalisation of policies and public opinions, and beyond that to Europe’s multiple historical layers and memories, and the other calling for patience and perseverance in establishing a grand compromise for the whole of Europe in a new world for which there is no historical precedent.
The paradox of Maastricht is to have been designed in the spirit of a grand compromise, open to further elaboration, but to have been inspired by the renewed competition between states, and to have promoted a trend to a renationalisation of policies and public opinions. Its implementation, however partial, rests on the drive and support of the member states, anchored in their own historical identities, with their particular external attachments and domestic alignments and interests to consider. Its ambitions are a token of the Union’s weight in a global economy which perforates its frontiers and ignores its territorial limits. As there is no final agreement about its destination, the Union must meanwhile deal with the extension ofEurope’s periphery eastwards and the lengthening list of candidates who wish to join. That extension shifts the balance of Europe towards its geographic centre in Germany, away from the EC’s own inner periphery of the British isles or southern Europe. It places a great burden onGermany, economically and psychologically, and may be expected to drive upGermany’s price for cooperation. It not only challenges, but fosters national identities.It proclaims an ultimate objective of a Europe beyond the powers, but it was written because of the collapse of the 1945-89 inter-regnum and the re-mergence of aEuropedifferentiated between greater and smaller powers.
The Maastricht Treaty envisaged the European Community as the core around which a wider, openEuropewould be organised. But the fragmentation from the peripheries of Europe was quite capable of entering the core, destroying the achievements of the past four decades.Europe’s society of states had flowered within the confines of the Atlantic alliance. Its rationale of containment disappeared with the Soviet Union. The novelty forEuropethus lay in the opening of a parenthesis in European history, where the continent would be in transition from a containment which had provided it with a degree of unity in opposition to a common enemy, to an as yet undefined polity capable of containing its historic diversity.Europe, in short, is in transition from one containment to another. It triumphed in the first; it has just embarked on the second.Maastricht version 1992 was the first step.:Maastrichtversion 1996 will be the second step. Further “Maastrichts” would be required thereafter.
There can be little doubt that the real Europe of historical layers, of culturally disputed geographic boundaries and of local diversity in a world market and a world polity has entered on revolutionary times, and is tearing at the fragile edifice of institutional EU-rope.The real Europe is once again pregnant with conflicts. A positivist belief that politics and institutions still have purchase on European affairs would urge that Europe’s many latent conflicts may be promoted and contained by the only institutional fabric of which the real Europe permits: beyond blueprints into a Europe of the the Atlantic alliance, and within that of an EU of concentric circles, inner groups, many speeds and multiple geometry–the only Europe of which Burke may ever have approved. A more negative belief on the purchase of politics over events in the world market and polity as it is developing may suggest, though, that the EU of concentric circles, inner groups and many speeds is merely an older and differentiated Europe in new guise. Accepting that Europe would be yielding the ideal to the diktat of events. Rather than becoming trapped in such dichotomies, it may be worth returning to the simplicity and wisdom of the founding fathers of Europe’s longest peace: the preservation of the peace and the reconciliation of the peoples must remain at the very forefront of political action and imagination.
INSEAD and St Antony’s,Oxford
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