The Europe to Come

Perry Anderson

  • The Rotten Heart of Europe by Bernard Connolly
    Faber, 427 pp, £17.50, September 1995, ISBN 0 571 17520 1
  • Orchestrating Europe: The Informal Politics of European Union 1973-93 by Keith Middlemas
    Fontana, 821 pp, £27.50, November 1995, ISBN 0 00 255678 2

On New Year’s Day 1994, Europe – the metonym – changed names. The dozen nations of the Community took on the title of Union, though as in a Spanish wedding, the new did not replace but encompassed the old. Was anything of substance altered? So far, very little. The member states have risen to 15, with the entry of three former neutrals. Otherwise things are much as they were before. What is new, however, is that everyone knows this is not going to last. For the first time since the war, Europe is living in anticipation of vast but still imponderable changes to the part that has stood for the whole. Three dominate the horizon.

The first is, of course, the Treaty of Maastricht. We can set aside its various rhetorical provisions, for vague consultation on foreign policy and defence, or ineffectual protection of social rights, and even ignore its mild emendations of the institutional relations within the Community. The core of the Treaty is the commitment on the part of all the member states save Britain and Denmark to introduce a single currency, under the authority of a single central bank, by 1999. This step means an irreversible move of the EU towards real federation. With it, national governments will lose the right both to issue money and to alter exchange rates, and will only be able to vary rates of interest and public borrowing within very narrow limits, on pain of heavy fines from the Commission if they break central bank directives. They may still tax at their discretion, but capital mobility in the single market can be expected to ensure more or less common fiscal denominators. European monetary union spells the end of the most important attributes of national economic sovereignty.

Secondly, Germany is now reunited. The original Common Market was built on a balance between the two largest countries of the Six, France and Germany – the latter with greater economic weight and slightly larger population, the former with superior military and diplomatic weight. Later, Italy and Britain provided flanking states of roughly equivalent demographic and economic size. This balance started to break down in the Eighties, when the European Monetary System proved to be a zone pivoting on the Deutschmark, as the only currency never to be devalued within it. A decade later, Germany’s position has been qualitatively transformed. With a population of over eighty million, it is now much the largest state in the Union, enjoying not only monetary but increasingly institutional and diplomatic ascendancy. For the first time in its history, the process of European integration is now confronted with the potential emergence of a hegemonic power, with a widely asymmetrical capacity to affect all other member states.

The third great change has followed from the end of Communism in the countries of the former Warsaw Pact. The restoration of capitalism east of the Elbe has further transformed the position of Germany, both by reinstating it as the continental Land der Mitte which its conservative theorists always, with reason, insisted it would once again become, and – a less noticed development – by reducing the significance of the nuclear weapons that France or Britain possessed and it lacked. Yet more significant, however, is the currently expressed desire of virtually all the East European countries, and some of the former Soviet lands, to join the EU. As things stand, the total population of these candidates is about 130 million. Their inclusion would make a community of half a billion people, nearly twice the size of the United States. More pointedly still, it would approximately double the membership of the European Union, from 15 to some thirty states. A completely new configuration would be at stake.

Historically, these three great changes have been interconnected. In reverse order, it was the collapse of Communism that allowed the reunification of Germany that precipitated the Treaty of Maastricht. The shock-wave moved from the east to the centre to the west of Europe. But causes and consequences remain distinct. The outcomes of these processes obey no single logic. More than this: to a greater extent than in any previous phase of European integration, the impact of each is quite uncertain. We confront a set of fundamental indeterminacies that, adopting a Kantian turn of phrase, might be called the three amphibologies of post-Maastricht politics. They pose much more dramatic dilemmas than is generally imagined.

The Treaty itself offers the first. Its origins lie in the dynamism of Delors’s leadership of the Commission. After securing passage of the Single Market Act in 1986, Delors persuaded the European Council two years later to set up a committee largely composed of central bankers, but chaired by himself, to report on a single currency. Its recommendations were formally accepted by the Council in the spring of 1989. But it was the sudden tottering of East Germany that spurred Mitterrand to conclude an agreement with Kohl at the Strasbourg summit in the autumn, which put the decisive weight of the Franco-German axis behind the project. Thatcher, of course, was implacably opposed.

She was comprehensively outmanoeuvred, however, not least by the Continental regime she most disliked, which sat in Rome. The otherwise impregnable self-confidence of The Downing Street Years falters disarmingly whenever its heroine comes to Europe. The titles of the chapters speak for themselves. The ordinary triumphal run – ‘Falklands: The Victory’, ‘Disarming the Left’, ‘Hat Trick’, ‘Not So Much a Programme, More a Way of Life’, ‘The World Turned Right Side Up’, is interrupted by a faintly woeful note. We enter the world of ‘Babel Express’, with its ‘un-British combination of high-flown rhetoric and pork-barrel polities’, where ‘heads of government would be left discussing matters that would boggle the mind of the City’s top accountants,’ and ‘the intricacies of European Community policy really test one’s intellectual ability and capacity for clear thinking.’

The uncharacteristic hint of humility is well-founded. Thatcher appears to have been somewhat out of her depth, as a persistent tone of rueful bewilderment suggests. The leitmotif is: ‘Looking back, it is now possible to see’. Or: ‘I can only say it did not seem like that at the time.’ Many are the occasions that inspire such mortified hindsight. Exemplary in its comedy is the Milan summit of the European Council in 1984, which ensured the inclusion of qualified majority voting in the Single European Act. ‘Signor Craxi could not have been more sweetly reasonable’: ‘I came away thinking how easy it had been to get my points across.’ But on the following day, lo and behold: ‘To my astonishment and anger, Signor Craxi suddenly called a vote and by a majority the council resolved to establish an Inter-Governmental Conference.’ Six years later, the precedent set at Milan proved fatal at Rome. This time it was Andreotti who set the trap into which Thatcher fell headlong, at the European summit of October 1990. ‘As always with the Italians, it was difficult throughout to distinguish confusion from guile,’ she haplessly writes. ‘But even I was unprepared for the way things went.’ Once more, a vote to convene an IGC was sprung on her at the last minute, this time on the even more provocative topic of Political Union. Her explosion at Andreotti’s ambush finished her. In London, Geoffrey Howe took a dim view of her reaction, and within a month she was ejected from office. No wonder she hated her Italian colleagues, to the point of saying: ‘To put it bluntly, if I were an Italian I might prefer rule from Brussels too.’ Thatcher respected Delors (‘manifest intelligence, ability and integrity’), liked Mitterrand (‘I always have a soft spot for French charm’) and could put up with Kohl (‘style of diplomacy even more direct than mine’). But Andreotti she feared and detested from the start. At her very first G-7 summit, within a few months of coming to power, she found that

he seemed to have a positive aversion to principle, even a conviction that a man of principle was doomed to be a figure of fun. He saw politics as an 18th-century general saw war: a vast and elaborate set of parade-ground manoeuvres by armies that would never actually engage in conflict but instead declare victory, surrender or compromise as their apparent strength dictated in order to collaborate on the real business of sharing the spoils. A talent for striking political deals rather than a conviction of political truths might be required by Italy’s political system and it was certainly regarded as de rigueur in the Community, but I could not help but find something distateful about those who practised it.

Andreotti’s judgment of Thatcher was crisper. Emerging from one of the interminable European Councils sessions devoted to the British rebate, he remarked that she reminded him of a landlady berating a tenant for her rent.

The increasing role of Italy as a critical third in the affairs of the Community was a significant feature of these years. The Report on Economic and Monetary Union that laid the basis for Maastricht was drafted by an Italian, Tommaso Padoa-Schioppa, the most trenchant advocate of a single currency, and it was also an Italian initiative – Andreotti again – which at the last minute wrote an automatic deadline of 1999 into the Treaty, to the consternation of the British and of the Bundesbank. Nevertheless, the final shape of the bargain reached at Maastricht was of essentially French and German design. The central aim for Paris was a financial edifice capable of replacing the unilateral power of the Bundesbank as the de facto regulator of the fortunes of its neighbours, with a de jure central authority over the European monetary space in which German interests would no longer be privileged. In exchange Bonn received the security system of ‘convergence criteria’ – in effect draconian conditions for abandonment of the Deutschmark, which Italian theorists of a single currency had always rejected – and the fixtures and fittings of ‘political union’.

The diplomatic origins of the Treaty are one thing. Its economic effects, if implemented, are another. What is the social logic of the monetary union scheduled to come into force by the end of the decade? In a system of the kind envisaged at Maastricht, national macro-economic policy becomes a thing of the past: all that remains to member states are distributive options on – necessarily reduced – expenditures within balanced budgets, at competitive levels of taxation. The historic commitments of both social and Christian democracy to full employment and traditional welfare services, already scaled down or cut back, would cease to have any further institutional purchase. This is a revolutionary prospect. The single obligation of the projected European Central Bank, more restrictive even than the charter of the Federal Reserve, is the maintenance of price stability. The protective and regulative functions of existing national states will be dismantled, leaving sound money as the sole regulator, as in the classical liberal model of the epoch before Keynes.

The new element – namely, the supranational character of the future monetary authority – would serve to reinforce such a historical reversion: elevated higher above national electorates than its predecessors, it will be more immune from popular pressures. Put simply, a federal Europe in this sense would not mean – as Conservatives in this country fear – a superstate, but less state. Hayek was the lucid prophet of this vision. In his 1939 essay on ‘Economic Conditions of Interstate Federalism’ he set out the current logic of European monetary union with inspired force and clarity. After arguing that states within such a union could not pursue an independent monetary policy, he noted that macro-economic interventions always require some agreement about values and objectives:

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[*] Macmillan, 314 pp., £10, 21 April 1995, 0 333 64169 8.