John R. Gillingham, The EU: an Obituary, London, Verso, 2016. Review and commentary.Part I. Early Years.

This is an excellent analysis on the condition of the European Union (EU). Its author, one of the United States leading historians of the EU, has in effect written a hard hitting appeal for Europeans to get serious about what he considers a failing experiment in supranational governance. His is a call to start thinking and acting about alternatives. For the moment, the author sees no imminent exit from the situation into which the self proclaimed “Europeans” have precipitated the continent by their “arrogance”– his description of their attitudes over the past decades.

I will sketch his thesis, make some comments on it on the way, and outline what I consider the line of thinking and action that has to be developed for Europe to be able to return to its natural dynamism, while providing a common governance regime that channels its diversity.

Urgent need to rewrite the EU’s history.

The present crisis of the European Union, he writes, makes it painfully evident that the history of the EU must be re-thought, re-cast, and re-written. From inception, the whole construction has been a “massive establishmentarian enterprise”, that affirms Europeanism as a secular faith-an ordained agent of human progress. The commentators and scribes who feed off it are all paid up devotees of the Euro-cult. Funded by its institutions, they have written the scholarly work about its doings, and opened new sources of legitimacy to develop its own power base. As Laurent Cohen Tanugi warned in his book, La metamorphose de l’democratie française, De l’État Jacobin à l’État de Droit, Paris, Gallimard, 1993, a danger inherent to the enterprise, was the lack of any upper limit to the powers claimed by Brussels.

The project posits federation as a teleological end point. Three schools of thought have sustained this belief, and interestingly enough, all the three that he cites are Anglo-American in origin. All three, he maintains, are based on outworn ideas, and fail to explain the history, the process, or the present and likely future condition of the EU.

1.The best known is that of Ernst Haas. His The Uniting of Europe, Stanford: Stanford            University Press, 1958, was chosen by the US Foreign Affairs magazine as one of the            fifty most significant texts on international relations in the twentieth century.  The               thesis he drew on is known as functionalism, whereby through a “spill over process”,           one   function of government after another accrues to the EU institutions. Haas later             repudiated this thesis, which has only operated sporadically.

  1. Another theory is liberal inter-governmentalism, exemplified by Professor Andrew Moravcsik. His book, The Choice for Europe: Social Purpose and State Power from Messina to Maastricht, Ithaca, Cornell University Press, 1998, explains the EU’s emergence through a series of inter-state bargains, following intense diplomatic exchanges, and followed by periods of incrementalist activities by institutions and member states. The theory helps explain the big deals, notably the deal sealed by the Maastricht Treaty of 1992. But, Gillingham argues, its does not explain failure. And given the EU’s present condition, cannot be taken seriously.
  2. Alan Milward, a UK economic historian, has argued that the EU system, and its ancestors salvaged the welfare state following the second world war. Two key books of Milward’s are The Reconstruction of Western Europe, 1945-51, Berkeley, University of California Press, 1984, and The European Rescue of the Nation-State, Berkeley, University of California Press, 1992. The thesis’ point of departure is the centrality of welfare provisions for modern industrial societies. Welfare states are highly complex, specific in the multiple ways that their functions may be applied, and can only be run by élites. Co-operation between modern states being indispensible, and the EU becoming ever more involved in the politics of welfare, Milward considers that the EU will develop as an elitist project. What sustains this idea, writes Gillingham, is a deep faith that the integration process will eventuate in a USE, a social democratic United States of Europe.

All three ideas, the author argues, are based on outworn ideas that beg for correction. Spill over is far from automatic; inter-state failures to agree are not explained by Moravcsik’s big deals; and faith in élites is a tenuous assumption.

So what is Gillingham’s thesis? His theme, the fourth of the major theories, is that the EU is an epiphenomenon of international drivers of change, which are the prime movers of the integration process. These drivers would be the cold war in the 1950s; the dollar politics of the 1970s and 1980s; and globalization, with the ascendance of China on the world scene since 1992, the year of the Maastricht Treaty. Globalisation, best understood as the acceleration of technological changes, writes Gillingham, constitutes an ongoing threat to bureaucratic EU system builders.

His theme is illustrated by the title of his key book, European Integration: 1950-2003: Superstate or New Market Economy? Cambridge, Cambridge University Press, 2003. The Superstate, he goes on to write in The EU: An Obituary, is ambitious far beyond its means, arrogant, undemocratic, blundering, and the the prime feature holding the European polity back from adapting to the fast changing global economy. His preference is clearly for rooting the EU in the consent of the peoples of the member states, and in allowing them to experiment their ways forward, through the ongoing technological and market driven revolution. He ends proposing a serious re-foundation of the project.

Part One: The Myth as Method

In the first part of his book, he unveils one after another the series of myths that the project has generated about itself, a sort of self scripted hagiography. The first, and oft repeated myth, credits the EU with the peace and prosperity enjoyed by Europe since 1945. The prime reason was of course the central role played by the US in helping to revive the western European economies, the creation of NATO under the aegis of the US, and the nuclear stand-off once the Soviet Union acquired comparable nuclear capabilities.

Jean Monnet and western security.

Where the project’s tireless founder, Jean Monnet, did seek to influence the tide of events, the results were less than optimal, and had certain of his plans succeeded, they may well have turned out to be disastrous. Gillingham mentions four in particular: the European Coal and Steel Community; the European Defense Community; the Euratom treaty; and the Multilateral Nuclear Force. All four represented Monnet’s understandable concern to deal with France’s German Problem in the context of the cold war.

The founding initiative of the Monnet project was to create a Coal and Steel Community(ECSC), Robert Schuman, French Foreign Minister, made the famous statement on May 9, 1950:

“The pooling of coal and steel production should immediately provide for the setting up of common foundations for economic development as a first step in the federation of Europe, and will change the destinies of those regions which have long been devoted to the manufacture of munitions of war, of which they have been the most constant victims. The solidarity in production thus established will make it plain that any war between France and Germany becomes not merely unthinkable, but materially impossible.”

More prosaically, the ECSC involved decorating a pre-existing continental steel cartel created in 1925, with a High Authority to regulate production and an Assembly to give it a democratic flavor. Very soon, the negotiations about details ran into problems, while West Germany seized the opportunity provided to regain control of the Ruhr. The German steel industry disregarded the quotas set, and grew by leaps and bounds to meet demand for German reconstruction. Meanwhile, the coal industry, under challenge from cheap oil, drifted into crisis, and by the end of the 1950s, the organization has been eclipsed by other Monnet initiatives.

The European Defence Community was also launched in 1950, at the time of the outbreak of the Korean war. The US was looking to supplement defense in Europe through recourse to German manpower, a highly contentious idea so soon after the war. The Pleven Plan, named after the French Prime Minister, was launched in October1950.  Jean Monnet’s idea was to create a supranational European army, under the command of a council of ministers from the member states; the ECSC assembly was to serve as a democratic veneer, alongside a Commissariat, functioning as a procurement agency to sponsor the French arms industry. President Eisenhower, at first skeptical, was brought round in support by his Secretary of State, John Foster Dulles-a rich New York lawyer who had helped to bail out Monnet’s cognac business. But Chancellor Adenauer was lukewarm; the UK was indifferent; the French high command opposed the proposal. The French National Assembly voted against the project in August 1954.

The lesson drawn by Monnet, writes Gillingham was that ambitious projects require popular support. So he created the Action Committee for the United States of Europe, a longer term vision of Europe organized as a federal state.

The failure of EDC gave rise to new round of negotiations to push the project forward. With Europe becoming increasingly dependent on oil imports from the Mid East and the Gulf, the new Monnet project was to create a supranational Atomic Energy Agency, which took the form of the Euratom Treaty. Much hope was placed in Euratom: the idea was that it would regulate and foster a European atomic energy industry for civilian uses. Monnet wanted a European nuclear bomb. The whole issue became entangled in the complex of negotiations in the western alliance on nuclear weapons, relations with the USSR and the future defense of Germany. When de Gaulle returned to power over the Algerian war in 1958, Euratom was downgraded and became little more than, in Gillingham’s words, a record keeping agency.

The swansong of Monnet’s excursions into military matters was the Multi-Lateral Force-a proposal of successive US administrations from the late 1950s until the mid-1960s. The idea was to create a fleet of ballistic missile submarines and warships, each manned by international NATO crews, and armed with multiple nuclear-armed Polaris ballistic missiles. The idea was to create a trans-Atlantic condominium, ruled by Washington, that would open markets, squelch any French or British ambitions for independent nuclear weapons, and rope in Germany to a non-national western security system. President Kennedy’s “two pillar” proposal for an Atlantic Community was launched in his July 4 1962 speech  at Philadelphia, when the President proposed a new declaration of interdependence. The project was sunk when in January 1963 de Gaulle vetoed the UK’s entry to the EEC.

Jean Monnet and European economic integration.

Monnet’s name is better remembered now for his advocacy of European economic integration. At root, his was a call for government by technocracy. Monnet viewed democratic decision-making as a hindrance to technocratic efficiency. His political method reflected that bias: the source of his influence in France was his contacts in Washington DC, acquired before and during the world war, as well as his network of disciples in the US, in the UK, France and Germany. In particular, he had extensive contacts among the senior civil servants from France, the Benelux and West Germany. They helped to create the European Economic Community, whose foundational text is the 1957 Rome Treaty.

The Rome Treaty was regarded by Monnet’s followers as the step sister to Euratom, which was, in contrast to the Rome Treaty, clearly supranational in design. As Gillingham writes :

“The EEC, the embryo of the later EU, was not Monnet’s handiwork, or conceived as an essential first step towards a united Europe, but grew out of the collective labours of senior civil servants more modestly intent upon strengthening commercial relations with the Federal Republic”(ppp.71-72).

The Treaty specified that the objective was to create a customs union; the European Court of Justice’ powers were limited solely to adjudicating differences between the institutions(Commission, Council of Ministers, Court); Council could decide by majority, but as soon became evident in practice by consensus; the Assembly was composed of delegates from national parliaments. The Commission was allocated no specific powers, and the Treaty made no special mention of political federation. Rather, the aim was broadly defined as rather “laying the foundations of an ever closer union among the peoples of Europe to ensure the economic and social progress of their countries by common action to eliminate the barriers which divide Europe”.

Monnet selected the first Commission President Walter Hallstein, the author writes. Gillingham does not mention this, but Hallstein in 1930 became the youngest professor of law in Germany, kept his distance from the regime, and ended the war in a US prisoner of war camp. His ambition for the EEC was spelt out in his book, The Uncompleted Federal State, –Der unvollendete Bundesstaat. Europäische Erfahrungen und Erkenntnisse, Econ Verlag, 1969in which he outlined his vision of the Commission as the USE’s future government; its civil servants as Platonic Guardians of the European interest; and the process whereby the Commission’s officials would work to acquire powers gradually.

Hallstein’s big success was to win recognition from the General Agreement on Tariff and Trade(GATT), based in Geneva, as the EEC trade negotiator. On this basis, he floated the theory that being an international actor, the EEC founders had intended to create a federation. The Court made similar claims to primacy over national laws in a series of judgements in the early 1960s. Inevitably, Commission and Court activism bumped into the imposing figure of President de Gaulle, for whom the EEC institutions were merely tools at the disposal of the member states, and of France in particular. Political progress as envisaged by Hallstein was halted in its tracks, but what lived on was Hallstein’s integration teleology, a legal doctrine, and a line of argument about the inevitability of the integration process leading to federation.

As Gillingham points out the EEC was not the only way of dealing with Germany’s revival. Other institutions, like NATO, the Council of Europe, the OEEC or GATT provided varied responses to the region’s diplomatic requirements to establish a security community; define the political foundations of that community; open intra European markets, and start to negotiate tariff reductions with the United States in particular. All of these contributed to the reconstruction of Europe, and set the stage for a wider reconciliation between its peoples.

Nor did the EEC contribute much to European growth. The highest growth rates of all were recorded in Germany prior to the creation of the EEC and were the handiwork of Ludwig Erhardt, an economic liberal who disliked Germany’s entry to a customs union, but was brought round by Chancellor Adenauer, for whom reconciliation with France was a priority. Jacques Rueff introduced a liberal stabilization plan in France under de Gaulle’s first government, which launched France onto its rapid growth and transformation in the 1960s. In addition to national liberal economic policies, European growth in the 1960s was driven by the rapid conversion out of agriculture in the six founding states, the influx of cheap labour from Spain, Portugal, Southern Italy, and then Turkey; and not least, the continent’s conversion out of coal to run on oil. Thus, a further myth was the EEC as a significant source of European dynamism.

Gillingham attaches particular significance to these founder years and the myths they generated: the myths of inevitability; the Community method; the federal teleology; and its association with economic success. But also as he illustrates in his discussion of Monnet’s efforts in the security field, there were repeated failures and setbacks. He discerns no automatisms in the process of EU integration.

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About Jonathan Story, Professor Emeritus, INSEAD

Jonathan Story is Emeritus Professor of International Political Economy at INSEAD. Prior to joining INSEAD in 1974, he worked in Brussels and Washington, where he obtained his PhD from Johns Hopkins School of Advanced International Studies. He has held the Marusi Chair of Global Business at Rensselaer Polytechnic Institute, and is currently Distinguished Visiting Professor at the Graduate Schoold of Business, Fordham University, New York. He is preparing a monograph on China’s impact on the world political economy, and another on a proposal for a contextual approach to business studies. He has a chapter forthcoming on the Euro crisis. His latest book is China UnCovered: What you need to know to do business in China, (FT/ Pearson’s, 2010) (www.chinauncovered.net) His previous books include “China: The Race to Market” (FT/Pearsons, 2003), The Frontiers of Fortune, (Pitman’s, 1999); and The Political Economy of Financial Integration in Europe : The Battle of the Systems,(MIT Press, 1998) on monetary union and financial markets in the EU, and co-authored with Ingo Walter of NYU. His books have been translated into French, Italian, German, Spanish, Chinese, Korean and Arabic. He is also a co-author in the Oxford Handbook on Business and Government(2010), and has contributed numerous chapters in books and articles in professional journals. He is a regular contributor to newspapers, and has been four times winner of the European Case Clearing House “Best Case of the Year” award. His latest cases detail hotel investments in Egypt and Argentina, as well as a women’s garment manufacturer in Sri Lanka and a Chinese auto parts producer. He teaches courses on international business and the global political economy. At the INSEAD campus, in Fontainebleau and Singapore, he has taught European and world politics, markets, and business in the MBA, and PhD programs. He has taught on INSEAD’s flagship Advanced Management Programme for the last three decades, as well as on other Executive Development and Company Specific courses. Jonathan Story works with governments, international organisations and multinational corporations. He is married with four children, and, now, thirteen grandchildren. Besides English, he is fluent in French, German, Spanish, Italian, reads Portuguese and is learning Russian. He has a bass voice, and gives concerts, including Afro-American spirituals, Russian folk, classical opera and oratorio.
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