When the leaders of the twelve members of the European Community signed the Treaty on Monetary and Political Union in Maastricht in December 1991, the project of a United Europe, which began in 1950 under the inspiration of Jean Monnet, seemed to be making spectacular progress. A single currency, a common monetary policy, and an independent central bank were to be established in stages before the end of the century, thus bringing to its logical conclusion the design for a single European market that had been proposed in the mid-1980s. 1 The powers of the Community were also to be extended to deal with a broad range of policies concerning health, consumer protection, the environment, crime, immigration, labor relations, diplomacy, and defense. Even though Britain had refused both to accept the new social provisions of the treaty and to join the full monetary union, agreement on so vast an expansion of community activities was hailed as a great success.
Yet the signing of the Maastricht treaty marked the beginning of a serious crisis, which has led to a new wave of pessimism about Europe’s future, both on the Continent and in the US. The pessimism comes from a variety of different troubles. Every Western European economy is stagnant, the result both of the worldwide recession and the huge costs of German unification. Partly as a result, the main European governments are concentrating on their domestic difficulties and programs. Two other sources of the European malaise may be more difficult to deal with in the long run. One is often referred to as the Community’s “democratic deficit,” the much-resented distance between the bureaucracies that administer the EC and the European voters who are affected by it. Perhaps the deepest problem of all concerns the relation of the traditional nation-state to a new United Europe.
The ambitious plans that are now falling apart were the product of another recession—the one that hit Western Europe after the oil crisis of 1973 and resulted in years of “Europessimism,” fluctuations in exchange rates, and stagnation in the development of the Community. Even Britain’s entry into the EC didn’t help, since the British spent, in effect, ten years—between 1974 and 1984—renegotiating the terms on which they had been admitted. In 1978, the French President Valéry Giscard d’Estaing and the West German Chancellor Helmut Schmidt took the initiative to set up a European Monetary System (EMS) that would create monetary stability by narrowing the range of exchange rate fluctuations among the members’ currencies. This seemed one of the more striking European successes of the postwar period. Devaluations and reevaluations of currency were not ruled out, but they became increasingly rare. Britain, which had at first stayed out, finally joined the EMS in 1990. The EMS was to be the basis on which a full monetary union, ultimately with a common European currency—an objective toward which Jaques Delors, the president of the EC’s Commission, had been working for years—was going to be built.
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