As home to the main institutions of the European Union, Brussels likes to call itself “the capital of Europe.” But the conceit does Europe no favors. Brussels is a dank, irritable city with some of the ugliest public buildings west of Warsaw. Think of it rather as the world’s biggest company town. What they make there is European integration, and the market is booming.
A “European Economic Community” of six countries founded in Brussels in 1957 has evolved into a “European Union” of fifteen (the name was changed in 1992). A dozen more countries, mostly ex-Soviet satellites from Central Europe, are pressing to join. The engagement demanded of Union members has evolved from a relatively simple set of rules covering trade and agriculture to acceptance of a sprawling corpus of European law—90,000 pages at last count—touching every large aspect of economic life and a growing number of noneconomic aspects besides. This year’s innovation has been a common currency, the euro, adopted in eleven countries of the Union so far. The other four have stayed aloof for a mixture of political and economic reasons, but all—even so-far skeptical Britain—appear likely to join within five years at most.1 The rise of the European Union has been counterpointed by the decline of other big ideas, such as the Soviet-sponsored Comecon and the British-inspired European Free Trade Area. Whatever the EU’s absolute merits, there is now no rival project for “Europe.”
For many economic purposes, although not for most political ones, the Union is integrated enough to demand that it be viewed as a single entity. It has all but abolished national barriers internally to the movement of goods, services, capital, and labor. With relatively few exceptions, the main ones in banking and other financial services and in pharmaceuticals, nothing stops a company based in any one EU country from selling its goods and services in all fifteen countries. And nothing, in principle, stops a citizen of one country from taking a job in another (save for many public-service jobs which are still reserved for a country’s citizens). London is full of German bankers, Berlin is full of British construction workers. Foreign trade is governed by a single set of tariff and quota rules binding on all countries; a single European team of negotiators represents all the EU governments in international trade talks.
That said, national governments do argue fiercely among themselves about the sort of trade deals they want to strike, with France often leading the protectionist faction. (For example, Denmark and the Netherlands oppose the EU’s use of tight quotas to restrict imports of bananas from Central American countries, a practice which is provoking a minor trade war between the EU and the United States. In recognition, the US is trying to spare Danish and Dutch products when choosing European goods for punitive countertariffs.) And EU governments do sometimes interfere unilaterally with the free movement of goods, in breach of European law, claiming health or safety reasons. France, Austria, and Luxembourg have all issued orders closing their national markets to some genetically modified crops, even though the crops in question have been approved for sale by the European Commission.
The EU’s footprint in the world economy compares only with that of the United States. In 1997 Europe’s GDP totaled $8 trillion, against $8.1 trillion for that of the United States. In January, the first month of the euro’s existence, euro-denominated international bond issues exceeded even dollar-denominated bond issues. There is more European direct investment in Texas alone than there is American direct investment in all of Japan.
And yet, for all these achievements, the European Union must still be classified as an experiment. Nothing like it has ever been done before. Nobody knows what form it will ultimately assume. There is general acceptance that political integration must follow economic integration, but with wide differences of opinion about what this proposition implies. The character and scope of the Union are supposed to be defined by a series of international treaties among its members, but these have proved susceptible to contentious interpretations. When French and the German politicians launched the first of Europe’s federalizing structures, the European Coal and Steel Community, in 1951, their ultimate aim was to make another war between their countries “unthinkable.” In this the participants have long since succeeded.
If the Union can be said to have any new transcendent goal, it is probably the less easily advertised one of challenging, and beating, America in as many fields as possible. It may never do so, and certainly not in the foreseeable future, in the strength of military forces, or in information technology. But its partial successes are cherished and they are by no means insignificant. Europe speaks as an equal to America in matters of world trade. Airbus, Europe’s government-backed plane-making consortium, offers the world a serious alternative supplier to Boeing. The euro, despite an early weakness against the dollar that some Europeans are starting to find worrying, still seems assured of its natural place as an international reserve currency.
Michael Emerson and Hugo Young both add generously to our knowledge about Europe and its mysteries with their very different but equally well-informed books. Emerson, who left a job at the European Commission for academic life in 1996 after almost twenty years as a policymaker and diplomat, has attempted to sketch out a sort of general theory of European integration. He deals in schematic fashion with the circumstances that will tend to encourage peace and unity in Europe, and those that will tend to provoke conflict. Democracy and religious tolerance are central in the first category; alienated ethnic minorities dominate the second.
Emerson shows the outcomes toward which different combinations of circumstance may lead, and identifies the “rules” needed to make the more benign outcomes more likely. The political rules he identifies—promotion of democratic institutions, respect for individual rights, and so on—are fairly well accepted, if not always observed. The economic “rules,” by contrast, are less obvious and more open to dispute. Emerson thinks they should certainly include open markets, fiscal and monetary stability, and (with Russia especially in mind) effective corporate governance. The European Union is at the center of his concerns, but he breaks with the limited EU perspective all too common in Brussels by insisting on the need always to reach out to a “wider Europe” which includes, notably, Russia, Ukraine, and Turkey. He argues that this hinterland must eventually be drawn into some common frame of rules or institutions if Europe is ever to rest easy.
Hugo Young has long been one of Britain’s most influential political journalists, writing mainly for the left-of-center Guardian newspaper. His previous book, a biography of Margaret Thatcher, was widely and justly admired.2 In This Blessed Plot Young examines a special case of European integration: that of Britain, which discovered reluctantly in the aftermath of Hitler’s war that it had nowhere else to go. Young’s book is being read with admiration throughout the European political establishment. A member of Tony Blair’s staff told me recently that it was having “a big influence on all the young people in Downing Street.” Joschka Fischer, the new German foreign minister, recommends it to visitors in jacket-copy language. At a meeting I attended in January he called it “a wonderful book, a judicious book, a clever and highly readable book.”
It is easy enough to see why he might say so, quite apart from the fact that the work fully merits such praise. Young’s argument is that Britain, even after it joined the European Union in 1973, has often been shortsighted, foolish, rude, and self-destructive in its dealings there, which is just what Britain’s partners in Europe think privately, but (except for France perhaps) rarely choose to say out loud. Sheer British rudeness reached its zenith under Mrs. Thatcher, who, among other things, accused the European Commission of trying to “extinguish democracy”; called the notion of monetary union “cloud-cuckoo land”; and told a German diplomat in 1990 that it would be “at least another forty years before the British could trust the Germans again.” British foolishness may well have reached its nadir under Mrs. Thatcher’s successor, John Major, who in 1996 announced a policy of “noncooperation” with Europe: his gripe was an EU ban on the world-wide sale of British beef, which, owing to singularly unpleasant British farming methods, might give a fatal brain disease to people who ate it. Young concludes that Britain is mending its ways under Tony Blair. He calls Blair a prime minister “untroubled by the demons of the past, prepared to align the island with its natural hinterland beyond.” But by keeping Britain out of the single currency at its launch, Blair has shown that even he will not be taking any big political risks for “Europe” just yet. His strategy has been to promise a referendum on joining the euro after the next British general election, probably in 2001 or 2002: his ruling Labour Party hopes that the public mood will have shifted in favor of the euro by then.
The experimental empire which has so discomfited Britain is administered mainly from a trio of institutions clustered on the eastern edge of the Brussels city center. They do the high-level work of a supranational government in a limited number of fields. As such they contain most of the classical elements of national government, but arranged in unusual forms.
The mainstay of the system, the European Commission, is in a particularly unusual form at the moment. Its main building, a star-shaped block called “the Berlaymont,” is wrapped in thick white canvas worthy of an early Christo project. Asbestos was found in the walls in 1991. Defaulting contractors and wrangling bureaucrats have kept the place a building site ever since. There are hopes of unwrapping the Berlaymont and returning it to service in 2001 or so. Until then the twenty commissioners, two appointed from each big country and one from each small country in the Union, are parked in temporary quarters a hundred yards away. Commissioners are replaced or reappointed once every five years. The current “college” of commissioners, under the presidency of Jacques Santer, a former prime minister of Luxembourg, took office in 1995 and will serve to the end of this year.
The Commission is the Union’s main supranational body, which is to say, the commissioners are supposed to act in the interests of “Europe,” not of the countries from which they are drawn. The Commission has the sole right to propose new legislation for the Union. This allows it to impose many small ideas of its own: priorities for this year include the creation of an EU-wide patent system to supersede national patent rules; drafting an “action program” for improving public health throughout the EU; and removing lingering obstacles to the free sale of energy across national borders. It is also the Commission’s job to elaborate into workable form the big ideas backed by national governments which give European integration its staying power. The great project of the past five years has been the launch of the single currency. The half-decade before that was dominated by the completion of the “European Single Market,” when national barriers to commerce were progressively abolished.
The Commission acts as the executive arm of the Union, and as its civil service. Its staff of 16,000 professionals are divided into twenty-four departments (called “directorates-general”), of which the most powerful are the ones dealing with “competition” (which investigates large corporate mergers and acquisitions involving EU firms, and has the power to block transactions on antitrust grounds); “external economic relations” (which oversees foreign trade negotiations on behalf of all EU governments); “external political relations” (which, among other things, reviews candidates for admission to the Union); and agriculture (which administers a program of farm subsidies worth about $45 billion a year). Lesser directorates-general handle employment policy, transport, regional policy, energy, tourism, the environment, consumer policy, and financial services.
In all these Commission offices, the civil servants not only draft the laws and projects they think the Union should adopt, but also check that countries are enforcing the rules already in place. Usually this is done by monitoring national legislation, and by inviting national governments to submit reports on their economic and social policies for the Commission to compare and criticize publicly. Where it suspects violations of antitrust policy, the Commission has legal powers to investigate. In February, for example, it sent inspectors into eight big European banks which it suspected were colluding to keep bank charges high. Behind the commission stands the EU’s high court, the European Court of Justice, which has the power to levy fines even on governments.
The civil servants oversee a Union budget of almost $100 billion annually, derived in part from a tithe on national sales taxes and in part from contributions by governments proportionate to the size of their respective economies. This adds up to a little more than 1 percent of the Union’s GDP, not enough to be of much general macroeconomic significance, but enough to give the Commission some serious powers of patronage. Roughly half the budget goes to farm subsidies, for historical reasons. The founders of the EU wanted to buy the good will of French and Italian peasants, whom they thought might otherwise revolt against the opening up of national markets to cheaper foreign food. They began using taxpayers’ money not only to pay subsidies to farmers directly but also to rig markets so as to keep the price of basic foods high. The result forty years later is a European farm industry helplessly addicted to public money.
The rest of the EU budget goes mainly into infrastructural and development projects such as new roads, sewage treatment plants, local telephone systems, and job-training schemes, most of which are meant to help the poorer countries of the Union (Spain, Portugal, Ireland, Greece) catch up with the rich ones. The idea is to raise the productivity, and hence the purchasing power, of the poor countries, not least so that they can buy more goods from the rich countries; the money also ensures that these countries feel they are getting something tangible out of their EU membership, in exchange for the loss they feel at having to open their protected markets to foreign goods and services. Spain, the biggest recipient, got $7 billion last year: EU money even helped pay for a beltway around Madrid. EU governments are currently looking for ways to reform the budget, mainly by containing farm subsidies, so that new members can be admitted without triggering big new spending obligations. A package deal covering budget policy for the years between 2000 and 2006 is supposed to be reached when heads of government meet for a special summit in Berlin on March 24-25. But the arguments so far have been acrimonious, and agreement is far from certain.
And, not least, the Commission evaluates the suitability of countries applying to join the Union. That task, backed by a generous assistance program to help the applicants adjust, gives the Commission political leverage across most of Eastern Europe. Here Poland, the Czech Republic, Hungary, Estonia, and Slovenia lead the dozen countries making prodigious efforts now to show themselves ready to join the European Union in the decade ahead. They are privatizing their inefficient and subsidized public utilities, recruiting border guards, training statisticians in the methods of national accounting that will be acceptable to the EU. Entire codes of law are being brought into line with European norms: that may mean much drafting from scratch in areas such as company law, accounting, intellectual property, environmental protection, and consumer rights.
The Union offers a means of reinforcing fragile young democracy and civil society—as it did in Greece, Spain, and Portugal twenty years earlier; and in Germany and Italy twenty years before that. None had more than a decade’s experience of democracy in the years before they joined the European Union or its precursors, yet in none of them, or in any other Union country, has democracy since been in danger. In the case of one current candidate for membership, Slovakia, the lure of Europe has already had a decisive effect. Last year, after the European Commission said the country’s authoritarian political drift was making it an unsuitable candidate for Union membership, Slovak voters threw out the increasingly nasty and pro-Russian government of Vladimir Mecå?iar and installed a pro-European coalition under Mikulas Dzurinda.
With only one instrument, the fact of membership, the European Union is well on its way to achieving one of the great foreign policy triumphs of the postwar world: the entrenchment of liberal democracy across half a continent, with most of the other half soon to follow. It counts as something of a paradox, in those circumstances, that the EU’s own institutions and functioning are only minimally democratic in character. Ideas are hatched within an isolated policy elite at the Commission, or in private discussion among national leaders, and often passed into law with much of the European public scarcely noticing. But this is in large measure the secret of the EU’s success. It has progressed through bold and sweeping initiatives (internal free trade, open borders, admission of new members, and a single currency) which might never have found majority support in public opinion had public opinion been allowed a determining say on any of these issues. And, in some sense—since it does not manifest any obvious signs of outrage—public opinion must be held complicit in its own circumvention.
Counterbalancing the Commission’s supranational functions, the Council of Ministers is the Union’s main intergovernmental institution. The Council consists of ministers from the fifteen national governments meeting among themselves and voting on the laws that will bind them all equally. This is, more or less, the legislature of the European Union, and it occupies a big, ugly pink building just across the road from the Berlaymont. The title is confusing since there is, in fact, no single, permanent “council of ministers” as such, despite the name. The Council consists of different groups of ministers meeting at different times in different “formations”—agriculture ministers one day, home affairs ministers the next, foreign ministers the week after.
On routine matters, usually economic in nature, the Council passes laws by majority voting. (The bigger the country, the more votes it has in the Council. Germany has ten votes, for example, whereas Luxembourg has two. Votes in the council usually require a “qualified majority,” which is to say, at least sixty-two votes out of a possible eighty-seven must be cast in favor, for a proposal to pass into law.) This is one essential way that countries surrender the day-to-day substance of national sovereignty on joining the Union. They cannot always say “no” successfully—as Britain discovered to its fury in 1996, when the EU obliged it to halt all exports of potentially diseased beef. Only in more sensitive matters—employment law, tax policy, immigration rules—must decisions be adopted unanimously; hence the current British confidence that it will be able to stop the Union from ever imposing standardized rates for corporate and income taxes. But the scope of these reserved subjects has been diminishing steadily, and will probably continue to do so.
The third main institution of the Union, the European Parliament, which divides its time between Brussels and Strasbourg, is the only one that is directly elected by voters in each country and it is much the weakest—it is a talk-shop with a limited (if growing) capacity to block or amend legislation going to the Council of Ministers, in addition to a few constitutional powers. It must approve international agreements and annual budgets; it can sack the Commission in its entirety, though not individual commissioners. In January it came close to using this power of dismissal for the first time, after a dispute with the Commission over the high level of fraud and waste of money in recent budgets. An EU audit report for 1997 indicated that roughly 2 to 3 percent of all farm subsidies—meaning more than $1 billion a year—went to farmers fraudulently overstating their crops or acreage. Aid programs to Eastern Europe and Africa were being so loosely managed that it was hard to tell what money was being used productively and what was being wasted or stolen.
Members of the European Parliament often call on national governments to transfer more powers to their institution, mainly in the form of more control over the European Commission, in order to remedy what has come to be called a “democratic deficit” within the Union. This deficit arises, supposedly, because civil servants and ministers acting for Europe should be accountable to a parliament elected by Europeans. But in practice the Commission can afford to ignore the Parliament at least half the time, and the Council of Ministers all of the time.
At least the Council of Ministers, through which all laws must pass, consists solely of democratically elected officials. If voters in any EU country want to elect an avowedly anti-EU government, whose ministers will obstruct and veto everything in sight, they are at liberty to do so. In practice, none has gone quite that far (though Mrs. Thatcher certainly owed some of her support among British voters to her strong reservations about European integration). As for the commission, it draws legitimacy from the EU’s constitutional treaties, to which all EU governments put their names.
But nobody pretends that the derived legitimacy of either institution is entirely adequate by conventional standards of democracy. The need for the Union to be made more open and accountable to the public is a refrain constantly heard from both its supporters and its critics. Seen from the elitist perspective of Brussels, the question is how to increase the weight of democracy in the EU, so that it becomes more popular and more legitimate, without at the same time making its deliberations more of a hostage to the sort of populism and national chauvinism that could block further integration.
One natural way forward might be to give the most democratic of the Union’s own political institutions, the European Parliament, more power over the least democratic of the EU’s political institutions, the commission. But this is less of a ready answer than it might seem. The parliament is directly elected, but it has commanded relatively little interest to date from the European public in whose name it claims to speak. When elections come round (as they do every five years, with the next one due in June), the candidates in most countries are mediocre, the turnout is low, and the results are correspondingly erratic. The chamber has become a happy home to dozens of extremists, eccentrics, and simple incompetents. If, for example, the parliament were given the power to sack individual members of the European Commission (a power it would dearly love to acquire), large sections of its membership would soon spend their time doing nothing else.
Robin Cook, the British foreign secretary, suggested last year that it might be useful to create a second chamber for the European Parliament filled with representatives from national parliaments. This scheme would give the European Parliament more political clout, and would probably ensure that national parliaments paid both more attention and more respect to events in Brussels. But it would also represent, if only in formal terms, a step backward in European integration, a “renationalization” of one part of the political process; and, as such, the idea has found few echoes of support even within the British government.
Others have argued for creating a new council of senior ministers from national governments—deputy prime ministers, say—as a permanent body, residing in Brussels. This new tier of ministers would, in effect, take charge of the Council of Ministers. They would give the council a permanent, visible leadership, and they would supply voters in each country with a “minister for Europe” who could reasonably be held directly responsible for whatever the EU was doing. The effect would not be so much to increase the quantity of “European” democracy, as rather to allow national democracy to function a little better as a check on Europe.
Gerhard Schroeder’s new German government has suggested a slightly different route for tilting the balance of power in Europe a little more toward the individual: it wants the EU to enact a “charter of basic rights” for all citizens. This document would express a wide range of civil and political rights in a simple, standard form, and would allow citizens to seek redress from any European court if those rights were being violated by EU institutions or national governments.
There is something to be said for all of these ideas. But there is also something to be said for the idea that the European public is happy enough on balance to let the business of European integration play itself out in much the way it has been doing so far. To suggest that the European public is being carried along willy-nilly by the conspiracies of an elite is perhaps to underestimate the collective intelligence of electorates. When Europe needed visionary politicians to tide it over the collapse of communism, voters supplied them in the shape of Kohl, Mitterrand, Thatcher, and others. Now that moment has passed, and Europe needs to wrestle with the practical details of monetary union and economic integration, voters have supplied it a new generation of leaders (Blair in Britain, Schroeder in Germany, Aznar in Spain, Kok in the Netherlands) who are seen as pragmatic and realistic. Democracy seems, in fact, to be coping rather well with the new challenges of Europe—which is not, of course, an argument against enlarging its role further.
To these three bastions of the Union must be added two significant outposts. One is the European Court of Justice, which sits in Luxembourg. The court is the most commonly underrated of the Union’s institutions. It administers a code of European law, based on the Union’s founding treaties and enlivened by a creative jurisprudence, which overrides the national law of all member states—even (in the European Court’s own view, though France dissents) the constitutional law of member states. This supremacy of European law is another expression of the diminished sovereignty which countries must accept when they join the Union. If the European Court tells them to treat men and women equally at work, or to let foreigners practice as lawyers, or to stop calling their local fizzy wine “Champagne,” they and their national courts and their national parliaments have no choice but to grumble and obey. Any of the European institutions may bring a case to the court. So may individuals and companies, though these will usually go first to a junior “court of first instance.” The Commission turns to the court when it wants to force a member state to obey community law. For example, in Commission v. Germany (case 178/84 of 1988), the court struck down a German law on the “purity of beer” which it judged to be a form of disguised protectionism. In Commission v. Italy (case 352/88R of 1989), the court told Italy that it must allow Aer Lingus, an Irish airline, to fly into Milan. But the court is not merely a passive instrument of the law. Like America’s Supreme Court, it construes a constitution—in Europe’s case, the treaties founding the European Union. When considering specific complaints in the light of the treaties, the European Court may discover and proclaim general principles with sweeping implications.
In one of its most widely cited judgments (the “cassis de Bourgogne” case, also known as Rewe-Zentrale v. Bundesmonopolverwaltung für Branntwein, 1979), the court seized on a German law about the strength of fruit liqueurs to deliver a generalized attack on the use of arbitrary national standards to deter the sale of foreign goods on local markets. That ruling did as much as anything to inspire the creation of the Single European Market a decade later. The Union gains in strength because its settled existence is based on a rule of law and not on the momentary political calculations of member states.
The other main outpost is the European Central Bank—set up in Frankfurt, at German insistence, so that it might absorb more easily the austere habits and principles of its near neighbor, the Bundesbank. As issuer and manager of Europe’s new currency, the euro, the bank is supposed to enjoy complete independence from political pressures as it pursues its statutory goal of “price stability” across Europe. It takes this to mean an inflation rate of less than 2 percent, which it pursues by adjusting both the supply of money and the rate of interest at which it is willing to lend money, in the light of business conditions. But the bank’s mandate was written into the European treaties in 1991, when right-wing governments ran most Union countries. Now left-wing governments are in the majority, and they want the bank to adopt a more flexible, responsive approach—which is to say, they want it to err on the side of looseness rather than tightness in its monetary policy.
They are worried mainly by unemployment rates in Europe, which have stuck obstinately at around 10 percent, or more than twice the American level. Among young people under twenty-five, the European rate is more than 20 percent. France and Germany both seem to think that lower interest rates would help create jobs. The Central Bank replies, convincingly, that unemployment owes much more to “structural” causes. Governments themselves, the bank believes, kill jobs by overtaxing and overregulating the labor market in particular, and commerce in general. It is a dangerous dialogue to be conducting publicly, since each side risks driving the other into a more extreme position: the bank will be more reluctant to cut interest rates if it fears the appearance of caving in to political pressure; governments will be more reluctant to conduct fiscal or social policies that seems to imply acceptance of terms fixed by the Central Bank.
Governments in most countries are, moreover, still smarting from the fiscal and monetary squeezes that were needed in 1995-1997 to meet the rules set for monetary union: the main requirements here were a national budget deficit below 3 percent of GDP and government debt either below 60 percent of GDP or heading persuasively in that direction. These targets were met, by and large, not by radical cutbacks in welfare entitlements or in labor-market regulation, but by raising already-high taxation, and hence causing a further slowdown in job creation.
France has been an especially stubborn case in point. Its economic squeeze began as early as the mid-1980s when President François Mitterrand decided that the French franc should be stabilized against the German mark—a political decision which proved, with hindsight, an essential early step along the road to monetary union. The franc fort (strong franc) became a matter of national pride. It demanded a tightening of monetary policy, to which French governments of the right and left remained faithful right up to the euro’s launch. But it also brought long periods of high real interest rates; and when unemployment rose sharply in response, the combination of powerful labor unions and French traditions meant that no government dared cut welfare benefits, or deregulate the labor market, so that jobs might be created more cheaply. The result today is a French unemployment rate of 11.6 percent, a full two percentage points above the average for the EU as a whole—and that, despite French economic growth of 3.2 percent in 1998, the country’s best performance since 1989.
For the French and German governments alike, given the new environment of monetary union, there is a strong political incentive to see if the blame for high unemployment rates can be shifted, however dishonestly, onto the European Central Bank. Early French and German criticisms of the bank’s monetary policies and inflation targets appeared to be directed at this end. If so, it counts as a clever strategy politically, a stupid one economically. The real test of the bank’s independence will come when Europe next hits a serious economic downturn: the most awkward circumstance would be a downturn that hit some countries severely but others scarcely at all, creating conflicting policy needs within the monetary union that the politicians will have to address.
When we consider how energetically the European project has widened in scope and ambition throughout its existence, it may seem odd that critics have often turned first to its limitations. But these certainly troubled Britain mightily when it contemplated exchanging its global destiny for a “merely” European one. In a speech given in 1952, Anthony Eden, then Britain’s foreign secretary and later its prime minister, said:
Frequent suggestions have been made that the United Kingdom should join a federation on the continent of Europe. This something which we know, in our bones, we cannot do…. For Britain’s story and her interests lie far beyond the Continent of Europe. Our thoughts move across the seas to the many communities in which our people play their part, in every corner of the world. These are our family ties. That is our life; without it we should be no more than some millions of people living in an island off the coast of Europe, in which nobody wants to take any particular interest.3
As Hugo Young shows, Eden was not an especially attractive politician, and these are somewhat disingenuous words. Whatever one might think of the British Empire and its legacy, it was not primarily a matter of “family ties.” But this was the way that many Britons thought, and the “verdict” of World War II confirmed their view. The countries of continental Europe were enemies or inferiors. If France and Germany wanted to stop themselves from invading one another ever again, and had settled on some sort of federation as the means, it was a laudable endeavor. But it was not an example Britain felt constrained to follow. As Sir Roy Denman, a veteran British and European diplomat, put it, for the British to throw in their lot with a “bombed out, defeated rabble south of the channel” seemed unthinkable.4
In addition to these strong psychological—or historical, or instinctive—objections, Britain discovered objections of political principle. Proposals for a European federation offended the British national attachment to absolute parliamentary sovereignty. The European governments were guided in forming the European Community mainly by intuition and optimism—which were not the ordinary working methods of the government of the United Kingdom. The Italian foreign minister, Count Sforza, tried to explain to Britain that “it was the music and not the words that counted” in the European treaties. Sir Edward Bridges, head of the British Treasury, disagreed. In 1950, with the Coal and Steel Community beckoning from across the Channel, he told ministers:
In view of our world position and interests, we should not commit ourselves irrevocably to Europe either in the political or the economic sphere unless we could measure the extent and effects of the commitment.
Looking back, one may regret the inadequacy of this advice. But it must surely have seemed to make sense to most UK politicians at the time it was offered.
It may well be, as Young argues persuasively and as Denman and others have done before him, that Britain and Europe would both be in better shape today if Britain had directed its considerable resources toward Europe in the postwar years, instead of squandering them on delusions of grandeur in Suez and elsewhere. But the early psychological obstacles for Britain—its attachment to its overseas possessions, its insistence that Parliament could not accept impairments of its sovereignty—were almost impossibly large, and whereas Young does take due note of them, he may not always give them the weight they deserve. His opening contention, that “high political misjudgment is the thread running through this history,” is defensible if one defines “misjudgment” to mean misjudgment about what would, in strict fact, have been the best course for Britain over the long term. But if one gives weight also to judgments about what would have been foreseeable, defensible, and even popular by the standards of the day, then the verdict on this early fumbling over Europe must surely be more nuanced.
Hugo Young touches at several points in his story on the most telling argument advanced by British politicians hostile to the European Union: namely, that the British public was and has never been told clearly the full implications of the British commitment to Europe, with its sweeping surrender of both parliamentary and legal sovereignty. Nobody told them straight out, in terms they could understand, that British courts would lose their last word on British law; or that British ministers could and would be outvoted in the Council of Ministers by cunning coalitions of French and German and Italian ones. Successive governments have blurred the issue since, fearing what Young calls elsewhere “the British tradition of aggression towards Brussels.”
The terms of Union membership have never been a “secret” in any formal sense, of course. The treaties are a matter of public record, even if they are too long and complicated for almost anybody to read and understand fully. Statements can be found here and there on the public record in which ministers admit that Britain will not be quite the nation-state it was. But the Euroskeptical view of Europe as an “elite project,” not willingly exposed to public debate, does have an awkward amount of truth in it. The British government has always been inclined to give a minimalist account of its obligations and intentions. When Edward Heath’s government negotiated the terms of British entry to the European Economic Community in 1972, it published a policy document claiming that
There is no question of any erosion of essential national sovereignty…. What is proposed is a sharing and an enlargement of individual national sovereignties in the general interest.
A more robust view was taken by Lord Denning, a British judge, in a celebrated ruling on a civil case in 1974. He said the Treaty of Rome, the constitution of the European Union, was “like an incoming tide. It flows into the estuaries and up the rivers. It cannot be held back.” And Denning was right. He was, however, addressing the objective consequences of the treaty for practitioners of British law, which were clear and inescapable. The substance of civil law applied in Britain would be changed by accession to the Union; so would the sources of that law. Some of it would come directly from legislation enacted in Brussels. Some of it would come from the case law of the European Court of Justice in Luxembourg. And even when British law was being applied, British courts acquired the duty to “construe” that law in accordance with the European treaties.
The political implications for sovereignty in political terms have remained a more subjective and furtive affair. Whereas complete negations of sovereignty—invasion, occupation—are usually conspicuous affairs, the record of the European Union governments in maintaining all the conventional superstructure of classical nation-states (eleven abolished their national currencies this year, but none its central bank) suggests that incremental erosions can be almost invisible, especially if governments choose to obscure or ignore them. Arguments about whether power has or has not been lost irrevocably shade quickly into the unprovable. States may bind themselves by treaties and revoke the treaties later. Overlapping sovereignties can coexist, much as some people have dual nationality. Sovereignty, as Heath once remarked, is not “something you put down in the cellar in your gold reserve, and go down with a candle once a week to see if it is still there.”
But even accepting these qualifications: if one takes an empirical view of sovereignty, then clearly something dramatic has been going on in Europe. Emerson reports a finding that throughout the EU 60 percent of national legislation is now driven by EU policies, and they consume two thirds of the time spent by the policy officials in several ministries. Sadly, further detail is lacking, but the figures sound plausible enough: agriculture, environment, trade, and industrial policy have been almost wholly Brusselized by now, to the point at which national freedom of action has become insignificant. If you as a minister want to double your country’s milk production, or build a Russian-designed nuclear power station, or buy more Central American bananas, or subsidize your national airline, then tough, Europe says you can’t. So why—and how, for that matter—do European governments go on giving the impression that they run their countries in the traditional way, not merely as agents for their principals in Brussels?
The “why” is more quickly answered: like all complex organisms, national governments have strong survival instincts, and none is going to actively undermine its authority by advertising its possible obsolescence. It carries on as before, pretending to govern even where it merely administers. As to “how”: the quality of issues decided in Brussels has remained relatively undramatic politically, even though the quantity and economic importance of business done there has grown very high. The Brussels institutions hand down antitrust rulings (saying yes last year to an accountancy merger between Price Waterhouse and Coopers and Lybrand, for example, but no to a merger between two publishers, Reed Elsevier and Wolters Kluwer, that would have cornered too many markets in textbooks and scholarly journals). They fix the level of grain subsidies and ban dangerous toys from the shops. But anything sensitive enough to register strongly with the distracted voter as a “national” issue—defense, foreign policy, direct taxation, criminal justice—is still mainly a national prerogative.
That said, the hollowing-out of national sovereignties is going to continue, and must at some point become visible to any untutored eye. In such matters as direct taxation and the rules that must be followed by employers and employees, national vetoes are still respected in Brussels. Majority voting does not apply. Matters concerning defense and criminal justice are for the moment formally excluded from the action of the Union. But policies on all these questions are slowly being drawn into the sphere of collective decision-making. Thus France and Germany are pressing openly for decisions on taxation in Europe to be taken by a majority vote in the Council of Ministers, for example. Sooner or later they may prevail, whatever the present British government says to the contrary, because the modalities of European politics encourage a sort of ratchet effect toward integration. Governments go through periodic fits of integrationism when new treaties are signed and new powers transferred; and these transfers are almost impossible to reverse when the mood changes.
Another factor in the process is “disequilibrium dynamics,” which Emerson defines as “the process whereby one step in systemic integration creates a new situation, in which a further step is now required if the system itself is not to become destabilised.” Set up a common currency, and you will find you need fiscal rules—such as a strict limit on national budget deficits, which may not now exceed 3 percent of GDP for countries within the monetary union—to bringing national budgets and economic cycles roughly into line. Abolish frontier controls, and you find you need more pan-European policing to catch the criminals who, by crossing borders unhindered, can the more easily escape any one national jurisdiction. Set up a common trade and aid policy, and sooner or later you will want a common foreign policy. Otherwise you will get tired of contributing, say, $1.9 billion to the Palestinian Authority (as the EU plans to do) while having next to no impact on the diplomatic aspects of the Middle East peace process. Set up the common foreign policy, and you will find you need a common defense policy (especially if you have Serbia next door). Others call this the “bicycle theory” of integration. Move forward, or you fall over.
But move forward to where? Robert Cooper, a British diplomat, has suggested that advanced countries are “moving towards a system of overlapping roles and responsibilities with governments, international institutions and the private sector involved, but none entirely in control.”5 Emerson thinks Europe may be moving toward what he calls “cosmopolitan democracy,” a condition which
…belongs to the post-modern idea, rejecting [the view] that great centres of state power have to be concentrated at the level of a unified jurisdiction. The idea is rather that a set of rules and codes, defined and enforced at a variety of supra- and multinational levels, largely displace the need for superpowers.
So here, happily, are arguments that one could be a good “European” without sharing the fear that a monolithic “European super-state” is in the making. The Union is thoroughly open-minded about where power should be located, so long as it functions fairly well. The new Central Bank has a free hand to manage the currency. The European Court of Justice has a free hand to interpret the Union treaties. The Commission’s idea of a good policy decision is one supported by the broadest possible coalition of interest groups. (When the Commission was drafting directives to cover the recognition of professional qualifications across Europe, so that physiotherapists, librarians, and the like could practice freely in different countries, it passed out drafts of its own texts informally to groups of practitioners, and incorporated into its own final draft chunks of text suggested by the professional groups themselves.) There is plurality here, and dialogue.
The centralizing of power in the Union institutions is also counterbalanced by a movement of power in the opposite direction, from national governments to the regions. The most headstrong of Europe’s regions—such as Catalonia in Spain, Flanders in Belgium, Scotland (a country in its own right, technically) within the United Kingdom—tend to be distinguished linguistically, and by the sense of a distinct history of their own. In the new, borderless Europe, they must be kept happy by a grant of powers over matters such as culture, education, and local planning, for example—because otherwise such regions cannot be maintained at all. The overarching continuity of the European institutions and, now, the single currency, have made the breaking-up of a nation- state within the Union a much less risky affair than it has ever been anywhere in the world before. Schism carries with it no fears of invasion, or ostracism, or financial chaos. Flanders, the Dutch-speaking region of Belgium, is well on its way to de facto independence. Some Scots are contemplating the de jure variety.
Risk-free regionalism is intrinsically attractive to almost everybody (except, of course, to the national governments at risk). It fits well with “globalization,” each force complementing and tempering the other. The trend toward standardization and depersonalization in the economic sphere is countered by a strong sense of local difference and local identity in the political and social sphere. Emerson worries that too much “fragmentation and layering” will make the precise location of “loyalties” and “state power” in the new Europe “more opaque.” The ideal must surely be to achieve a distribution of loyalties and state power so wide that only innocuous quantities of either can collect in one place.
The European Union still has a long way to go, and a lot more changes to go through, before it reaches this or any other balance. Talk of a “United States of Europe” has gone out of fashion among the politicians, because it raised too many misplaced expectations among believers about what might be achieved in the short term, and too much hostile reaction from disbelievers. The broad priorities set for the next decade are pragmatic ones. The first is to cope with the admission of the dozen or so candidates for membership. Ways will have to be found of integrating them into the EU’s institutions without allowing their inexperience and sheer number to paralyze the Union’s workings. Money will have to be found to help improve their roads and telephones, shut down their old nuclear power stations, and fortify their borders. There may be friction to manage with Russia and Belarus, as these countries try to deal with their loss of access and influence in their former backyard.
The second is to manage the economic convergence needed to maximize the benefits from monetary union. This will be a political process more than anything: it will require countries within the Union to discover how best to set, for all their citizens, a “European” economic policy (they have never tried it before), and how best to communicate the wisdom of that policy to the Central Bank in a way that wins the bank’s cooperation. Nobody doubts that there will be arguments in the early stages: the right interest rate for Dublin is certainly not yet the right one for Düsseldorf. The gamble of monetary union is that these can be surmounted and convergence achieved, not by economic ingenuity but by political will.
If those problems can be successfully addressed, beyond them probably lies the building of a common foreign policy which will be the next big step toward a true political union and will require a rethinking of the European role in NATO. Eastern European nations will still want America to lead. Western European ones will be much less sure.
But wherever Europe goes next, the launch of the single currency has greatly amplified the potential consequences of success or failure for each country involved, so restoring to the Union its air of adventure. One political scientist has called it “an unidentified political object.” To which Michael Emerson makes the reasonable rejoinder, “So far it flies.”
—March 11, 1999
April 8, 1999
The single currency is real enough, but not very visible yet. During a transitional period designed to help the public adjust to the new regime, national notes and coins—deutsche marks, French francs—will continue to circulate exclusively, though euro-denominated bank accounts and credit cards are freely available. Only in 2002 will euro-denominated notes and coins be substituted. But since January 1 this year the value of each vestigial national currency has been fixed irrevocably in euro terms, and the management of the whole system has been handed over to the new European Central Bank in Frankfurt. ↩
Hugo Young, One of Us (London: Macmillan, 1989). ↩
Sir Roy Denman, Missed Chances: Britain and Europe in the 20th Century (London:Cassell, 1996), p. 195. ↩
Denman, Missed Chances. The title of Denman’s book is a fair clue to its general argument. A British civil servant who moved in his later career to the European Commission, Denman offers many details about European diplomacy and strategy which complement usefully the more purely British perspective of Young’s work. ↩
See Robert Cooper, The Post-Modern State and the World Order (London: Demos, 1996), p. 47. ↩