Michael Gehler, Wilfried Loth (Ed.)

Reshaping Europe

Towards a Political, Economic and Monetary Union, 1984-1989

1. Edition 2020, ISBN print: 978-3-8487-6674-1, ISBN online: 978-3-7489-0785-5,

Series: Veröffentlichungen der Historiker-Verbindungsgruppe bei der Kommission der EG, vol. 20

Bibliographic information
Nomos Publications of the | 20 European Union Liaison Committee of Historians Michael Gehler | Wilfried Loth [eds.] Reshaping Europe Towards a Political, Economic and Monetary Union, 1984–1989 Veröffentlichungen der Historiker-Verbindungsgruppe bei der Kommission der Europäischen Gemeinschaften Publications of the European Union Liaison Committee of Historians Band 20 | Volme 20 BUT_Gehler_6674-1.indd 2 09.07.20 11:17 Towards a Political, Economic and Monetary Union, 1984–1989 Reshaping Europe Nomos Michael Gehler | Wilfried Loth [eds.] BUT_Gehler_6674-1.indd 3 09.07.20 11:17 Onlineversion Nomos eLibrary This publication owes its funding to the Institute for History at the University of Hildesheim Foundation, especially the Action Jean Monnet Erasmus Plus, and the colleagues of the Liaison Group of Historians at the EU Commission. The Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data are available on the Internet at ISBN 978-3-8487-6674-1 (Print) 978-3-7489-0785-5 (ePDF) British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library. ISBN 978-3-8487-6674-1 (Print) 978-3-7489-0785-5 (ePDF) Library of Congress Cataloging-in-Publication Data Gehler, Michael; Loth, Wilfried Reshaping Europe Towards a Political, Economic and Monetary Union, 1984–1989 Michael Gehler / Wilfried Loth (eds.) 524 pp. Includes bibliographic references and index. ISBN 978-3-8487-6674-1 (Print) 978-3-7489-0785-5 (ePDF) 1st Edition 2020 © Nomos Verlagsgesellschaft, Baden-Baden, Germany 2020. Printed and bound in Germany. This work is subject to copyright. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage or retrieval system, without prior permission in writing from the publishers. Under § 54 of the German Copyright Law where copies are made for other than private use a fee is payable to “Verwertungs gesellschaft Wort”, Munich. No responsibility for loss caused to any individual or organization acting on or refraining from action as a result of the material in this publication can be accepted by Nomos or the editors. BUT_Gehler_6674-1.indd 4 09.07.20 11:17 Contents Introduction 9 Michael Gehler European Integration by Mail: European Symbols and Subjects on Postage Stamps 17 Jasper M. Trautsch New InitiativesPart I: A Double-Edged Victory: Fontainebleau and the Resolution of the British Budget Problem, 1983–84 45 N. Piers Ludlow The Relaunch of the Benelux Union and the Origins of the Schengen Agreement: The Interplay of two Sub-Regional Experiences 73 Simone Paoli Spinelli’s Initiative and the European Parliament’s Union Project 99 Daniela Preda A Dream Coming True: The Netherlands and the Creation of the European Common Market, 1984–1989 119 Jan van der Harst The Single European Act and its ConsequencesPart II: European Political Cooperation and the Single European Act 131 Maria Eleonora Guasconi 5 The Negotiations on the Single European Act 149 Gilles Grin Unzufrieden mit der Einheitlichen Europäischen Akte. Zur Geschichte des italienischen Referendums von 1989 167 Georg Kreis The Transformative Impact of European Integration on Member States: The German Länder in Search of a New Role during the Second Half of the 1980s 189 Kiran Klaus Patel Towards the Single Market Project and the Monetary Union Part III: The Single Market Project as a Response to Globalisation: The Role of the Round Table of European Industrialists and other non-state Actors in launching the European Union’s Internal Market (1983–1992) 211 Anjo G. Harryvan Le Livre Blanc sur le marché intérieur objectif et instrument de la relance Delors 227 Eric Bussière The Implementation of the Single Market Programme, 1985–1992 247 Laurent Warlouzet Too Big a Club? The 1980s Common Agricultural Policy Crisis and Differentiated Integration 263 Marko Lovec In search of the Holy Grail: France and European Monetary Unification, 1984–1989 283 Frédéric Bozo Contents 6 Between France and the Bundesbank: Hans-Dietrich Genscher, Helmut Kohl and the Breakthrough of the Monetary Union 331 Wilfried Loth Enlargements and NeighborhoodsPart IV: The European Community’s Struggle with the agro-budgetary Problem: Its Impact on the Spanish Accession Negotiations, 1979– 1985 349 Marta Alorda The least loved Policy: the EEC’s Enlargement to Portugal 373 Alice Cunha Austria’s application as Precursor of EFTA Member States in Times of Reshaping Europe 1984/85–1989 393 Michael Gehler Cold War, European Security and Global ChallengesPart V: Mikhail Gorbachev, European Security, and the Common European Home 1985–1989 423 Wilfried Loth The Common European Home. The Soviet Prescription for reshaping Europe 443 Deborah Cuccia European Emancipation within the Atlantic Alliance? Franco- German Initiatives in European Defence 461 Frederike Schotters The Breakthrough: Freedom and Security at the Vienna CSCE Follow-up Conference 1986–1989 477 Michael Gehler / Andrea Brait Contents 7 Summary and ConclusionPart VI: Reshaping Europe by different Europeanisations 1984–1989. Summary and Conclusion 499 Michael Gehler / Wilfried Loth List of Contributors 511 List of Abbreviations 513 Register of Persons 519 Contents 8 Introduction Michael Gehler Thematic overview The historical phase between the failure of a European army on 30 August 1954 and the foundation of the European Economic Communities on 25 March 1957 by the Treaties of Rome is referred to as “relance européenne”. Another new start in European integration policy was made between 1985 and 1989 as the end of the Cold War drew closer.1 At the beginning of the 1980s, the situation was no less difficult. In 1979, the international balance was in fact aggravated by the Soviet intervention in Afghanistan. The NATO double resolution of 19792 and its implementation in 1982 provided for retrofitting in the event of the continued deployment of Soviet medium-range missiles in Central and Eastern Europe. The mechanism of the Conference on Security and Cooperation in Europe (CSCE)3 threatened to break apart at the beginning of the failed follow-up conference in Madrid in 1981–1983. Under US President Ronald Reagan’s foreign policy, the East-West conflict initially came to a head. Furthermore, in the early 1980s, the European Communities had to fear an economic and technological lag to Japan and the USA in case of a stagnating integration. The much-quoted word “eurosclerosis”,4 which German Chancellor Helmut Kohl remembered at the beginning of his term of office in 1982, quickly spread. “Eurosclerosis”, however, was used to retrospectively build a legitimation strategy. With other words, it was a politi- 1 Odd Arne Westad, The Cold War. A World History, New York: Basic Books, 2017. 2 Philipp Gassert / Tim Geiger / Hermann Wentker (Eds.), Zweiter Kalter Krieg und Friedensbewegung. Der NATO-Doppelbeschluss in deutsch-deutscher und internationaler Perspektive, Munich: Oldenbourg, 2011. 3 Wilfried Loth, Overcoming the Cold War. A History of Détente, 1950–1991, Basingstoke / New York: Palgrave, 2002; Matthias Peter / Hermann Wentker (Eds.), Die KSZE im Ost-West-Konflikt. Internationale Politik und gesellschaftliche Transformation 1975–1990, Munich: Oldenbourg, 2012. 4 Herbert Giersch, Eurosclerosis (Kieler Diskussionsbeiträge 2), Kiel: Institut für Weltwirtschaft, 1985. 9 cally motivated exaggeration, for the outcomes of the 1970s were not so negative in terms of integration policy. Proof of that are the European Parliament direct elections in 1979,5 and the preparations of negotiations for the first and second enlargement to the south with Greece joining the EC in 1981, and Portugal and Spain by 1986. The development of the European Court of Justice (ECJ) in an increasingly important player with ground-breaking judgments and the creation of the European Currency System (ECS) under Valéry Giscard d’Estaing and Helmut Schmidt in 1978 should be recalled as well.6 At the beginning of the 1980s, it was far less a matter of overcoming the “eurosclerosis” than of taking up and implementing existing projects such as the “Common Market” envisaged since the late 1950s and the “Economic and Monetary Union” drafted at the beginning of the 1970s with the Werner Report. A second “Relance Européenne” in the wake of the failure of the European Army had started with the Hague Summit on 1–2 December 1969.7 It was now the third new attempt in the first half of the 1980s. By 1981, the German politician Hans-Dietrich Genscher had demanded for the European Communities “a visible step towards the European Union”. The German government adopted the initiative and, at Italy’s insistence, added a “Declaration on Questions of Economic Integration”. The “Genscher-Colombo-Initiative” aimed at a “European Act”, which should prepare a stronger political union.8 On 19 June 1983, the European Council in Stuttgart signed the “Solemn Declaration on the European 5 David Judge / David Earnshaw, The European Parliament, Houndmills: Palgrave Macmillan, 2nd edition 2008; Doris Dialer / Heinrich Neisser / Eva Lichtenberger, Das Europäische Parlament. Institution, Vision und Wirklichkeit, Innsbruck: University Press, 2010; Richard Corbett / Francis Jacobs / Michael Shackleton, The European Parliament, London: John Harper Publishing, 8th edition 2011. 6 Johnny Laursen (Ed.), The Institutions and Dynamics of the European Community, 1973–83 (Publications of the European Union Liaison Committee of Historians Vol. 14), Baden-Baden: Nomos, 2014. 7 Jan van der Harst (Ed.), Beyond the Customs Union: The European Community’s Quest for Deepening, Widening and Completion, 1969–1975 (Groupe de Liaison des Historiens auprès de la Commission Européenne/European Liaison Committee of Historians), Bruxelles – Paris – Baden-Baden: Nomos, 2007. 8 Ulrich Lappenküper, „Hans-Dietrich Genscher, Emilio Colombo und der Kampf gegen die «Eurosklerose« 1981–1983“, in: Michael Gehler / Maddalena Guiotto (Eds.), Italien, Österreich und die Bundesrepublik Deutschland in Europa. Ein Dreiecksverhältnis in seinen wechselseitigen Beziehungen und Wahrnehmungen von 1945/49 bis zur Gegenwart (Institut für Geschichte der Universität Hildesheim, Arbeitskreis Europäische Integration, Historische Forschungen, Veröffentlichungen 8), Wien / Köln / Weimar: Böhlau, 2012, 225–242; Deborah Cuccia, „The Gensch- Introduction 10 Union”, which signalled a spirit of optimism. The declaration lagged behind the German-Italian initiative and was met with reservations. Even though it was operationally relatively meaningless, the idea of the Union was maintained. Thanks to Altiero Spinelli’s commitment, one of the most ambitious initiatives9 was the European Parliament’s “Draft Treaty establishing the European Union”, which was adopted on 14 February 1984 by 232 votes to 31, with 43 abstentions, after more than three years of deliberation. This type of draft Constitution remained formally a treaty in need of ratification. The Union was equated with a federal or federation-like construction. The reactions of the heads of state and government, however, showed that the realisation of such a far-reaching concept of a political union was not conceivable. “I want my money back”, called Prime Minister Margaret Thatcher to the men’s group of EC heads of state and government at a summit meeting in Dublin on 29 November 1979, when she first made this demand. It is told that she had built up her handbag threateningly in front of her. Helmut Schmidt and François Mitterrand gave up and agreed with irritation to her demands. After a stubborn five-year struggle, the “Iron Lady” reached her goal at the summit in Fontainebleau near Paris on 25/26 June 1984: Britain received a two-thirds rebate on its payments to the Brussels budget. The starting point of the discussion was the insight that any EC Member State, which – measured against its prosperity – bore too great a budgetary burden could benefit from a rebate. When Thatcher won such a rebate, the UK was the largest contributor to the EC budget after Germany, but seemed rather “poor” compared to others. At Fontainebleau, the European Council overcame stagnation in the EC through compromise by agreeing on the UK membership fee, agricultural overproduction and environmental protection (air pollution). Border controls should be reduced. As a result of the summit, the Federal Republic agreed with its neighbours Denmark, the Netherlands, Belgium, Luxembourg and France to gradually abolish border controls, which constituted the prehistory of the Schengen Agreement (1985).10 The green disc became the license plate: er-Colombo Plan: A forgotten page in the European Integration History“, in: Journal of European Integration History 24 (2018), 59–78. 9 Piero S. Graglia, Altiero Spinelli, Bologna: Il Mulino, 2008, 119–123; Gerhard Brunn, Die Europäische Einigung, Stuttgart: Reclam, 200), 54–57. 10 Michael Gehler /Andreas Pudlat (Eds.), Grenzen in Europa (Historische Europa- Studien 2), Hildesheim – Zürich – New York: Georg W. Olms, 2009; Andreas Introduction 11 simple visual checks without waiting times became the rule for vehicles, random checks next to the lane the exception. In summer 1984, the European Council nevertheless followed on the heels of the “Stuttgart Declaration” by instructing an ad hoc committee on institutional reforms to draw up proposals for “concrete decisions on progress towards a European Union”. The “Dooge Report”, named after the Irish conservative politician James Clement Dooge,11 was presented on 29/30 March 1985. It fell far short of the European Parliament’s draft Constitution, but, at least, it contained proposals for a further development of the Communities which went far beyond the status quo. The overarching goal was to build a “political unity”. The report listed various individual measures and called for the immediate convening of an Intergovernmental Conference to discuss and decide on the draft treaty. Still, its 36 footnotes also included several objections, particularly from Denmark, Greece and Great Britain, which did not want to take part in such a far-reaching step. The year 1985 can be seen as a moment of change in international policy and integration policy. On 7 January, Jacques Delors12 assumed the presidency of the European Commission. Delors gave new impetus to the EC. Various interest groups of member countries, such as the „Round Table of European Industrialists“ (RTE), advanced to lobby for intensified integration. Mikhail S. Gorbachev was elected CPSU Secretary General on 11 March 1985. At that time, the Soviet system was still based on the ideology of Marxism-Leninism, one-party rule and central planned economy. Gorbachev was, though, no longer prepared to use politico-military force and state terror to enforce them. On 3 December 1985, the European Council agreed in principle on the “Single European Act” (SEA), i.e. to extend the contractual basis of the EC in the sense of the Stuttgart Declaration. A common denominator was thus found and the SEA, which entered into force on 1 July 1987, attempted to initiate a revision of the Treaties of Rome. The internal market con- Pudlat, „Perceptibility and Experience of inner-european borders by institutionalised border protection“, in: Quaestiones Greographicae 29 (2010), No. 4, 7–13; Idem, „Der lange Weg zum Schengen-Raum: Ein Prozess im Vier-Phasen-Modell“, in: Journal of European Integration History 17 (2011), 303–325; Idem, Schengen. Zur Manifestation von Grenze und Grenzschutz in Europa (Historische Europastudien 7), Hildesheim / Zürich / New York: Georg W. Olms, 2013. 11 Hans-Jürgen Liebscher / Gert Schultz, „In Memoriam James Dooge“, in: Hydrologie und Wasserbewirtschaftung 54 (December 2010), 380f. 12 Jacques Delors, Erinnerungen eines Europäers, Berlin: Parthas, 2004; Helen Drake, Jacques Delors. Perspectives on a European Leader, London – New York: Routledge, 2000. Introduction 12 cept “EC 92”,13 launched by the EC Commission since 1985, showed the way with a medium-term perspective. The Cecchini report (“The Cost of Non-Europe”) very rationally calculated the costs of the lack of an internal market. Published on 29 March 1988 at the Brussels European Council on 11–13 February and named after the Italian Commission official Paolo Cecchini, it was a study initiated by the Delors Commission. It focused on the internal market to be established and was the expression of an unbroken ideology of predicted economic growth and competitive advantages for the EC through the removal of trade barriers. This was to be achieved by the Schengen Agreements dismantling border controls, but also through the removal of technical barriers and the reduction of tax barriers. By 1986, the enlarged Community of twelve Member States opted for EC reforms by amending and supplementing the Treaties. “Political union” was cited as an objective without the Single European Act having made a clear commitment to it. It also contained new treaty elements: strengthened majority voting in the Council, economic and monetary cooperation focused on the objective of “convergence”, extension of the functional catalogue to include research, technology, environmental protection and social policy and “economic and social cohesion” through a new approach to the use of EC structural funds and financial instruments. European Political Cooperation (EPC)14 was placed on a treaty basis, but the decision-making procedure changed only marginally, and above all the decision-making mode of the Council (veto practice) remained essentially unaffected. With the SEA, however, the EC was cautiously developing further. The “Delors package” should provide for a reform of the financing system, the Common Agricultural Policy (CAP) and an increase in the EC Structural Funds. It was a compromise solution, which had to take into account the interests of all parties involved. The reform programme could 13 Gilles Grin, The Battle of the Single European Market. Achievements and Economics 1945–2000, London / New York / Bahrain: Paul Kegan, 2003; David Vaughan / Adrian Robertson (Eds.), Law of the European Union, Oxford – New York: Oxford University Press, 2003; Catherine Barnard, The Substantive Law of the EU: The Four Freedoms Oxford / New York: Oxford University Press, 3rd edition 2010. 14 Alfred E. Pijpers et al. (Eds.), European Political Cooperation in the 1980s. A Common Foreign Policy for Western Europe? Dordrecht: Martinus Nijhoff, 1988; Martin Holland (Ed.), The Future of European Political Cooperation: Essays in Theory and Practice, Basingstoke: Macmillan, 1991; Roy H. Ginsberg, Foreign Policy Actions of the European Community. The Politics of Scale, Boulder: Lynne Rienner, 1989. Introduction 13 only be implemented through new packages. After all, the SEA succeeded in incorporating functional areas and institutions that had previously been “adjacent” to the treaty system, as well as codifying existing practice. However, the currency issue remained controversial. Therefore, differences of interpretation existed. While London, with the internal market project fully supported by Margaret Thatcher, regarded the reform policy process as completed, France and above all the Delors Commission continued to stand on the integration policy issue with regard to a single European currency. The British budget problem still had to be solved. Due to the dominance of the Deutschmark in the European Currency System, France had urged monetary integration steps since December 1987. Paris supported the Balladur Memorandum, named after Prime Minister Edouard Balladur, which was positively answered by the German Foreign Minister Hans-Dietrich Genscher in February 1988 and institutionalised at the EC Council Summit in Hanover on 27 and 28 June 1988 with the establishment of the Delors Committee. From that time on, the development towards monetary union picked up speed. Under Delors’ chairmanship, a committee of EC central bank governors and independent experts had drawn up a programme, which was adopted in Madrid on 27 June 1989. With the 1988/89 “Three Step Plan” developed by Delors – liberalisation of capital movements and increased coordination by 1 July 1990; creation of a European Monetary Institute; an economic and monetary union with fixed exchange rates and a European Central Bank – a further impetus was given to the completion of the internal market with a target date of 1993 and to the introduction of monetary union by 1999 at the latest. The “Three Stages Delors Plan” for Economic and Monetary Union (EMU) highlighted the new rationality of integration intentions.15 The revolutionary events in Central and Eastern Europe and the increasing dynamism of the German question16 were to give the plans such urgency that they became a compelling political necessity for integration. 15 Emmanuel Moulon-Druol, A Europe Made of Money. The Emergence of the European Monetary System, Ithaca- London: Cornell University Press, 2012; Harold James, Making the European Monetary Union, Cambridge/Mass.: Harvard University Press, 2012. 16 Wolfgang Mueller / Michael Gehler / Arnold Suppan (Eds.), The Revolutions of 1989. A Handbook (Österreichische Akademie der Wissenschaften/Philosophische Historische Klasse/Institut für Neuzeit- und Zeitgeschichtsforschung/ Internationale Geschichte/International History 2), Vienna: ÖAW-Verlag 2015. Introduction 14 Conception This volume is the result of an initiative of the Liaison Group of Historians at the EU Commission. Since 1984, this group has organised international conferences on recent research in the field of European Integration history. Following the phased opening of the archives of national governments and European institutions, these conferences aimed at putting together the evidence from different sources and thereby promoting a more serious knowledge of the reasons for decisions in the process of European integration and the way it took.17 When Wilfried Loth asked me on the fringes of a symposium of the Max Planck Institute in Frankfurt/Main on the occasion of “60 Years of the Rome Treaties”, whether a next conference on the events of European integration from 1985 to 1989 should be organised in Hildesheim, I did not hesitate for a second to positively respond to this request. We then jointly drew up a programme and prepared the conference, which took place at the University of Hildesheim from 17 to 19 October 2019. The results of the conference are presented in this volume. There were five questions, which moved Wilfried Loth and me to organize this conference and which we asked the speakers to answer, provided that their topics allow that: 1. What were the motives behind reshaping of common Europe? What considerations played a role? 2. Were there other actors involved besides the so-called main players – Mitterrand, Delors and Kohl – and if so, which ones? Which role did officials in the second row play? 3. Which role did the Benelux countries, Denmark, Great Britain, Ireland and Italy play – promoters or retarders? 4. How can the new dynamics in European integration policy in the second half of the 1980s be explained years before the fall of the Berlin Wall, and what influence did the end of the Cold War have? 5. Which role did international and global challenges play? The answers to these questions are gathered in five sections: New Initiatives; The Single European Act and its Consequences; Towards the Single 17 See Wilfried Loth, „Le Groupe de liaison des professeurs d’histoire auprès de la Commission européenne”, in: Jean-Marie Palayret / Isabelle Richefort / Dieter Schlenker (Eds.), Histoire de la construction européenne (1957–2015). Sources et itinéraires de recherche croisés, La Courneuve: Direction des Archives diplomatiques, 2019, 177–190. Introduction 15 Market Project and the Monetary Union; Enlargements and Neighbourhoods; and Cold War, European Security and Global Challenges. Together, they offer a new chapter in the history of European Integration. These five sections are framed by an article dealing with European symbols and subjects on postage stamps. Thanks Finally, we would like to thank the German Research Foundation (DFG), the University of Hildesheim Foundation, and the Erasmus Plus Programme of the Jean Monnet Action, for their support to the conference. Dr. Deborah Cuccia played a decisive role in the editing of many of the contributions to this volume. Many thanks to her. Dr. Friederike Wursthorn and Alexandra Beutelmann from Nomos was very helpful in taking care of the publication within the Liaison Committee publication series. Last but not least, Mrs. Eva Löw once again achieved a top organisation without which the conference could not have taken place. Hildesheim, June 2020 Michael Gehler Introduction 16 European Integration by Mail: European Symbols and Subjects on Postage Stamps Jasper M. Trautsch Efforts to promote the European integration process and to encourage citizens to identify with the EC/EU and its institutions have been the subject of numerous historical studies. Initially, such research tended to focus on the legitimizing strategies pursued by EC/EU institutions such as the European Commission, the European Parliament, and the European Central Bank themselves.1 More recently, the role of non-institutional actors in fostering pro-European sentiment has also been investigated.2 The pertinent endeavors by member states, by contrast, are often ignored or the national governments are even depicted as competing for people’s identity, seeking to obstruct the EC/EU’s attempts to promote a European identity, and jealously guarding the primacy they had over their citizens’ loyalties.3 However, such a dichotomous opposition between European and national identity ignores the synergetic and even mutually reinforcing nature of the relationship between both attachments, which do not need to be in conflict with one another.4 In fact, member states actively contributed to the 1 See, for example, Cris Shore, Building Europe: The Cultural Politics of European Integration, London: Routledge, 2000; Tobias Theiler, Political Symbolism and European Integration, Manchester: Manchester University Press, 2005; François Foret, Légitimer l’Europe: Pouvoir et symbolique à l’ère de la gouvernance, Paris: Presses de Sciences Po, 2008; Jacob Krumrey, The Symbolic Politics of European Integration: Staging Europe, Cham: Springer, 2018; Sam Pryke, “National and European Identity,” in: Nations and Nationalism, Vol. 22, No. 1 (2020), 91–105. 2 See, for example, Monica Sassatelli, Becoming Europeans: Cultural Identity and Cultural Policies, Basingstoke: Palgrave Macmillan, 2009; Oriane Calligaro, Negotiating Europe: EU Promotion of Europeanness since the 1950s, New York: Palgrave Macmillan, 2013. 3 One of the few exceptions are the articles dealing with the films promoting the European integration process commissioned by the West German, French, and Italian governments in Gabriele Clemens (ed.), Werben für Europa: Die mediale Konstruktion europäischer Identität durch Europafilme, Paderborn: Ferdinand Schöningh, 2016, part 2. 4 Laura Cram, “Identity and European Integration: Diversity as a Source of Integration,” in: Nations and Nationalism, Vol. 15, No. 1 (2009), 109–128, here: 109–110. 17 spread of Europeanism and, arguably, promotion of the EC/EU by member states might have been more effective than that by EC/EU institutions themselves, since it appeared less self-serving and governments could tailor their efforts to the national conventions, expectations, and interests of their respective citizenry. Therefore, this article explores member states’ efforts to boost the European integration process among their populations. A particularly fruitful type of sources for such an investigation is that of postage stamps.5 First, they reached circulation numbers otherwise only attained by coins and bank notes. Usually, a European stamp issued in the 20th century was printed at least tens of millions of times and sometimes even hundreds of millions. The 1982 West German stamp commemorating the 50th anniversary of the Treaties of Rome, for example, had a circulation of 102,126,000. In the second half of the 20th century, even a stamp relating to the EC/EU from Luxembourg, with its population ranging only between 300,000 and 450,000 in the period, was printed on average about 1,000,000 times. Few other media could boast such circulation numbers and stamps hence made their way into most households. Second, their character as a primarily visual medium gave them particular suggestive power and emotional effectiveness. Given the miniature format of stamps, designers not only generally favor pictorial over textual elements; the visual representation also has to be compact, concise, simple, distinct, and precise such that viewers can grasp their meaning at a quick glance. The stamp is supposed to contain the “interpretation of a given subject through a succinct, unambiguous, and thoughtful symbol, extreme concision and focus of design, harmoniously balanced distribution of type face and image, which form an inseparable unit,” as the art advisory committee (Kunstbeirat) of the German Federal Post Office described the ideal form of the stamp in its 1956 manifest.6 This visual style renders stamps particu- 5 The question of how stamps were used to legitimize the European integration process is a lacuna in the otherwise blossoming research on the EU’s history, as few historians have used stamps as historical sources. Markus Göldner reconstructed the failed attempts to found a European Postal Community and to issue European stamps valid in all EC member states in Politische Symbole der Europäischen Integration: Fahne, Hymne, Hauptstadt, Pass, Briefmarke, Auszeichnungen (Frankfurt am Main: Peter Lang, 1988), 225–236. For a comprehensive compilation of stamps and other postal documents intended to legitimize the European integration process see Michael Gehler and Otto May, Motiv Europa: Postalische Dokumente zur Geschichte und Einigungsidee seit 1945, Hildesheim: Franzbecker, 2018. 6 Quoted in: Hermann Josef Martin Bender, “Studien zur Entwicklung der Bildform des europäischen Postwertzeichens, 1840–1970”, PhD dissertation, Rheinische Friedrich-Wilhelms-Universität zu Bonn, 1976, 181. Jasper M. Trautsch 18 larly appealing and eye-catching, making it probable that they made an impression on at least some recipients of mail on which they were used as postage. Finally, using stamps as one’s source material makes it possible to actually analyze the entire corpus of available sources, i.e. all stamps ever produced in certain countries, since the number of stamps issued every year is limited, and complete lists can be found in pertinent stamp catalogues such as the Michel in Germany, the Stanley Gibbons in the UK, the Yvert et Tellier in France, and the Unificato in Italy. Importantly, the fact that no selection has to be made gives us the opportunity to trace quantitative changes in the number of stamps issued on certain subjects over the course of time as well as to ascertain when the way certain subjects were represented changed or when certain subjects were addressed on stamps at all. Therefore, for this article, all postage stamps issued by the six founding members of the EC from its inception in 1950 (Schuman Declaration) to the end of 2019 were analyzed and all the stamps that dealt with the EC – or, since 1993, the EU – were identified.7 Importantly, they had to specifically refer to the EC/EU in one way or another.8 Stamps championing the Council of Europe or the Organization for Economic Co-Operation and Development (OECD) or other competing institutions such as the European Patent Office (EPO) or the European Organization of Supreme Audit Institutions (EUROSAI) or the European Organization for the Safety of Air Navigation (EUROCONTROL), which have no direct relationship to the EC/EU, were not included.9 Nor were the so-called Europa postage stamps – i.e. the stamps issued jointly by members of the European Con- 7 Official mail stamps – i.e. postage stamps produced for the use of government officials on government mail – were not included, because they were not intended for public consumption. For purposes of clarity, it should also be mentioned that the postage stamps issued in West Berlin are not included, because, de iure, the Senate of West Berlin and, since 1954, the West Berlin State Post Office and not the West German Federal Post Office were responsible for them. 8 The European Schools were counted as a subject implicitly referring to the EC/EU, since, even though they have never been formal EC/EU bodies, they were created for the express purpose of providing education for the children of EC officials and employees. For the first European school see Stefanie Pukallus, The Building of Civil Europe 1951–1972, Cham: Palgrave Macmillan, 2019, 123–171. Stamps issued on the occasion of European Years or to celebrate a European Capital of Culture, by contrast, were only counted if they made the connection to the EC/EU explicit rather than merely printing an urban sight or a symbol related to the subject of the European Year. 9 This entails that stamps celebrating the European Convention on Human Rights also remained outside the purview, since it was drafted by the Council of Europe European Integration by Mail: European Symbols and Subjects on Postage Stamps 19 ference of Postal and Telecommunications Administrations (CEPT) – considered, unless they explicitly promoted the EC/EU as opposed to the European integration process in general (whatever that was supposed to mean) or the CEPT itself, simply because they did not champion, or intend to increase identification with, the EC/EU as such.10 However, if the flag of the EC/EU appeared on a stamp (after it was adopted in 1986), it was counted, even if the stamp’s subject did not have anything to do with the EC/EU, since the symbol itself is a form of promotion. All in all, 216 postage stamps that had the EC/EU as their subject or carried its symbol could be found. Luxembourg issued the most EC/EU-related stamps (62) followed by Italy (55), Belgium (33), and France (27). The Federal Republic and the Netherlands brought out the fewest EC/EU-related stamps (21 and 18 respectively). Graph 1 shows the number of stamps promoting the EC/EU according to the decades in which they were issued. A clear pattern is discernable: Initially, the number was highly limited: merely five stamps were issued in the 1950s, and eight in the 1960s, to legitimize the new institutions. Afterwards, their number significantly grew in the 1970s, more than tripling to 22. In the following decade, the amount of EC/EU-related stamps remained fairly constant (23), only to increase exponentially again in the 1990s (50) and the 2000s (86). However, the growth process was finally reversed in the 2010s when the number of stamps honoring the EU dramatically shrank to 22. and ratified by its members. Only stamps championing the Charter of Fundamental Rights of the European Union were counted in this respect. 10 For the Europa postage stamps see Josef und Gregor Bender, Vereintes Europa auf der Briefmarke, Munich: Heinrich Wittmann, 1967; Werner Rötzel, “Europamarken – Gemeinschaftsausgaben,” in: Archiv für deutsche Postgeschichte, No. 1 (1979), 58–65. Jasper M. Trautsch 20 1950-1959 1960-1969 1970-1979 1980-1989 1990-1999 2000-2009 2010-2019 Number of EC/EU-related Stamps Issued by the Six Founding Members Seeking to interpret the graph with respect to the epistemological interest described at the beginning, one is faced with three relevant questions: 1. Is the small number of EC-related stamps in the 1950s and the 1960s indicative of a lack of enthusiasm for the ESCS, EURATOM, and the EEC?11 2. Does a growing desire by the governments to increase people’s identification with the EC/EU explain the sudden increase of pertinent stamps first in the 1970s and then in the 1990s and 2000s?12 3. Is the sharp decrease in Graph 1: 11 This would conform to the view expressed inter alia by Montserrat Guibernau that the EC’s “founders” were inspired solely by pragmatic considerations and had no desire to promote a European identity. Montserrat Guibernau, “The Birth of a United Europe: On Why the EU Has Generated a ‘Non-Emotional’ Identity,” in: Nations and Nationalism, Vol. 17, No. 2 (2011), 302–315. For the lack of a European identity among the political elites who created the EC in the 1950s also see Achim Trunk, Europa, ein Ausweg: Politische Eliten und europäische Identität in den 1950er Jahren, Munich: Oldenbourg, 2007. 12 Such an explanation would, on the one hand, match Bo Stråth’s claim that cultural integration appeared on the EC agenda in the 1970s when, at a time of economic crisis in Western Europe, the promise of prosperity no longer sufficed to legitimize the European integration process and that, as a result, the European passport, flag, anthem, and day were introduced in the 1980s to strengthen citizens’ identification with the EC and, on the other hand, Cris Shore’s assertion that the early 1990s, in which the single market, the Euro, educational exchanges, and European Integration by Mail: European Symbols and Subjects on Postage Stamps 21 the number of stamps promoting the EU in the 2010s in turn a sign of a “European integration fatigue”?13 Definite answers require meticulous and time-consuming research in the national archives of the six founding members where the postal files are kept. However, preliminary answers can already be attained by analyzing the subjects that the EC/EU-related stamps addressed and the symbols that they employed. EC/EU Symbols and Subjects on Postage Stamps When analyzing the visual designs of the 216 stamps, one can distinguish six categories of EC/EU symbols.14 1. Most apparently, after it adopted the image of a circle of twelve fivepointed golden (or yellow) stars on a blue background as its official flag in 1986, the EC – and subsequently the EU – has been represented by this symbol. However, the Council of Europe has been using the same emblem as its symbol since 1955, meaning, on the one hand, that its appearance on a stamp before 1986 was not related to the EC and, on the other hand, that, afterwards, it can only be interpreted to refer to the EC/EU if its connection to the Council of Europe was not made explicit.15 To count, this symbol needs be recognizable as such, i.e. the stars need to be five-pointed and arranged in a circle or they must be town-twinnings were created, witnessed a boost in EC promotion efforts. Bo Stråth, “A European Identity: To the Historical Limits of a Concept,” in: European Journal of Social Theory, Vol. 5, No. 4 (2002), 387–401. Shore, Building Europe. For the legitimization strategies of the European Commission between the 1970s and 1990s also see Dominika Biegon, “Specifying the Arena of Possibilities: Post- Structuralist Narrative Analysis and the European Commission’s Legitimation Strategies,” in: Journal of Common Market Studies, Vol. 51, No. 2 (2013), 194–211. 13 This would correspond to the fact that trust in the EU and its institutions, as measured by the Eurobarometer surveys, declined in the years after 2007 and that Eurosceptic parties made large gains in the elections to the European Parliament in 2014. 14 For an overview of official EU symbols see Johan Fornäs, Signifying Europe (Bristol: Intellect, 2012). For symbols promoting the European integration process more generally see Ian Manneres, “Symbolism in European Integration,” in: Comparative European Politics, Vol. 9, No. 3 (2011), 243–268. 15 For example, in 1999, several stamps were issued that used the symbol of twelve yellow stars on blue to celebrate the 50th anniversary of the Council of Europe. Jasper M. Trautsch 22 yellow on a blue background. In such cases, pertinent stamps were included even if the symbol was not depicted in its entirety.16 The Flag as an EC/EU Symbol on Postage Stamps 2. The Euro is another symbol associated with the EU. Even though not all EU members have yet adopted this currency, it is connected to the EU, not only because its institutions themselves use it, but also because all EU members, except Denmark, are obliged to adopt the Euro once they meet the requirements of the Exchange Rate Mechanism. Naturally, it was only counted as a relevant symbol if it appeared on a stamp in its own right, not if it served merely to denote the currency of its value. Depictions of a Euro coin or a Euro note on postage stamps fall into the same category as the Euro.17 Illustration 1: 16 In 2007, the German Post Office, for example, issued a stamp commemorating the 50th anniversary of the Treaties of Rome. It features, in front of a picture of the signing ceremony, the circle of yellow stars. However, to make the point that the ECC only had six founding members, merely half of the circle is shown on the stamp. The 2000 Europa stamp, by contrast, was not counted, since the image of children playing with multicolored stars on a green meadow can hardly be interpreted as a representation of the EU flag. 17 For the Euro symbol see inter alia Matthias Kaelberer, “The Euro and European Identity: Symbols, Power and the Politics of European Monetary Union,” in: Review of International Studies, Vol. 30, No. 2 (2004), 161–178; Suzanne Shanahan, “Currency and Community: European Identity and the Euro,” in: Luisa Passerini (ed.), Figures d’Europe: Images and Myths of Europe, Bruxelles: P.I.E.-Peter Lang, 2003, 159–179. European Integration by Mail: European Symbols and Subjects on Postage Stamps 23 The Euro as an EC/EU Symbol on Postage Stamps 3. Apart from these official symbols, there have also been other ways of visualizing the EC/EU and its institutions on stamps. They could be represented by their (stylized) initials (such as “PE” for “Parlement européen” or “EG” for “Europäische Gemeinschaften”) or by their buildings (such as the European Parliament in Strasbourg or Brussels) or parts thereof (such as the legislature’s circular chamber).18 Illustration 2: 18 The emblem of the European Parliament before 1984 (the letters “EP-PE” within a laurel wreath on a blue background) also falls within this category of initials. For architectural and urban landscapes as European icons see Carola Hein, “In Search of Icons for a United Europe,” in: City: Analysis of Urban Trends, Culture, Theory, Policy Action, Vol. 10, No. 1 (2006), 71–89. Jasper M. Trautsch 24 Buildings as an EC/EU Symbol on Postage Stamps 4. Moreover, extracts, signatures, seals, or pictures of the signing of EC founding treaties as well as portraits of “founding fathers” or other decisive figures of the EC/EU, i.e. statesmen or stateswomen having played a significant part in the creation or history of the EC/EU have also served as symbols for the EC/EU.19 However, such politicians were only counted if the stamp emphasizes their European function,20 or if the stamp was issued on a European occasion.21 The only exception was Illustration 3: 19 Only actual passages from a treaty, signatures, its seal, or a photo from its signing ceremony were interpreted as a symbol. A mere reference such as “10 Years Treaty of Maastricht” did not suffice. 20 For example, the French stamp from 1975 commemorating Robert Schuman was counted, since the former French foreign minister was explicitly referred to as “l’européen.” The French 2007 stamp honoring former French Prime Minister Pierre Pflimlin was also counted, because the yellow stars on blue background surrounding his portrait raise attention to his importance for the EC. Even the Italian 2019 stamp issued to commemorate the 25th anniversary of former Italian Prime Minister Giovanni Goria’s death, whose role for the European integration process was rather insignificant, was included, since it shows the EU’s yellow stars on blue. By contrast, the West German stamps from 1968 depicting Konrad Adenauer, Winston Churchill, Alcide de Gasperi, and Robert Schuman were ignored, since they give no indication of their European functions and they came out on the occasion of the former West German Chancellor’s death the previous year. 21 The 1972 Luxembourg stamp featuring Schuman was therefore counted, since it was issued on the occasion of the 20th anniversary of Luxemburg becoming the seat of the European Coal and Steel Commission, even though Schuman’s por- European Integration by Mail: European Symbols and Subjects on Postage Stamps 25 made for Jean Monnet, since he never held a significant national office and is therefore exclusively remembered for his role in the founding of the EC. Treaties as an EC/EU Symbol on Postage Stamps Politicians as an EC/EU Symbol on Postage Stamps Illustration 4: Illustration 5: trait is not accompanied by any further information. The two 1986 Luxembourg stamps for Schuman, by contrast, were not included, since they were merely issued on the occasion of his 100th birthday. The 1967 Belgian stamp of Schuman was likewise ignored, since there is no indication that the stamp’s subject is ECrelated. Jasper M. Trautsch 26 5. Maps of the EC/EU territory, i.e. the circumscribed area of its members, have provided yet another way to visually represent it. Like maps of individual nations, which nationalists have been using as a national logo to promote a national consciousness, the outlines of the area covered by the EC/EU could serve as its cartographic symbol. Significantly, maps of Europe as a whole were not counted, since they were not suitable as a means to increase people’s identification with the EC/EU as such, which, until the 21st century, only represented a small part of the Continent.22 Maps as an EC/EU Symbol on Postage Stamps 6. Finally, instead of using the official EC/EU flag, which was only adopted in 1986, stamp producers could, from the very beginning, display the combined flags of all EC/EU member states, for example by putting them all together such that they would form a big international flag or arranging them as bunting or as a ribbon forming the letter “E.”23 Stamps on which the names of all countries were spelled out or on which all their initials were grouped together or on which their individual territorial contours (rather than their flags) were shown jointly, also fall in this category. Illustration 6: 22 For a more detailed analysis of maps of Europe and the EC/EU territory on postage stamps see Jasper M. Trautsch, “Von der nationalen zur europäischen Identität? Potential und Problematik von Europakarten auf Briefmarken“, in: Journal of European Integration History, Vol. 25, No. 2 (2019), 165–187. 23 The stamps, which were issued in 2004 and on which the flags of just the new states joining the EU were depicted together, were also counted. European Integration by Mail: European Symbols and Subjects on Postage Stamps 27 The Combined Member States’ Flags as an EC/EU Symbol on Postage Stamps Graph 2 shows how often these symbols appeared on stamps per decade.24 As can be seen, the frequency with which these symbols were used differed quite significantly over the course of time, providing us with parts of an answer to the questions posed above. Naturally, the Euro symbol would only be used for the first time in the late 1990s when the Euro came into virtual existence in 1999, and its appearance on stamps, not surprisingly, peaked in the 2000s with the introduction of the new coins and notes in 2002. Also, the circle of twelve yellow stars on blue could only be used to promote the EC/EU after it had been adopted it as its official flag in 1986. However, once chosen as an emblem, it quickly became the most frequently employed EC/EU symbol on postage stamps, topping all others in the 1990s and thereafter. So the fact that the flag and the Euro only made their appearance on stamps in the 1980s and 1990s respectively, explaining in part the rise of EC/EU-related stamps in this period, is not in itself an indication that the governments put more emphasis on promoting the European integration process in recent times than before, as these symbols simply were previously not yet available or not yet linked to the EC/EU. Illustration 7: 24 The overall numbers are slightly higher than on the previous graph, since in some cases more than one symbol was used per stamp. On the other hand, there are also a few stamps that did not contain any of the EC/EU-related symbols typologized above. Jasper M. Trautsch 28 -5 0 5 10 15 20 25 30 35 40 45 Portraits of EC/EU Leaders and Treaties Initiales and Buildings of EC/EU Institutions EC/EU Flag Euro Symbol, Coins, and Notes Flags, Names, Initials, and Territories of all EC/EU Member States Maps of EC/EU Territory Frequency of EC/EU-related Symbols on Postage Stamps A similar argument can be made with regards to the extracts, signatures, seals, and pictures of the signing of founding treaties. These are commonly celebrated on major anniversaries, which require passage of a significant amount of time, usually at least 20 or 25 years. Therefore, it was only in the 1970s that the founding of the EC increasingly became the subject of stamps. It also explains why almost 50 percent of such commemorative stamps were issued in the 2000s, since it was this decade that witnessed the 50th anniversary of the Schuman Declaration, the Treaty of Paris and the Treaties of Rome, the founding of the Court of Justice of the European Communities and the Official Journal of the European Communities, and the establishment of the European Schools. Moreover, only in the late 20th century the European Central Bank was founded and the common market and the Euro as a virtual currency were introduced such that they could not be remembered on stamps before the 21st century. So part of the explanation as to why there was an initial boost in EC-related stamps in the 1970s and why the number of pertinent stamps peaked in the 2000s lies in the fact that more opportunities to celebrate the founding of the EC presented themselves in these decades. Graph 2: European Integration by Mail: European Symbols and Subjects on Postage Stamps 29 Table 1: Stamps Commemorating the Founding of the European Communities Signing of Treaty/ Founding of Institution Occasion Country Year Schuman Declaration (1950) 10th anniversary Luxembourg 1960 50th anniversary Luxembourg 2000 Treaty of Paris (1951) /ECSC (1952) 4th anniversary Luxembourg (3x) 1956 25th anniversary FRG 1976 30th anniversary Luxembourg 1982 50th anniversary Luxembourg 2001 Court of Justice of the EC (1952) 20th anniversary Luxembourg 1972 50th anniversary Luxembourg 2002 60th anniversary Luxembourg 2012 Official Journal of the EC (1952) 50th anniversary Luxembourg 2003 European Schools (1953) 10th anniversary Luxembourg 1963 50th anniversary Luxembourg 2004 Spaak Report (1956) 40th anniversary Italy 1996 Treaties of Rome (1957) 10th anniversary Italy (2x) 1967 20th anniversary Luxembourg 1977 Belgium 1978 25th anniversary FRG 1982 France 1982 40th anniversary Italy 1997 Luxembourg 1997 50th anniversary Belgium 2007 FRG 2007 France 2007 Italy (2x) 2007 Luxembourg (2x) 2007 60th anniversary Italy 2017 Table 1: Jasper M. Trautsch 30 Signing of Treaty/ Founding of Institution Occasion Country Year Publications Office of the EC (1969) 25th anniversary Luxembourg 1994 50th anniversary Luxembourg 2019 European Court of Auditors (1977) 25th anniversary Luxembourg 2002 Schengen Agreement (1985) 25th anniversary Luxembourg 2010 Maastricht Treaty (1992) 10th anniversary FRG 2003 European Central Bank (1998) 10th anniversary Netherlands 2008 Luxembourg 2008 Introduction of the Euro (1999/2002) 10th anniversary Luxembourg 2009 Luxembourg 2012 The same explanation also applies to portraits of “founding fathers” and other significant leaders of the EC/EU. Since most post administrations follow the general rule of not representing any living persons on stamps (except the respective heads of state), the EC’s “founding fathers” first had to pass away before they could appear on stamps.25 Robert Schuman, one of the first EC founders to die, was most commemorated in the 1970s on the occasion of the 20th anniversary of the founding of the ECSC and the 25th anniversary of the Schuman Declaration. The portrait of Jean Monnet, the so-called Father of Europe, was printed on stamps most often in the 1980s after his death in 1979. Honoring the EC’s “founding fathers” was thus in most cases not possible (or at least appropriate) before the 1970s. The increasing usage of their portraits as EC/EU symbols in the 1970s and 1980s, therefore, is not necessarily a sign that the governments were making a conscious decision to do more to promote the European integration process than they had previously done. As with the commemoration of founding treaties, there were simply more occasions to honor the EC’s founders – not only because it was common practice not to represent them on stamps while they were still alive, but also because it is customary to pay tribute to deceased leaders on their 100th birthday rather than remember them without a specific occasion on an earlier date. 25 The only exceptions among the EC/EU-related stamps are the two German stamps issued in honor of Jean Monnet – upon his being endowed with the title of Honorary Citizen of Europe – in 1977 and Helmut Kohl on the occasion of the 30th anniversary of him becoming chancellor in 2012. European Integration by Mail: European Symbols and Subjects on Postage Stamps 31 Table 2: Stamps Commemorating EC/EU Founders and Leaders Person Occasion Country Year Alcide de Gasperi (1881–1954) 20th anniversary of ECSC Italy 1971 Robert Schuman (1886–1963) Completion of Schuman Memorial Luxembourg 1966 20th anniversary of ECSC Italy 1971 Luxembourg 1972 25th anniversary of Schuman Declaration Luxembourg 1975 France 1975 Konrad Adenauer (1876–1967) 20th anniversary of ECSC Italy 1971 Gaetano Martino (1900–1967) 25th anniversary of Schuman Declaration Luxembourg 1975 100th birthday Italy 2000 Paul-Henri Spaak (1899–1972) 25th anniversary of Schuman Declaration Luxembourg 1975 20th anniversary of Treaties of Rome Belgium 1978 Jean Monnet (1888–1979) Honorary Citizen of Europe FRG 1977 death France 1980 Luxembourg 1980 100th birthday Belgium 1988 France 1988 FRG 1988 Luxembourg 1988 Louise Weiss (1893–1983) 100th birthday France 1993 Altiero Spinelli (1907–1986) 100th birthday Italy 2007 Giovanni Goria (1943–1994) 25th death anniversary Italy 2019 Table 2: Jasper M. Trautsch 32 Person Occasion Country Year Pierre Pflimlin (1907–2000) 100th birthday France 2007 Helmut Kohl (1930–2017) 30th anniversary of chancellorship FRG 2012 Since the twelve yellow stars on blue were not applicable as a relevant symbol for the EC/EU before 1986 and since the Euro only emerged as a pertinent icon in the 1990s and since commemorative stamps featuring portraits of EC “founders” and emblems of founding treaties could not be issued before the arrival of appropriate anniversaries, the three remaining types of symbols seem more suitable for gauging the efforts by member states to promote the EC/EU, since they were available to the postal administrations right from the beginning: maps of the EC/EU territory, representations of the EC/EU institutions in the form of initials and edifices, and the combined flags and the like of the member states. Maps of the EC/EU territory are the symbol used least on postage stamps (since the 1950s only 12 such stamps have been issued) and the pertinent graph shows no clear direction, the numbers per decade fluctuating randomly between 0 and 4. The reason for this scant use lies in the fact that maps have the effect of fixing borders. However, since the European integration process has aimed at territorial expansion right from the start, a symbol demarcating the area encompassed by the EC/EU members seemed unsuitable. It was only when the Cold War division of Europe was overcome after the end of the Cold War through the large-scale enlargement process in the 21st century that it seemed more opportune to use maps to represent the continent as a closed space. However, such maps usually no longer distinguished between EU members and non-EU members, but rather showed the entire Continent as a unit, since, unlike in the first decades of the EC’s existence, the EU now does cover large parts of Europe either directly through membership or indirectly through association agreements or accession negotiations.26 The graph for the use of initials or buildings of EC/EU institutions shows a rising tendency from the 1950s to the 1980s (in which it was the symbol employed most often) after which the frequency of their appearance on stamps decreased again. Representations of EC/EU-buildings on stamps in the first decades usually followed the completion of new edifices. Therefore, it is no coincidence that about half of the stamps bearing 26 Trautsch, “Von der nationalen zur europäischen Identität?,” 176–180. European Integration by Mail: European Symbols and Subjects on Postage Stamps 33 symbols of this type (10 out of 21) that were used between the 1950s and 1980s were issued by the Luxembourg Post Office. After all, the small Duchy has been home to numerous EC/EU institutions, among which are: the European School building at the Boulevard de la Foire in Limpertsberg, completed in 1956 and displayed on stamps from 1960 and 1963; the Alcide de Gasperi building, the first skyscraper in Luxembourg, constructed to house EC institutions, the completion of which in 1965 was celebrated on a stamp from 1966; the Palais Building of the European Court of Justice on the Kirchberg plateau, which became the subject of stamps in the year of its inauguration in 1972 and its 15th anniversary in 1987; and the office tower “hémicycle européen” on the Kirchberg Plateau, which was used by the European Parliament until 1981, the very year in which it was remembered on a stamp. The declining rate after the 1980s in turn can be attributed to the emergence of the flag as a more potent symbol and the fact that the principal EU institutions now possessed most of their required buildings, with only a few new major edifices, such as the new parliament in Strasbourg, being added. Finally, there is the EC/EU symbol of all the member states’ flags or names or individual territories shown together. Surprisingly, this symbol was not most frequently employed before the adoption of the yellow stars on blue as the official flag in 1986, but actually reached its highest distribution in the 1990s (16) and the 2000s (27). The spike of its curve at the turn of the century offers the clearest indication that the governments of the EU member states attached increasing importance to the European integration process, as the century progressed, and made increasing efforts to promote their population’s identification with the EU. However, even in this case, the interpretation of this symbol’s use needs to account for the occasions that triggered the issuance of the stamps and, additionally, the specific meaning of the symbol. On the one hand, 23 of the 27 stamps issued in the 2000s and bearing this symbol were produced to celebrate the enlargement of the EU through the accession of ten new members in 2004 – an unprecedented event in the EU’s history.27 On the other hand, this symbol’s message differs from that of the official flag. In the latter, the EU stands for itself, the yellow stars, arranged in a circle, being a symbol of perfection and entirety and, unlike in the U.S. flag, not representing the member states. It visualizes the metaphor of the EU as a melting pot, in which a 27 However, in 1993, Italy issued 12 stamps with the flags of all 12 member states without any specific occasion. This stamp series can therefore indeed be interpreted as a conscious effort to boost the European integration process. Jasper M. Trautsch 34 new Europeanness is forged out of the various nationalities.28 The representation of the combined flags or names of the member states, by contrast, emphasizes the EC/EU’s constituent parts and hence its federative character, thus visualizing the “salad bowl” metaphor. The symbols thus epitomize two different conceptions of the EC/EU: “e pluribus unum” (“one out of many”) versus “in varietate concordia” (“united in diversity”).29 The continued use of the combined flags symbol after the EC flag was adopted in 1986 thus implies skepticism towards further centralization processes and expresses an insistence on the retention of a certain amount of national autonomy within the EC/EU. Conclusions After having analyzed the reasons for the changing frequency in the uses of the various EC/EU symbols, preliminary answers to the three questions posed above can be given. 1. The low number of stamps displaying EC-related symbols in the 1950s and 1960s can be, at least partially, explained by the fact that, on the one hand, pertinent symbols did not yet exist (such as the flag or the Euro) or were politically not opportune (such as maps of the EC territory) and, on the other hand, occasions for the celebration of the EC were rare (major anniversaries such as the 25th and 50th jubilee of founding treaties only occurring in later decades and the commemoration of the EC’s “founding fathers” only being possible after their deaths). In this context, it also needs to be mentioned that the general number of stamps issued per year was lower in the 1950s and 1960s than they would be in later times. For example, in the 1950s, the Federal German Post Office issued, on average, 15.6 commemoratives (as opposed to definitives) per year and, in the 1960s, 24.3, whereas in the 1970s it would issue, on average, 35.5 commemora- 28 This vision of a Europe homogenized through the EC is neatly captured in the 1960 Luxembourg stamp celebrating the 10th anniversary of the ECSC, on which a steel worker lifts his fork out of the furnace, the melted metal at the end of which having taken the shape of the letters “CECA” (Communauté européenne du charbon et de l’acier). The sparks coming out of the crucible form the contours of the EC territory. 29 For the idea of unity in diversity see Gerard Delanty, “Europe and the Idea of ‘Unity in Diversity’,” in: Rutger Lindahl (ed.), Whither Europe? Orders, Boundaries, Frontiers in a Changing World, Gothenburg: CERGU, 2003, 25–42. European Integration by Mail: European Symbols and Subjects on Postage Stamps 35 tives per annum.30 In other words: As in the first decades after the Second World War fewer stamps were issued, there was also less chance of EC subjects being addressed and EC symbols being employed on them.31 2. For the same reasons, it is necessary to avoid jumping to conclusions when interpreting the rise in the number of EC-related stamps in the 1970s. For one, the overall number of stamps produced by postal administrations grew such that a proportional increase in the number of stamps bearing EC-symbols is not necessarily an indication of a rising desire by the governments to promote the European integration process. More importantly, more occasions presented themselves to address the EC on stamps in this decade. On the one hand, “founding fathers” of the EC such as Robert Schuman, Paul-Henri Spaak, and Martino Gaetano could be portrayed on stamps only after they had died in the 1960s or early 1970s, and the 20th anniversary of the Treaty of Paris and the Treaties of Rome and the 25th anniversary of the Schuman Declaration fell into this decade. On the other hand, the first elections to the European Parliament took place in 1979 prompting the issuance of stamps to raise attention to this event in all of the six EC founding member states. The further increase in EC-related stamps in the 1990s and 2000s can, at least partially, be similarly explained by new opportunities for making the EC/EU the subject of stamps. Most importantly, the introduction of the Euro in 1999/2002 and the largest expansion of the EU in 2004 triggered a huge amount of stamps (26 and 24 respectively), contributing to a significant extent to the growing number. The introduction of the common market in 1993 and the rotating Presidency of the Council of the EU were also addressed on stamps in each of the founding member states (6 and 14 respectively). The 50th anniversary of the Treaties of Rome was commemorated on 7 stamps from all states except the Netherlands. Moreover, with the adoption of the EC/EU flag in 1986, a new visually striking symbol had 30 Definitives are stamps printed in masses for everyday postage and are used for many years. By contrast, commemoratives, honoring an institution, commemorating an event, person, or artifact, or raising attention to a political or social issue, have a smaller circulation and are only printed for a limited period of time. 31 These explanations for the low number of EC-related stamps in the 1950 and 1960s are not to deny that historical contemporaries did not attach as much importance to events like the conclusion of the Treaties of Rome as we do today. This fact most likely contributed to them being only rarely mentioned on stamps. See Mark Gilbert, “The Treaties of Rome in Narratives of European Integration,” in: Michael Gehler (ed.), Vom gemeinsamen Markt zur europäischen Unionsbildung: 50 Jahre Römische Verträge, 1957–2007, Vienna: Böhlau, 2009, 721–730. Jasper M. Trautsch 36 become available to visualize the European integration process in the 1990s and the 21st century. 3. These cautionary notes about the interpretation of the graph are not meant to claim that the growing usage of EC/EU-related symbols was not the result of increasing efforts to promote the EC/EU in more recent times than in the early years. After all, the postal administrations did make the decision to issue stamps to raise attention to the importance of elections to the European Parliament, to commemorate the founding treaties and “fathers” of the EC, to promote the Euro, and to advertise the enlargement in 2004. That the celebration and commemoration of these political events and persons could not be taken for granted becomes clear when considering that, in the 2010s, the number of EU-related stamps did indeed decrease significantly, even though there were several occasions to warrant the EU as the subject of stamps. The 25th anniversary of the Maastricht Treaty in 2017 and the 25th anniversary of the common market in 2018 were not publicized on stamps; only the Italian Post considered the awarding of the Nobel Peace Prize to the EU in 2012 a good enough reason for the issuance of a pertinent stamp; and while all the EC founding member states had printed stamps on the occasion of the first and second elections to the European Parliament in 1979 and 1984 in order to encourage citizens to cast their vote, Luxembourg was the only one to consider the 2014 and 2019 European elections worthy as a subject of postage stamps. The decrease in the number of EU-related stamps in the 2010s, therefore, can indeed be interpreted as a sign of weakening efforts to promote the European integration process.32 Even the sharp decline of the curve in the 2010s, however, needs to be put into perspective and should not be prematurely interpreted as a dramatic shift in priorities. After all, the 2010s did not witness as many decisive political events and important anniversaries as the two previous decades. There was no equivalent to the introduction of the Euro or the common market, and only one single country (Croatia in 2013) joined the EU in this period. However, most postal administrations’ regulations for stamp selection include the stipulation that subjects should not be randomly addressed, but should be dealt with on stamps at suitable moments, 32 In their analysis of newspaper coverage of European treaty anniversaries Kiran Klaus Patel, Alexandros Sianos, and Sophie Vanhoonacker also came to the conclusion that the Maastricht Treaty received much less attention than the Treaties of Rome: “Does the EU Have a Past? Narratives of European Integration History and the Union’s Public Awareness Deficit,” in: Journal of European Integration History, Vol. 24, No. 1 (2018), 143–165, here: 150. European Integration by Mail: European Symbols and Subjects on Postage Stamps 37 i.e. when events take place or anniversaries occur. As the last graph, showing the occasions for the issuance of stamps having the EC/EU as their subject or using EC/EU symbols over the course of time, reveals, very few such stamps were printed without occasion. Only the 1990s witnessed a certain spike in the curve of stamps issued without apparent cause, as the Italian Post Office issued 12 stamps celebrating the “United Europe” without providing a specific explanation as to the reason for the series on either the stamps or the first day cover (even though one might assume that the introduction of the European common market might have inspired the creation of these stamps). Almost all other stamps either had a contemporary political event as its subject (such as the elections to the European Parliament, the introduction of the Euro or the common market, the accession of new member states, or the inauguration of a new building) or they commemorated an event (such as the signing of a treaty or the founding of an institution) or a person (on their birthdays or death anniversaries).33 As can be clearly seen in the graph, it was the decrease in the subject of political events that caused the decline in EU-related stamps in the 2010s – a development that reflects the general trend in the history of the EU in this period. Politically, it was the European sovereign debt crisis, the failure to come to an agreement on the refugee issue, and the British decision to leave the EU that mainly determined the political agenda in the 2010s, and none of these issues was suitable to be addressed on a stamp. 33 Political events having caused the issuance of stamps include: the European elections (31), the enlargement in 2004 (24), the introduction of the Euro (19), EU Council Presidencies (14), the inauguration of new EC/EU buildings (7), the introduction of the common market (6), and others (12). 25 stamps commemorated the signing of EC treaties (15 of which the Treaties of Rome), 23 the anniversaries of EC/EU institutions (7 of which the ECSC), 11 the birthdays or years of death of EC/EU leaders, with 2 stamps raising attention to the inauguration of a memorial and the jubilee of a building. 23 stamps were issued without apparent occasions and 17 stamps bore EC/EU symbols, even though their subject was not related to the European integration process. Jasper M. Trautsch 38 commemoration contemporary political events without apparent cause no EC/EU connection Occasions for the Issuance of EC/EU-Related Stamps As the analysis of the stamps’ subjects and symbols makes clear, it was three factors that have determined the issuance of EC/EU-related stamps: the political will to promote the EC/EU, the emergence of suitable occasions in the form of political events or anniversaries to make the EC/EU the subject of stamps, and the availability of visually striking and easily comprehensible symbols to visualize the EC/EU. While this interlocking relationship between political will, suitable occasion, and visual symbols has been in operation for the most part of the 21st century, their connection has started loosening, as, since the 1990s, the EU flag has been gaining independence and increasingly become an autonomous symbol. After all, what, at least on second sight, appears noteworthy in graph 3 is the appearance (in steady frequency) of a fourth type of EU-related stamp (besides those being occasioned by political events, by commemorative events, and with no apparent reason) in the last decade of the 20th century: stamps bearing EU symbols (i.e. the flag), but not having the EU as their explicit subject. Graph 3: European Integration by Mail: European Symbols and Subjects on Postage Stamps 39 EU Symbols on Stamps without EU-Subjects Admittedly, in the 1990s, the stories that such stamps told still had a connection to the European integration process. For example, the French stamp commemorating the 50th anniversary of the end of the Second World War in 1995 displayed the European flag behind the word “paix,” hereby suggesting that it was the EC/EU that had ensured the long-ranging peace.34 Similarly, the use of the EU flag on the German stamp issued to celebrate the German national day in 1998 was meant to indicate that German and European unity were two sides of the same coin, the united Germany remaining firmly committed to the European integration process. However, in the 2010s, stamps began appearing that had no connection to the EU whatsoever, but still displayed the EU flag as a symbol for Europe as such. For instance, on the 2013 Italian stamp honoring the Italian State Police, the EU flag hangs, as a matter of course, besides those of Italy and the city of Rome at the façade of the Central Police Headquarters in Rome. When the French Post Office issued a stamp to promote the Ryder Cup (a Illustration 8: 34 The peace-establishing narrative has appeared on a few stamps addressing the EC/EU. The peace dove was displayed on the Belgian stamps for the European elections in 1979 and 1984, and an olive branch was placed on the Italian stamp prompted by the awarding of the Nobel Peace Prize to the EU in 2012. Jasper M. Trautsch 40 biennial men’s golf competition between teams from the U.S. and Europe) taking place near Paris in 2018, it used the Star-Spangled Banner and the EU flag to represent the U.S. and Europe (a design modeled on the official logo of the event). In the same year, a Luxembourg stamp, to give a final example, celebrated the 50th anniversary of the Miami University’s campus in Differdange in the southwest of the Duchy, displaying the U.S. and the EU flag to indicate the institution’s transatlantic nature.35 As, on these stamps, the EU is used to symbolize Europe, Europe in turn is equated with the EU – a process that Kiran Klaus Patel has called “the synecdochic quality of the EC/EU integration process,” in which a part stands for the whole.36 This increasing identification of the EU with Europe on stamps through the use of symbols like the flag in contexts that have little connection to the EU represents an ideal-typical case of “banal nationalism” – promoting a national identity through repetitive and often unconscious use of its symbols in everyday contexts – as applied to the EU.37 Possibly, such subliminal stimuli operating at the unconscious level are more effective at fostering a European consciousness than overt celebrations of EU institutions, since they are more easily accepted as natural and disinterested and hence are little challenged.38 This development indicates that in future political events galvanizing the public, such as major treaties or expansion rounds, might become less important for the continuous promotion of the EU if the symbolic equation of the EU with Europe increasingly becomes an unquestioned convention. 35 Other examples include the use of the EU flag on stamps celebrating the 100th anniversary of Labor Day in Italy in 1990 or commemorating the 50th anniversary of the Franco-German Elysée Treaty in France in 2013. 36 Kiran Klaus Patel, “Provincializing European Union: Co-Operation and Integration in a Historical Perspective”, in: Contemporary European History, Vol. 22, No. 4 (2013), 649–673, here: 667. 37 For the concept of banal nationalism see Michael Billig, Banal Nationalism, London: Sage, 1995. For its application to European identity formation see Laura Cram, “Imagining the Union: A Case of Banal Europeanism?,” in: Helen Wallace (ed.), Interlocking Dimensions of European Integration, Basingstoke: Palgrave, 2001, 233–246. Laura Cram, “Banal Europeanism: European Union Identity and National Identities in Synergy,” in: Nations and Nationalism, Vol. 15, No. 1 (2009), 101–108. 38 The impact of stamps promoting the EC/EU is difficult, if not impossible, to measure in retrospect, since, if they had an influence at all, it would have been indirect and long-term. However, the circulation numbers indicate how many people were exposed to individual stamps and through the stamp’s value one can reconstruct the targeted audience (i.e. whether the stamp was intended for domestic or international mail). European Integration by Mail: European Symbols and Subjects on Postage Stamps 41 Part I: New Initiatives A Double-Edged Victory: Fontainebleau and the Resolution of the British Budget Problem, 1983–841 N. Piers Ludlow The row over Britain’s contribution to the European Community budget epitomised the problems of the EEC in the first half of the 1980s. At the heart of the dispute were a series of complex calculations about how much money Britain paid into the Community’s coffers and how much money it received back via the EEC budget. This was something that only a handful of officials, politicians and experts in Brussels, London and a few other national capitals fully understood – and even they disagreed strongly amongst themselves about the exact sums involved, let alone the best way to resolve the problem. But even the many who did not understand entirely the arcane details, could appreciate the damage that the dispute was doing to the Community’s operation and reputation. This last was not just measured in terms of the multiple European Council meetings, Council of Ministers sessions, or Coreper gatherings, that were devoted to the subject – often acrimoniously and largely fruitlessly. It was also the way in which what was originally called the BBQ (so either the British Budgetary Question or the Bloody British Question depending on your mood and viewpoint)2 but which was then redubbed the somewhat more neutral ‘budgetary imbalances’ issue added an extra level of seemingly insoluble complexity to the wider questions of how the Community should be paid for and how it should reform itself. Affected too were attitudes towards enlargement. At a time when some within the Community already harboured misgivings about the imminent entry of Spain and Portugal, and felt annoyance at the somewhat contentious debut in Community politics made by the Greek government of Andreas Papandreou, the spectacle of the largest of the 1973 entrants disrupting Community business in pursuit of its own narrow aim, could only increase the tendency of long term Brus- 1 Great thanks are due not simply to those who responded to this paper as originally given in Hildesheim, but also to those who have sent written comments on my draft text, including James Ellison, Rob Saunders, Helen Parr, Mathias Haeussler and Katja Seidel. 2 Roy Jenkins, European Diary, 1977–1981, London: Collins, 1989, 545. 45 sels-hands to look back with wistful nostalgia to the Community of Six. And above all the row had come to block any real prospect of wider Community advance. There were of course many other obstacles in the path of the Community relaunch that was so often discussed but so hard to achieve in the early 1980s. But there was a wide degree of agreement that until the endless wrangle over Britain’s share of the Community’s costs was resolved, the chances of more generalised advance were very bleak indeed. The resolution of the row at the June 1984 Fontainebleau summit does therefore deserve to be seen as one of the key milestones on the way to that very different, and much more dynamic phase of European integration that would come to be associated with the second half of the decade. This chapter will be made up of four parts. The first will briefly recall the origins and roots of the budgetary row, explaining how this reflected the profound mismatch between the nature of the Community budget as it had been devised by the EEC founder members, and the trading habits and economic profile of the United Kingdom. The clash between the Community status quo and the UK once it joined was therefore both predicable and predicted. A second section will then briefly sketch out the early attempts to sort out the problem, especially the May 1980 deal and the subsequent failure of the so-called ‘mandate’ talks. The third and largest section will zero in on the crucial period between the Stuttgart Council of June 1983 and the Fontainebleau Council a year later during which a solution was, painstakingly and painfully, arrived at. This section will also seek to identify the factors that allowed the longstanding impasse to be broken. And a final section will seek to draw some broader conclusions from this whole episode, looking at the significance of the Fontainebleau breakthrough for the general mood and pace of change within the EEC, the institutional implications of how the deal had been reached, and its consequences for the ever problematic relationship between Britain and its European partners. Of this last, it will be suggested that while beneficial to the UK’s involvement in the integration process in the mid-1980s, and financially advantageous to Britain for many years to come, the Fontainebleau settlement, and especially the manner in which it had been reached, solidified in British minds a template of how best to approach EC negotiations that would have baleful long term consequences for the UK’s position in Europe. N. Piers Ludlow 46 foreordained row There should have been no great surprise that the question of how much money Britain paid into, and received from, the Community budget proved contentious. The issue had been argued about as early 1962, when those involved with the first UK bid to join the EEC had squabbled with the French over what were then just plans for how the Community budget should work.3 In the years that followed, Harold Wilson the Labour Prime Minister, had also been very worried that excessive British contributions to the costs of the CAP especially would make British EEC membership a massive and perhaps unaffordable strain on the UK’s balance of payments.4 Such misgivings were not enough to prevent him applying in 1967, of course, but his doubts had never been entirely satisfied and might well have once more become a source of argument had Charles de Gaulle not vetoed the second application. And following the 1970 settlement amongst the six founder members on the basic rules of Community finance, the British had again rung alarm bells about the issue during their membership negotiations in 1970–1. The question had for instance featured prominently in the talks between Edward Heath and Georges Pompidou when the two leaders met in Paris in May 1971.5 But in their haste to join, the British had decided – wisely or unwisely – not to insist upon any permanent alteration of the budgetary rules before signing the treaty of accession. Instead they had placed their faith in the Commission’s public pledge during the negotiations that “Should unacceptable situations arise in the present Community, or an enlarged Community, the very survival of the Community would demand that the institutions find equitable solutions” and in their own ability to argue their case once they had taken their place at the Council table.6 The issue had then been raised once more in the course of the Labour-led ‘renegotiation’ of Britain’s membership terms in 1974–5, but here too the British had broken off prematurely their A 3 Ann-Christina L. Knudsen, “The Politics of Financing the Community and the Fate of the First British Membership Application”, in: Journal of European Integration History 11, no. 2 (2005), 11–30. 4 Helen Parr, Britain’s Policy Towards the European Community: Harold Wilson and Britain’s World Role, 1964–1967, London: Routledge, 2006, 134–35. 5 Daniel Furby, ‘The Revival and Success of Britain’s Second Application for Membership of the European Community, 1968–71’, PhD, Queen Mary, University of London, 2009, 232–75. 6 For the Commission promise, see Stephen Wall, The Official History of Britain and the European Community. Volume II: From Rejection to Referendum, 1963–1975, Abingdon: Routledge, 2012, 426. Fontainebleau and the Resolution of the British Budget Problem, 1983–84 47 crusade for an altered system, putting their faith in a complicated mechanism designed to smooth out the difficulty which in the end proved totally ineffective.7 The roots of the problem lay in the fact that the British did particularly badly out of both the revenue and the expenditure side of the Community budgetary system. In the 1970s and early 1980s, the EEC derived its income from three types of ‘own resources’: customs receipts, levies on agricultural imports, and a slice of the money that each member state raised through Value-Added Tax (VAT). In all three cases, the British contributed substantially more than they ought to have done in relation to their share of the total EEC GNP. In 1979, for instance, a year when the UK’s GNP represented 15.5 % of the EEC total, the British paid in 25 % of all customs receipts received by the EEC, 17.5 % of all levies, and 18 % of VAT receipts. The British contribution to the Community budget was thus of 20 % overall.8 This pattern reflected the UK’s tendency to trade more with countries beyond the EEC than most of their partners, and the country’s higher than average level of consumer spending. But at a time when only Ireland and Italy had lower per capita GNPs than the UK, such ‘over-payment’ was hard for the British to swallow. Matters were made much worse, furthermore, by the expenditure side of the equation. Here the principal problem was the disproportionate share of Community expenditure that went on agricultural support – a sum that was seldom less than 70 % of the total EEC budget during the latter half of the 1970s and the first half of the 1980s. Very little of this agricultural expenditure directly benefited Britain, for the simple reason that the UK had fewer farmers than most other member states and produced much less of its own food. It therefore received comparatively little by way of subsidy, export restitution, or market intervention. In 1979 for instance the Commission estimated that only 5 % of farm spending would go to Britain.9 Initially London had hoped that low UK receipts on agriculture would be counterbalanced by higher than average gains elsewhere – with particular expectations surrounding the Community’s nascent ‘regional policy’. But when the level of Community spending on regional policy had failed to grow nearly as fast as anticipated during the 1970s and early 1980s – and continued to be dwarfed by farm spending – this hoped for 7 Wall, 576–77. 8 Tickell Papers (henceforth TP), All Souls College, Oxford, File 20, ‘British Budgetary Problem’, Michael Jenkins note, ‘Structural nature of the UK’s budgetary deficit’, 10 May 1979. 9 Ibid. N. Piers Ludlow 48 solution had failed to materialise. Instead the British went on receiving back from the Community much less than they paid in. The outcome was that throughout the post-1979 period Britain and the Federal Republic were the only two member states to make a sizeable net contribution to the Community budget. Given that Britain – unlike West Germany – was one of the poorer states in the EEC, this was seen by London and more grudgingly accepted elsewhere as an unacceptable state of affairs.10 running sore Any British Prime Minister would have been duty-bound to complain about this situation once the country ceased in 1979 to be shielded from the full effects of the budgetary imbalance by the transitional arrangements negotiated during entry. James Callaghan had for instance told Roy Jenkins, the then President of the Commission, that “The British were not prepared to be the paymasters of Europe”.11 But Labour’s defeat in the May 1979 general election ensured that it would be Margaret Thatcher and not Callaghan who would lead Britain’s campaign to redress this situation. She would do so, furthermore, in a distinctively combative and forceful fashion. Thatcher’s campaign to ‘get her money back’ quickly became one of the dominant features of the European Community in 1979 and early 1980. Her performances on the subject hijacked the European Council meetings in Strasbourg (June 1979), Dublin (December 1979) and Luxembourg (April 1980), galvanised British opinion on the issue (Granada Television even made a film about the crusade entitled Mrs Thatcher’s Billion12), and seriously strained relations between the British Prime Minister and the two key leaders of the European Community at the time, namely Helmut Schmidt and Valéry Giscard d’Estaing. The German Chancellor is reported to have feigned sleep during one of Thatcher’s outbursts, while the French A 10 For a more detailed explanation of how the problem arose, and an exploration of why the UK’s partners were reluctant to accept that the British had a case, see N. Piers Ludlow, Roy Jenkins and the European Commission Presidency 1976–1980: At the Heart of Europe, Basingstoke: Palgrave Macmillan, 2016, 207–16. 11 TP, File 17, ‘Meetings and Conversations 1978 to March 1979’, meeting between the President of the European Commission and the British PM, London, March 8, 1979. 12 For details see (last visited, 2.1.2020). Fontainebleau and the Resolution of the British Budget Problem, 1983–84 49 President ostentatiously ordered his motorcade to pull up outside the door of the summit venue midway through one of her tirades.13 But while undoubtedly disruptive and alienating (Henri Simonet, the Belgian foreign minister probably spoke for many when noting acerbically, “Voilà parle la vraie fille de l’épicier”, picking up an epithet that had already been directed at Thatcher in British domestic politics), Thatcher’s single-minded struggle left her fellow leaders in little doubt that a settlement would have to be found.14 And so, after several twists and turns, a compromise was eventually hammered out at the Council of Ministers meeting in Brussels on May 30, 1980.15 The deal done had two main components. The first was the agreement for a lump sum that would be paid to the British in both 1980 and 1981, covering some of the excess contribution; the second a ‘mandate’ given to the European Commission to investigate and propose a longer-term solution to the underlying problem. The lump sums were meant to buy the Community some time – Tickell talks of “a two year truce”16 – during which a more in-depth reflection could be carried out about a lasting settlement. Unfortunately, attempts to carry out the ‘May 30th mandate’ led the newly installed Thorn Commission into highly perilous waters. Its reputation and its capacity to act as the main source of ideas about how to 13 For the first, see Jenkins, European Diary, 1977–1981, 530; for the motorcade incident, see Hugo Young, This Blessed Plot: Britain and Europe from Churchill to Blair, Basingstoke: Macmillan, 1998, 314. A more sustained analysis of how the row affected relations between Thatcher and her French and German counterparts can be found in Laurence Baratier-Negri, Valéry Giscard d’Estaing & le Royaume-Uni: Le couple Franco-Britannique sur la scène internationale de 1974 à 1981, Paris: Sorbonnes université presses, 2018; Mathias Haeussler, Helmut Schmidt and British- German Relations: A European Misunderstanding, Cambridge Cambridge University Press, 2019, 149 ff. 14 The source of Simonet story is Jenkins, European Diary, 1977–1981, 529. 15 The best source on this meeting and the diplomacy preceding it is the internal history written up by Jenkins’ chef de cabinet, Crispin Tickell. TP, File 20, ‘British Budgetary Problem’, ‘Settlement of the British Budgetary Issue Reached at the General Affairs Council, 29/30 May, 1980’, July 29, 1980. Published accounts include David Hannay, Britain’s Quest for a Role: A Diplomatic Memoir from Europe to the UN, London: I.B.Tauris, 2013, 99–101; Michael Butler, Europe: More than a Continent, London: Heinemann, 1986, 97–98; Ludlow, Roy Jenkins and the European Commission Presidency, 220–23; Michel Vanden Abeele, “The Mandate of 30 May 1980, Budget Financing and the Revitalization of the Community: An Unfinished Journey”, in: Common Market Law Review 19, no. 4 (1 December 1982), 501–19. 16 TP, File 20, ‘British Budgetary Problem’, ‘Settlement of the British Budgetary Issue Reached at the General Affairs Council, 29/30 May, 1980’, July 29, 1980. N. Piers Ludlow 50 overcome the budgetary problem would never fully recover from the setback it encountered. There was, it is true, some logic to the approach chosen by the Thorn Commission. Britain’s budgetary problems were, in part at least, a product of the Community’s uneven development and the manner in which one policy, the CAP, accounted for the lion’s share of the EEC budget. Rebalancing the policy mix would certainly be a step towards resolving the British difficulty. It was also the case that the Commission could not ignore the increasingly tight nature of the Community’s budgetary ceiling. Jenkins had used some of his final bilateral meetings with the EC heads of state and government to warn of the dangerous asymmetry between the Commission’s largely static revenue stream and its highly dynamic pattern of expenditure, and he had also spoken publicly of the need to move towards a significantly higher pattern of Community spending.17 Thorn was thus merely picking up the baton that his predecessor had passed to him. He was also entirely correct to underline the imminent budgetary crisis.18 But the breadth and the ambition of Thorn’s June 1981 proposals was striking nonetheless. What the Commission outlined as its response to the May 30th mandate was an extensive suite of forward moves. As Thorn explained in his covering letter sent to each Community leader alongside the Commission’s report, The Commission has come up with a number of reforms which, in its view, should help deal with the problems it was asked to consider. As you will see, the reforms are far-reaching. This is inevitable. Reforms cannot be lasting and effective unless they get to the root of our present difficulties, which the mandate itself recognised as being structural. Our recommendations relate to the structures which can be 17 See e.g. TP, File 18, ‘Meetings and Conversations April 1979 – December 1980’, Record of a conversation between the President of the European Commission and the President of the French Republic, Elysée, November 26, 1980. For the Churchill Memorial Lecture given by Jenkins on November 20, 1980, see http://a (last visited, 2.1.2020). 18 See the figures for the VAT ‘call-up’ rate for Community own-resources cited in COM (84) 140 final, ‘Future Financing of the Community’, March 5, 1984. Available at (last visited 2.1.2020). Fontainebleau and the Resolution of the British Budget Problem, 1983–84 51 changed using instruments provided by the Treaty. An intrinsic feature of the Community is that it is capable of changing from within.19 The body of the report then went on to outline a programme of suggested change which began with a renewed push to create a fully functional internal market, proceeded to the reform of the CAP, and continued with an effort to expand the European Monetary System. Also envisaged was progress towards a common energy policy, steps to make Europe more competitive in science and technology and to boost the continent’s research capabilities, action to revitalise competition policy, and a thorough rebalancing of Community expenditure covering not only the CAP, but also regional and social policies. In order to pay for this the Commission recommended the scrapping of the 1 % ceiling on its share of the member states’ VAT take, and its replacement by an agreement by the member states that own resources be increased ‘when this becomes necessary to achieve agreed objectives.’20 The Community’s financial straitjacket was to be entirely removed, in other words. Little wonder then that earlier draft versions of the Commission report had used as their title ‘La Communauté dans les années 80: un nouveau contrat’.21 And the sense of challenge was well captured by the report’s final paragraph: A political decision is needed if the Community is to be relaunched. This means working together to find solutions which correspond to the general interest. The Treaties have provided a method and procedures for advancing in this way. The Commission has started the process by outlining the way forward. It is now for the other institutions to commit themselves.22 Few of the member states, however, were prepared to commit themselves to this ambitious programme of advance. None rejected the Commission’s suggestions out of hand.23 In so broad a package of proposals, after all, there were elements that appealed to each national capital. It also took a 19 Gaston Thorn letter to EEC heads of state and government, 24.6.1981, COM (81) 300 final. Available at pdf (last visited 2.1.2020). 20 Ibid. 21 Historical Archives of the European Union, Florence, Emile Noël papers (henceforth EN), EN-1729, p. 42. 22 COM (81) 300 final. 23 See European Commission Archives (henceforth ECA), INV 2/2018, Dossiers 360A & 360B for the summer and autumn discussions of the Commission’s proposals. N. Piers Ludlow 52 while for the Commission’s ideas to be fully unveiled. The first wave of precise proposals setting out the Commission’s thinking was not completed until mid-October 1981, and even then the Commission showed itself ready to tinker with its ideas so as to meet member state objections.24 Thorn thus submitted the outlines of a new package deal in January 1982.25 Both the UK and France, furthermore, added their own suggestions as to how the budgetary impasse could be broken to the mix.26 The strong advance on so many parallel fronts that Thorn had hoped for failed to materialise, however. Instead the deadlock hardened, particularly on the question of Britain’s budgetary contribution. In February, following an especially confrontational discussion of the budgetary issue at the January 25, 1982 Council of Ministers meeting, the UK decided to resume its tactic of blocking the annual setting of agricultural prices necessary for the CAP to function unless and until a budgetary settlement had been reached.27 This was an approach that British officials believed had proved effective in 1980 and had contributed to the May 1980 agreement.28 But the second time around the attempted linkage backfired badly. At a daylong Agricultural Council meeting on May 18, Peter Walker, the British Minister of Agriculture, found himself systematically outvoted on each CAP price, his attempts to invoke the Luxembourg Compromise ruled invalid by the Belgian Presidency and his fellow ministers of agriculture.29 Britain’s bluff had been called.30 At a time when the UK was already at war with Argentina over the Falkland Islands, and reliant on Community solidarity to maintain an economic and arms embargo against the South American dictatorship, the British decided that they could not protest too much. As Michael Butler, the British Permanent Representative noted drily in his memoirs, this reflected “the impossibility for the British of fighting two ‘wars’ at once”.31 This British defeat also signalled the de facto end of Thorn’s bold gambit to solve the budgetary problem by means of broad advance. Within 24 There is a full list of the Commission proposals in ECA, INV 3/2018, Dossier 878. 25 ECA, INV 2/2018, Dossier 361A, Thorn to Carrington, January 8, 1982. 26 For the UK proposal see Stephen Wall, The Official History of Britain and the European Community, Volume III, The Tiger Unleashed, 1975–1985, Abingdon: Routledge, 2019, 204–5. 27 Wall, 216–17. 28 Hannay, Britain’s Quest for a Role, 100. 29 Wall, The Official History, The Tiger Unleashed, 226–28. 30 ‘How Britain Was Outflanked’, Financial Times, May 20, 1982. 31 Butler, Europe, 100. Fontainebleau and the Resolution of the British Budget Problem, 1983–84 53 days of Peter Walker’s climb-down a further Council meeting in Brussels had been forced to agree another lump-sum payment to Britain to cover 1982 – an acknowledgement of the lack of headway made towards a lasting settlement.32 Instead, the simmering disagreement between Britain and the Nine continued, aggravated by, and aggravating in turn, the more general budgetary crisis that both Jenkins and Thorn had predicted, but neither had been able to solve. In 1982 for instance a sharp surge in agricultural expenditure led to a situation in which the Community needed a call-up rate of 0.9 % of VAT to cover its costs – a significant rise from 0.78 level which had characterised the previous few years, and a figure which was perilously close to the 1 % ceiling on Community expenditure.33 Translated into more comprehensible language, this meant that EEC spending was fast approaching the maximum permitted level with no scope to borrow or obtain extra money. The Community’s budgetary woes and the strong fear of impending bankruptcy deepened the gloomy mood that characterised discussions about the European integration process in 1982.34 The road to a lasting solution In the event, however, it was the Community’s financial crisis which would ultimately prove to be the key to solving the British budgetary problem. The greatest challenge faced by the UK in finding a lasting resolution was the disinclination of their partners to take the problem entirely seriously and to dig into their pockets so as to help London out, especially at a time of economic crisis when state budgets were everywhere under strain. The British hence needed a mechanism which would oblige the other member states not only fully to engage with the problem, but also to accept the additional financial costs that a satisfactory solution would entail. What had seemed to work in 1980, however, namely the linkage with agricultural prices, had failed in 1982. Any lasting settlement of the British budgetary dispute would hence require a new lever to be found. The growing need by 1983 to rethink the Community’s overall budgetary settlement, and in particular the imperative to raise the 1 % VAT ceiling on Community own resources, would provide just such a tool. 32 Butler, 99–101. See also ‘Britain and EEC Partners Declare Truce’, Financial Times, May 26, 1982. 33 COM (84) 140 final, ‘Future Financing of the Community’, March 5, 1984. 34 The famous – or infamous – cover of The Economist announcing the imminent death of the EEC dates from March 29, 1982. N. Piers Ludlow 54 The first sign of positive movement came in the spring of 1983 when the Commission – which was of course the first institution to feel the impact of the ever-tighter Community finances – made a renewed bid to break the impasse and to put forward a fresh proposal on the future financing of the EEC.35 The new document opened with a stark warning of what was at stake: “[L]a Communauté vit aujourd’hui sous la menace de l’épuisement de ses ressources financières…. C’est donc le maintien ou le fonctionnement normale de toutes les politiques de la Communauté qui est aujourd’hui en cause.”36 It therefore went on to propose a lifting of the 1 % ceiling for own resources, initially to 1.4 %, but crucially with the provision that future increases would no longer need ratification by national parliaments, but could instead be approved by the European Council and by majority vote in the European Parliament. Increases beyond 1.4 % would, in other words, become significantly easier to agree. Importantly, from a British perspective, this loosening of the own resources straitjacket would be accompanied by a complex system of VAT modulation, meaning that the exact amount of VAT claimed by the Community from the national take, would vary according to the member state’s GNP and the degree to which it benefitted financially from CAP expenditure. Countries like Britain, that were neither comparatively wealthy, nor had many farmers, would thus end up having to pay a significantly lower percentage than states like the Netherlands, Denmark or France, that were wealthier and derived much greater direct benefit from the CAP budget.37 Needless to say these ideas were not immediately welcomed by those member states that were liable to have to pay more under the proposed new arrangements. Indeed the counter-attack began even before the document had been approved by the Commission with Christopher Tugendhat, the budget Commissioner’s draft proposal, denounced in furious terms to Thorn by Richard Burke, the Irish Commissioner.38 “[I]t amounts to a barefaced assertion of the principle of a juste retour as the controlling principle of our budgetary operations”, Burke objected. Nor were most member states that taken with the idea of altering the basis upon which future increases of the own resource ceiling could be made. But the ab- 35 EN-952, COM (83) 270 final/2, ‘Le Financement future de la Communauté – Projet de décision sur les ressources propres’, May 6, 1983, pp.3 – 18. For the preparations that went into the new Commission proposals, see ECA, INV 3/2018, Dossier 324. 36 COM (83) 270 final/2, p. 4. 37 Ibid. pp.10 – 11. 38 EN-1751, Burke to Thorn, April 22, 1983, p.34. Fontainebleau and the Resolution of the British Budget Problem, 1983–84 55 sence of easy agreement at this stage mattered less than the fact that serious discussions had resumed. Furthermore, the idea of lessening Britain’s contribution by means of a VAT rebate, also provided a useful means of preventing the European Parliament obstructing the refund, as had happened to the 1982 lump sum payment and would happen again to that for 1983.39 The Stuttgart summit discussion of the budgetary issue would not prove an easy one. Indeed the informal British record of proceedings, drawn up by Geoffrey Howe, the Foreign Secretary, brings out strongly the asperity of discussions over the issue. The British Prime Minister herself was forceful and distinctly ungenerous to her partners: “The Prime Minister recalled the conclusion of the Brussels European Council. It was the last of a series of promises, all of which remained unfulfilled. Now was the time for them to be kept. Otherwise there would be a strong sense of betrayal.” But others too were outspoken. Amintore Fanfani, the veteran Italian Prime Minister commented that “He could not live in a Community of accountants.” François Mitterrand too counter-attacked strongly over criticisms of how much France gained from the CAP.40 But Thatcher’s clear new line, linking British acquiescence in the rise of own resources needed to pay for both the imminent enlargement of the Community to Spain and Portugal and any new policy initiatives, gave Chancellor Helmut Kohl in the chair some scope to cobble together a package of future work that all could accept.41 Alongside the Council’s most famous achievement, namely the “Solemn Declaration”, the ten Heads of State and Government also agreed a set of Conclusions setting out an ambitious programme which would commit the EEC to pressing ahead with CAP reform and especially steps to control runaway expenditure, the development of new policies particularly ESPRIT (an initiative to boost high-tech research in Europe), a greater level of budgetary discipline, a new agreement on own resources including a solution to the “particular problems of certain member states” and rapid 39 For an explicit statement of how important this factor became to London, see UK National Archives, Kew (henceforward UKNA), PREM 19 1225, ‘Anglo-Italian summit, 26–7 January. Post-Stuttgart negotiations: Speaking note for the Prime Minister’, undated but clearly late January 1984. 40 UKNA, FCO 73/542, European Council Stuttgart, 17–9 June 1983, Informal Record. 41 Thatcher only finally accepted the link between new own resources and a longterm British settlement on the very eve of the Stuttgart meeting, despite the fact that her officials had been recommending this to her for some time before. Butler, Europe, 101. N. Piers Ludlow 56 progress towards enlargement.42 The European Council had in other words committed itself to the type of broad sweep of advance advocated so unsuccessfully by the Thorn Commission nearly two years earlier. And it would do so furthermore by committing the foreign ministers and finance ministers to meet each other more frequently under a special emergency procedure. As a bonus the summit also agreed to a further one year lumpsum payment to the UK to cover its excess contribution to the 1983 budget. Thatcher was delighted, telling ITV News that “The result exceeds anything that I had expected to achieve here at Stuttgart.”43 It very quickly became apparent, however, that a readiness to discuss the British budgetary issue, alongside the rest of the Stuttgart work programme, was not the same as a willingness to agree. Part of the problem was that there were soon almost too many ideas about possible solutions in play. In the second half of 1983, the Commission’s proposals were joined on the negotiating table by competing suggestions from the British, the Danes, the French, the Germans and the Luxembourgers.44 Sustaining a focused discussion would be hard with so many rival proposals jostling for pre-eminence. And in November matters were made even more complicated when the Commission tabled a new set of calculations about the size of the budget imbalances in general and the British ‘over-payment’ in particular which differed markedly from the numbers that had previously been used. British negotiators were predictably deeply annoyed since the figures, compiled not by Tugendhat, but instead by the Groupe des conseillers led by Jean-Louis Lacroix, suggested that the excess UK contribution was distinctly smaller than previously assumed.45 The new figures were never fully accepted but their presentation added further to the intellectual confusion over the issue. 42 The Stuttgart Conclusions are available at _1983.pdf (last visited 2.1.2020). 43 Transcript available at (last visited 2.1.2020). 44 For the various national proposals, plus Commission paperwork analysing each one, see EN 952, EN 953 & EN 955. 45 For the British response, see UKNA, PREM 19 1225, Armstrong minute to Thatcher, ‘Cabinet: Community Affairs: Commission Paper on Budgetary Imbalances’, November 9, 1983. The British had been told the initiative came from Thorn, himself. Internal Commission paperwork suggests that the intellectual origins should be traced to the Groupe des conseillers, although they may well have been asked by the President to recalculate the budgetary figures. See EN 977, Lacroix note on ‘Déséquilibres budgétaires’, October 18, 1983, pp. 76–8. Fontainebleau and the Resolution of the British Budget Problem, 1983–84 57 Typically, the British response to the lack of sufficient progress in the special Council meetings agreed to at Stuttgart was to step up bilateral discussions with the two member states it regarded as most crucial to a successful outcome, namely Germany and France. In early November, Thatcher wrote to Mitterrand, stressing the utility of bilateral contacts on the post-Stuttgart agenda so as to “further our shared objective of taking decisions at the Athens European Council” and nominating David Williamson of the Cabinet Office to lead these talks.46 Discreet conversations began that very day with Pierre Morel of the Elysée staff.47 And within weeks talks had begun with the Germans too.48 Thatcher had raised the topic with Kohl in the course of their meeting on November 9, and the Chancellor promised to nominate an appropriate German official.49 As Thatcher’s ‘speaking notes’ for her encounter with Kohl observed: “The three of us [Britain, France and Germany] must not appear to gang up. But if we – the future three only net contributors – can agree, we shall certainly not fail to get our way.”50 In the short-term at least, such optimism looked ill-placed. Despite these discreet Anglo-German and Anglo-French discussions, no agreement on the issue proved possible at Athens. Indeed the summit was an overall failure, with EC leaders incapable of even agreeing on a communiqué.51 Mitterrand furthermore seemed particularly recalcitrant on the British budgetary issue at the summit, reverting in British eyes at least to positions that pre-dated Stuttgart, and suggesting a series of ad-hoc payments rather than the longer-term deal which the UK sought. An urgent inquiry was launched amongst UK diplomats to seek to understand why this had hap- 46 UKNA, PREM 19 1225, Thatcher to Mitterrand, November 3, 1983. Williamson was a clever choice. The Cabinet Office expert on the budgetary issue, he had excellent French, and had worked for the European Commission. He would go on to be Emile Noël’s successor as Secretary General of the Commission. 47 Ibid. Williamson to Coles, November 4, 1983. 48 Ibid. Williamson to Bone, November 18, 1983. 49 Akten zur Auswärtigen Politik der Bundesrepublik Deutschland (AAPD) 1983, Band II, 1691–2. 50 UKNA, PREM 19 1225, ‘Post-Stuttgart Negotiations: The Budget Inequity. Line to take with Chancellor Kohl on 8–9 November.’ Undated but clearly early November 1983. 51 AAPD 1983, Band II, 1870–4. The failure in Athens famously provoked a strong denunciation by Thorn of the intergovernmental methods that were taking over the Community. He was especially angry at the way in which national proposals were competing with Commission ones, with the British budgetary problem a key example of this abuse. For the text see (last visited 2.1.2020). N. Piers Ludlow 58 pened.52 The British Ambassador’s response was somewhat pessimistic, casting doubt on the French president’s readiness to agree to a long term deal, but recommending the continuation of the low-key Anglo-French dialogue. Sir John Fretwell also suggested, presciently as it turned out, that the recent appointment of Roland Dumas as European Minister might be helpful, since Dumas was close to the President and might improve coordination between the Elysée and French representatives in Brussels. He strongly recommended that Dumas be invited to London to meet Howe.53 The French EEC Presidency of January to June 1984 would ultimately succeed in solving the British budgetary dispute. But getting to this point proved difficult and acrimonious. A first big push to resolve the matter at the Brussels Council in March fell short amidst bitter mutual recriminations. This setback was all the more concerning for coming so soon after the equally fruitless Council meeting in Athens. As the Financial Times observed: “The comprehensive failure of one EEC summit is a misfortune, the collapse of two in succession may yet prove a political calamity.”54 The British were particularly aggrieved that at a moment when Mitterrand and Dumas did seem to be close to narrowing the gap between the size of the rebate sought by Thatcher, and that which the nine other member states were prepared to offer, the advance towards a compromise deal had been frustrated first by Giulio Andreotti, the Italian foreign minister, and then by Kohl, both figures hitherto seen as reasonably helpful from a UK point of view.55 The French too were angry, highly conscious that a package deal covering not just the British budgetary problem, but also the wider Stuttgart programme, had seemingly been within reach. Significantly, however, the Presidency was inclined to blame Thatcher’s obduracy for the frustration of their hopes.56 Mitterrand’s words to the press after the Council meeting had ended emphasised the seriousness of the problem, but did not yet signal despair: “L’Europe des Dix n’est pas morte. Disons qu’elle a reçu un coup ou une blessure supplémentaire.”57 In the weeks that followed, British diplomats tried hard to keep the discussions going at official and ministerial level. This reflected not just the sense that agreement had been close in Brussels, but also the desire to hold France to the presidency proposal which had been on the table of the 52 UKNA, PREM 19 1225, Tickell to Fretwell, December 8, 1983. 53 Ibid., Fretwell to Tickell, December 21, 1983. 54 ‘So near… and yet so very far’, Financial Times, March 22, 1984. 55 UKNA, PREM 19 1227, Tel. 1027, Butler to FCO, March 21, 1984. 56 Roland Dumas, Affaires Étrangères. 1981–1988, vol. 1, Paris: Fayard, 2007, 211. 57 Ibid., 211. Fontainebleau and the Resolution of the British Budget Problem, 1983–84 59 March summit to move towards a lasting scheme in 1985 after just one more ad hoc lump-sum payment.58 This was seen in London as an important advance, but one which had been imperilled in the latter stages of the Council itself when Kohl had started talking once more about a succession of lump-sum payments with no longer term scheme in view. If all momentum was lost, the Foreign Office feared that the French would back away from their earlier suggestion and side with the German Chancellor. Also of concern to the British was the way in which the fast-approaching European Parliamentary elections might lead to a hardening of tone, and possibly of substance, in many of the member states. But despite these UK efforts no substantial progress was possible before the European election campaigns began.59 Behind the scenes consultations between the French, Germans, British and others continued of course.60 But multilateral talks in Brussels were suspended. If the issue was going to be solved under the French presidency, it would all come down to the final summit, to be held at Fontainebleau in late June. Discussions at the summit did not begin well. Matters had not been helped in Anglo-French terms by a revised set of proposals sent by Dumas to Howe on the very eve of the meeting.61 These were seen as “completely unacceptable” by the British.62 Nor was the first round of discussions on the subject amongst the national leaders much better.63 Of particular concern to the British was the way in which the idea of having just a single ad 58 For the importance of the one year ad hoc scheme, see UKNA, PREM 19 1227, Williamson to Coles, March 28, 1984; for Howe and Butler’s desire to preserve the momentum in Brussels, see PREM 19 1228, ‘Note of a meeting held at No. 11 Downing Street on Tuesday, 3 April, to discuss EC future financing’. 59 UKNA, PREM 19 1228, Armstrong note on ‘Community Affairs’, May 23, 1984. A subsequent Armstrong note confirmed the hardening of national positions during the elections. PREM 19 1229, ‘Community affairs’, June 6, 1984. 60 Kohl and Thatcher met in early May, see AAPD 1984, Bd I, 585–97, Genscher and Dumas on May 15, AAPD 1984, 662–5, and Kohl and Mitterrand met twice on May 20 and again on May 28, AAPD 1984, 703–10, 711–4 & 729–34. Thatcher, Kohl, Mitterrand and Bettino Craxi also held brief bilateral conversations on the margins of the G7 summit in London in early June. UKNA, PREM 19 1229, Williamson note, ‘Community affairs’, June 12, 1984. In addition Thatcher spoke with Lubbers by phone: PREM 19 1229, Prime Minister’s call to the Netherlands Prime Minister, 20 June, 1984. 61 UKNA, PREM 19 1229, ‘Message de M. Roland Dumas à Sir Geoffrey Howe, Paris, le 24 juin, 1984’. 62 UKNA, PREM 19 1229, Renwick to Coles, June 25, 1984. 63 The most detailed British account of the summit is the informal record kept by Geoffrey Howe. This can be found in UKNA, FCO 73/546, ‘European Council, N. Piers Ludlow 60 hoc year before the establishment of a permanent system which they believed had been accepted by their partners in Brussels, was seemingly no longer on the table, with ideas ranging from two lump sum payments up to four or five. After intense work amongst the officials overnight, however, and bilateral breakfast meetings between both Kohl and Mitterrand and Thatcher and the French President, the question of lump-sum payments was put to one side with discussion instead focusing on the amount that Britain should receive back through the permanent mechanism. On this consensus emerged fairly rapidly to explore figures between 60 % and 70 % of the gap between the UK’s share of Community expenditure and its VAT contribution to the Community budget, with a final agreement reached on 66 %. And with this figure settled, there was then a rapid return to the idea of a single year of lump sum payments covering 1984 and the unblocking of the stalled 1983 lump sum payment of which had been held up by the European Parliament. A deal had been done, allowing the agreements reached on the whole of the Stuttgart package to go forward, and the summit itself to move onto possible new ventures, including both institutional change and a number of steps designed to build what was dubbed ‘a citizens Europe’. After half a decade of disagreement between Britain and its European partners, the BBQ had been settled. Both Mitterrand and Thatcher were understandably elated. The former summed up the deal struck to waiting journalists: Bref le paquet, le fameux paquet dont on avait commencé à parler à Stuttgart, est désormais entièrement dénoué, et tous les objets, toutes les parties comprises dans ce paquet sont désormais acquises. Il n’est pas une seule des questions ébauchées à Stuttgart, étudiées à Athènes, débloquées pour partie à Bruxelles, qui reste aujourd’hui à discuter. Tout a été décidé, sur tous les points.64 Fontainebleau, 25–6 June 1984’. Michael Butler, one of the key negotiators also wrote up an account immediately afterwards, available at the Margaret Thatcher Foundation website: Thatcher herself, most unusually, wrote up a personal account. This too is available at through the Thatcher Foundation: ument/139100 (both visited on 2.1.2020). 64 The text of Mitterrand’s press conference is available on the CVCE website: https: // 6_june_1984-en-b28bbf91-7fd4-4274-a7a1-49f8576cfff8.html (last visited on 2.1.2020). Fontainebleau and the Resolution of the British Budget Problem, 1983–84 61 This opened up exciting future prospects: Tout cela étant débloqué, une relance très forte a tout été aussitôt décidée, puisque, dans la foulée, nous avons pu régler le problème récent posé par l’Allemagne, décider le principe du règlement du déficit budgétaire actuel et, dépassant de loin tout cela, engager toute une série de politiques nouvelles que je vous résumerai en disant : politiques nouvelles, Europe des citoyens, formalités aux frontières, passages des personnes et des marchandises, équivalences universitaires, diplômes, toute une série d’initiatives tendant à associer l’Europe dans des démarches de toutes sortes, information, chaînes de télévision, culture, jumelage, environnement, biologie, santé, recherche, industrie, biotechnologies et télécommunications, espace et projet de station orbitale, espace social européen, lutte contre la drogue, et enfin, ce qui est la marque décisive de cette relance, la remise en chantier des structures sur la base du Traité de Rome, en se rapprochant du moment où l’élan initial fut donné pour repartir vers de nouveaux horizons adaptés à ce que nous pouvons connaître du monde en 1984. C’est donc une forte relance de l’Europe, de la Communauté européenne, à laquelle nous venons d’assister à la conférence de Fontainebleau.65 Thatcher too was in triumphant mood: I am pleased to be able to report to you that the United Kingdom’s long search for a fairer and more soundly financed European Community has at last produced a satisfactory result. I, personally, have spent the last five years trying to achieve this. It has not been easy. Indeed, here in Fontainebleau, we have had an arduous and trying negotiation. The important point, however, for both Britain and the Community, is that we have succeeded in constructing a satisfactory settlement out of what was initially a very unpromising situation. The way is now clear, not merely for enlargement by the accession of Spain and Portugal, but for completion of the Common Market in goods and services and for developing new policies which make the Community more competitive, and so create more jobs; and for exercising a wider global influence which the world’s largest trading bloc should be capable of. We in Britain bow to no-one in our commitment to Europe and the settlement reached today underlines this. 65 Ibid. N. Piers Ludlow 62 I want to stress that I think the settlement is good for Britain and good for the Community.66 So what had been agreed?67 And more importantly why had a deal been possible to strike in 1984 which had eluded Europe’s leaders ever since 1979 – or maybe even 1971? There are at least three key factors that help explain the breakthrough. Of these the first, was the way in which the final stages of discussion became ever more steadily an almost purely Anglo- French affair. Other countries had a stake in the issue too of course, none more so than Germany which was likely to end up bearing a significant part of the cost of any rebate offered to Britain.68 But in the latter stages of the French presidency most of the significant new ideas and possible ways forward were aired in the context of private Anglo-French encounters. These included not just the Williamson meetings referred to earlier, but also those between Jacques Attali, Mitterrand’s close advisor and Robert Armstrong, the Cabinet Secretary, and Howe and Dumas.69 This dense network of high level interaction more than compensated for the somewhat distant relations between Thatcher and Mitterrand themselves. Dumas had for instance let the British know that France could contemplate a 2/3 rebate several days before the European Council began.70 A similar pattern of Anglo-French interaction continued at the summit itself. Indeed what is striking about the Stuttgart discussions of the budgetary issue and those a year later at Fontainebleau is the narrowing of the cast list of those involved. In June 1984, even Kohl, who was normally a central figure, was temporarily distracted by his own fight to get the French presidency to agree to a special VAT relief scheme designed to benefit German farmers hard hit by the recent CAP reforms, and intervened much less than usu- 66 The text of Thatcher’s press conference is available at the Thatcher Foundation website: (last visited on 2.1.2020). 67 For a detailed instant analysis, see Geoffrey Denton, “Re-Structuring the EC Budget: Implications of the Fontainebleau Agreement”, in Journal of Common Market Studies 23, no. 2 (1984), 117–40. 68 One of the provisions of the Fontainebleau deal was to limit Germany’s share of the costs by 1/3. But as the other major net contributor, a significant portion of the cost still fell on the Federal Republic. 69 For a flavour of these bilateral exchanges, UKNA, PREM 19 1229, Armstrong to Coles, June 4, 1984 and ‘EC budget: telephone conversation with Dumas, 22 June’. Both Dumas and Howe acknowledge the importance of their bilateral channel in their memoirs Dumas, Affaires Étrangères. 1981–1988, 1:214; Geoffrey Howe, Conflict of Loyalty, London: Macmillan, 1994, 399–403. 70 UKNA, PREM 19 1229, Armstrong note, ‘Community affairs’, June 20, 1984. Fontainebleau and the Resolution of the British Budget Problem, 1983–84 63 al.71 And the background negotiations amongst the key officials at the summit conformed to the same pattern: Butler, one of the key British figures involved, notes a) that “the only players in this final end-game of the 5-year match were the French, the Germans and ourselves” and b) that “the French won their game within the game with the Germans”. This mattered because an essentially bilateral argument made it much easier to focus on the key points of difference and in particular to start bridging the gap between the sums sought by Britain and those the French were willing to contemplate. But it also mattered because the French when not holding the presidency, and hence duty-bound to strive for agreement, had tended to be extremely doctrinaire on the budgetary issue, prone to quibble with the very basis of the British case. Their transformation from potential trouble-makers to peace-makers was thus hugely important in easing the path to a deal. The Germans by contrast were much less obstructive even when they were not in the chair. A second essential ingredient for success was the combined effect of two seemingly very technical changes to the way in which the problem was defined and a solution sought both of which served to blur the real sums at stake and to disguise some of the principles being argued over. The first of these was the shift, in the final six months or so of negotiation, from talking about the British overpayment in terms of the mismatch between the amount that the UK paid into the Community budget and the amount that it got out, to instead defining the crucial gap as that that between Britain’s share of the Community budget and the country’s VAT contribution. This seemingly arcane change – proposed it is claimed by Michael Butler to the Germans, who were then able to put it forward as their idea72 – side-stepped the frequently heard counter-argument that Britain’s overpayment of customs duties and agricultural levies should be disregarded since both of these taxes were Community own resources and should not be perceived as national payments into the EEC budget. VAT by contrast was a primarily national tax, a small slice of which accrued to Brussels. British overpayments of this were much more clearly a case of national overpayment, and were hence a more legitimate target for some degree of 71 A factor Thatcher’s own account highlighted: document/139100 (last visited 2.1.2020). 72 Stephen Wall credits Butler with devising the idea and selling it to Bonn: Stephen Wall, A Stranger in Europe: Britain and the EU from Thatcher to Blair, Oxford: Oxford University Press, 2008, 32. Butler’s own account is a bit more circumspect, although he does talk of the idea emerging in talks he had with Hans Tietmeyer: Butler, Europe, 105. N. Piers Ludlow 64 compensation. Doing the sums in terms of the VAT gap rather than the overall net contribution one, also made it easier for the British to scale down the amount that they sought, since the 66 % rebate that Thatcher secured at Fontainebleau could be publicly presented as being in line with the 2/3 refund that she had been seeking since the outset of the dispute, despite the fact that, as internal British documents make clear, she actually settled for 2/3 of a significantly smaller sum.73 On an issue where so few people really understood the calculations involved, however, the Thatcher government could largely hide the level of concession made. Equally important was the shift between the Brussels and Fontainebleau summits from absolute figures for the rebate to a percentage of VAT gap. Again this helped disguise the actual sums involved and, because of the highly technical nature of the calculations, restricted the number of people who could meaningfully contribute to the debate. That narrowing of the cast-list centrally involved at Fontainebleau was partially a result. And once more the sheer obscurity of the figure arrived at allowed all involved to return home to their national capitals trumpeting victory. Third, and most important, was the unique balance of imminent crisis but real opportunity that characterised mid-1984. The mood of crisis was perhaps the more obvious. By the spring, the Commission was so short of funds it was having to appeal to member states to grant it extra national payments so as to cover the costs of CAP payments.74 It had also made clear that in its view, the 1985 budget would have to exceed the 1 % VAT threshold irrespective of whether an actual deal had been done on own resources – a stance that put it on collision course with the Council.75 There was also growing pessimism in both Paris and Bonn about the likelihood of any form of deal being brokered by the Irish or Italian presidencies that were due to follow the French. Kohl told Mitterrand in May, „Wenn Iren oder Italianer dieses Problem lösen sollten, würde für die EG eine schlimme Zeit hereinbrechen.“76 And the reduced turnout in the second ever direct elections to the European Parliament held in the early summer of 1984 underlined how disillusioned with the integration process the 73 UKNA, PREM 19 1229, ‘Reform of the Community’s Finances and United Kingdom Refunds’, Cabinet office note, June 14, 1984. The British had originally insisted that they would need over 70 % of this smaller gap. 74 UKNA, PREM 19 1228, Peretz note, ‘EC budget: Discussion with Vice-President Ortoli’, April 16, 1984. 75 Ibid., Armstrong note, ‘Community Affairs’, May 23, 1984. 76 AAPD 1984, 730. Fontainebleau and the Resolution of the British Budget Problem, 1983–84 65 European public seemed to be.77 A real breakthrough was essential to cut through this spiral of gloom and doom. But in amongst these reasons for anxiety there was also a tangible sense that a big European leap forward was close at hand. In all of the main Community capitals, important new ideas about how to progress with European integration were emerging. This sense of anticipation had been hinted at by the Stuttgart declaration itself. But in the following 12 months more and more new hopes for the future had emerged. These included many of the ideas about institutional change and a citizens Europe that were to form the subject matter of the Dooge and Adonnino committees set up in the wake of the Fontainebleau summit. They also included the ideas for institutional reform advanced by Mitterrand in his speech before the European Parliament on May 24, 1984, and of course the Parliament’s own views enshrined in the Spinelli draft treaty.78 And they had even been added to by the British themselves who, in an effort to demonstrate that they too had a positive vision of the Community, had sent all of the European leaders copies of a document called Europe – the Future on the eve of Fontainebleau.79 If what Kohl and Mitterrand referred to as the problem ‘poisoning’ the whole Community could be got rid of, then multiple possibilities of advance would suddenly open up.80 When the costs of not resolving the dispute were so high, but the rewards of doing so were so great, tolerating impasse for the sake of a few million ECU made much less sense that it had done in earlier periods. What proved less significant than some accounts suggest, I would argue, were the veiled threats made by France and Germany to push ahead with European integration without the British were the deadlock not broken. The argument that the menace of a two-speed Europe was crucial in making the British give ground is central to Dumas’ analysis of how the deal was done.81 Indeed in an annex to his memoir he prints copies of a number of documents that were discussed between Paris and Bonn outlining initiatives that could be taken were the British to be left behind.82 It was 77 See UKNA, PREM 19 1229, Bonn tel. no. 606, Taylor to Howe, June 18, 1984. 78 nt_europeen_24_mai_1984-fr-cdd42d22-fe8e-41bb-bfb7-9b655113ebcf.html (last visited 2.1.2020). For the Spinelli draft see Daniela Preda’s paper. 79 The full text was published as ‘Europe — the Future’, in: Journal of Common Market Studies 23, no. 1 (1984): 73–81. 80 For Mitterrand’s use of this term in his May 1984 meeting with Kohl, see AAPD 1984, Band I, 705. 81 Dumas, Affaires Étrangères. 1981–1988, 1:214–17. 82 Dumas, 1:385–96. N. Piers Ludlow 66 also argued in some of the immediate political science analyses of the breakthrough that the fear of being excluded from a new European advance was a significant element in Britain’s decision to bring the budgetary dispute to an end.83 But there is little in the detailed UK government document record to support this argument. The British were aware of certain amount of talk about a two-speed Europe and of the mounting frustration of their partners with the budgetary road-block to progress.84 Time and again, however, such dangers are dismissed in internal documents. A June 14 Cabinet Office brief on the budgetary affair noted for instance: “We doubt whether in the short term at least attempts to move ahead without the United Kingdom would get very far. Nor is it likely that the United Kingdom would be excluded from discussion of any measures which went wider than bilateral Franco/German understandings”.85 More importantly Britain had its own strong reasons to want to settle without needing to point to the fear of being left behind. One of these was the extraordinary level of frustration felt at the way in which the ad hoc solutions which had hitherto been resorted to repeatedly failed to deliver the money that London expected in the timeframe anticipated. The row over the European Parliament’s delaying of the 1983 refund was just the latest of these; the still simmering row over another £42 million the British believed themselves owed out of the 1982 figure was another.86 It was therefore clearly in UK interest to reach an accord which would resolve the problem, protect payments against future delays (which a VAT based rebate would do), and spare the UK government the immense time and energy devoted to fighting this battle every year. Even more importantly, Britain too had clear ambitions to see Europe advance. Europe – the Future was not in other words just a tactical ploy. Instead it should be seen as a genuine plea for Europe to press ahead, primarily in the direction of greater commercial liberalisation but also towards more effective foreign policy cooperation. As Thatcher put it in a letter sent to Kohl in early June, “As I see it, we must finally make a reality of the Treaty of Rome, breaking down barriers – economic, cultural and political – which still block our path to the goal set out in its 83 Paul Taylor, “The New Dynamics of EC Integration in the 1980s”, in: Juliet Lodge (ed.), The European Community and the Challenge of the Future, London: Pinter, 1989, 6–8. 84 UKNA, PREM 19 1228, Fretwell to Tickell, April 11, 1984. 85 UKNA, PREM 19 1229, ‘Reform of the Community’s Finances and United Kingdom Refunds’, Cabinet office note, June 14, 1984. 86 For the latter see e.g. UKNA, PREM 19 1227, Howe to Thatcher, ‘1982 Risk-Sharing Refunds’, March 5, 1984. Fontainebleau and the Resolution of the British Budget Problem, 1983–84 67 preamble – a closer union among the peoples of Europe. At the same time, we must project our cooperation into new areas of significance for Europe, the Alliance – and the world beyond”.87 Attaining such targets without prior agreement on the budget was totally unrealistic, however. Britain thus had strong incentives to settle anyway, and did not need to be cowed into doing so, by the prospect of being stranded by a somewhat improbable Franco-German fuite en avant. Conclusions There are, I think, at least three broad conclusions that can be drawn from dénouement of this messy and long-running affair. The first and the most obvious is that the deal done was, despite its technicality, a vital precondition for the surge forward in the European integration process that would ensue over the 1985–1992 period. This is not of course to argue that the British budgetary breakthrough caused this period of rapid advance. But it is to assert that ending this dispute was an essential prerequisite for the advances that followed. Mitterrand was right: the BBQ was an affair that was ‘poisoning’ the Community. Once the venom was removed, the prospects of realising the multiple hopes for future advance listed above suddenly became considerably brighter. This chapter does therefore deal with a subject that a volume on the relaunching of Europe in the mid-1980s has to cover, however seemingly arcane the subject matter may be. Second, the manner in which the dispute was ultimately resolved reveals a lot about the institutional balance of the Community before the post-1985 relance. In particular it highlights the way in which the Commission had allowed itself to be sidelined on an issue that ought to have been its own, and the initiative had instead been seized by the Council Presidency. The story of the Commission’s role in the BBQ settlement is one of growing irrelevance. In the early stages, Commission expertise and mediation had been crucial; the May 30, 1980 deal deserves to be seen as a significant achievement of the Jenkins Commission.88 But having tried to be bold in the manner in which he took on the May 30 Mandate, Gaston Thorn instead succeeded in making himself largely peripheral to the latter 87 UKNA, PREM 19 1229, Draft letter to Kohl, June 1,1984 & Roger Bone letter, ‘Paper on the Future of the European Community’, June 4, 1984. Significantly perhaps Thatcher objected to the original reference – and accurate quote of the preamble – to ‘an ever closer union’ preferring ‘a closer union’ instead! 88 Ludlow, Roy Jenkins and the European Commission Presidency, 216–24. N. Piers Ludlow 68 stages of the dispute. At one level of course this was desperately unfair. Thorn after all did no more than follow the path that Jenkins had set, and the proposals he put forward in the summer and autumn of 1981 anticipated many aspects of the solution ultimately arrived at. But by trying to do too much, too soon, he lost the respect of the member states (on both sides of the argument) and limited his scope to influence the way in which discussions evolved. The Commission remained involved of course. Tugendhat’s May 1983 paper arguably fired the starting gun for the final phase of the negotiation. And there were later efforts to influence the direction of travel, whether the largely unsuccessful November 1983 bid to change the figures on which the dispute centred, or Etienne Davignon’s energetic, but ultimately vain attempts to advance compromise ideas in the spring of 1984.89 But Thorn’s own profile in the latter stages was so low-key as to be almost invisible.90 Instead the process was driven forward by an activist Council presidency, especially from January 1984 onwards. The manner in which the BBQ was ultimately settled thus becomes yet another sign of that slippage away from Commission leadership, and towards European Council and Presidency control, that Thorn so lamented. Interestingly, though, a glance forward at the next chapter in the budgetary saga, underlines the extent to which the Delors Commission was able in 1988 to recapture leadership on the budgetary issue, and to bring the European Parliament into the equation much more too.91 The triumph of the Council Presidency would prove short-lived on budgetary matters at least. Third, the ending of the BBQ would prove an important milestone in the wider story of Britain’s attitude towards the European integration process. In the short to medium term, the impact was positive. The British were generally pleased with the outcome – indeed they felt strongly that they had ‘won’92 – and so threw themselves with enthusiasm into the charting of a path forward for all of Europe, now that the impasse had been broken. Their ideas, primarily centred on market liberalisation, were 89 See e.g. UKNA, PREM 19 1227, Brussels tel. no. 1192, Butler to Howe, March 30, 1984. 90 Tellingly the Commission decided against submitting a new proposal in February 1984, and then did not hold another discussion of the budgetary imbalance issue again for the rest of the French presidency. ECHA, COM (84) PV 726 final, 2e partie, 15.2.1984 & COM (84) PV 727 final, 2e partie, 22.2.1984. 91 Vincent Dujardin et al., eds., The European Commission 1986–2000. Histories and Memories of an Institution, Luxembourg: Publications Office of the European Union, 2019, 211–16. 92 See e.g. Butler’s triumphalism: 78 (last visited 2.1.2020). Fontainebleau and the Resolution of the British Budget Problem, 1983–84 69 certainly not the only ones in play. And so, in order to push ahead with UK priorities, the British had to acquiesce – as they had done at Fontainebleau itself – in a number of projects and initiatives which they liked rather less. These would include, as other chapters in this volume make clear, both the alteration of the balance of institutional power within the EC and the re-starting of serious debate about Economic and Monetary Union. Ultimately these last would begin to sap the roots of Britain’s European enthusiasm. But it would take until the late 1980s – maybe even the early 1990s – for this negative trend to begin to overwhelm the strong sense that Europe was moving in Britain’s direction and that the UK should hence be in the vanguard of advance. Put differently, June 1984 can be seen as the start of arguably the most positive period ever of UK engagement with the European integration process. In financial terms the UK also did remarkably well out of the Fontainebleau deal. This observation centres not so much on the sums involved – although these were far from insignificant – but instead on the arrangement’s longevity. Ostensibly the deal done was meant only to last as long as the particular own resources regime that it allowed to begin. Mitterrand was thus very clear in his post-Fontainebleau comments to the press that the arrangement was unlikely to endure beyond 1987 or 1988 by which time a renegotiation of the 1.4 % VAT ceiling would prove necessary.93 But in practice the British would prove very adept at maintaining the advantages they had gained, even though the strength of their original justification for the rebate, centred as it was on the UK’s relative poverty, dwindled as British economic fortunes improved and as the EC/EU opened its doors to considerably poorer states from southern and then eastern Europe. The rebate would thus survive largely unscathed down to 2020. The Fontainebleau deal thus went on working significantly in Britain’s financial favour for the entire duration of Britain’s EC/EU membership. Rather more double-edged by contrast has arguably been the way in which the budgetary ‘success’ helped solidify, in British minds at least, a template of how best to approach Community/Union negotiations that has gone on shaping UK tactics – and popular perceptions of what tactics ought to be adopted – deep into the 21st century. The British reading of how the budgetary dispute had worked out, after all, was that they were 93 eau_26_june_1984-en-b28bbf91-7fd4-4274-a7a1-49f8576cfff8.html (last visited 2.1.2020). N. Piers Ludlow 70 best able to realise their interests and ‘get their money back’, through strong-arm tactics and high profile obstructionism. Banging the table was elevated into the default approach to European negotiation – even if a careful reading of how Britain actually struck the Fontainebleau deal would suggest that constructive proposals and careful bilateral bargaining were actually as fundamental to the UK’s success as Thatcher’s strident personal approach. The consequences of this reading of how to negotiate in Europe are arguably still with us today… Fontainebleau and the Resolution of the British Budget Problem, 1983–84 71 The Relaunch of the Benelux Union and the Origins of the Schengen Agreement: The Interplay of two Sub-Regional Experiences Simone Paoli Introduction This chapter deals with the role that the Benelux Economic Union played in the origins of the Schengen Agreement in 1985. In his reconstruction of the history of European integration, The Choice for Europe (1998), American political scientist Andrew Moravcsik argued that the Schengen process was triggered and shaped by the French-German will to liberalise trade in Europe. The French Government, concerned that the Federal Republic of Germany (FRG) was setting standards on products aimed at blocking imports, and the Government in Bonn, worried that France would close its borders because of its balance of payments problems, promoted a bilateral arrangement to simplify and eventually abolish border formalities. This arrangement, negotiated and agreed in 1984, took the name of Saarbrücken Agreement from the German city where it was signed. The French and German leaders then agreed for commercial reasons to include the members of the Benelux Union, which were ready to follow in their footsteps.1 In his analysis of post-war migration politics in Europe, The History of the European Migration Regime (2018), French historian Emmanuel Comte essentially supported this interpretation. Unlike Moravcsik, however, he stressed the role of Community institutions and non-state actors, especially economic organisations. He also maintained that West Germany more 1 Andrew Moravcsik, The Choice for Europe. Social Purpose & State Power from Messina to Maastricht, Ithaca: Cornell University Press, 1998, 359–360. German political scientist Jörg Monar adopted a similar line of reasoning. Valsamis Mitsilegas, Jörg Monar, Wyn Rees, The European Union and Internal Security. Guardian of the People?, Basingstoke: Palgrave Macmillan, 2003. See also: Jörg Monar, “The Project of a European Border Guard: Origins, Models and Prospects in the Context of the EU’s Integrated External Border Management”, in Marina Caparini, Otwin Marenin (eds.), Borders and Security Governance. Managing Borders in a Globalised World, Zurich: Lit, 2006, 193–194. 73 than France assumed the initiative and leadership of the Schengen process. Finally, he argued that the Benelux countries were admitted not only for commercial motives. They were also included to make more credible the threat of excluding the British from the Single Market; this, in turn, was linked to the French aim of preventing Great Britain from blocking the revision of the Rome Treaty and the launch of a European Monetary Union.2 Although he paid more attention than Moravcsik to the Benelux Union’s initiatives, in his Cultures of Border Control (2011), Italian political scientist Ruben Zaiotti confirmed that “the Franco-German ‘fire’ kept the Community cauldron boiling and provided the decisive impetus for change.”3 The Benelux Union countries participated in the Schengen process since its inception but, according to Zaiotti, initiative and leadership were always firmly in the hands of the French-German couple. German historian Angela Siebold, too, supported the idea that “the Schengen Agreement had its origins in Helmut Kohl and François Mitterrand’s decision in 1984 to create a border-free zone in what would become the Schengen area.”4 French political sociologist Didier Bigo has been the only major scholar to put an emphasis on the part played by the Benelux Union and to examine, albeit briefly, its motivations to act. In his Polices en Réseaux (1996), Bigo argued that the participation in the Schengen Agreement was not a mere reaction to the Franco-German initiatives. According to him, before Bonn and Paris signed their bilateral agreement, the Netherlands, Belgium and Luxembourg were already trying to export their model of integration and expanding the area in which free circulation of persons, goods and services were allowed. Meanwhile, the Secretariat of the Benelux Union was looking for “l’occasion de retrouver une activité”; by offering itself as an institutional “backbone” to the enterprise, in particular, it hoped to find a new mission, thereby safeguarding its status and number of staff.5 2 Emmanuel Comte, The History of the European Migration Regime: Germany’s Strategic Hegemony, Oxon-New York: Routledge, 2018, 143–149. 3 Ruben Zaiotti, Cultures of Border Control. Schengen and the Evolution of European Frontiers, Chicago: University of Chicago Press, 2011, 67–68. 4 Angela Siebold, “Between Borders. France, Germany, and Poland in the Debate on Demarcation and Frontier Crossing in the Context of the Schengen Agreement”, in Arnaud Lechevalier, Jan Wielgohs (eds), Borders and Border Regions in Europe: Changes, Challenges and Chances, Bielefeld: Lit, 2006, 130. See also: Angela Siebold, ZwischenGrenzen. Die Geschichte des Schengen-Raums aus deutschen, französischen und polnischen Perspektiven, Paderborn: Schöningh, 2013, 40–49. 5 Didier Bigo, Polices en réseaux: l’expérience européenne, Paris: Presses de la Fondation Nationale des Sciences Politiques, 1996, 115. Jean-Sébastien Louette was more fo- Simone Paoli 74 Drawing inspiration from this historiographical debate, researches were primarily conducted at the Historical Archives of the European Commission, the Historical Archives of the Council of the European Union, and the Luxembourg National Archives, where precious and still largely underexploited Benelux primary sources are kept. What emerged is that the role of the Benelux Union, though usually neglected, is far from negligible and merely reactive. The Schengen Agreement, in turn, appears to have been surprisingly crucial to the Benelux Union’s and its members’ strategies. The long path to regional de-bordering in post-war Europe In the aftermath of the Second World War, several countries in Western Europe made successful attempts at sub-regional de-bordering. Between 1943 and 1957, Denmark, Norway, Sweden and Finland signed a string of agreements and conventions that gradually abolished the requirements for visas, work permits and passports on their common borders. This process culminated with the agreement on the Nordic Passport Union in 1957. Iceland joined it in 1966.6 Meanwhile, in 1952, Great Britain and Ireland revived the Common Travel Area, created between 1923 and 1925 but suspended at the outbreak of the war in 1939. The Governments in London and Dublin reduced controls at their common borders to the minimum and established closer cooperation on migration policies. More ambitiously, between 1944 and 1958, Belgium, Luxembourg and the Netherlands gradually removed internal tariff barriers and worked to ensure free movement of goods, services and persons. In 1958, they signed the Treaty establishing the Benelux Economic Union, which came into force two years later. This Treaty placed the free movement of persons at the forefront of its objectives.7 The nationals of the three countries might freely enter the territory of each contracting party and should enjoy the same treatment of nacused on the role played by the Benelux countries in the implementation rather than the formation of the Schengen Agreement. Jean-Sébastien Louette, Les États du Benelux et la France face aux accords de Schengen, Bruxelles: Centre de recherche et d’information socio-politiques, 1998. 6 Miika Tervonen, “The Nordic passport union and its discontents: unintended consequences of free movement”, in Johan Strang (ed.), Nordic Cooperation. A European region in transition, Oxon-New York: Routledge, 2016, 131–146. 7 Gert Vermeulen, Wendy De Bondt, Justice, Home Affairs and Security. European and international institutional and policy development, Antwerpen-Apeldoorn: Maklu, 2015, 19–31. The Relaunch of the Benelux Union and the Origins of the Schengen Agreement 75 tionals of that state as regards freedoms of movement, sojourn, settlement and occupational choice. Further documents should be concluded for the purpose of determining the specific provisions regulating those matters.8 In accordance, in 1960, two new conventions were stipulated between the members of the Benelux Union. One was the Convention on Establishment. It provided that nationals of each of the contracting parties should have the right to establish themselves in the territory of the other contracting parties, provided they had adequate means of subsistence and were of good character; once established, they might be expelled only if they endangered public order or national security.9 The second was the Convention on the Transfer of Entry and Exit Controls to the External Frontiers of the Benelux Territory. It provided that each of the contracting parties should abolish controls at the internal frontiers while simultaneously transferring them at the external borders; a common visa was established for the Benelux territory.10 The idea of abolishing internal border controls and guaranteeing free movement for goods and persons was also inherent in the process of integration between France, West Germany, Italy, Belgium, Luxembourg and the Netherlands; a greater amount of heterogeneity, however, made more difficult for them than for Nordic and Benelux countries to achieve forms of internal de-bordering. The first, concrete plans for abolishing border controls at Community level came after the first enlargement. The proposal for “establishing a passport union and, in anticipation of this, the introduction of a uniform passport”, put forward by the European Council meeting in Paris on 9 and 10 December 1974, marked a milestone in this respect; according to the Heads of Government and the Foreign Ministers of the Nine, the ultimate aim was to “provide for stage-by-stage harmonization of legislation affecting aliens and for the abolition of passport control within the Community.”11 Political considerations were important, if not decisive, in prompting these early developments: the abolition of border 8 Traité instituant l’Union économique Benelux, La Haye, 3/2/1958. 9 Convention portant exécution des articles 55 et 56 du Traité instituant l’Union économique Benelux, Bruxelles, 11/4/1960. 10 Convention entre le Royaume de Belgique, le Grand-Duché de Luxembourg et le Royaume des Pays-Bas concernant le transfert du contrôle des personnes vers les frontières extérieures du territoire du Benelux, Bruxelles, 11/4/1960. 11 “Final communiqué of the Paris Summit (9 and 10 December 1974)”, in Bulletin of the European Communities, 12, 1974, p. 8. Simone Paoli 76 controls on person was considered as a crucial way to achieve a European Union and create a European citizenship12. These ideas were revived and developed in the report that Belgian Prime Minister Leo Tindemans sent to his European Council colleagues on 29 December 1975. With an aim to establish a citizen’s Europe and, in particular, to provide external signs of European solidarity, Tindemans supported all the measures leading to uniformity of passports and later to a passport union; in addition, as a corollary of passport union, he went as far as proposing that the future European Union should set as its aim “the gradual disappearance of frontier controls on persons moving between member countries”.13 This ambitious plan was strongly supported by both the European Commission and the European Parliament; it was also officially endorsed by the European Council and the Council of Ministers. Against the backdrop of widespread economic and political protectionism, however, the establishment of a uniform passport was repeatedly postponed, and the abolition of border controls was temporarily put aside.14 The process regained momentum in the early 1980s as a result of a combination of political and economic dynamics. The Community countries were then experiencing a phase of economic stagnation and a crisis in economic relations: international trade and financial flows within the Community, in particular, were steadily declining. Intra-Community trade had shrunk from 54.5 % of the total trade of Member States in 1979 to 50.7 % in 1981. Meanwhile, the general rate of investment as a percentage of gross domestic product had declined from 23 % in 1970 to 20 % in 1981; the share of intra-Community investment flows, in addition, was going down at the same time when transatlantic investment flows were significantly increasing. This economic situation, in turn, was undermining political cooperation and solidarity within the Community.15 In the context of the process triggered by the 1981 Genscher-Colombo Plan, under the Dutch Presidency, the Council of Ministers resolved that the Member States should issue a uniform passport by 1985. The aim was 12 Willem Maas, Creating European citizens, Lanham: Rowman & Littlefield, 2007, 29–35. 13 “European Union. Report by Mr Leo Tindemans, Prime Minister of Belgium, to the European Council”, in Bulletin of the European Communities, 1, 1976, 27. 14 Andrew Geddes, Immigration and European integration. Beyond fortress Europe?, Manchester: Manchester University Press, 2008, 42–67. 15 Laurent Warlouzet, Governing Europe in a globalizing world: neoliberalism and its alternatives following the 1973 oil crisis, Abingdon-New York: Routledge, 2018, 16– 35. The Relaunch of the Benelux Union and the Origins of the Schengen Agreement 77 to facilitate the movement of Community citizens, so fostering the sense of European identity.16 This document was followed up, on 9 July 1982, with a Commission’s draft resolution on the easing of internal border controls on Community citizens. Inspired by German Karl-Heinz Narjes, Commissioner for the Common Market, the Commission’s document was concerned, more than in the past, with economic considerations; the easing of checks on persons at intra-Community frontiers was clearly becoming part of a broader strategy aimed at ensuring the complete freedom of movement for all production factors.17 The Benelux countries were particularly interested in the removal of intra-Community barriers. Their level of exports per capita was three times higher than that of France and Great Britain; foreign trade, in particular, accounted for 60 % of the gross domestic product of the Belgium–Luxembourg Economic Union, when compared with 21 % of France. Although the Benelux countries were globally oriented, moreover, they were particularly reliant on intra-Community trade. More than 70 % of the exports from the members of the Benelux Union were directed towards countries in the European Community (EC). Meanwhile, 64 % of imports into the Belgium–Luxembourg Economic Union and 54 % of imports into the Netherlands came from countries in the EC. These were, by far, the highest percentages in the Community.18 The most important clients and suppliers of the Benelux countries were their neighbouring countries: France and, to a greater extent, West Germany. In addition to supporting the elimination of intra-Community barriers, Belgium, Luxembourg and the Netherlands were then committed to abolishing all remaining obstacles to movement within the Benelux Union itself. Intra-Benelux trade, in fact, was not that bad. Between 1980 and 1985, goods transported by road from the Netherlands to Belgium and Luxembourg rose by 18 %, from 9,035 to 10,663 million tonnes; in the same period, goods transported by road from Belgium and Luxembourg to the Netherlands rose by 22.5 %, from 10,761 to 13,189 million tonnes. Benelux 16 “Resolution of the Representatives of the Governments of the Member States of the European Communities, meeting within the Council of 23 June 1981”, in Official Journal of the European Union (OJ) C 241, 19/09/1981. 17 Commission, “Draft Council resolution on the easing of the formalities relating to checks on citizens of Member States at the Community’s internal frontiers”, in OJ C 197/6, 31/7/1982. 18 Importations from outside the European Community were composed, for the most part, of fuel and raw material. François Gay, Paul Wagret, L’économie des pays du Benelux, Paris: Presses Universitaires de France, 1987, 102–113. Simone Paoli 78 authorities, however, remained convinced that it was possible to do even better if controls at intra-Benelux frontiers were completely abolished. They also believed that this could help to relaunch the Benelux Union as a political project.19 The Manifeste pour une relance du Benelux, presented to the Governments of the three Member States by the Benelux Interparliamentary Consultative Council on occasion of its twenty-fifth anniversary on 7 May 1982, put a great emphasis on the urgency to fight against any form of protectionism as a privileged way to revamp both the Benelux Union and the European Community.20 This idea was discussed and further developed during a meeting of the Heads of Government and Foreign Ministers of the Benelux countries that took place on 10 November 1982 in The Hague. Here, Belgian Wilfried Martens and Tindemans, Luxembourg Pierre Werner and Colette Flesch and Dutch Ruud Lubbers and Hans van den Broek analysed problems and searched for possible solutions. They noted that, despite some signs of recovery, recession remained alarming and protectionist trends were on the rise. Since the Benelux countries were extremely dependent on commercial freedom, it was in their vital interest to warn against protectionism in all the relevant fora where they were involved: the General Agreement on Tariffs and Trade (GATT), the Organization for Economic Cooperation and Development (OECD) and, more importantly, the European Community. The leaders of the Benelux countries also made a direct appeal to their Community partners to refrain from establishing further barriers to trade and to eliminate the existing ones.21 In the same meeting, the Heads of Government and Foreign Ministers also committed to strengthening cooperation within the Benelux framework. According to them, this implied to simplify and gradually eliminate all formalities at their common borders; to coordinate their social and economic policies; to collaborate on cross-border and environmental issues; 19 Erik Jones, “The Benelux Countries: Identity and Self-Interest”, in Simon Bulmer, Christian Lequesne (eds), The Member States of the European Union, Oxford: Oxford University Press, 2005, 165–184. 20 Archives Nationales de Luxembourg (ANL), Archives de l’Union Economique Benelux (AUEB), M-100, Union Economique Benelux (UEB), Collège des Secrétaires Généraux, Mémorandum en vue de la réunion des chefs de Gouvernement et des Ministres des Affaires Etrangères du 10 novembre 1982 dans la “Trêveszaal”, Binnenhof à La Haye, Bruxelles, 1/11/1982. 21 ANL, AUEB, M-100, UEB, Procès-verbal de la réunion Benelux des chefs de Gouvernement et des Ministres des Affaires Etrangères, tenue à La Haye le 10 novembre 1982, Bruxelles, 25/11/1982. The Relaunch of the Benelux Union and the Origins of the Schengen Agreement 79 and to develop common foreign policy initiatives both within and outside the Community. As the elimination of border formalities was concerned, a great emphasis was put on the need to abolish controls on persons. This measure was presented as crucial for improving the economic and social conditions of Benelux peoples and for enhancing the credibility and thereby the external influence and internal consensus of the Benelux Union; removal of checks on persons at the intra-Benelux countries could also be useful to show the way to the European Community as a whole. Meanwhile, a commitment was made to ensure more effective controls at the external borders as a necessary precondition for both guaranteeing freedom of movement within the Benelux Union and reducing political and economic costs associated with illegal immigration.22 These commitments were soon followed up with concrete actions. The Governments of the Benelux countries adopted measures to reduce internal border controls on goods and persons. At the same time, they improved the coordination of their immigration policies and strengthened external border controls, especially at the porous and poorly controlled Belgian-French frontiers. This came under pressure from the Government of the Netherlands. In 1983, the Dutch Interior Ministry led by Koos Rietkerk published an important White Paper on Minorities (Minderhedennota) wherein, for the first time, the myth that immigrants would return home was given up; it also officially recognised that the Netherlands was de facto an immigration country. This document and the debates preceding and following it paved the way to a serious effort to integrate migrants into the Dutch society and to reduce the socioeconomic deprivation of ethnic minorities. Meanwhile, both the document and debates highlighted the need to strengthen the fight against illegal immigration in order to make the task of integrating foreigners more manageable.23 Between early and mid-1983, the Belgian Minister of Justice Jean Gol agreed on increasing the staff of the Gendarmerie. This enabled the Belgian police to intensify controls on the international trains and buses from Paris to Brussels and 22 ANL, AUEB, M-100, UEB, Décisions de la réunion Benelux des chefs de Gouvernement et des Ministres des Affaires Etrangères, tenue à La Haye le 10 novembre 1982, Bruxelles, 30/11/1982. 23 Andrew Geddes, Peter Scholten, The politics of migration & immigration in Europe, London-Thousand Oaks: Sage, 2016, 101–124. See also: Hans van Amersfoort, “Migration Control and Minority Policy. The Case of the Netherlands”, in Grete Brochmann, Tomas Hammar (eds), Mechanisms of Immigration Control. A Comparative Analysis of European Regulation Policies, Oxford-New York: Berg, 1999, 135– 167. Simone Paoli 80 to improve checks at the Franco-Belgian highway border crossings; results in terms of refoulement of illegal migrants attempting to enter Belgium and the Benelux Union through France were immediately visible.24 At a meeting that took place on 17 October 1983 in Luxembourg, the Heads of Government and Foreign Ministers of the Benelux countries also adopted a memorandum arguing for the establishment of a European Common Market and, in this context, the easing of border controls on persons and vehicles at Community level.25 The Governments of the Benelux countries were not alone in supporting the Commission’s attempts to eliminate internal border controls. The Union of Industrial and Employers’ Confederations of Europe (UNICE) vociferously advocated the abolition of all obstacles to cross-border traffic. European industrialists, in particular, criticised the cost of controls at intra- Community borders and, consequently, called for their radical simplification; this action, according to them, could help European companies to restore competitiveness vis-a-vis American and Japanese competitors. The European Parliament Committee on Economic and Monetary Affairs confirmed the importance of the cost of internal border controls; in 1983, it estimated that the expenses due to the waiting time at internal borders amounted to 1 billion Ecu each year and that the total cost of intra-Community border crossings amounted to 12 billion Ecu a year26. An enlargement of the Benelux Union? Despite this great deal of pressure, the abolition of border controls on persons remained a controversial issue at Community level; progress in this sector, accordingly, was much slower than the Benelux countries hoped. Most Member States of the EC, in fact, shared the objective of relaxing controls at intra-Community borders. All the members of the Community 24 ANL, AUEB, M-100, UEB, Comité de Ministres (CM), Vingt-septième rapport commun des gouvernements belge, néerlandais et luxembourgeois au Conseil interparlementaire consultatif de Benelux sur la réalisation et le fonctionnement d’une union économique entre les trois Etats, 1er juillet 1982–30 juin 1983, Bruxelles, 17/10/1983. 25 ANL, AUEB, M-100, UEB, CM, Mémorandum des pays du Benelux sur le fonctionnement du marché intérieur de la Cee, Bruxelles, 17/10/1983. See also: ANL, AUEB, M-100, UEB, CM, Conclusions de la réunion tenue à Luxembourg le 17 octobre 1983, Bruxelles, 24/10/1983. 26 Hans Claudius Taschner, Schengen oder die Abschaffung der Personenkontrollen an den Binnengrenzen der EG, Saarbrücken: Europa-Institut der Universität des Saarlandes, 1990. The Relaunch of the Benelux Union and the Origins of the Schengen Agreement 81 apart from the Benelux countries, nevertheless, rejected the Commission’s draft resolution on the easing of internal border controls on Community citizens. The main reason for this opposition was that the document did not take into due consideration the complementary need to control immigration from outside the Community. The European Community did not have competence and most Member States were reluctant to give up sovereignty in this domain; moreover, they generally mistrusted the Southern European countries’ effectiveness in managing migration flows.27 This was certainly true for the French Government and Presidency, which were preoccupied with the political and electoral rise of the anti-immigration Front National (FN) and a sharp increase of terrorist activities in France. This was also true for the Government in Bonn, which was similarly concerned with the rise in migrants and asylum seekers and committed to reducing the numbers of foreigners in West Germany.28 The Governments in London, Dublin, Copenhagen and Athens, meanwhile, were sceptical about the idea itself of giving up controls on their borders. Great Britain, Ireland and Greece did not share land borders with Community partners; the relaxation of controls on persons, therefore, would hardly contribute to easing intra-Community traffic of goods, which was an important motive for abolishing border controls. Being islands, in addition, Great Britain and Ireland had relied much more than their continental partners on border controls; the virtual inexistence of domestic controls made British and, to a lesser extent, Irish authorities particularly reluctant to abandon checks on persons at borders. The Danish Government, finally, did not have any intention to jeopardise relations with its partners in the Nordic Passport Union.29 27 Historical Archives of the Council of the European Union (HACEU), Le Conseil, Compte rendu des travaux du Groupe de travail “Union des passeports”: Projet de résolution relative à l’allégement des conditions dans lesquelles s’exerce le contrôle des citoyens des Etats membres lors du franchissement des frontières intracommunautaires, Bruxelles, 15/11/1983. 28 Sarah Collinson, Europe and international migration, London-New York: Pinter Publishers for Royal Institute of International Affairs, 1994, 43–63. See also: James Frank Hollifield, “Immigration and integration in Western Europe: a comparative analysis”, in Emek Uçarer, Donald James Puchala (eds), Immigration into Western societies: problems and policies, London-Washington: Pinter, 1997, 28–69. 29 Andrew Moravcsik, “Negotiating the Single European Act. National Interests and Conventional Statecraft in the European Community”, in International Organization, 45/1, 1991, 37–40. Simone Paoli 82 Between mid-February and early March 1984, a dramatic event helped to break the deadlock.30 The longstanding economic and political need to remove intra-Community physical barriers combined with the urgency to give a response to an important social factor: protests from truck-drivers, angered by long queues at border crossings and insisting on the removal of obstacles to cross-border passages. Protest, in particular, began as a response to the work-to-rule of Italian customs officers, which blocked the transit of trucks going to Italy; greatly annoyed by situation, truck-drivers from West Germany, France, Austria and the Netherlands decided to block all vehicles, the aim being to draw the public’s attention on their difficulties.31 Against this backdrop, the president of the European Commission, Luxembourg Gaston Thorn, together with Common Market Commissioner Narjes and Transport Commissioner Giorgios Contogeorgis urged the Governments of the Member States to adopt the measures at the time proposed by the executive of the EC to eliminate checks at the internal borders. Meanwhile, the Dutch Minister of Transport, Neelie Kroes, proposed to convene a meeting of the Council of Transport Ministers of the European Community aimed at easing internal border checks.32 The Council of Ministers of the Community, however, did not come to much. The Governments in Paris and Bonn were increasingly convinced of the importance of abolishing border controls with neighbouring countries. At the same time, they continued to think that Brussels lacked the competence to deal with the complementary measures deemed necessary to combat illegal immigration and safeguard security. In addition, they wanted to be free to exclude members of the European Community who were not considered ready to join the borderless area33. The Governments in London, Dublin and Copenhagen, and Athens, meanwhile, continued to be reluctant to establish a common travel area at Community level as such. 30 Yves Pascouau, La politique migratoire de l’Union européenne. De Schengen à Lisbonne, Paris: Fondation Varenne, 2010, 67–68. 31 Vendelin Hreblay, Les accords de Schengen: origine, fonctionnement, avenir, Bruxelles: Bruylant, 1998, 15–16. 32 Guillaume Courty, Les routiers: contribution à une sociologie des groupes d’intérêt, Nanterre: Université de Paris X, 1993. See also: Guillaume Courty, “Barrer, filtrer, encombrer: les routiers et l’art de retenir ses semblables”, in Cultures et Conflits, 12, 1993, 143–168. 33 Simone Paoli, Frontiera sud. L’Italia e la nascita dell’Europa di Schengen, Milan: Mondadori Education, 2018, 29–58. The Relaunch of the Benelux Union and the Origins of the Schengen Agreement 83 As the process was stagnating at the level of the European Community, the Government of the Netherlands decided to take the initiative. Dutch Prime Minister Lubbers contacted the German Ambassador to the Netherlands at the Christian Democratic Appeal’s congress on 11 February 1984 in Breda, asking for a meeting with German Chancellor Helmut Kohl to discuss European topics. Three weeks later, Lubbers delivered a letter to Kohl via the German Christian Democratic member of the European Parliament, Philipp von Bismarck. The Dutch Prime Minister explicitly mentioned the issue of border controls. Special emphasis, in particular, was put on the positive effect their abolition would have on the people’s attitude towards the European Community, an argument that was particularly important on the eve of the second direct election to the European Parliament.34 Lubbers found an agreeable interlocutor. German Chancellor Kohl was increasingly favourable to relaxation and even abolition of intra-European border formalities for both economic and political motives. Kohl was eager to respond to the concerns of West German exporters and transporters. With European elections approaching, in addition, he was determined to give a tangible sign of his commitment to the European ideal. After the disappointing results of the European Council meeting in Brussels on 18– 19 March 1984, at the same time, Kohl became definitively convinced that intergovernmental initiatives might be more viable than action within the Community framework.35 The Chancellor’s willingness to give up border controls met with fierce resistance from both the Federal Ministry of Interior, Friedrich Zimmermann, and the Federal Ministry of Finance, Gerhard Stoltenberg. Zimmermann, in particular, was concerned about issues of internal and external security. Despite this, the West German Chancellor introduced that topic into the bilateral talks with French President François Mitterrand and agreed to discuss it with Dutch Prime Minister Lubbers.36 34 Matteo Bastian Scianna “The German Road to the Schengen Agreement, 1981– 1985”, Paper given at the Second Annual Graduate Conference on the History of European Integration, European University Institute, Florence, 10–11/9/2018. 35 Helmut Kohl, “Policy Statement on the European Council in Brussels to the Bundestag on March 8, 1984”, in Statements & Speeches, 5, 1984, 1–7. 36 Monika Bösche, “Trapped Inside the European Fortress? Germany and European Union Asylum and Refugee Policy”, in Gunther Hellmann (ed.), Germany’s EU Policy on Asylum and Defence. De-Europeanization by Default?, Basingstoke: Palgrave Macmillan, 2006, 33–39. Simone Paoli 84 After second-hand contacts, Lubbers and Belgian Prime Minister Martens met with Kohl at the Congress of the European People’s Party, which took place in Rome on 2–4 April 1984. Although this meeting confirmed the common willingness to move towards the abolition of border controls, it also brought out problems and potential tensions. Lubbers was surprised and irritated at knowing that the German Government had unilaterally decided to remove controls at three checkpoints between the two countries. Kohl, on the other hand, was becoming increasingly sensitive to criticism from his Interior Minister, who vociferously argued that a majority of drugs in circulation in Germany entered the country through the Netherlands37. What was more was that the data confirmed Zimmermann’s alarms. The figures provided by the Federal Criminal Police Office showed that, in 1983, 87,000 criminals were caught at German borders: 20,000 of them had violated immigration regulations, 10,000 were charged with offences against property and capital, 10,000 were wanted for possession or trafficking of drugs. The latter represented 70 per cent of all the persons arrested in West Germany for drug-related crimes; most of them were taken at the German-Dutch borders.38 Nonetheless, Kohl was convinced that it was possible to combine the economic and political interest to abolish intra-European border controls with the duty to guarantee the security of German citizens.39 After informal contacts between West German Minister of Transport Werner Dollinger and his counterpart in the Netherlands, Kroes, a first meeting between German and Dutch transport experts was held at the Federal Transport Ministry in Bonn on 25 April 1984; proposals to relax border formalities were then discussed. This meeting was followed by official dis- 37 Thomas Jansen, The European People’s Party. Origins and Development, New York: Palgrave Macmillan, 1998, 76–78. See also: Thomas Jansen, Steven Van Hecke, At Europe’s service. The Origins and Evolution of the European People’s Party, Berlin: Springer; Brussels: Centre for European Studies, 2011, 115–117. 38 Historical Archives of the European Commission (HAEC), ASCE, BAC 153–1990 216, Bundeskriminalamt, Contrôle des personnes aux frontières intérieures de la Communauté, Bruxelles, 23/7/1984. 39 Anke Gimbal, “Deutsche Suche nach europäischen Lösungen im Rahmen der Zusammenarbeit in den Bereichen Justiz und Inneres”, in Heinrich Schneider, Mathias Jopp, Uwe Schmalz (eds), Eine neue deutsche Europapolitik? Rahmenbedingungen – Problemfelder – Optionen, Bonn: Europa Union Verlag, 2001, 481. See also: Simon Bulmer, “Shop till you drop? The German executive as venue-shopper”, in Petra Bendel, Andreas Ette, Roderick Parker, Marianne Haase (eds), The Europeanization of Control. Venues and Outcomes of EU Justice and Home Affairs Cooperation, Berlin: Lit Verlag, 2011, 56–58. The Relaunch of the Benelux Union and the Origins of the Schengen Agreement 85 cussions between Dollinger and Kroes in The Hague on 3 May 1984. The communiqué released at the conclusion of The Hague meeting expressed the willingness to remove border controls in the Community once and for all, and announced immediate actions, especially as far as transport of goods was concerned. The Governments in Brussels and Luxembourg were uneasy about bilateral consultations between the Germans and the Dutch, which excluded their respective countries and the Benelux institutions. They believed, in particular, that the Government of the Netherlands was driven by the need to gain a success in the upcoming European elections. The Belgian and the Luxembourg Governments, too, wanted to take part in the initiative in order to improve their image in the eyes of their respective electorates; this was particularly true for the Martens’ Government, which was then under great domestic pressure.40 The idea of internal de-bordering was also discussed at the Council of Transport Ministers of the EC on 10 May 1984 in Brussels, when it became once again clear that any real progress in the Community framework was virtually impossible. On 31 May 1984, therefore, Federal Transport Minister Dollinger invited his Benelux colleagues in his hometown in Bavaria: Neustadt an der Aisch. His aim was to discuss if Germany could enjoy the same freedoms that were in place in the Benelux Union. More specifically, he wanted to examine which measures could be taken to facilitate the movement of vehicles and transport of goods, possibly before the elections for the European Parliament. These discussions, which culminated with a political declaration announcing the intention to reduce controls and obstacles at common borders, were taking place in a broader, positive context. The German Chancellery went as far as to promote a study to assess whether the FRG could join the Benelux Union. Without consulting his Belgian and Luxembourg colleagues, meanwhile, the Dutch Prime Minister proposed to include the Federal Republic of Germany in the Benelux; this ended up not only surprising but also irritating both Martens and Werner.41 40 José M. Magone, The Statecraft of Consensus Democracies in a Turbulent World. A comparative study of Austria, Belgium, Luxembourg, the Netherlands and Switzerland, Abingdon-New York: Routledge, 2017, 53–62. See also: Wilfried Martens, Mémoires pour mon pays, Bruxelles: Racine, 2006. 41 It was not the first time that there was the concrete possibility of enlarging the Benelux Union. Since its inception, the Benelux Union had to fend off a number of competing but less universally acceptable proposals from France and Italy, including Fritalux-Finebel. Alan S. Milward, The Reconstruction of Western Europe 1945–1951, London: Methuen, 1984, 306–316. The possibility of enlarging Simone Paoli 86 In the meantime, Kohl resolved that the time had come to accelerate towards easier circulation of persons and vehicles with France too. He was convinced that abundant controls at the Franco-German border checkpoints were incompatible with the European ideal as well as with the new political understanding with Paris; in addition, he was concerned that France might further strengthen protectionism because of its financial difficulties. The idea was quickly adopted by Mitterrand. The turning-point clearly coincided with the domestic ‘turnaround’ in 1983–1984, after which French policy moved boldly in a liberal and European direction. Although French border controls were more strict, careful and regulated than German ones, Mitterrand became aware that free movement of persons and vehicles was crucial to the economic and political strategies of France and the European Community. He was also worried that German technical barriers were blocking imports and consequently interested in simplifying and eventually eliminating formalities at the French-German borders.42 After a series of preliminary conversations at the bilateral summits in Ludwigshafen on 2 February 1984 and in Rambouillet on 28–29 May 1984, Kohl and Mitterrand formalised their commitment to gradually abolish controls at their common frontiers. Shortly afterwards, the European Council meeting in Fontainebleau on 25–26 June 1984 solemnly confirmed that this was an objective for the European Community as a whole. The Heads of State and Government of the Member States of the EC considered it essential that “the Community should respond to the expectations of the people of Europe by adopting measures to strengthen and promote its identity and its image both for its citizens and for the rest of the world”.43 Under the section entitled “A People’s Europe”, to this end, they reiterated the principle of creating a European passport and asked the Council to take the necessary decisions to ensure that this passport was actually available to Member States’ nationals by l January 1985. They also endorsed the ideas of introducing a single document for the movement of Fritalux-Finebel to include Great Britain and West Germany was taken into serious account. Richard T. Griffiths, The Fritalux-Finebel negotiations, 1949–1950, Florence: European University Institute, 1984. 42 François Mitterrand, “Discours devant le Parlement européen (24 mai 1984)”, in Bulletin des Communautés Européennes, 5, 1984. 43 “European Council meeting at Fontainebleau. Conclusions of the Presidency”, in Bulletin of the European Communities, 6, 1984, p. 8. The Relaunch of the Benelux Union and the Origins of the Schengen Agreement 87 goods and abolishing all police and customs formalities for people crossing intra-Community frontiers.44 These conclusions seemed promising, all the more so because the Council of Labour and Social Affairs Ministers meeting in Luxembourg on 7 June 1984 finally adopted a resolution supporting the establishment of a passport union and, in this context, the gradual abolishment of border controls on Community nationals. The resolution, at the same time, warned that Community countries should simultaneously resolve specific problems: the transfer of controls from internal to external borders, the admission of third-country nationals and an effective collaboration on public security issues. Yet, Mitterrand and Kohl could not wait any longer. During the European election campaign, the two statesmen had announced that customs formalities would have been shortly abolished; now they needed to show that their intentions were serious. The Chancellor’s announcement, in addition, had the effect that travellers between Germany and France refused to be checked; some of them even drove through checkpoints completely ignoring customs officers. Rapidity was also necessary to overcome reservations and opposition that were spreading within their respective Governments and administrations.45 At the conclusion of brief negotiations, the French Minister of European Affairs, Roland Dumas, and the Head of the Chancellery of West Germany, Waldemar Schreckenberger, came to a bilateral arrangement. The French-German agreement, signed in Saarbrücken on 13 July 1984, provided for the immediate abolition of controls on persons and the easing of checks on vehicles. At a later time, the contracting parties were expected to transfer these controls to external borders, harmonise visa policies and legislation on foreigners, drugs, arms, and passport delivery and strengthen cooperation between police and customs officials.46 The agreement was realised outside the EC, though it was explicitly linked to European integration. 44 Ibidem. 45 Roland Sturm, Heinrich Pehle, Das neue deutsche Regierungssystem. Die Europäisierung von Institutionen, Entscheidungsprozessen und Politikfeldern in der Bundesrepublik Deutschland, Wiesbaden: VS Verlag für Sozialwissenschaften, 2005, 336. 46 Agreement between France and the Federal Republic of Germany on the gradual abolition of checks at the Franco-German border, Saarbrücken, 13/07/1984. See also: Andreas Pudlat, Zur Manifestation von Grenze und Grenzschutz in Europa, Hildesheim- Zürich-New York: Olms, 2013. Simone Paoli 88 The Benelux drive to multilateralism Shortly afterwards, Kohl made contact with his counterparts in the Benelux countries to take a common initiative modelled on the Saarbrücken Agreement. This was part of a broader strategy aimed at creating a network of bilateral agreements with as many neighbouring countries as possible. At the same time that Kohl was making a proposal for an agreement with the Benelux countries, he also contacted his colleagues in Copenhagen and Vienna. The Danish Government reacted in a very cold manner due to its commitment to the Nordic Passport Union. The Austrian Government, on the other hand, accepted to start negotiations with the Government in Bonn. These talks culminated with a German-Austrian agreement to ease controls at common borders, whose results were not too successful. The reason for this substantial failure was that Austria was not a member of the Community and that the Balkans were behind it.47 The Belgian, Luxembourg and Dutch Governments, too, were interested in abolishing border controls with the FRG. This was due to obvious political and economic motives and to the desire to expand the Benelux passport union into a similar, larger scheme.48 For the same reasons, however, they were also interested in simultaneously creating a borderless area with France. La nécessité de maintenir un parallélisme approprié entre les deux pays s’impose pour des raisons politiques et économiques évidentes et se situe d’ailleurs dans la logique à la fois de la déclaration commune des gouvernements franco-allemand du 13 juillet 1984 et de celle adoptée par le Conseil européen les 25 et 26 juin 1984.49 On 26 October 1984, accordingly, the Belgian, Luxembourg and Dutch Governments published a joint press release in their respective capitals, which announced that: 47 HACEU, Représentation Permanente de la République fédérale d’Allemagne, Lettre au Secrétariat Général du Conseil: Allégement des contrôles aux frontières intérieures de la Communauté, Bruxelles, 13/11/1984. 48 ANL, AUEB, M-100, UEB, Comité de Ministres (CM), Vingt-huitième rapport commun des gouvernements belge, néerlandais et luxembourgeois au Conseil interparlementaire consultatif de Benelux sur la réalisation et le fonctionnement d’une union économique entre les trois Etats, 1er juillet 1983–30 juin 1984, Bruxelles, 7/11/1984. 49 ANL, AUEB, 44 P, UEB, Comité des Ministres, Instructions à adresser aux ambassades des pays du Benelux à Bonn et à Paris, Bruxelles, 14/2/1985. The Relaunch of the Benelux Union and the Origins of the Schengen Agreement 89 les trois pays étaient disposés à entamer à bref délai des pourparlers avec les gouvernements de la République fédérale d’Allemagne et de la France, dans le but de parvenir à une simplification rapide et poussée de la circulation des personnes et des biens aux frontières du BNL avec ces deux pays.50 In so doing, they were consciously moving away from a bilateral to a multilateral approach, which later became the rationale behind the Schengen system.51 On 11 December 1984, the Transport Ministers of the Benelux countries signed with their Western German colleague a technical agreement which gave substance to the commitment made in Neustadt an der Aisch on 31 May 1984. The following day, the Benelux Ministerial Committee took the initiative to address a memorandum to both Bonn and Paris aimed at implementing «dans la cadre européen un assouplissement des formalités relatives au trafic transfrontalier des personnes et des marchandises»52. Like the Saarbrücken Agreement, the Benelux Memorandum drew a plan structured into two distinct phases. In the short term, the contracting parties should simplify controls on persons and goods. At a later stage, they should develop a common migration policy, harmonise visa policies, transfer controls to external borders and, more importantly, strengthen cooperation between police and customs officials in the fight against criminality, terrorism, drugs and illegal immigration. At the same time, the contacting parties should eliminate every physical, technical and fiscal barrier to trade of goods. The Benelux Memorandum differed from the Saarbrücken Agreement in three main respects. First, it gave controls on goods the same importance as checks on persons, while the Franco-German document was more focused on persons. Second, it mentioned the need to take into full 50 Ibidem. More generally, see: ANL, AUEB, 12/1 R, UEB, Willem van der Veen, Une initiative du Benelux pour combattre le protectionnisme, Bruxelles, 28/5/1984. 51 HAEC, BAC 153–1990 201, Commission, Allégement du contrôle des personnes aux frontières intérieures de la Communauté, Bruxelles, 5/12/1984. See also: Thomas Gehring, “Die Politik des koordinierten Alleingangs. Schengen und die Abschaffung der Personenkontrollen an den Binnengrenzen der Europäischen Gemeinschaft”, in Zeitschrift für Internationale Beziehungen, 5, 1998, 43–78. 52 ANL, AUEB, 44 P, UEB, Comité des Ministres, Mémorandum, Bruxelles, 12/12/1984. See also: ANL, AUEB, 44 P, UEB, Commission Spéciale pour la Circulation des Personnes, Extrait des conclusions de la réunion du Comité de Ministres tenue à Bruxelles le 12 décembre 1984: Simplification des formalités aux frontières dans la circulation transfrontalière des personnes et des merchandises avec les pays tiers (Allemagne-France), Bruxelles, 14/2/1985. Simone Paoli 90 account future progress within the EC. Third, it explicitly invited the other members of the Community to join the agreement. The Benelux countries gave the highest priority to this project. This was due to: their ideological commitment to European unity; traditional concern for political and economic partnership with France and West Germany: and great interest in the completion of the Common Market at Community level. A multilateral agreement on the suppression of controls at internal borders and the transfer of these controls to external ones also reflected the experience of the Benelux Union.53 The project, moreover, was an integral part of the broader strategy to revitalise the Benelux Union. Two years after the Manifeste pour une relance du Benelux, on 12 June 1984, the Belgian Minister of Economic Affairs Mark Eyskens made a wide-ranging proposal to revamp the Benelux54. This aim was confirmed and relaunched during the meeting taking place in Breda on 5 September 1984 to commemorate the fortieth anniversary of the signing of the Netherlands–Belgium–Luxembourg Customs Convention. According to Lubbers, Martens and the newly appointed Luxembourg Prime Minister Jacques Santer, the Benelux countries should further strengthen and widen their cooperation, speak as much as possible with a single voice in international fora, and enhance visibility and prestige of the Benelux Union. The proposed agreement with France and the FRG represented an opportunity in all these directions. While pursuing their respective interests, the Benelux countries were also exporting a model, solidifying their cohesion and trying to establish their organisation and its common institutions as a motor force behind a larger project; the Benelux Secretariat General, in particular, presented itself as the possible centrepiece of the multilateral agreement.55 Their only doubt concerned the risk of creating a two-tier Europe, but this doubt was soon overcome. After all, when he was Belgian Prime Minister, Tindemans had been the first Head of Government of a Member State of the Community who had spoken of the need to allow different levels of 53 ANL, AUEB, 12/3 R, UEB, Délégations Benelux, Intervention du Benelux à la suite de la Communication de la Commission du Conseil concernant la consolidation du Marché Intérieur, Bruxelles, 27/9/1984. 54 ANL, AUEB, 12/1 R, UEB, Mark Eyskens, Benelux, levier de la relance européenne?, Bruxelles, 13/6/1984. 55 ANL, AUEB, 12 R, UEB, Conseil de l’Union économique, Suggestions pour une relance du Benelux, Bruxelles, 13/11/1984. See also: ANL, AUEB, 12 R, UEB, Conseil de l’Union économique, Rapport sur l’état d’avancement des activités de l’Union économique Benelux, Bruxelles, 13/11/1984. The Relaunch of the Benelux Union and the Origins of the Schengen Agreement 91 integration in the context of the EC. The Tindemans Report on European Union, in particular, had stated that the differences between the Member States were so large that it was impossible to assume that all the intermediate goals of European integration could be reached by all countries at the same time. The leaders of the Benelux countries also justified their initiative by arguing that the European Economic Community (EEC) had legally permitted the existence of a two-speed Europe since its inception. Article 233 of the Treaty establishing the EEC stated that “the provisions of this Treaty shall not be an obstacle to the existence or completion of regional unions between Belgium and Luxembourg, and between Belgium, Luxembourg and the Netherlands, in so far as the objectives of these regional unions are not achieved by application of this Treaty”.56 The main novelty, according to Benelux authorities, was that West Germany and France were, in a sense, joining the Benelux Union. The leaders of the Benelux countries, finally, did not consider five-party cooperation as an end in itself; they explicitly considered it as a laboratory for future cooperation at Community level. Meanwhile, the European Commission took the opportunity to propose a Community directive to ease internal border controls on persons.57 Although it was prudently limited to nationals of the Member States and made mention to relaxation rather than removal of intra-Community checks, the Commission’s proposal was met with coldness, if not open opposition.58 While the Governments in London, Dublin and Copenhagen and, to a lesser extent, Athens continued to refuse, for various reasons, the objective of abolishing internal border controls, the other Member States remained generally well-disposed towards the liberalisation of the movement of people within the Community. France and the FRG, however, were still convinced that the EC lacked the competences in justice and home affairs, which were deemed necessary to compensate for the loss of internal controls. The proposed directive, therefore, was set aside.59 56 Treaty establishing the European Economic Community, Rome, 25/3/1957. 57 HAEC, BAC 153–1990 479, Lorenzo Natali, Lettre à Giulio Andreotti, Président du Conseil des Communautés européennes: Proposition de directive du Conseil relative à facilitation des contrôles et des formalités applicables aux citoyens des Etats membres lors du franchissement des frontières intracommunautaires, Bruxelles, 28/1/1985. 58 Commission, “Proposal for a Council directive on the easing of controls and formalities applicable to nationals of the Member States when crossing intra-community borders”, COM (84) 749 final, 24/1/1985. 59 HACEU, Présidence du Conseil, Rapport au Comité des Représentants Permanents: Facilitation des contrôles et formalités applicables aux citoyens des Etats membres lors du franchissement des frontières intracommunautaires, Bruxelles, 25/4/1985. See also: Simone Paoli 92 At the same time, Paris and Bonn officially accepted the Benelux Memorandum, together with the Saarbrücken Agreement, as a basis for discussing a new, intergovernmental agreement. Negotiations between representatives from France, West Germany and the Benelux countries started on 27 February 1985 in Brussels. The Benelux countries decided to act as a single entity and not as individual states. It was the first time since the Treaty establishing the Benelux Economic Union was signed in 1958 that the Benelux countries participated with one single voice in negotiations with third countries.60 Talks were short and relatively easy. This, of course, does not mean that there were not disagreements between participants. Representatives from all the five countries, including those from the three Benelux countries, were convinced that the gradual abolition of checks at their common borders should be counterbalanced by transfer of controls at the external borders and complementary measures to combat illegal immigration and safeguard security. Migration, in particular, was becoming a subject of capital importance both in Belgium and above all the Netherlands; awareness was growing in both these countries that integration policies should be accompanied by restrictive entry policies.61 Only apparently paradoxically, therefore, while it was negotiating the abolition of border controls with France, the Belgian Government, in agreement with the Government of the Netherlands, further increased controls on the trains from Paris to Brussels; the percentage of checked trains, consequently, rose from 25 % in 1981 to 80 % in 1985. The Belgian, Luxembourg and Dutch Governments, meanwhile, signed readmission agreements with the Comité des Représentants Permanents, Rapport au Conseil (Marché Intérieur): Facilitation des contrôles et formalités applicables aux citoyens des Etats membres lors du franchissement des frontières intracommunautaires, Bruxelles, 2/5/1985. 60 Anjo G. Harryvan, In pursuit of influence: the Netherland’s European policy during the formative years of the European Union, 1952–1973, New York: Peter Lang, 2009. 61 The Luxembourg Government continued to look favourably on immigration. ANL, AUEB, 12/1 R, UEB, Gaston Raus, Le Grand-Duché de Luxembourg et ses immigrés, Bruxelles, 16/3/1984. Unlike the Government in Luxembourg, the Belgian and, to a greater extent, the Dutch Governments were becoming increasingly concerned about immigration and its economic and social repercussions. ANL, AUEB, 12/1 R, UEB, Albert Bastenier, Felice Dassetto, L’interpénétration des Communautés autochtones et immigrées: un défi à relever, Bruxelles, 19/3/1984; Jan Berting, Les minorités ethniques et les travailleurs étrangers aux Pays-Bas, Bruxelles, 21/3/1984; Albert Martens, La main-d’œuvre étrangère: une nouvelle composante durable du marché de l’emploi, Bruxelles, 22/3/1984; Wilfried Dumon, La population étrangère dans le Benelux, Bruxelles, 23/3/1984. The Relaunch of the Benelux Union and the Origins of the Schengen Agreement 93 Government in Bonn, whereby the contracting parties accepted to readmit irregular migrants transiting from their respective countries. All that said, when compared with French and West German representatives, negotiators from the Benelux seemed to consider abolition of internal border controls as much more important than complementary measures. In addition to this, whereas German and French representative were more concentrated on persons, representatives from the Benelux continued to be more inclined to keep together persons and goods. A specific but important problem, finally, concerned the tolerant policy with regard to drugs pursued in the Netherlands, which worried both Bonn and Paris.62 A compromise was facilitated by the common determination to reach an agreement and a general positive climate; this, in turn, was created by the presentation of the report from the ad hoc Committee on a People’s Europe to the European Council in Brussels on 29–30 March 1985.63 Negotiations culminated on 14 June 1985, when French Secretary of State for European Affairs Catherine Lalumière, Head of German Chancellery Waldemar Schreckenberger, Dutch Secretary of State for Foreign Affairs Willem Frederik van Eekelen, Belgian Secretary of State for European Affairs Paul De Keersmaeker, and Luxembourgian Secretary of State for Foreign Affairs Robert Goebbels met to sign a multilateral, intergovernmental agreement on the gradual abolition of checks at their common borders. The signing of this agreement took place in the Luxembourg village of Schengen, aboard the riverboat Princesse Marie-Astrid, at the exact point on the Moselle River where the political borders between Luxembourg, France and Germany merged. The representative from the Luxembourg Government, which was then holding the rotating presidency of the Benelux Union, insisted on signing this agreement in a symbolic place, at the border of three countries, and in a sort of extraterritorial place, on the 62 ANL, AUEB, 44 P, UEB, Ambassade de Belgique à Paris, Télex au Ministère belge des Affaires étrangères: Allégement formalités aux frontières Benelux-RFA-France, Bruxelles, 26/2/1985; Ambassade de Belgique à Bonn, Télex au Ministère belge des Affaires étrangères: Simplification des formalités aux frontières BNL-RFA-France, Bruxelles, 26/2/1985. See also: ANL, AUEB, 44 P, UEB, Ambassade néerlandais à Bonn, Télex au Ministère néerlandais des Affaires étrangères: Facilités aux frontières BNL-RFA-France, Bruxelles, 26/2/1985. 63 HAEC, ASCE, BAC 153–1990 216, Commission, Europe des citoyens, Bruxelles, 6/6/1985. See also: “Report from the ad hoc Committee on a People’s Europe”, in Bulletin of the European Communities, 3, 1985. Simone Paoli 94 water; at the same time, he proudly claimed the fundamental role played by the Benelux in triggering and developing the project.64 The Schengen Agreement or, as the British named it, the Moselle Agreement was explicitly rooted in the final statement of the Fontainebleau European Council, the Franco-German Saarbrücken Agreement, the conclusion of the German-Benelux meeting in Neustadt an der Aisch and the Benelux Memorandum. It was divided into two parts. The first part was devoted to measures applicable in the short term. With regard to the movement of persons, police and customs authorities should, as a general rule, carry out a simple visual check of vehicles crossing the common frontier at a reduced speed, without requiring such vehicles to stop. In order to avoid any adverse consequences resulting in the field of immigration and security from the easing of controls at the common frontiers, the parties should endeavour to approximate as soon as possible their visa and entry policies. They should also cooperate in fighting international criminality. The second part was focused on the measures applicable in the long term. With regard to the movement of persons, the parties committed themselves to abolishing the controls at the common frontiers and transferring them to their external frontiers. They also committed to take complementary measures to safeguard security and combat illegal immigration. Finally, they should seek to harmonise visa policies, conditions for entry to their respective territories and laws and regulations on drugs, arms, explosives and registration of travellers in hotels. Although it was an intergovernmental arrangement and it only involved the states of the Benelux Union, the FRG and France, the Schengen Agreement explicitly looked at the EC. The document expressed the intention to be compatible with Community objectives and achievements; similarly and even more significantly, measures were targeted at all nationals of the Member States of the European Community.65 On the same day, 14 June 1985, the European Commission submitted to the Council its White Paper on the completion of the internal market which set out a timetable for the measures required for the completion of the Single Market by 31 December 1992 at the latest. As highlighted by 64 Robert Goebbels, “Discours sur l’accord de Schengen (14 juin 1985)”, in Bulletin de Documentation, 4, 1985, 32–33. 65 Agreement between the governments of the States of the Benelux Economic Union, the Federal Republic of Germany and the French Republic on the gradual abolition of checks at their common borders, Schengen, 14/6/1985. The Relaunch of the Benelux Union and the Origins of the Schengen Agreement 95 Tindemans, it would have been a huge mistake to undervalue the role that the Schengen process had played in this decision.66 Conclusions The origins of the Schengen process has been unfairly ignored in literature; its accurate reconstruction, in fact, would help to better understand and even shed new light on the building of the European Single Market, a People’s Europe, the Single European Act and later the Third Pillar of the European Union.67 More extensive, archive-based analyses of the process leading to the Schengen Agreement could also help scholars to expand knowledge of the “forgotten” Thorn’s era, which provided the basis for the breakthroughs in the Delors’ years.68 More specifically, this research confirms that France and above all West Germany were crucial in shaping the Schengen Agreement; at the end of the day, Paris and Bonn were able to keep the topic out of the Community framework, to put complementary measures at the centre of the project and to focus the attention of the agreement much more on persons rather than goods. Far from being passive bystanders, however, the Benelux countries were active players, even driving forces in decisive moments. With the Dutch leading the way, the Benelux countries triggered the process in early 1984 and drove it towards multilateralism in late 1984; they were also important in keeping the project linked to the Community. The Schengen process, in turn, was a very significant factor in the relaunch of the Benelux Union. Facing economic downturns and the risk of political downgrading in the context of the Mediterranean enlargement of the EC, Belgium, Luxembourg and the Netherlands decided to strengthen their mutual cooperation and revitalise their common institutions; this, according to them, should not happen to the detriment but to the benefit of 66 ANL, AUEB, 12, UEB, J. Vermorken, W. van de Rijt, Interview du Ministre Tindemans: “La solidarité Benelux, un fait notoire dans la CEE”, Bruxelles, 13/1/1987. See also: ANL, AUEB, 12, UEB, J. Vermorken, W. van de Rijt, Interview du Ministre Poos: “De la nécessité de s’unir”, Bruxelles, 8/1/1987. 67 Piers Ludlow, “European Integration in the 1980s: On the Way to Maastricht”, in Journal of European Integration History, 1, 2013, 11–22. 68 Klaus Schwabe, “Gaston Thorn (1981–1985): A Forgotten President”, in Jan van der Harst, Gerrit Voerman (eds), An Impossible Job? The Presidents of the European Commission, 1958–2014, London: John Harper, 2015, 151–172. Simone Paoli 96 the Western European integration as a whole.69 Schengen gave the Benelux countries the opportunity to test their cohesion, spread their values and secure their interests, find a new mission for the Secretariat General and show both internally and externally the strength of their model of integration. 69 ANL, AUEB, 44 P, UEB, Comité de Rédaction “Revue Benelux 85–1”, Editorial. Le Benelux au sein des Douze, Bruxelles, 15/4/1985. The Relaunch of the Benelux Union and the Origins of the Schengen Agreement 97 Spinelli’s Initiative and the European Parliament’s Union Project Daniela Preda The fall of the Berlin Wall, with the consequent breakup of the Soviet Union and the demise of bipolarism, represented a major break in the history of Europe. The turning point of 1989 has rendered anachronistic the overlap between Atlanticism and Europeanism that characterized the Cold War era, favoring the emergence, on the one hand, of new nationalisms, and on the other of a more ‘European’ Europe, capable of acting autonomously in a multipolar, globalized world in which it could play a leading or secondary role. In the era of multipolarism, without the American protection that had long guaranteed Europe the main instruments of sovereignty – security and a common defense, through the nuclear umbrella and NATO, and monetary stability, through the dollar and the gold exchange standard – thereby permitting economic and commercial growth and an international presence, even though limited and subordinate, Europe could no longer postpone indefinitely the long-standing issue of constructing its statehood. In Maastricht, the European response to the new historical challenge, even if destined to prove insufficient, was immediate and in many ways effective, significantly involving the three most important pillars of statehood: creating an economic and monetary union; initiating a foreign and defense policy; and relaunching institutional reforms. This rapid reactive capacity should not be surprising, since the Community was preparing for change as early as the 1970s and 1980s, having observed the progressive detachment from American statehood and the latter’s difficulty in containing multipolar centrifugal pressures. One need only consider, at the monetary level, the entering into force in 1979 of the European Monetary System (EMS),1 which capped a long journey toward European monetary unification and which was studied dating back to the end of the 1950s; at the eco- 1 The monetary agreement was essential both to put an end to the wild exchange rate fluctuations and to monetary instability that undermined the success of the common market, and to avoid the formation of a Europe proceeding along at two speeds. Cf. Michele Fratianni and Jürgen von Hagen, The European Monetary Sys- 99 nomic level, the Single European Act of 1986, which reaffirmed the objective of the single market thirty years later; at the political level, the election by universal suffrage in June 1979 of the European Parliament; and at the institutional level, the Treaty Project establishing the European Union, approved on February 14, 19842 by a vast majority by the European Parliament at the urging of Altiero Spinelli. This latter development represents the focus of the present paper. The actions of the elected Parliament In the mid-1970s, the institutional structure of the European Community was insufficient and inadequate to deal with Europe’s problems, such as security and defense, the freedom of international trade, and North-South relations. Initiatives were undertaken from time to time by this or that Member State, convinced it was expressing the common attitude of all, or through intergovernmental agreements on political or monetary cooperation that were laboriously achieved. In the economic field stagnation was also evident: not only was the Community incapable of implementing effective common policies, it had even taken steps backwards in the field of trade liberalization. Nevertheless, a kind of “cultural shift” was beginning to emerge in the concept of economic and monetary policy, which would lead to “a radical change3 in the prevailing trend in exchange rates” of many European countries, thus strengthening the determination to correct inflation mechanisms, review the anti-cyclical policies followed up to that point, and proceed towards the creation of monetary stability mechanisms. The focus, however, remained the institutions. The Community continued to lack an adequate and effective capacity for action because its decitem and European Monetary Union, London and New York: Routledge, 2019; Piers Ludlow, The Making of the European Monetary System, London:Butterworth Scientific, 1982; Emmanuel Mourlon Druol, A Europe made of Money: the Emergence of the European Monetary System, Ithaca and London: Cornell University Press, 2012; Daniela Preda (ed.). The History of the European Monetary Union. Comparing Strategies amidst Prospects for Integration and National Resistance, Brussels: P.I.E. Peter Lang, 2016. 2 Cf. Pier Virgilio Dastoli, Andrea Pierucci, Verso una costituzione democratica per l’Europa. Guida al Trattato di Unione europea, Casale Monferrato: Marietti, 1984. 3 Giovanni Magnifico, “Lo Sme: un ventennio per traghettare l’Europa dal disordine valutario degli anni Settanta alla moneta unica”, in: Il Ponte, May 2009; Id., European Monetary Unification, London: Macmillan, 1973. Daniela Preda 100 sion-making system was inadequate and ineffective, since it was not supported by a democratic consensus. Among the first tentative steps taken by the governments to emerge from the crisis, steps that were mostly within the framework of the traditional intergovernmental approach, the direct election of the European Parliament, whose relevance appeared negligible to some as the Parliament seemed to be devoid of power, was thought by many to be the appropriate instrument to break the impasse, thereby allowing initiatives of great importance to be taken for Community construction.4 In fact, an elected Parliament, enjoying the legitimacy that only the vote can give, would perhaps have had the courage to propose new and bold actions. In particular, the prospect of the direct election of the European Parliament seemed to make politically feasible an institutional development capable of achieving and managing economic and monetary unification, thereby ensuring the strengthening of the mechanisms of Community solidarity necessary to enable the weaker countries to abandon exchange rate maneuvers as a means of achieving competitiveness with the strongest countries and of playing an important role on the international stage. The idea that the elected Parliament could accelerate the push for the Union was widespread among both the political movements and the government leaders. Willy Brandt, speaking at the congress organized in Brussels by the European Movement in 1976, called on the European Parliament to come out into the open and engage in a show of force, since governments would presumably not serve Europe on a silver platter. “Parliament”, he said, “must be ‘the voice of Europe’. […] It must therefore be seen as a permanent constituent assembly of Europe.”5 In turn, Altiero Spinelli, who for years waged a strenuous battle for a European federation, was looking for a mechanism to trigger the impulse capable of raising the level of European political struggle.6 At this stage of the European integration process Spinelli introduced an element that the governments, conditioned by diplomatic negotiations and the consequent 4 Wolfram Kaiser, Shaping European Union: The European Parliament and Institutional Reform, 1979–1989, European Parliament History Series, Brussels: European Union, 1918. 5 Brandt’s speech at the Congress of Europe organized by the European Movement, Brussels 5–7 February 1976, in: Informationdienst Rat der Europäischen Bewegung 27, n° 3, March 1976, 2–3. 6 Intervention of Gerardo Mombelli, in Maria Grazia Melchionni (ed.), Altiero Spinelli e il progetto di trattato di Unione Europea, Roma, Biblioteca della “Rivista di Studi storici internazionali”, new series, 2007, n.1, 16–17. Spinelli’s Initiative and the European Parliament’s Union Project 101 compromises, did not take into account: a leap in constitutional quality, which would allow those political challenges (economic-social, environmental, foreign policy) to be addressed for which the governments had proved inadequate and which only a single European body could face. This body was the European Parliament. After the elections in June 1979, Parliament immediately showed a willingness to take political action,7 in particular to strengthen its role vis-a-vis the Council of Ministers. The test of the EP’s new capacity for action was the vote on the Community budget, the only area in which Parliament could boast real power. Elected as an independent in the ranks of the Italian Communist Party, Altiero Spinelli immediately worked to convince his colleagues that, by simply using the powers provided by the treaties, the construction of Europe would not move forward, remaining anchored to the unanimous decisions of the governments.8 During the debate on 27 September and the subsequent special meeting in Strasbourg in November 1979, Parliament examined at a first reading the draft budget drawn up by the Commission in June9 and reviewed by the Council of Ministers in September. In the context of its limited powers, Parliament voted on amendments to non-obligatory expenditure and on proposals to amend compulsory expenditures, trying to circumvent the expenditure constraint dictated by its “own resources” (customs duties, levies on agricultural products, a VAT rate for Member States not higher than 1 %), also by virtue of the fact that with the 1980 budget the Community would have 7 On the work of the European Parliament cf. “Nota informativa sull’attività del Parlamento europeo 1979–1984” edited on an ongoing basis for the magazine PiemontEuropa by Sergio Pistone, who, between 1979 and 1984, as a young federalist militant supported Altiero Spinelli, participating in all the plenary sessions of the European Parliament. On the beginnings of the Crocodile Club, see Crocodile: letter to the Members of the European Parliament, published by Spinelli and Felice Ippolito and directed by Pier Virgilio Dastoli. On the genesis and development of the Letter see Pier Virgilio Dastoli, “L’iniziativa del Coccodrillo. La storia della ‘Lettera’ dal 1980 al 1995”, in Daniele Pasquinucci, Daniela Preda and Luciano Tosi (eds.), Le riviste e l’integrazione europea, Padua: Cedam, 2016, 643–647. The Letter was published 48 times, first on 12 October 1980, initially in French and English and then also in German, Italian, Greek and Dutch. The Letters are kept in the Spinelli and Dastoli Private Archives in the Historical Archives of the European Union (HAEU) of Florence. 8 Altiero Spinelli, Towards the European Union, Sixth Jean Monnet Lecture, Florence, European University Institute, 13 June 1983. 9 The budget was tabled on 29 February and corrected in light of the proposals of 30 April on agriculture. Daniela Preda 102 reached the maximum utilization limit for these expenditures.10 While the request by the budget commission (particularly its chairman, the Dutch Socialist Pieter Dankert, and vice-chairman Spinelli) to increase the VAT rate to 1.5 % and that of the Hon. Diana to introduce a 1 % tax on animal and vegetable fats was not approved due to the opposition of the French and of the German SPD, the request to move funds from the EAGGF- (European Agricultural Guidance and Guarantee Fund – FEOGA) Guarantee to the EAGGF-Guidance and to increase the co-responsibility tax for the dairy sector was accepted. Spinelli withdrew more advanced amendment proposals regarding the establishment of a global reserve for energy policy, an industrial policy in the sector of advanced technologies and industrial redevelopment, and appropriations for non-member developing countries. Even Ruffolo’s proposal to establish a fund to finance investments in the energy, scientific research, industrial, and social policy sectors was rejected. On the other hand, a request was made to restore the allocation for the Regional Fund, set by the EEC Commission at 1,200 million EUAs and reduced by the Council of Ministers to 850 million, as well as to increase the Social Fund by approximately 200 million EUAs. It should be pointed out that, in order to facilitate the convergence of economic policies through support for weaker areas and to initiate common policies, the Mac Dougall11 Report, published in 1977, aimed at increasing the revenue from Community resources by increasing Community public expenditure by the nine member countries to 2.5 % of GDP. However, a decision by the Council of Ministers was needed to change the revenue totals, whereas in the individual states this decision belonged to the individual Parliaments. Therefore, it was a question of fighting for new political prerogatives for the Parliament elected by universal suffrage, and thus democratically legitimized at the European level. After a futile attempt at compromise between the Council of Ministers and the Budget Committee of Parliament,12 on 13 December 1979 the EP, using the powers granted to it by the Treaties on the introduction of the system of own resources, rejected at the second reading, by 288 votes in favor and 64 against, the Community budget for 1980 as amended by the 10 “Il voto del Parlamento europeo sul bilancio comunitario 1980”, in: PiemontEuropa. Nota informativa sull’attività del Parlamento Europeo, n. 1, 1979. 11 Report of the Study Group on the Role of Public Finance in European Integration, Brussels: Commission of the European Communities, 1977. 12 The December 12th marathon session, which lasted until 5 a.m., is recalled in Altiero Spinelli’s Diario Europeo 1976–1986, edited by Edmondo Paolini, Bologna: Il Mulino, 1992, 393–395. Spinelli’s Initiative and the European Parliament’s Union Project 103 Council of Ministers, thus seeking to assert its decision-making power over the budget. In April 1980, the EP also overwhelmingly approved the resolution tabled by Jean Rey, on behalf of the Political Commission, regarding the institutional relations between Parliament and the Commission. The right provided Parliament to censure the Commission, by a two-thirds majority, had never been exercised or evoked. After the direct elections, however, Parliament, in stressing the change in the institutional balance within the Community, affirmed the need, precisely to avoid a damaging use of the censure, to proceed preemptively to a debate on the Commission’s program and an investiture vote by Parliament. The resolution also called on the Commission to consult Parliament periodically on the means for implementing its program before submitting the implementation proposals to the Council, thus foreshadowing a transformation in the functioning of the Community institutions regarding the responsibility of the executive towards Parliament. The need for growth in the Community’s financial resources was evident. In the meantime, in the Budget Committee the ‘Own Resources’ working group, chaired by Spinelli and composed of the Gaullist Ansquer, the German Social Democrat Arndt, the Italian Democrat Barbi, the Dutch Liberal North, and the English conservative Taylor, prepared a draft resolution which, making explicit reference to the Mc Dougall Report, proposed in the short term the possibility to exceed the 1 % VAT limit and the introduction of a system of weighted VAT payments that took into account the economic imbalances between the Member States and, in the medium term, the transfer to the Community of a portion of the personal income tax. However, the EP soon found that the rejection of the budget was a blunt weapon since the treaties allowed the Commission to continue to spend the provisional twelfths indefinitely. Since several months would have to pass before the presentation of a new budget, the EP’s action was thus thwarted. After the failure of the Luxembourg Summit,13 which had highlighted the Community’s paralysis, the EP, during its May session, ap- 13 The Luxembourg Summit in April 1980 addressed the issue of reviewing the British contribution to the Community budget (the British deficit was aggravated by the corrective measures agreed to in Dublin in 1975), which was linked to the need for a review of agricultural prices. On the failure of the summit, see “Dichiarazione del Presidente UEF sui risultati del Vertice di Lussemburgo del 27–28 aprile 1980”, in: Mario Albertini, Tutti gli scritti, edited by Nicoletta Mosconi, vol. VIII, 1979–1984, Bologna: Il Mulino, 2009, 329–330. Daniela Preda 104 proved a resolution presented by Dankert by a vote of 116 in favor, 31 opposed, and 37 abstentions. The resolution reaffirmed the Parliament’s desire to exercise its given budgetary powers, stating that, in the event the Council did not approve an agricultural policy by June 1st, the draft budget presented by the Commission would be valid in all respects. During the June session, the compromise reached at the Venice Summit on 12–13 June 1980 on the problem of the British contribution to the Community budget was viewed with satisfaction by the Parliament, which also expressed the hope for a rebalancing of expenditures for agricultural policy and of those for regional, social, industrial and energy policies.14 Six months after the EP’s negative vote on the budget, there was not much left to protect in the current year. Thus, during the sessions of 26–27 June and 7–11 July, the EP ended by approving a Community budget which only partially accepted the objections formulated by Parliament, in particular by increasing the regional and social funds by 240 million ECU, and which did not grant research and energy policy appropriations or a review of the common agricultural policy. The Crocodile Club The clash between Parliament and the Council over the amount and quality of the budgetary expenditure for the following year and its frustrating conclusion for Parliament made clear the almost exclusively advisory role of the assembly and the need to reform the institutions so that the Community could effectively address the new internal and international challenges. The problem would have resurfaced immediately, however, since the preliminary draft budget for 1981 presented by the Commission on 9 July included cuts in non-obligatory expenditure to avoid exceeding the 1 % VAT limit. While the governmental initiative to ‘relaunch’ the Community promoted by the German and Italian ministers Genscher and Colombo also proved to be nothing more than an illusion, Altiero Spinelli appealed to the European parliamentarians for a constituent initiative, which he mentioned for the first time on 21 May 1980 in a major speech in Strasbourg, inviting colleagues to reflect on the “need to change this Community”, which was paralyzed by the lack of “appropriate institutional instruments 14 “Sessione del 16–20 giugno 1980”, in: Nota informativa sull’attività del Parlamento Europeo, n. 9, 25 June 1980. Spinelli’s Initiative and the European Parliament’s Union Project 105 to enable common feelings and aspirations to become common political action."15 Immediately following up on his initial intuition, on June 25th Spinelli sent a letter to his colleagues proposing joint action to reform the Community institutions, and to this end the first eight supporters of the proposal met on July 7th.16 Thus, in September a cross-party group, the “Crocodile Club”17, was formed that took on the name of the restaurant where the inaugural meeting had taken place. At that time the group already included some seventy parliamentarians (this number would rise to 180 in July 1981). By analyzing the evolution of international relations, Spinelli believed that Europe could not remain immobile and that the timing was right to make significant progress in European integration. It seemed especially clear to him that military and nuclear innovations had caused a lack of correspondence between Europe’s and America’s security needs, not so much in terms of the fundamental solidarity of the West, but from a strategic and diplomatic point of view. This profound change required a European security policy distinct from that of the United States: Europe would need “a real European government, with real powers, based on European democratic legitimacy”.18 At its first meeting on 17 September, the Crocodile Club, which had seen an increase in the number of its members19, began to debate a motion for a draft resolution calling for the establishment by the European Parlia- 15 “Risultati del Consiglio Esteri del 27 e 28 aprile 1980”, Spinelli’s speech to the European Parliament on 21 May 1980, in Altiero Spinelli, Discorsi al Parlamento Europeo 1976–1986, edited by Pier Virgilio Dastoli, Bologna: Il Mulino, 1987, 209–213. 16 The eight members included Paola Gaiotti de Biase, Hans August Lücker and Karl von Wogau (EPP), the Italian communist Silvio Leonardi, the Italian republican Bruno Visentini, the British conservative Stanley Johnson, the British Labour Richard Balfe and Brian M. Key. 17 Cfr. Pier Virgilio Dastoli, “L’azione del Club del Coccodrillo”, in: Ariane Landuyt and Daniela Preda (eds.), I movimenti per l’unità europea 1970–1986, Bologna: Il Mulino, 2000, vol. I, 559–567; Rita Cardozo and Richard Corbett, The Crocodile Initiative, in European Union: the European Community in search of a Future, London: Macmillan, 1986, 15–45. 18 Cf. Crocodile – Letter to the Members of the European Parliament/Crocodile – Lettera ai membri del Parlamento europeo (henceforth Crocodile), n. 6, September 1981. All the citations in this text have been taken from the Italian version of the Letter, and thus the relative translations may not correspond to the original text in English. 19 The following were members of the Club at that time: the Hons. Agnelli, Arndt, Balfe, Bangemann, Bonaccini, Brandt, Carettoni, Cassamagnago, Cecovini, Colla, Cohen, Dabin, Dankert, De Pasquale, Deschamps, Diana, Didò, Enright, Flesch, Daniela Preda 106 ment of a Constitutional Committee to draw up a draft treaty on the institutional reform of the Community. The draft resolution was studied at the October meeting and finalized by a drafting group formed, under Spinelli’s leadership, by the German Socialist Seefeld, the Belgian Socialist Radoux, the British Conservative Johnson, the Dutch Liberal North, the British Socialist Balfe, the Belgian Socialist Lizin, and the Italian Christian Democrat Gaiotti de Biase. Starting from the recognition of the clear institutional limits that had paralyzed the Community and undercut any attempts at making it more effective, the resolution called on the elected Parliament to fulfil its “duty to present, debate, and vote on proposals for institutional reforms” to be sent “directly for ratification to the relevant constitutional bodies in each Member State”. It also called on the Presidency, by virtue of the political importance of this task, to create a cross-party group charged with carrying out the necessary consultations, then presenting the various reform options, and, finally, drawing up, on the basis of the choices made by the EP, the final text to be adopted.20 Spinelli thus succeeded in including in the resolution to be voted on by the Parliament not only the final objective but also the strategy to adopt, which was based on two cornerstones: the convening of an ad hoc constitutional committee in charge of drafting an institutional reform project and the immediate sending of the reform project approved by Parliament to the appropriate national bodies for ratification, thus eliminating the intergovernmental study phase. There was immediate widespread acceptance of the resolution text.21 B. Friedrich, Gaiotti, Gautier, Hamilius, Hoper, van den Heuvel, Hoff, Habsburg, Ippolito, C. Jackson. Johnson, Key, Leonardi, Linde, Lizin, Luecker, Macciocchi, Notenboom, Nord, Patterson, Pelikan, Pfennig, Pisani, Price, Ripa di Meana, Radoux, Roudy, Ruffolo, Scrivener, Seefeld, Spaak, Squarcialupi, Tindemans, Van Miert, Viehoff, Visentini, Welsch, Walz, Wieczorek-Zeul, Wittgenstein, Von Wogau. Nota informativa sull’attività del Parlamento Europeo, 23 September 1980. 20 The motion is reported in: Nota informativa sull’attività del Parlamento Europeo, 25 November 1980. 21 Among the first signatories were the Hons. Adam, Balfe, Bettiza, Carettoni-Romagnoli, Cecovini, Colla, Herklotz, Hoff, Ippolito, Johnson, Lezzi, Linde, Lizin, Nord, De Pasquale, Pelikan, Pfenning, Puletti, Radoux, Pininfarina, Ripa di Meana, Ruffolo, Schwenke, Seefeld, Seeler, Spaak, Spinelli, Vandwiele, Van Minnen. Cf. Nota informativa sull’attività del Parlamento Europeo, 25 November 1980. The signatories would shortly rise to 172, only 14 of which, however, were Christian Democrats. Cf. Nota informativa sull’attività del Parlamento Europeo, 17 March 1981. The number of signatories stood at 180 in April. Spinelli’s Initiative and the European Parliament’s Union Project 107 In November, the EP approved at the first reading the 1981 budget – which would be adopted definitively at the December session – sending at the same time an important signal for change to the incoming Commission led by Gaston Thorn, welcoming by a large majority an amendment urging the new Commission to exercise control over the evolution of agricultural expenditure and to increase its own resources.22 On 4 December, the Budget Committee also approved the Spinelli report on its own resources, as mentioned above. As the institutional clash over the 1980 supplementary budget continued, on 11 February a delegation led by Spinelli presented the Crocodile Club resolution to the President of Parliament, Simone Veil.23 The resolution called for the convening of an ad hoc Commission “in charge of presenting proposals regarding the state and development of the Community”.24 Despite Spinelli’s success among parliamentarians, the political forces were lukewarm about the substance of his project: the Socialists (especially the French and Germans) were largely indifferent to the institutional issue; among the Communists, only the Italians were cautiously in favor of the initiative, to the point that it seemed destined to divide the group at the European level; and the moderates of the EPP feared that the role of the Political Affairs Committee, chaired by the Christian Democrat Mariano Rumor, would be diminished and opposed the establishment of a new committee, which was also requested by the Crocodile Club to overcome the resistance to institutional reforms that had emerged in the Political Affairs Committee. While all political groups gave their members freedom to sign the Crocodile resolution, the EPP decided to take a joint decision, binding its members to party discipline, which led to a heated debate between those who wanted to participate in the constituent action and those who wanted to postpone it, while taking advantage in the meantime of the opportunities offered by the treaties. The anti-signature approach prevailed, with the call for the topic of reform to be entrusted to the alreadyoperational Political Committee, within which an institutional sub-committee would be created. Supported by the action of the federalists, Spinelli wrote an “open letter to colleagues of the EPP” in which, noting that the draft resolution of the 22 Nota informativa sull’attività del Parlamento Europeo, 10 November 1980. 23 Un’Europa dal mito al voto: Louise Weiss, Simone Veil: discorsi, ed. by the Senate of the Republic, Rome 2017. 24 “La consegna della risoluzione Crocodile alla Presidente Simone Veil”, in: Crocodile, n. 4, March 1981. Daniela Preda 108 Crocodile Club was born of needs similar to those that had generated the von Aerssen25 resolution and emphasizing the urgency of the action, stated that to be effective the reform initiative would have, on the one hand, to obtain the approval of a large majority of the EP (and thus of its political groups), and on the other to ask the competent bodies in the individual states to approve the project and to use the appropriate tools. The ad hoc Committee, with the sole mandate to prepare proposals for institutional reform, responded to this need.26 In March 1981, the EP approved, with the significant exception of all the French parliamentarians, the resolution on the 1982 budget presented by Spinelli. The budget called for changes to agricultural regulations to reduce expenditure on structural surpluses through the principle of the financial responsibility of producers, an increase in the percentage of VAT allocated to expenditure, the inclusion in the budget of loans and mortgages, a proposal that the inclusion of any obligatory expenditure be decided through consultation among the Council, Commission, and Parliament, and the wish for a strengthening of the budget through the transfer of public expenditures from the national level to the Community one. In the subsequent session in April, the EP, while adopting a resolution by Spinelli on the Community’s own resources,27 nevertheless renounced the battle for the reform of agricultural policy. Meeting on 7 April, the Bureau of the EP decided to put the discussion on the draft resolution of the Crocodile Club on the agenda of the meeting on 15–19 June. The debate would be delayed until July because of Parliament’s workload. The outcome depended substantially on the EPP’s 25 On 27 September 1979 a draft resolution was presented to the Parliament signed by Jochen Van Aerssen, Egon Klepsch, Emilio Colombo and Leo Tindemans, as well as by other EPP party leaders, seeking a “broadening of the legal bases of the European Community”. Cf. Pascale Fontaine, Voyage to the Heart of Europe, 1953– 2009: a History of the Christian-Democratic Group and the Group of European People’s Party in the European Parliament, Brussels: Racine, 2009. 26 A. S. [Altiero Spinelli], “Cinque tesi per il PPE”, in: Crocodile, n. 5, June 1981. 27 The resolution, presented by Spinelli on behalf of the Budget Committee, provided for the abolition of the 1 % ceiling of the VAT quota due the Community; the participation of the Community in the personal income tax; the issuing of ECUdenominated bonds; and the introduction of a decision-making mechanism for the creation of new resources. In particular, provision was made for a revision of art. 201 of the Treaty, with the granting to the Commission of the initiative to modify its own resources and to allocate new resources to the Community, following the assent of the Council by a qualified majority and the final decision of the EP also by a qualified majority. Spinelli’s Initiative and the European Parliament’s Union Project 109 support for the Crocodile Club’s initiative. During the days of study at Aachen at the beginning of June, within the EP the so-called “twofold strategy” emerged: this entailed proceeding simultaneously on the “constituent and federalist” path in favor of a reform of the Treaties and on the “pragmatic and progressive” path to improve relations among the various bodies of the EEC through small concrete steps.28 However, in announcing on 9 June in Brussels a Christian Democratic proposal ”to revitalize the Community”, the President of the EPP, Tindemans, merely reiterated the cautious arguments made in his 1975 report. However, a compromise solution was now possible. On 9 July 1981, after a two-day debate the European Parliament approved by a large majority (161 votes in favor, 24 against, 12 abstentions)29 a resolution that echoed the demands of the Spinelli Club, taking the initiative to give “new impetus to the creation of the European Union”, starting with the appointment, at the beginning of the second half of the legislature,30 of a “Permanent Committee for Institutional Issues” tasked with drafting a reform of the existing Treaties. This decision was the result of a compromise with the EPP, reached by a vote on an amendment presented by Jonker, van Aarsen, Klepsch, Vergeer, Zecchino, and Blumenfeld. The document stipulated that the reform proposals should be “sent directly for ratification to the relevant constitutional bodies in each Member State.”31 Parliament also approved, with some improved amendments, a proposal by Mario Zagari, a resolution by Lady Elles on the EP and political cooperation,32 and four resolutions proposed by the institutional subcommittee of the Political Committee, chaired by Diligent: the report of the German socialist Hänsch on relations between Parliament and the Commission; that of the Belgian socialist Van Miert on the EP’s right to take the initiative in the legislative process of the Community; that of the French EPP 28 Cf. P. Fontaine, op. cit., 187–188. 29 Cf. “Il Parlamento europeo assume l’iniziativa della rifondazione istituzionale della Comunità”, in: Nota informativa sull’attività del Parlamento Europeo, n. 22, 14 July 1981. 30 The statutory renewal of all the committees, and thus also the creation of new ones, was to take place at the start of the second half of the legislature. 31 The resolution can be found in: Crocodile, n. 6, September 1981. 32 The Elles report asked the European Council to express its opinion with one voice on all fundamental foreign policy issues for the Community, underlining the need for all Member States to participate in joint decisions, thereby avoiding the formation of any Directorate. However, Parliament had simultaneously rejected two amendments by the German Christian Democrats Blumenfeld and Lucker calling for the definition of a common foreign policy. Daniela Preda 110 member Diligent on relations between the EP and the national parliaments; and that of the independent Italian communist Fabrizia Baduel Glorioso on relations between Parliament and the Economic and Social Committee. The simultaneous approval of the Crocodile Resolution, aimed at a radical revision of the treaties, and of these reports, aimed at achieving significant progress in the existing legal framework, went beyond the discord between the Crocodile Club and the EPP, thereby allowing the implementation of the “twofold strategy” and the EPP’s support for the Spinelli project. The Institutional Affairs Committee In January 1982, the European Parliament elected the Institutional Affairs Committee, composed of 37 members, which was tasked with the institutional reform of the existing treaties. The European Parliament thus began its long and tortuous path toward the institutional reform of the Community, taking on the role of “permanent constituent of Europe” that Brandt had envisaged. Of course, as Spinelli pointed out, it would have been an “ad referendum” constituent, which could only have proposed the ratification of the “Treaty-Constitution of the European Union”; however, Parliament would have had the task of drafting, debating, and voting on this Treaty-Constitution.33 The constituent strategy initiated by Spinelli34 as far back as the 1940s, when he had proposed transforming the Council of Europe’s Consultative Assembly into a Constituent Assembly, and then relaunched in the 1950s, when he had fought to give the constituent power to the EDC Assembly, was at that time at its most fully developed. The time had now arrived for political action: “Alea iacta est”, commented Spinelli, “and everything remains to be done”.35 The Institutional Committee appointed Italian Socialist Mauro Ferri as President, and as Vice-Presidents Jonker, Nord, and the Italian Radical Marco Pannella.36 The procedure adopted was prudent and inclusive, open to input from all political groups and from civil society. The EP’s action 33 Altiero Spinelli, “Il Club davanti al suo primo successo”, in: Crocodile, n. 6, September 1981. 34 Altiero Spinelli, Una strategia per gli Stati Uniti d’Europa, Sergio Pistone ed., Bologna: Il Mulino, 1989. 35 Spinelli, “Il Club davanti al suo primo successo”, cit. 36 Cf. Daniele Pasquinucci, “Le ragioni di un connubio. Altiero Spinelli, Marco Pannella e il progetto di Trattato sull’Unione Europea”, in: Umberto Morelli and Spinelli’s Initiative and the European Parliament’s Union Project 111 would be supported by the movements for European unity. On 30 April 1981, the European Movement created a Committee for Institutions, under the chairmanship of Martin Bangemann,37 the German ELD leader, with an active role played by the Secretary General of the European Federalist Movement Luigi V. Majocchi,38 who produced a report in October 1981 and closely followed the work of the EP Committee on Institutional Affairs39. In turn, the MFE would launch a Campaign for the European Government, adopted by the UEF,40 creating a reform committee chaired by Francesco Rossolillo.41 Any gradual progress in the work of the Committee was to be discussed and voted on, not only in the Committee but also in the plenary assembly to allow for the full involvement of the EP in the drafting of the reform project. It is also for this reason that a motion for a resolution, accompanied by a complete treaty text presented by the EPP member Sjouke Daniela Preda (eds.), L’Italia e l’unità europea dal Risorgimento a oggi. Idee e protagnisti, Padua: Cedam, 2014, 363–376. 37 The Committee was composed of 26 members: Pierre Bourdeaux-Groult, Erwin Guldner (Organisation française du Mouvement Européen); Étienne Boumans, Paula Degroote from the Belgian Council of the European Movement; Carlos Bru-Puron, from the Spanish Council; M. Grabitz, from the German Council; Sean Healy, Neville Keery, from the Irish Council; José Macedo Pereira, Carlos de Pitta e Cunha, from the Portuguese Council; Luigi Vittorio Majocchi, Giampiero Orsello, from the Italian Council; H. J. Mettler, Alois Riklin, from the Swiss Council; Ivo Samkalden, from the Dutch Council; John Pinder, Derek Prag, from the British Council; Anthony Callus, from the Maltese Council; Max Wratschgo, from the Austrian Council; I. Camunas (MLEU); J.L. Cougnon (Fédération internationale des Maisons de l’Europe); Jean-Pierre Gouzy (Association des journalistes européens); Pascal Fontaine (EEP); Fernand Herman (Union européenne des démocrates chrétiens); Giancarlo Piomnbino (Consiglio dei Comuni d’Europa); Wolfgang Wessels (Institut für Europäische Politik); A. Westerhof (Association européenne des Enseignants). Cf. AHUE, ME, 2194. 38 Luigi Vittorio Majocchi was Director of the European Federalist Movement from 1980 to 1987 and Director of the International European Movement from 1984 to 1987. During this period, he co-operated closely with Altiero Spinelli, supporting him in his struggle within the European Parliament. 39 Cf. Daniela Preda, “La Commissione istituzionale del Movimento europeo e le proposte per la riforma istituzionale dell’Unione europea dei federalisti, in: Landuyt/Preda, I movimenti, 569–602. 40 Cf. Report by Luigi Vittorio Majocchi to the European Federalist Movement Congress in Cagliari on 2–4 November 1984, in Unione Europea subito, Pavia: EDIF, 1985; Umberto Morelli,” Il Movimento federalista europeo sopranazionale e l’Unione europea dei federalisti”, in: Landuyt/Preda, I movimenti, 665–741. 41 Raffaella Cinquanta, Francesco Rossolillo e la battaglia per gli Stati Uniti d’Europa, Milan: Unicopli, 2019. Daniela Preda 112 Jonker in February,42 was highly contested by the Committee. It was thought that the draft Treaty should be developed within the Committee and not simply be voted on by it. The first four months of work were devoted to the preparation of a preliminary document on the guidelines to be followed in the drafting of the Treaty,43 which was approved on 26 May by the Committee by 31 votes in favor and only 2 abstentions, and on 6 July 1982 by Parliament with 58 votes in favor, 37 against and 21 abstentions. From the more general guidelines (increasing political, economic and social solidarity, respect for human rights and values as well as for ethnic and cultural diversity, elimination of regional imbalances, responsible and vigorous contribution to peace and security, and preservation of natural resources in the context of balanced economic development), more targeted indications about the privileged areas of interest for reform were dealt with: the economic sectors envisaged by the Treaties of Rome and Paris, which would proposed new initiatives based on the subsidiarity principle; economic, industrial, commercial, and monetary policy; social policy; the transition from cooperation to a common policy on development aid; and the progressive formation of a common European policy on international and security relations. The motion for a resolution also provided for the institutions to be defined according to the principle of the separation of powers, thereby ensuring the legitimacy and democratic control of Community decisions and the improvement in the functioning of the Communities. In particular, it stressed the need for a division of powers among Community institutions to strengthen the executive and initiating role of the Commission, an increase in the control authority of the EP, and a redefining of the role of the Council of Ministers, to whom the exercise of legislative power was to be jointly entrusted. Finally, a differentiation of the rules for the revision of the Treaties was envisaged based on the type of revision entailed. After the general guidelines had been approved, in July 1982 the General Affairs Committee appointed Spinelli as rapporteur-coordinator, also appointing six other rapporteurs, each of whom tasked with drafting a working paper on different sections of the reform project: the French Gaullist Michel Junot, later replaced by the German Social Democrat Seeler, for finance; the French Socialist Jacques Moreau for economic policy; the 42 The second presenter of the proposal was the future President of the EP, Egon Klepsch. 43 Cf. the Resolution on the Guidelines of the European Parliament, in: Crocodile, n. 8 (May 1982) and n. 9 (June 1982). Spinelli’s Initiative and the European Parliament’s Union Project 113 British Conservative Derek Prag for foreign policy; the German Christian Democrat Gero Pfennig for social policy; the Belgian Liberal Karel De Gucht for the legal structure of the Union; and the Italian Christian Democrat Ortensio Zecchino for the institutions. In parallel with the EP, the Council and the Commission were also moving on the path of reform: the former worked on the Genscher- Colombo Plan,44 appointing a committee of diplomats led by de Schoutheete for more detailed study,45 while the latter created a task force for the study of reforms. In many European circles the idea of a new Messina was beginning to circulate, with a relaunch of European construction by the governments, to the point that already in the autumn of 1982, Spinelli would speak of the “sabotage” of the European Parliament’s institutional project.46 It is therefore no coincidence that, at the beginning of 1983, the Committee would address the problem of the follow-up to the project being studied, entrusting the analysis of ratification to expert lawyers. On the basis of the six final reports and of the annual drafting and rereading of each section and chapter, Spinelli drafted a resolution on the contents of the draft Treaty, which would be approved by the Committee on Institutional Affairs on 5 July 1983, with 29 votes in favor, 4 against, and 2 abstentions, and by the European Parliament on 14 September 1983, with 201 votes in favor, 37 against, and 72 abstentions. On the eve of the vote in the Committee and in the run-up to the plenary session debate, Spinelli sent a letter to Presidents Thorn and Ferri in which he pointed out some of the characteristics of the project which, if preserved, would make it a “strong” and long-term political act: the delimitation of a constitutional space within which gradualism was inscribed in the Constitution of the Union, finding expression in the sector of the competing competences and in the principle of subsidiarity; the effectiveness of political institutions; the European Union’s implementation of all Community policies, of political cooperation, and of the EMS, and the possibil- 44 Maria Eleonora Guasconi, “Il piano Genscher-Colombo”, in Lara Piccardo (ed.), L’Italia e l’Europa negli anni Ottanta. Storia, politica, cultura, Milan: FrancoAngeli, 2015, 33–46; Deborah Cuccia, “The Genscher-Colombo Plan: A Forgotten Page in the European Integration History”, in: Journal of European Integration History 24/1 (2018), 59–78. 45 The Genscher-Colombo Plan would give rise to the “Solemn Declaration on the European Union”, adopted by the European Council of Stuttgart on 19 June 1983. 46 “Sabotaggio…,” in: Crocodile, n. 10, October 1982. Daniela Preda 114 ity of changing these policies through new EU procedures; the ratification of the draft treaty by majority vote and its presentation directly to the national Parliaments.47 Spinelli was particularly aware of the need to defend the project from the resistance of the Member States, and before the EP vote he addressed the assembly by highlighting the difficulties of the task from the point of view of its concrete implementation, referring with great oratory effectiveness to Hemingway’s apologue of the old fisherman who, having caught the most important fish of his life, saw it gradually devoured by sharks to the point that, when it arrived in port, all that remained was a single fishbone. “When it votes in a few minutes”, he exclaimed, “Parliament will have caught the biggest fish of its life, but it will have to take it to shore. So let’s be careful, because there will always be sharks that will try to devour it. Let’s try not to arrive back in port with only a single fishbone”.48 Following the resolution approved on 14 September, the Committee on Institutional Affairs turned its contents into articles of a Treaty text with the help of four lawyers: Francesco Capotorti, Meinhard Hilf, Francis Jacob, and Jean-Paul Jacquet. Approved by the Committee on 13 December by 31 votes to 2, the draft Treaty was debated by the EP in plenary session on 14 February 1984. Spinelli intervened in the chamber, presenting the project as a response to the growing need for European unity: the affairs of common interest could only be managed properly by a common power. He then focused at length on the follow-up to the project, trying to instill in his parliamentary colleagues the awareness of and pride in representing the only European forum in which the citizens of Europe were legitimately represented and thus able to draw up a constitutional project with a European perspective. This led to strong opposition to any attempt at bringing the project back to the beehive of traditional intergovernmental conferences and diplomatic negotiations, in which only opposing national interests were destined to emerge, and thereby have it degenerate into a simple study document: “Once approved, our project must not go to the Council, which would pass it on to the diplomatic representatives, who would then dissect and bury it. We will send it to the national governments and parliaments and ask them to start the ratification procedure.”49 47 Letter from Altiero Spinelli to Presidents Thorn and Ferri, in: Crocodile, n. 11, June 1983. 48 Spinelli, Discorsi, speech of 14 September 1983, 333. 49 Ibidem, speech on 14 February 1984, 337. Spinelli’s Initiative and the European Parliament’s Union Project 115 Spinelli was aware that the real battle would begin when the project was sent to the Member States; by adopting a method reminiscent of that adopted by Coudenhove-Kalergi and by the European Parliamentary Union in the second half of the 1940s, he invited the political groups of the EP to exercise their influence on the national parties and Parliaments. Finally, he recalled that, for the project to come into force, unanimity was not necessary, but only the agreement of six states (7 in the case of an enlarged 12-state Europe). As is well-known, the draft Treaty establishing the European Union was approved by a large majority in the European Parliament on 14 February 1984, with 237 votes in favor, 31 against, and 43 abstentions. The Draft Treaty establishing the European Union The European Parliament’s draft referred to the report drawn up in 1975 by the Committee of the European Communities50 and handed over to Tindemans, also referring to van Aerssen’s resolution of September 1979. The draft ensured legal continuity between the old Communities and the new Union that would replace them; transformed the European Council into the collegiate presidency of the Union and the Commission of the Community into a true democratic political executive;51 maintained a legislative and budgetary role for the Council of Ministers, which was transformed into a deliberative Chamber of the States with majority rule (a tenyear transition period was provided for); and gave the EP real legislative and budgetary power, in co-decision with the Council. It also gave the Union full economic powers and the power to gradually build a monetary union, as well as the power to increase its own resources through its democratic procedures by introducing the principle of subsidiarity for concurrent competencies. The project encompassed gradual decisions regarding foreign, security and defense policy, which were considered to be potential EU competencies: in the beginning, these powers would remain with the Member States, through an intergovernmental cooperation governed by 50 Strongly influenced by Spinelli, that report was mainly prepared by Riccardo Perissich, presenting elements – the division of exclusive, concurrent, and potential competencies, the subsidiarity principle – of the European Union project of 1984. Cf. Pier Virgilio Dastoli, in Melchionni (ed.), Altiero Spinelli e il progetto di trattato di Unione Europea, 22. 51 Alongside the no-confidence power of the EP with respect to the Commission, the power of the constructive vote of no-confidence was also proposed. Daniela Preda 116 the European Council, until such time as the European Council unanimously decreed that these competencies should become part of the concurrent or exclusive powers of the Union. The project therefore recognized the existence of a sphere of problems to be dealt with by the European Council through cooperation. However, on the one hand, it prohibited the intergovernmental method from intruding into the field of common action, and on the other opened the door to a possible transition from cooperation to common action. The Spinelli project introduced the concept of Union citizenship in parallel with national citizenship, the two being closely connected. Finally, the draft also envisaged, following the example of the Philadelphia Convention, ratification by a majority of the Member States, whose population made up two-thirds of the total population of the Community. There was extensive mobilization of movements for European unity in support of the project: in particular, the Congress organized by the European Movement in Brussels on 24 March 1984 and the States General of the Council of European Municipalities and Regions, held in Turin from 11–14 April 1984, with the participation of thousands of European local administrators.52 As Spinelli had predicted and feared, after approval by the EP, a mechanism was soon set in motion to misrepresent the project. At the European Council in Fontainebleau in June 1984, the Heads of Government decided to appoint a committee of their own personal representatives, under the presidency of the Irishman James Dooge, to draw up proposals to improve the institutional functioning of the Community to achieve the European Union. The Dooge Committee’s report, presented to the European Council in Brussels in March 1985, proposed convening an intergovernmental conference to draw up a draft European Union treaty “inspired” by the draft project of the EP, which was thus effectively shelved. At the Milan Council in June 1985, the Heads of State and Government finally chose the intergovernmental conference approach to draw up proposals to amend the institutional treaties aimed at improving institutional functioning, to achieve the internal market, and to integrate political cooperation into the community’s activities. The European Parliament was not even allowed to cooperate in the work of the governments, as had been the case with the ad hoc Assembly during the study of the draft Statute of the European Political Community. 52 Cf. Fabio Zucca, Autonomie locali e federazione sopranazionale, Bologna: Il Mulino, 2011. Spinelli’s Initiative and the European Parliament’s Union Project 117 As well-documented, the Conference would end during the European Council in Luxembourg on 2–3 December 1985, giving rise to the Single European Act, which in turn would revive the prospect of economic and monetary union. Spinelli’s disappointment was stinging, though he was not resigned to defeat. In January 1986, he gave a famous speech in the chamber: “Ladies and gentlemen, when we voted on the draft Treaty for the Union, I reminded you of Hemingway’s apologue of the old fisherman who catches the greatest fish of his life, sees it devoured by sharks, and reaches port with only a single fishbone. We, too, have now reached port and we, too, have only a single fishbone left of the great fish. For this reason, Parliament must not resign itself to defeat or renounce its goal. We must prepare to go out once again and soon into the open sea, preparing the best means for catching the fish and protect it from the sharks.”53 Although shelved, the draft Treaty of the EP, precisely because of its ability to give ideal but at the same time pragmatic answers to the challenges of the time, was nevertheless destined to bear fruit. In the immediate future, while the Single European Act left out the most advanced reforms in the Spinelli project, in addition to codifying foreign policy rules, it introduced at the same time some innovations in the institutional mechanisms, expanding the sphere of decisions to be made by majority vote in the Council of Ministers and strengthening the powers of the EP through legislative cooperation with the Council in areas where majority voting was called for. It also would require the assent of the European Parliament for entry into force of the Association Agreements and Accession Treaties and of some commercial agreements. Most of the innovative provisions of the draft Treaty would be included in subsequent Treaties (the Treaties of Maastricht, Amsterdam, and Nice) or in the text of the Constitutional Treaty of October 2004.54 53 Spinelli, Discorsi, speech of 16 January 1986, 373. 54 Paolo Ponzano, The “Spinelli Treaty” of February 1984. The Start of the Process of Constitutionalizing the EU, in EU Federalism and Constitutionalism: the Legacy of Altiero Spinelli, Andrew Glencross and Alexander H. Trechsel eds., Lanham: Lexington, 2010, 3–10. Daniela Preda 118 A Dream Coming True: The Netherlands and the Creation of the European Common Market, 1984–1989 Jan van der Harst For the Netherlands, the realisation of the common market – following the signing of the Single European Act in February 1986 – was like a dream coming true. Since the Beyen plan of the early 1950s, the Dutch government had been advocating the creation of a truly open European market, guaranteeing free and fair competition for firms operating across national borders. The Netherlands, with a domestic market of limited dimensions but with a well-developed, competitive and internationally oriented business sector, needed the European Community for boosting its exports. The calculation was that further liberalization of regional trade would contribute significantly to the country’s welfare and wellbeing. The customs union, agreed on in the 1960s, was considered insufficient and the White Paper designed by the Delors Commission was seen as perfectly in line with national economic and commercial preferences. With this in mind, the Netherlands was also in favour of extending the possibilities for majority-voting in the Council of Ministers. Coming out of the crisis By 1984, the starting year of this chapter, the Netherlands was just coming out of one of the more difficult periods in its postwar existence. In the late 1970s/early 1980s the country had been hit by a severe economic crisis, characterized by high unemployment and inflation, combined with huge uncertainties among the population. The Dutch budget deficit had reached alarming levels and the extensive and generous social security system was no longer considered to be sustainable. However, the country managed to come out of the crisis rather rapidly, helped by a stern but successful austerity programme, initiated by the centre-right government led by the Christian-democrat Prime Minister Ruud Lubbers. From 1982 Lubbers guided a coalition of Christian-democrats (CDA) and Conservative- 119 Liberals (VVD) which remained in charge all through the 1980s.1 This was also the time of the famous Wassenaar Agreement (1982), a tripartite deal between government, employers and trade unions, regulating wages and combatting unemployment and inflation. The intended measures initially encountered stiff opposition throughout the country, but they proved to be effective and soon contributed to making the Dutch economy healthy and competitive again. Apart from these encouraging developments at the domestic level, there was also movement on the European front. The Fontainebleau summit of 1984 managed to solve the British budget issue and made the Community prepared to take initiatives. This particularly became visible from 1985 on when Jacques Delors became head of the new European Commission. To the relief of Dutch government and parliament the long period of eurosclerosis or europessimism was finally over. The Hague was happy to see the European Commission taking the lead in the new relance. Indeed, by the mid-1980s the signals for taking fresh integration initiatives were put on green. There was dynamism on several levels: Spinelli came with his draft constitution for a European Union, Dooge produced a report on behalf of the European Council, and at the same time Max Kohnstamm mobilized a second action committee – the successor of the renowned Monnet committee – which behind the screens lobbied for a European relaunch centered around the creation of a common market. For Kohnstamm cum suis it was clear that in the mid-1980s the prospect of a common market offered the best chances for political support and success.2 Moreover, last but not least, the European business sector showed activism in developing new ideas. The Round Table of Industrialists played a crucial role in making the Community ripe for speeding up the process of economic integration. Triggered by American and Japanese competition the CEOs of big companies like Philips (electronics and lighting) urged the European governments to get rid of the remaining obstacles to crossborder trade. Although at the time the member-states maintained a common external tariff and had succeeded in abolishing mutual trading tariffs, there were still innumerable non-tariff barriers at the internal frontiers, such as quality and health checks, fiscal constraints and divergent environmental standards. Together they had a crippling effect on trade circulation 1 In 1989 the Lubbers governments I (1982–1986) and II (1986–1989), both consisting of CDA and VVD, were succeeded by Lubbers III (1989–1994), a coalition of CDA and PvdA (Labour). 2 Anjo G. Harryvan and Jan van der Harst, Max Kohnstamm. A European’s Life and Work, Baden Baden: Nomos, 2011, 145–156. Jan van der Harst 120 and limited the Community’s position vis-a-vis third countries. For the Dutch government it was evident that the common or internal market needed to be given first priority. In that respect, the Dutch differed from several other actors who preferred to move first in other areas, such as monetary affairs or defence. Even Delors initially had to be convinced that the market was the most likely instrument to offer results.3 Underestimating the implications With the Single European Act, the Cockfield report and the ‘1992 process’ the Dutch got most of what they aimed to achieve at the negotiation table. The whole development was a major success for Dutch diplomacy, arguably one of the biggest foreign-policy successes ever.4 Non-tariff barriers would be progressively eliminated and, despite British opposition, majority voting in the Council of Ministers was extended considerably – all in line with Dutch preferences.5 However, when looking back at the parliamentary debates at the time, it is striking to see how reserved, almost skeptical, the Dutch parliament at the time was about the outcomes of the Single European Act. We may say that parliament and political parties failed to fully grasp the importance of the moment. In fact, the majority of parliament complained that the Single European Act (SEA) was too modest in scope and did not go far enough. They saw the SEA as only a tiny step forward, as a “set of uninspiring treaty amendments rather than a harbinger of unprecedented economic and political change”.6 The Netherlands was not the only country showing hesitation: the Italian and German parliaments were also highly critical, while Denmark and Ireland put the issue to a referendum. The most general complaint voiced in the Dutch Lower House was that the European Parliament was given insufficient means to control the ex- 3 Harryvan and Van der Harst, Max Kohnstamm, 153. 4 Anjo G. Harryvan and Jan van der Harst, Succes creëert nieuwe verhoudingen: het Nederlandse regeringsbeleid en de Europese integratie, in: Hans Vollaard, Jan van der Harst and Gerrit Voerman (eds.), Van Aanvallen! naar verdedigen? De opstelling van Nederland ten aanzien van Europese integratie, 1945–2015, Den Haag: Boom bestuurskunde, 2015, 90. 5 Interview with Charles Rutten, in: A.G. Harryvan, J. van der Harst and S. van Voorst (eds.), Voor Nederland en Europa. Politici en ambtenaren over het Nederlandse Europabeleid en de Europese integratie, 1945–1975, Amsterdam: Boom, 2001, 228. 6 Desmond Dinan, Europe recast. A History of European Union, New York: Palgrave Macmillan, 2014, 206. The Netherlands and the Creation of the European Common Market, 1984–1989 121 panded development of integration. Almost all political parties – from left to right (with the exception of some small orthodox-protestant groups) – indicated that the cooperation procedure agreed on by the member-states, which provided the EP with the right of amendment (in the form of a second reading of draft legislation), was a disappointing result and that – instead – the EP should have been given wider responsibilities in the form of a parliamentary veto by means of a co-decision procedure (which would be introduced a few years later, in the Maastricht treaty). Democratic shortcomings formed the main problem for Dutch MPs, but apart from that, other criticisms were ventilated as well. Left-wing parties (PvdA, PSP, PPR) argued that the social and environmental benefits of the SEA were insufficient or even non-existent, while the governing centreright CDA warned that civil society should be more adequately represented in the new European constellation. Even government coalition partner VVD (also centre-right) criticized the lack of progress in the non-market domain. In this period the VVD was still very much integration-minded, it was the time just before Frits Bolkestein became leader of the party (in 1990). Under Bolkestein, the later Eurocommissioner under Prodi, the VVD steered in a more critical direction with regard to European integration, especially on issues stretching beyond the liberalization of markets. Progressive-Liberal D66 was the most Europhile party of the Dutch parliament and welcomed the step forward in economic integration, but, like most other parties, criticized the lacking degree of democratic accountability in the European Community. Once more, the necessity of a powerful European Parliament was urged to ensure democratic embeddedness for the expanding development of European integration.7 Eventually, despite the reservations and low expectations, an overwhelming part of the Dutch Lower House voted in favor of the SEA. The prevailing opinion was that the alternative – a negative vote – was after all the less attractive option. In sheer numbers there were only four parties supporting the Act (CDA, PvdA, VVD and D66) as opposed to five parties being against (SGP, PPR, GPV, RPF and PSP), but the four together held no less than 142 out of 150 parliamentary seats (compare with the situation in 2020, when the same four parties occupy only 79 seats!). The five opposing parties occupied the eight remaining seats and, being in such an 7 Anjo G. Harryvan and Jan van der Harst (eds.), Verloren Consensus. Europa in het Nederlandse Parlementair-politieke debat, 1945–2013, Amsterdam: Boom, 2013, 147– 154. Jan van der Harst 122 obvious minority position, they were unable to block the Dutch support for revision of the Treaty of Rome.8 Ambiguities regarding monetary integration In the course of time, Dutch enthusiasm for the European relaunch started to increase, especially when the beneficial effects of the ‘Europe 1992 campaign’ became fully clear. The Commission was provided with substantial leverage to clear many of the obstacles which were still bothering the free movement of goods, services and persons. Dutch business started to benefit quickly and substantially, also because of simultaneous actions undertaken to tackle the issue of free movement of capital. The latter development – freedom of capital – had become feasible after a major reorientation of French financial and economic policies under President François Mitterrand, starting in 1983. The Dutch government was happy to see Paris moving to a greater acceptance of liberalization and deregulation, but the French asked a price for this. They put the notion of Economic and Monetary Union (EMU) high on the agenda and asked the partners to make progress particularly with the issue of monetary integration, including opening discussions on a European System of Central Banks, the fixing of exchange rates and the transfer of monetary responsibilities from the participating countries to Community institutions. The French longer-term objective obviously was the creation of a European central bank and a common European currency, in an attempt to challenge the existing German unilateral hegemony in the monetary sphere. Authorities in the Netherlands had mixed feelings about this. At the time, the national monetary and financial position was fairly stable because of the prospering economy (which had recovered quickly after the Wassenaar Agreement of 1982) and the close bilateral linkage between the German Mark and the Dutch guilder, within the – in the Dutch view – well-functioning European Monetary System (EMS). Whereas other partners disliked the D-Mark’s position of de facto anchor currency in EMS, The Hague was perfectly happy with it and reluctant to sacrifice the privileged position for the sake of an unknown adventure involving the possi- 8 The Lower House vote on the Single European Act was as follows: In favour: CDA (54), PvdA (52), VVD (27), D66 (9); against: SGP (3), PPR (2), GPV (1), RPF (1), PSP (1). Soon after, in 1990, PPR and PSP, together with CPN (Communists), merged into the Green Party (Groen Links). The Netherlands and the Creation of the European Common Market, 1984–1989 123 ble sacrifice of both the national currency and the independence of the national bank.9 It was particularly the Dutch Central Bank (De Nederlandsche Bank, DNB), and its president Wim Duisenberg, warning the European partners that monetary integration in the European Community was acceptable only if substantial progress was made with the coordination of macro-economic policies – not earlier. It was the preferential Dutch sequence, consistently promoted by The Hague since the Werner plan of 1970: first tackle economics, then monetary affairs. DNB authorities feared the revival of old ideas where richer member-states (creditor countries) would be forced to pay for the debts and deficits of less developed ones, for example by the creation of a European transfer fund. These fears were enhanced by the recent EC enlargement with Spain and Portugal and by continuous Southern European pleas for an Integrated Mediterranean Programme and for an increase of regional or structural funds. The reserved DNB stance found support in the Ministry of Finance. More flexible were Prime Minister Lubbers and Foreign Minister Hans van den Broek, who both did not rule out the possibility of having the common market complemented by a single currency.10 But in the early stages of the discussions Finance and DNB were in charge. And they spoke out against the proposal for a monetary union.11 To prevent the French-desired move towards monetary integration from being made, Dutch authorities had put their hopes on two important actors in the European negotiations: the British Prime Minister Margaret Thatcher and the president of the German Central Bank Karl Otto Pöhl. The tandem Finance/DNB believed that these two leading personalities would be able to block unwise French proposals for further monetary entanglement. It was widely known that Thatcher was fully opposed to a single European currency and that Pöhl disliked the idea of giving up the independence of the Bundesbank. However, to the Dutch dismay, Thatcher and Pöhl proved to be unable to block the creation of the so-called Delors Committee, which was charged with the task of further exploring the EMU concept, with emphasis on the monetary side. Finance/DNB had hoped that the Committee would be fully run by the presidents of the cen- 9 Mathieu Segers, ‘Nederland en de Europese integratie’, in: Jacco Pekelder, Remco Raben and Mathieu Segers (eds.), De wereld volgens Nederland, Amsterdam: Boom, 2015, 97–100. 10 Roel Janssen, De euro. Twintig jaar na het Verdrag van Maastricht, Amsterdam: De Bezige Bij, 2012, 39; André Szász, De euro. Politieke achtergronden van de wording van een munt, Amsterdam: Mets & Schilt, 114. 11 Janssen, De euro, 105. Jan van der Harst 124 tral banks, but they were surprised to see that Delors was given the mandate to chair the meetings, with eventual endorsement of both Thatcher and Pöhl. It had turned out that Pöhl was faced with a new domestic reality in Germany after Foreign Minister Hans-Dietrich Genscher had openly started to speculate about the advantages of a monetary union. Pöhl could not ignore this political signal, which left Thatcher in a fully isolated position.12 When the Delors Committee’s report was published, Dutch apprehensions proved to be only partly justified. Indeed, Delors managed to have a big impact on the activities of the Committee and contributed to laying the foundations for what would eventually become a single currency and an ECB. But at the same time, thanks to Pöhl, Duisenberg and others, the Commission President had to make the important concession that the ECB would become fully independent following the example of the Bundesbank. This was warmly welcomed by Dutch monetary authorities who also praised the Committee report’s emphasis on price stability and the proposed connection between economic and monetary union.13 In that sense, the Netherlands was less alarmed by the outcome than the UK government. Prime Minister Thatcher was absolutely horrified and blamed the Delors Committee and its report for being a socialist conspiracy. To Dutch government representatives visiting her in Chequers she exclaimed: “Delors: a socialist! Pöhl: a socialist! And your bank president Duisenberg, isn’t he also a socialist?”14 Finance/DNB secretly hoped that the proposed ECB and common currency would prove to be long-term ventures without immediate implications. They aimed to postpone the ECB until the so-called ‘third phase’ of EMU, which was not supposed to happen in the foreseeable future. However, Delors and other supporters of monetary integration were helped considerably by the revolutionary events in Eastern Europe, starting in 1989, which fully changed the European landscape and made Germany prepared to further align with French monetary preferences and speed up the negotiations. It was also the time that DNB lost its leading position in formulating the Dutch policy position on monetary integration. The new Finance Minister Wim Kok (from 1989) was less reserved on the euro issue than his predecessors, and together with Prime Minister Lubbers and For- 12 Szász, De euro, 125 and 140–150. 13 Janssen, De euro, 144. 14 Szász, De euro, 146. Wim Duisenberg, the president of the Dutch Central Bank (1982–1997), later to become the first president of the European Central Bank (1998–2003), was member of the social-democrat PvdA. The Netherlands and the Creation of the European Common Market, 1984–1989 125 eign Minister Van den Broek he ensured an active Dutch role in the European negotiations, eventually leading to the realization of the Treaty of Maastricht, under Dutch chairmanship.15 Serious reservations regarding political integration Since the start of European integration in the 1950s, the Dutch government had been reluctant to support developments directed towards the political integration of Western Europe. In the area of High Politics priority was given to military and political cooperation with the big Atlantic ally, the United States. The Netherlands felt that the relationship with the US via NATO offered the best guarantee for Dutch security, and as such was to be preferred to European alternatives as they presented themselves throughout the years, such as the European Defence Community, the Fouchet plan cooperation and the Western European Union. Likewise, the European foreign-policy platform EPC (European Political Cooperation), which was founded in the early 1970s, received only lukewarm support from the Netherlands. EPC was acceptable only to the extent that it did not interfere with the existing Atlantic bond and arrangements. The Hague – and particularly its Atlanticist-oriented Foreign Minister Van den Broek – was happy to see that the Single European Act did not lead to a major reinforcement of the position of EPC, despite the latter’s upgrading with a permanent secretariat and its planned involvement in the political and economic aspects of security.16 More alarming for the Dutch government were initiatives on the part of Foreign Minister Genscher in Germany who – next to his moves in the monetary sphere (see the preceding section) – put the issue of European political integration on the agenda during the second half of the 1980s, by making a plea for a European pillar within NATO.17 Genscher was unhappy with the way how the United States and the Soviet Union bilaterally decided over European affairs, like in the Reykjavik agreement of 1986. German initiatives produced worries for the Lubbers government, the more so as Genscher seemed to be backed by Federal Chancellor Helmut Kohl. Dutch worries proved justified when from 1989 on the political revolution in Central and Eastern Europe 15 Szász, De euro, 229–238. 16 Duco Hellema, Nederland in de wereld. De buitenlandse politiek van Nederland, Utrecht: Spectrum, 2014 (5th edition), 321–322. 17 Szász, De euro, 125. Jan van der Harst 126 turned European political integration into a prominent issue on the agendas of the European Prime and Foreign Ministers. Especially so when political integration (championed by Germany) became tightly linked to the issue of monetary integration as promoted by France. All these developments took the Dutch government by surprise, and they forced The Hague to quickly adapt its strategy to the new circumstances. Although the Atlantic link remained vital, it was clear that the Dutch government could no longer avoid the reality of an increasing sense of urgency in organising foreign and security policy within the European Community. Conclusion The years 1984–1989 were critical years for Dutch membership of the European Community. It was exactly in this period that the long-anticipated move was made towards the establishment of the EC common market, one of the most important postwar policy aims of the Dutch government. The decade of eurosclerosis was finally left behind and the future looked bright again. The Dutch manufacturing industry and particularly the country’s expanding services sector were expected to benefit substantially from the removal of the still existing non-tariff barriers, as decided on in the Single European Act – and eventually they did benefit. Curiously enough, the initial reaction of the national parliament towards the SEA was predominantly one of skepticism and reservation. The general feeling was that the Act did not go far enough and especially left to be desired in terms of (democratic) powers attributed to the European Parliament. However, soon enough Dutch MPs came to realise that the implementation of Cockfield’s Whitebook provisions and the subsequent ‘Europe 1992 campaign’ were perfectly in line with the country’s economic and commercial preferences. This is not to say that it was a time of plain sailing for Dutch policymakers. One could argue that for the Dutch government the common market was an end in itself – Europeanization through ‘marketization’- but that was obviously not the case for Delors and many other European leaders (Mitterrand, Kohl, González, etc.). Simultaneous developments towards a monetary and political union were looked at suspiciously in the Netherlands. The French plans for monetary integration were condemned because they were expected to lead to a European common currency and a European Central Bank, where The Hague preferred to cling to the independence of its national bank from outside political pressure and to the maintenance of the Dutch guilder, within the context of EMS. If a mone- The Netherlands and the Creation of the European Common Market, 1984–1989 127 tary union was unavoidable it should in the Dutch view be something of the longer run, as the end result of an extensive process of monetary integration, preceded by solid arrangements in the sphere of macro-economic coordination. An ECB, if needed, should only be considered after a long transition period. Likewise, the Dutch government was unhappy with German initiatives aimed at closer political integration, in the form of a common foreign and security policy. European schemes in the area of High Politics were supposed to clash with Dutch preferences for maintenance of the Atlantic link with the United States through NATO. For a while, the Dutch government hoped that French monetary and German political ambitions would remain long-term objectives, staying low on the European agenda because of a lack of political urgency. However, this changed decisively when political revolutions in Central and Eastern Europe started to break out in 1989. They caught the Dutch government by surprise and left it with no other option than to accept the developments that were set in motion and that would be brought to a conclusion in Maastricht 1991, under Dutch chairmanship. Jan van der Harst 128 Part II: The Single European Act and its Consequences European Political Cooperation and the Single European Act Maria Eleonora Guasconi The Single European Act of 1986, which supplied the institutional machinery necessary to complete the internal market, represented a step change in European integration, able to spur on its revival after years of stagnation and decline. By eliminating all non-tariff barriers and establishing the free movement of goods, labour, capital and services by 1992, the Community established a European single market of over 325 million people, rescuing the European countries’ economy from the doldrums of the “long 1970’s”.1 Although the Single European Act was not originally designed to deal with foreign policy issues, it marked a significant step forward for the development of a common European foreign policy as well. In its title III, it formalized, in fact, the informal arrangement by which the EC members coordinated their foreign policies, known as European Political Cooperation (EPC), linking the EC procedures to this mechanism of coordination of the member states’ foreign policies in a single legal instrument.2 As a consequence, it inaugurated a structural duality between the EC’s policies and the intergovernmental cooperation represented by EPC, which would be confirmed by the pillar structure of the Maastricht Treaty. It also introduced the issue of ‘consistency’, in other words, the increasing recourse made by EPC to EC external policy tools, such as economic sanctions, or the use of conditionality in economic assistance, in order to further its policies.3 This chapter addresses the circumstances, which brought EPC’s procedures inside the negotiations of the Single European Act, trying to cast light on the debate, which arose among the European Foreign ministers 1 Desmond Dinan, Europe Recast. A History of the European Union, Boulder: Lynne Rienner, 2004, 217–222. 2 Simon J. Nuttal, European Foreign Policy, Oxford: Oxford University Press, 2000, 16. 3 Horst-Günther Kranzler / Henning C. Schneider, “The Question of Consistency”, in: Elfriede Regelsberger / Philipe de Schoutheete de Tervarent / Wolfgang Wessels (eds.), Foreign Policy of the European Union, Boulder: Lynne Rienner, 1997, 133–151. 131 on the Title III of the Act and on the role played by the Commission during the negotiations. It also deals with the consequences of the Single European Act in East- West relations, reflecting on whether and how it was instrumental in stimulating the Soviet Union opening to Western Europe. In particular, this contribution will try to demonstrate that the completion of the single market and the strengthening of European Political Cooperation affected USSR policy towards Western Europe and influenced Gorbachev’s diplomatic concept of a European Common Home. The European countries had achieved the goal of coordinating their foreign policies and behaved as a political actor, giving birth to a real Ostpolitik. EPC during the 1970’s: “a puny child” becomes “adolescent”4 EPC, established by the Davignon Report of 1970, was an informal arrangement by which the European governments coordinated their foreign policies, in the attempt to give a political dimension to the European Community and to have Europe’s voice heard in the world. The Report did not establish a real political union; instead, it created a network of meetings, contacts and relationships at all levels from the Foreign Ministers, through the Political directors right down to working desk level in the Foreign Ministries of the member countries. All these people were able to communicate with each other at different levels, if needed on daily basis, through the so-called COREU telegraphic network.5 The frequent meetings of Foreign ministers, political directors, experts or ambassadors created a true working community.6 EPC had an “effect educatif” on the European diplomats, who were obliged to “travailler en Eu- 4 Tanguy de Wilde d’Estmael, “European Foreign and Defence Policy”, in: Éric Bussière / Vincent Dujardin / Piers Ludlow / Federico Romero/ Dieter Schlenker, The European Commission. History and Memories of an Institution 1986–2000, Luxembourg: Publications Office of the European Union, 2019, 551. 5 Maria Gainar, Aux origines de la diplomatie européenne. Les Neuf et la Coopération politique européenne de 1973 à 1980, Brussels: Peter Lang, 2012, 63–68; Simon J. Nuttall, European Political Cooperation, Oxford: Oxford University Press, 1992, 149–182. 6 Christopher Audland, Right Place Right Time, London: The Memoir Club, 2004, 273–279; Angel Vinas / Sigfrido Ramiréz-Pérez / Éric Bussière, “Trade policy and external relations: new dynamics”, in: Bussière / Dujardin / Dumoulin / Ludlow / Brouwer / Tilly, The European Commission. History and Memories of an Institution 1973–1986, 425–427. Maria Eleonora Guasconi 132 ropéens”, comparing their national positions to those of the other member countries and to seek a common position in international crisis.7 The EPC machinery worked alongside, but was completely outside the Community framework, it was purely intergovernmental, its declarations were not legally binding and cooperation was limited to foreign policy issues, with the exclusion of defense and security matters. As was well described by the literature on this subject, the most important success achieved by EPC during the 1970’s was represented by the Conference on Security and Cooperation in Europe (CSCE). During the negotiations, which ended in Helsinki in August 1975, the EC member countries – which coordinated their works within the EPC’s framework – were able to speak with one voice and played an important role in the socalled “third basket”, which guaranteed civil rights and political liberties. Thus, they contributed decisively to the success of the Conference and to the emergence of various dissident groups who took advantage of the new environment.8 In other international crises, as for example the Euro-Arab dialogue, the crisis of Cyprus in 1974, the Soviet invasion of Afghanistan, or the seizing of US hostages in Iran in 1979, the European countries were not so able to speak with one voice. However, they distinguished themselves from the United States, maintaining a separate and autonomous attitude from the American government. For example, in spite of its limited achievements, the dialogue with the Arab countries harmonized the EC governments policies towards the Arab-Israeli conflict and led to the Venice Declaration in June 1980, considered a milestone of the European policy towards the Middle East.9 EPC’s failure to react immediately to the Soviet invasion of Afghanistan in December 1979 raised a debate among the Foreign ministers about the need to review its mechanism: in fact the Foreign ministers issued a declaration condemning the Soviet invasion only two weeks after the beginning 7 Historical Archives of the European Union, Florence (henceforth: HAEU), Emile Noël (henceforth: EN) Papers, f. 2254, Littérature grise, Dix ans de coopèration politique européenne, H. de Fonseca-Wollheim, Mars 1981. 8 Jacques Andreani, Le piège, Helsinki et la chute du Communism, Paris: Odile Jacob, 2005; Angela Romano, From Détente in Europe to European Détente. How the West Shaped the Helsinki CSCE, Brussels: Peter Lang, 2009; Daniel C. Thomas, The Helsinki Effect: International Norms, Human Rights and the Demise of Communism, Princeton: Princeton University Press, 2001. 9 David Allen / Andrin Hauri, “The Euro-Arab Dialogue, the Venice Declaration and beyond”, in: Victor Mauer / Daniel Möckli, European-American Relations and the Middle East: from Suez to Iraq, London: Routledge, 2010, 69–133. European Political Cooperation and the Single European Act 133 of military operations. The reason for this slow reaction depended only partially on the Christmas holidays and the turnover of the EPC’s Presidency, it was mainly due to the European attempt to preserve, as much as possible, a policy of détente, following a policy of “openness but firmness”: openness towards a dialogue with the Soviet Union, but firmness in not making concessions to Moscow, simply in order to have such a dialogue.10 However, this slow reaction became the subject of many bitter comments and proved the need to review the EPC’s mechanism, especially in light of the Community enlargement to Greece in 1981. In particular, the British Foreign Minister Peter Carrington bitterly criticized the slow and uncoordinated action of the Nine demonstrated during the Afghan crisis, and drew up a report, known as the London Report or the Carrington Plan, approved in October 1981, which introduced a series of pragmatic improvements to EPC’s machinery, such as the full participation of the Commission in EPC, the troika Secretariat and a crisis procedure, that introduced the possibility to convene the Political Committee, or a ministerial meeting, within 48 hours at the request of three member states. It also introduced the principle of consistency, stressing the need that: “the Presidency will ensure that the discussion of the Community and Political Cooperation aspects of certain questions is coordinated if the subject matter requires this”.11 The improvements provided by the London report and the increasing recourse to the EC’s economic and financial tools in order to reinforce the policies adopted in EPC’s framework proved particularly successful during the Polish crisis, which started after the imposition of martial law in December 1981, and the Falkland’s war of 1982. Poland and the issue of sanctions against Jaruzelski’s regime, who had imposed the martial law and imprisoned the members of Solidarity, became one of the most debated issues in EPC’s framework, providing a forum where the EC’s member states harmonized their foreign policies, developing a dialogue with Poland and the Soviet Union.12 The Ten promoted a political dialogue with the Polish government, mainly conducted by means of EPC, accompanied by the threat to suspend the purchase of European agricultural products at a favourable price. This 10 Maria Eleonora Guasconi, “Keeping Détente Alive: European Political Cooperation and East-West Dialogue during the 1980s”, in: De Europa, II, n.2, 2019, 87– 100. 11 Margaret Thatcher Foundation (henceforth MTF), Prime Minister 19/464, London Summit 24–26 November 1981, Report on Political Cooperation. 12 Guasconi, “Keeping Détente Alive”, 87–100. Maria Eleonora Guasconi 134 strategy proved to be a persuasive tool, due to the serious Polish economic crisis and to the country’s increasing international debt.13 In January 1982, the EC Foreign ministers issued a declaration, which expressed the Ten’s willingness to envisage economic sanctions against the Soviet Union (considered accomplice of Wojciech Jaruzelski), but, due to the opposition of the German Foreign minister Hans Dietrich Genscher, the Nine refused to extend these measures to Poland. Subsequently, in March 1982, the European Council of Ministers adopted a regulation imposing some watered-down restrictions on imports from the Soviet Union and froze the negotiations on the Polish international debt. The European response to the imposition of martial law in Poland caused a strain on relations with the Reagan administration, which considered the measures adopted by the Europeans too weak and ineffective and started to exert strong pressure on its allies, asking to take firmer steps in commercial measures against the USSR, aiming in particular to stop the building of the Siberian pipeline.14 In July 1986, the British ambassador presented a démarche to General Jaruzelski, on behalf of the EC members, making it clear that relations with Western Europe would continue to improve only if the Polish government widened the amnesty to include all Solidarity activists.15 In September 1986, Jaruzelski declared a general amnesty, which represented a watershed in Poland’s democratic transformation and is considered the departure point for the country’s democratic revolution, which culminated in the round table negotiations in February and in the elections of June 1989. The Polish crisis provided a precedent for similar sanctions against Argentina during the Falkland Islands’ war, which confirmed that EPC’s mechanism and the Community’s procedures were moving closer. In April 1982, following Argentina’s occupation of the Falkland/Malvinas Islands, Margaret Thatcher called on her EC partners to show their solidarity 13 Karen Smith, The Making of EU Foreign Policy: the Case of Eastern Europe, Palgrave: Macmillan, 1999, 38–42; Sara Tavani, “Muddling through the European Bloc System: the Evolution of Italian-Polish Relations over the 1970’s and 1980’s”, in: Winfried Loth / Nicolae Paun (eds.), Disintegration and Integration in East-Central Europe 1919-post 1989, Baden-Baden: Nomos, 2014, 52. 14 Stephan Kieninger, The Diplomacy of Détente. Cooperative Security Policies from Helmut Schmidt to George Shultz, London: Routledge, 2018, 83–148. 15 Gregory F. Domber, “Rumblings in Eastern Europe: Western Pressure on Poland’s Moves towards Democratic Transformation”, in: Frédéric Bozo / Marie- Pierre Rey / N. Piers Ludlow / Leopoldo Nuti (eds.), Europe and the End of the Cold War. A Reappraisal, London: Routledge, 2008, 92. European Political Cooperation and the Single European Act 135 against Argentina and asked them to exert political and economic pressures on the regime. The Commission proposed to use art. 113 of the Treaties of Rome, suspending all imports from Argentina for a month, in order to achieve a diplomatic deal. A great debate among the member countries arose on the principle of combined action between the Member States and the Community, mainly achieved through EPC and trade sanctions were approved and extended twice, although with the defection of Italy and Ireland.16 EPC and the negotiation of the Single European Act: the issue of consistency As demonstrated by the Polish crisis and the Falklands war, the Community recourse to financial resources in order to reinforce the policies adopted in EPC’s framework became, if not the rule, at least more frequent, representing an important precedent for the introduction of the principle of “consistency” in the Single European Act. This principle established a link between the Community economic structure, symbolized by the Commission, and the intergovernmental dynamics of the member states, represented by EPC and was defined as “a coordinated, coherent behavior based on agreement among the EC and its member states, where comparable and compatible methods are used in pursuit of a single objective and result in an uncontradictory foreign policy”.17 In reality, this principle wasn’t new, as it existed since the establishment of EPC: at the Paris Summit of 1972, for example, the Heads of State and Government had declared that: “on matters which have a direct bearing on Community activities, close contact will be maintained with the Institutions of the Community” and the Copenhagen report of 1973 made reference to the implications and the effects of EPC’s initiatives in the field of Community policies.18 As previously mentioned, the London report of 1981 also made a specific reference to the link between the EC and EPC and consistency was also proposed by the Dooge Report, drafted by the Ad Hoc Committee on Institutional Affairs and presented at the European Council of March 1985, which, in the section devoted to the EC’s search for its external identity, pressed on the need to bring the Community and 16 Wilde d’Estmael, European Foreign and Defence Policy, 427–428. 17 Krenzler / Schneider, “The Question of Consistency”, 134. 18 Nuttall, European Foreign Policy, 26–27. Maria Eleonora Guasconi 136 EPC together more closely, considering: “the interaction between these two frameworks […] both necessary and useful. They must therefore be more closely aligned”.19 One of the authors of the principle of consistency was Horst Günther Krenzler, a German commercial lawyer, who, since 1975 had worked in the DG 1 External Relations and in 1983 had been promoted Deputy Secretary General of the Commission. He took part in the Intergovernmental Conference and in 1987 became the Director General of the DG 1 External Relations.20 On 22 July 1985, just after the Milan Council and before the beginning of the Intergovernmental Conference, Krenzler presented an opinion, which stated that, in order to advance towards a European Union: “It was necessary to make fresh progress not only on economic and social integration, but also on foreign policy. Indeed, the fact that the two form an indivisible whole should be recognized by incorporating the proposed new provisions in a single framework […] Realistic conditions for osmosis between economic, social, financial, monetary affairs on the one hand and foreign policy on the other must be established”.21 These principles were far from being a foregone conclusion: it had not originally been the intention of the member states to bring the Community and EPC closer and at the European Council in Milan the Heads of State and Governments had been thinking in terms of a separate Treaty on foreign policy. When the negotiations on the Single European Act started in September 1985, they were conducted in two different bodies: the Dondelinger group, composed mainly of permanent representatives to the EC, who negotiated the changes to the Treaties of Rome, and the member’s state Political Directors who were in charge of the changes to EPC. Work on EPC began on the basis of a draft prepared by the Luxembourg presidency which tried to take into account all the contributions presented by the EC member countries in the previous months. One was a British draft, presented by the Foreign minister Geoffrey Howe at the European Council of Stresa in June, which was considered a copy-andpaste drafting of the London report and the Stuttgart declaration of 1983 19 Nuttall, European Foreign Policy, 243. 20 Jürgen Elvert, “Horst Gunther Krenzler (1933–2012): a Life for Europe”, in: Cristoph Hermann / Bruno Simma / Rudolf Streinz (eds.), Trade Policy between Law, Diplomacy and Scholarship, Colorado: Springer, 2015, 7–11. 21 HAEU, Florence, EN, f. 1802, Structure of the Act, Annex II. European Political Cooperation and the Single European Act 137 and was bitterly criticized by the Commission. It commented that “in some areas it was less advanced than existing practices or agreed texts”.22 Another was a Franco-German proposal, presented few days before the opening of the Milan Council, boldly titled “draft Treaty on European Union”, which dealt with foreign and security policy, proposing the establishment of a General Secretariat of the Council of the European Union, under the direction of a Secretary General in charge of Political Cooperation. It was seen with great suspicion by the Italian and the British governments, which feared the Franco-German axis.23 In addition, Italy and the Netherlands also presented two proposals designed to bring Political Cooperation closer to the Community. At the first meeting of the Political Committee on 3–4 September, Krenzler tabled a paper outlining the structure of the future Act, which would be composed by a Preamble and a common section affirming its political goals, followed by two separate titles, one dealing with amendments to the EEC Treaty, the other with EPC and final provisions for a rapprochement between the Community and Political cooperation. The decision on this proposal was postponed, as the question was too delicate. However, the Commission’s ideas began to make some headway at the beginning of November, when, at the meeting of 8–9 November, most of the delegations (the Italian, French, German, Dutch, Belgian, Luxembourg) declared they would accept this proposal. The turning point in the negotiations came at a meeting of the Foreign ministers on 19 November, when Pierre Morel, the French Political Director, tabled a draft Act of European Union, based on the structure proposed by the Commission and with a Secretariat, serving the European Council. The proposal for a strengthened European Council with its own secretariat did not pass, but the French paper passed and one month later, the Single European Act came into being.24 Title III of the Single European Act was to a large extent a review of existing EPC texts: the scope of the EPC was not affected, no advance was made on security matters, which continued to be discussed limited to the political and economic aspects of security. Belgium tried to make a breach 22 HAEU, Florence, EN, f. 987, Cooperation politique, analyse du document diffusé par la délégation britannique aux ministres des Affaires étrangères lors de la rèunion informelle à Stresa, les 8–9-juin 1985, 12–06–1985, confidentiel. 23 Maria Eleonora Guasconi, Prove di politica estera: la Cooperazione politica europea, l’Atto Unico Europeo e la fine della guerra fredda, Milano: Mondadori, 2020, 153– 166. 24 Ibid. Maria Eleonora Guasconi 138 in the principle of consensus in the voting system, but the other member states were not prepared to go further and elaborated a device, which would be later known as “constructive abstention”, which was suggested by the Italian government. The British were interested in promoting more cooperation on security issues, in the shadow of NATO, but Greece and Ireland fiercely opposed this proposal. Italy sought to merge the meetings of the General Affairs Council and the EPC ministerial meetings, which were still formally separated, but all other states, with the exception of the Benelux countries, voted against this proposal. The innovations mainly concerned the strengthening of the role of the Commission, which was now a full partner in EPC’s decision making, the establishment of a permanent Secretariat for EPC, based in Brussels, with the task of supporting the Presidency in EPC activity. Its first head was the Italian ambassador Giovanni Jannuzzi. The Commission objected to the establishment of an EPC secretariat, considered a superfluous parallel intergovernmental body, at odds with the desired consistency in the EC’s external action. Jacques Delors, almost prophetically, said: “It is absolutely vital to maintain the unity of the Community institutions. The Commission is not opposed to the EPC secretariat for superficial reasons: but you cannot have a European Union and, at the same time, create schizophrenia between the two pillars of the Community”.25 Finally, the Single European Act introduced the principle of consistency: art. 30.5 stated that “the external policies of the European Community and the policies agreed in EPC must be consistent. The Presidency and the Commission […] shall have special responsibility for ensuring that such consistency is sought and maintained”. According to Krenzler: “For the very first time two previously unconnected areas- the external policy of the Community and foreign policies cooperation of the member stateswere brought together and subjected, with unusual clarity, to the need for consistency”.26 25 Wilde d’Estmael, European Foreign and Defence Policy, 592. 26 Krenzler, “The Question of Consistency”, 134. European Political Cooperation and the Single European Act 139 The Single European Act, EPC and the relations with the Soviet Union in the second half of the 1980’s The entry into force of the Single European Act in July 1987 did not only represent a step change in the European integration process able to rescue the European economy from the stagnation of the 1970’s, it also had important consequences in East-West dialogue and in particular in Mikhail Gorbachev’s reassessment of Soviet foreign policy towards Western Europe and the European Community, which has been only partially studied by scholars and which can open new paths in historical research. Historians have well documented how European political leaders reacted to Gorbachev’s arrival to power in 1985. We know, for example, that Margaret Thatcher was the first European leader to understand the importance of Gorbachev for Soviet foreign policy, as she met him in December 1984, before he became the PCUS General Secretary, during a visit to Great Britain and received a very positive impression from the meeting. “I like Mr. Gorbachev – she famously remarked – We can do business together”.27 François Mitterrand too welcomed Gorbachev as a partner. In October 1985, the Soviet leader chose Paris for his first official visit to Western Europe and, when the French President visited Moscow in 1986, they seemed to agree on a wide range of issues, including the renewal of détente. Conversely, the German Chancellor, Helmut Kohl, was initially quite skeptical about Gorbachev’s new style, expressing doubts on the sincerity of his advances. Lacking proof that Gorbachev was different from his predecessors, Kohl adhered to German former perceptions and policies towards the Soviet Union. Moreover, in an embarrassing interview to Newsweek magazine in 1986, he compared him to Joseph Goebbels, Hitler’s propaganda minister, thus seriously damaging the German-Soviet relationship.28 As regards Italy, since the visit of Bettino Craxi to Moscow in May 1985, the Italian government started a fruitful dialogue with Gorbachev, which contributed to increasing the economic and commercial flows between the two countries, as shown by the large amount of economic and financial in- 27 Archie Brown, “Margaret Thatcher and Perceptions of Change in the Soviet Union”, in: Journal of European Integration History, XXXI, n.1, 2010, 17–30. 28 Michael Gehler, The Three Germanies: West Germany, East Germany and the Berlin Republic, London: Reaktion Books, 2011, 241; David Shumaker, Gorbachev and the German Question, Soviet-West Relations 1985–1990, London: Praeger, 1995, 41–47. Maria Eleonora Guasconi 140 vestments made by important Italian companies in the USSR, as Fiat, Finsider, Finmeccanica, Fincantieri, Montedison, Pirelli and of course Eni.29 Less certain and documented is how important Western Europe and the European Community seemed to Gorbachev. When the Italian Prime minister Bettino Craxi visited Moscow in May 1985, he was told by Gorbachev, in a luncheon speech, that “inasmuch the EEC countries act as a political entity, the Soviet authorities are ready to look together with them for a common language, including on specific international questions”.30 This concept was repeated by the Soviet leader few months later, during his visit to Paris.31 Gorbachev’s remarks raised a debate among the European Foreign ministers, developed mainly inside EPC’s framework, on how interpret such démarche. The USSR, in fact, had started to change its traditional negative attitude towards the EC since the beginning of the 1970’s, when Brezhnev, in a public speech in 1972, had talked about the need to recognize the Community “as an independent economic entity within the capitalist world”.32 In spite of the Soviet efforts to seek the establishment of official relations between the Council for Mutual Economic Assistance (CMEA- COMECON) and the EEC, the European countries had preferred to sign commercial and trade agreements with the single Eastern European countries.33 During his first two years in office, Gorbachev continued to meet his Western European partners, but he developed “a tactical and opportunistic approach” to European questions, concentrating his attention mainly on relations with the United States. Gorbachev viewed his relations with the European leaders in terms of their usefulness in dealing with the United States and hoped that he could use the European channel to force the US 29 Istituto Luigi Sturzo, Rome (henceforth: ILS), Giulio Andreotti (henceforth: GA) Papers, Series, USSR f. 709, Nota del ministero degli affari esteri per la visita di Giulio Andreotti a Mosca, 28/30–05–1985. 30 ILS, GA Papers, Series USSR, f. 710, Tel. 5589 from Moscow to Rome, 15–10– 1988, urgentissimo riservato. 31 Archives du Ministère des Affaires étrangères, La Courneuve, (henceforth: AMAE), Direction Europe, Cotes 1930 Inva 1981–1985, f. 5969, Visite de M. Gorbatchev en France (2–5 Octobre 1985), Allocution prononcée au Parlement français le 3 octobre 1985. 32 Angela Romano, “Untying Cold War Knots: The EEC and Eastern Europe in the Long 1970’s”, in: Cold War History, n. 2, vol. 14, 2014, 153–173. 33 Takeshi Yamamoto, “Détente or Integration? EC Response to Soviet Policy Change towards the Common Market 1970–1975”, in: Cold War History, n.1, vol. 7, 2007, 75–94. European Political Cooperation and the Single European Act 141 to give up the SDI project, regarding which, most West European leaders had been reluctant. As a consequence, the European reactions to Gorbachev’s new style were extremely prudent. They believed that the “Gorbachev style” and tone were new, but that the substance of Soviet foreign policy had not changed. This attitude would start to change in 1987, when Gorbachev became increasingly interested in European affairs and, regretting his lack of knowledge about the European Community, emphasized the need to study the organization, its functioning and decision-making process. During Margaret Thatcher’s visit to Moscow in March 1987, commenting a report written by the deputy minister for Foreign Affairs Anatoly Kovalev, the CPSU secretary said in front of the Politburo: “Europe is our business. There our interests are enormous […] You have to understand that Western Europe is our essential partner”.34 In 1988, Gorbachev established the Institute for Europe, within the USSR Academy of Sciences, under Vitali Zhurkin’s direction, a specialist on US and arms control matters. This institute provided the Central Committee with detailed analysis on current developments in Western Europe and on East and West Germany.35 When Jacques Delors, visited Moscow in July 1990, he was impressed by Gorbachev’s interest in European integration: the Soviet leader considered himself “an admirer of the European Community” and for him 1992 was “magic”.36 As well known, “1992” was the deadline proposed for the establishment of the Single Market, unfortunately, 1992 wouldn’t be so magic for the Soviet leader, but this quotation demonstrates that Europe and the European Community were at the heart of Gorbachev’s vision of a new international order. Which were the reasons for such a change in Soviet attitude towards Europe and European integration? 34 Marie-Pierre Rey, “Gorbachev’s New Thinking and Europe, 1985–1989”, in: Frédéric Bozo / Marie-Pierre Rey / N. Piers Ludlow / Leopoldo Nuti (eds.), Europe and the End of the Cold War. A Reappraisal, London: Routledge, 2008, 28. 35 Svetlana Savranskaya, “The Logic of 1989: The Soviet Peaceful Withdrawal from Eastern Europe”, in: Svetlana Savranskaya / Tom Blanton / Vladislav Zubok (eds.), Masterpieces of History. The Peaceful end of the Cold War in Europe 1989, Budapest / New York: Central University Press, 2010, 19; Vladislav Zubok, “The Soviet Union and European Integration from Stalin to Gorbachev”, in: Journal of European Integration History, n.1, vol. 2, 1996, 85–98. 36 AMAE, La Courneuve, Direction Europe, Cotes 1935 Inva 1986–1990, f. 6649, L’Union Sovietique et la Cee, Telegram 4990 from Moscow, 23–07–1990. Maria Eleonora Guasconi 142 Scholars have usually stressed the role played by perestroika, by Gorbachev’s contacts with West European leaders, by his travels in Western Europe, as well as by the reassessment that for Moscow the socialist bloc was more a burden than a strategic asset. However, the role played by the relaunching of European integration process in the second half of the 1980s and in particular by the implementation of the Single European Act has been underestimated, and generally told as a separate story. My point of view is that instead they were strictly connected: a reinforced, prosperous, democratic European Community as a consequence of the implementation of the single market in 1992 and the Soviet fear of remaining excluded, encouraged Gorbachev to imagine an extended system of relationship between the two halves of Europe. From 1988, in fact, Gorbachev focused on the concept of a European Common Home, as a way to overcome the Cold War by working together on a gradual rapprochement between the two halves of Europe37. EPC became the main framework where the Twelve Foreign ministers debated about Gorbachev’s project of a European Common Home and reconsidered their relationship with the Soviet Union. So, my point is that the revival of the EC after the implementation of the Single European Act as well as the Soviet fear of remaining excluded from the European fortress influenced Gorbachev’s concept of a European Common Home. EPC’s working group on Eastern Europe was appointed to produce a report on the Soviet concept of a European Common home, issued in March 1989, which stressed the connection existing between the implementation of the Single European Act and Gorbachev’s fear of remaining excluded: “La préoccupation croissante de l’URSS à l’égard de la consolidation de la Cee et du succès économique et technologique impressionnant de l’Europe de 12. L’approbation de l’Acte Unique européen, les perspectives du Marché unique de 1992 et plus généralement la dynamique crée en Europe occidental depuis la signature du Traité de Rome constituent une source de préoccupation croissante pour l’Union Soviétique. Cette préoccupation augmente au fur et à mesure que Moscou constate l’attrait que le succès de la Communauté exerce sur les pays de l’Est. Le leader soviétique a transmis ces craintes à ses interlocuteurs européennes plus récents: le chancelier allemand Kohl, le président Mitterrand et le pre- 37 Lara Piccardo, “La perestroika in politica estera. Gorbačëv e l’integrazione europea”, in: Lara Piccardo (ed.), L’Italia e l’Europa negli anni Ottanta, Milano: Franco Angeli, 2015, 13–33. European Political Cooperation and the Single European Act 143 mier ministre italien De Mita, en exprimant son inquiétude à l’égard d’une perspective d’une Europe fermée, et le besoin urgent de coopérer avec la CEE afin de pouvoir parvenir à la modernisation et au démarrage économique qui sont indispensables pour son projet politique. Tout récemment l’URSS a declaré [sic!] qu’elle reconnaissait maintenant que la Communauté ne se replie pas sur elle-même et ne devient pas une “forteresse” face aux autres”.38 The Twelve governments debated at length, inside EPC’s framework, on how to react to such a change in the USSR’s policy towards Western Europe, as some European governments were slow in picking up the signals that Gorbachev was sending out. There was a clear difference of attitude between those governments, led by Germany, Italy, Belgium and Spain who wanted to interpret these signs in a positive and encouraging way and aimed at establishing a political dialogue with Moscow and those, led by the UK and France, who remained cautious, considering Gorbachev’s project simply propaganda and preferred to maintain a policy of “wait and see”.39 In April 1987, the German government issued a report on Gorbachev’s policy, which almost prophetically stated: “The path embarked by the new Soviet leadership does not afford an absolute guarantee of the Soviet Union possibly moving in the direction of Western-style democracy and pluralism, but it is the essential prerequisite of such movement. There are some signs that Gorbachev’s policy offers the Soviet Union an opportunity, perhaps the last, for achieving peaceful and gradual change. It cannot be in the West’s interest for Gorbachev to fail, unless the West prefers the developments in the Soviet Union to come to a head”.40 On the other side, Great Britain, despite Margaret Thatcher’s role as an intermediary between Reagan and Gorbachev, worried that the Soviets were merely pursuing their old policy of attempting to divide the Atlantic Alliance and detach the West Europeans – in particular West Germany – from the United States. 38 AMAE, Direction Europe, Cotes 1935 Inva 1986–1990, f. 6649, L’Union Sovietique et la Cee, Groupe de Travail Europe de l’Est, Maison Commune Européenne, 1–3–1989. 39 ILS, GA, Series Europe, f. 381, Report from Ambassador Jannuzzi to Giulio Andreotti, 20–10–1988, riservatissimo; AMAE, Direction Europe, Cotes 1935 Inva 1986–1990, f. 6649, L’Union Sovietique et la Cee, Note du Quai d’Orsay, Réunion ministeriélle de Nybourg: relations des Douze avec l’Urss, 28–09–1988. 40 AMAE, Direction Europe, Cotes 1935 Inva 1986–1990, f. 6649, L’Union Sovietique et l’Europe occidentale, Étude de la delegation allemande, 10–04–1987. Maria Eleonora Guasconi 144 France, comparing Gorbachev’s project to de Gaulle’s idea of a European Community “from the Atlantic to the Urals”, considered it “ambigue” and believed that the time was not ripe for the creation of a European Common Home in Soviet terms. “Notre priorité – quoted a note from the French Foreign ministry of May 1988 – demeure de progresser dans le processus d’intégration à Douze avant d’envisager, éventuellement et quand cela serait possible, un certain degré d’intégration entre tous les pays européens”.41 In spite of the fact that the first group of countries interpreted the Common European Home more as a general framework than a real political program, they were convinced that it contained a perspective that could be used to speed up the Helsinki process, in a direction that could be useful to Europe and to the EC’s goals in Eastern Europe. For these reasons, they exerted pressure on the other EC members in order to begin a political dialogue with Moscow, to be conducted through EPC’s framework. Documents show that the European skepticism dissipated in the second half of 1988, as a consequence of the improvement of US-USSR relations, of the release of Soviet political dissidents from custody and of the Intermediate-range Nuclear Forces Agreement (INF) signed between the USA and USSR in December 1987. From a diplomatic point of view, the rapprochement between Western Europe and the Soviet Union took place in June 1988, when a first “Common Declaration” between the EC and the COMECON was signed, thus paving the way for a series of agreements on trade and economic cooperation between the Community and the COMECON’s members. At the European Foreign ministers meeting in Ioannina (Greece) in October 1988, the Belgian Foreign minister, Leo Tindemans, stressed the need to exploit the unique opportunity offered by history and the German Foreign minister, Hans Dietrich Genscher, expressed the hope to encourage the progressive rapprochement between Eastern and Western Europe, assessing that the EC would act as a “magnet” able to hold the remnants of the Soviet empire together.42 At the Rhodes European Council, which took place in December 1988, the twelve European countries seemed to have harmonized their foreign 41 Ibid., Fiche, Le Concept sovietique de l’Europe notre maison commune, 19–05– 1988. 42 ILS, GA, Series Europe, f. 381, Report from the Ambassador Giovanni Jannuzzi to Giulio Andreotti on the European Foreign Ministers meeting in Joannina, 15/16– 10–1988, riservatissimo. European Political Cooperation and the Single European Act 145 policy. They issued a declaration, stating that: “1992 Europe will be a partner, not a fortress” and reaffirmed their will to develop “a political dialogue with our Eastern neighbors”, taking into account each country’s specific situation.43 Such a political dialogue, developed through EPC’s framework, started with Moscow in January 1989 and was characterized by a series of political meetings organized at different levels, involving political directors, ambassadors and Foreign ministers, aimed to promote the Helsinki process, to encourage the respect of human rights in the Soviet Union and to develop economic, scientific and technological cooperation.44 At the same time, the EC ambassadors in Moscow started to receive regular briefings from the Soviet foreign ministry.45 From an economic point of view, the EC adopted a “carrot and stick” strategy, applying the principle of conditionality to its offers of assistance, seeking to emphasize separate dealings with individual East European countries rather than collective dealings with the COMECON: a series of trade agreements were signed with Hungary, Poland, Czechoslovakia, Bulgaria and finally, in December 1989, with the Soviet Union. At the same time, the European governments made some proposals aiming at establishing a pan-European framework. On 23 April 1989, the Italian Foreign minister, Giulio Andreotti, suggested, for example, at the EPC meeting of Grenada, to use the framework provided by the CSCE to improve the dialogue with the Soviet Union. French President François Mitterrand, in his televised New Year address on the evening of 31 December 1989, launched the project of a European Confederation within a flexible institutional framework, where the Soviet Union could find its place.46 43 ILS, GA, Series Europe, f. 382, Madrid European Council, Report on the relations between the EC and Eastern Europe, confidential. 44 AMAE, Direction Europe, Cotes 1935 Inva 1986–1990, f. 5964, Relations aves les pays de l’Est, Coreu, diner à Moscou des ambassadeurs communautaires avec le ministre sovietique des Affaires étrangeres, 11–02–1989. 45 Barbara Lippert, “Relations with Central and Eastern European Countries: the Anchor Role of the European Union”, in: Regelsberger / de Schoutheete de Tervarent / Wessels, Foreign Policy of the European Union, 221. 46 Frédéric Bozo, “The Failure of a Grand Design: Mitterand’s European Confederation, 1989–1991”, in: Contemporary European History, n.3, vol. 17 2008, 391–412. Maria Eleonora Guasconi 146 Conclusions The illusion of a pan-European framework where the Soviet Union could find its place was doomed to failure, following the rise of instability in Europe after the outbreak of the war in Yugoslavia and the changing preferences of the countries of Central and Eastern Europe, which were irresistibly attracted by the Western institutions, as the EC and NATO.47 The end of the Cold War took Gorbachev and the Western European political leaders by surprise, preventing the Soviet leader from implementing his project of a European Common Home, which remained more a metaphor, than a real political program. The trade agreement between the USSR and the EC was signed too late, in December 1989, when all the Eastern European regimes had collapsed, one after the other, the COME- CON was agonizing and the Kremlin was ready to accept German reunification. EPC mechanism, with its prudent exercise of collective and lengthy discussions, could not represent the right framework to face the revolutionary events of 1989. However, despite these remarks, during the 1980’s EPC had proved to be one of the main frameworks where the European governments discussed issues of great importance, such as the need to keep détente alive, or how to interpret Gorbachev’s foreign policy and the project of a European Common Home, trying to harmonize their foreign policies and to develop a real Ostpolitik. Since 1988, the principle of consistency, introduced in the Single European Act, as demonstrated by the Declaration of the European Council of Rhodes, contributed to the realization of a European foreign policy, which combined the exercise of developing a political dialogue with the Soviet Union, with the conclusion of a series of commercial agreements with the countries of Eastern Europe and with the USSR too. In the implementation of this “carrot and stick” strategy, co-ordination between the two sides of the Community, the political and the economic, worked well and thanks to this policy, the Community could exert a strong attraction towards the Eastern European countries. The central point of this contribution is that it was due to the success of the Single Market and to the Soviet fear of remaining excluded from the “fortress Europe”, but also to EPC mechanism, that Gorbachev saw the EC 47 Idib., 412. European Political Cooperation and the Single European Act 147 as a political reality and imagined a pan-European framework where the Soviet Union could find its place. In conclusion, analysis of EPC’s evolution during the 1980’s and in particular of the changes introduced in its mechanism by the Single European Act, has thus demonstrated how the European countries coordinated their foreign policies and acted as one political body, making the voice of Europe towards the great revolutions which took place in Eastern Europe in 1989 distinctly felt. Maria Eleonora Guasconi 148 The Negotiations on the Single European Act Gilles Grin This contribution deals with the negotiations on the Single European Act (SEA).1 This treaty was signed in February 1986 between the then 12 member states of the European Communities. It represented the first major overhaul of the treaties signed in the 1950s, and entered into force on 1 July 1987. In the second section we will study the chronology of the negotiations. In section three, we will present the issues and challenges of the negotiations. These can be summed up as completing the internal market, codifying and developing flanking policies, dealing with the monetary dimension, solving institutional questions, and formalising political cooperation on foreign affairs. In section four, we will study the actors of the negotiation, i.e. the member states and European institutions. We will present the main results of the negotiations in section five. Then, in section six, we will present the main reactions to the SEA. We will conduct a theoretical assessment in section seven, presenting Andrew Moravcsik’s theory on “intergovernmental institutionalism” and showing the complexity of the reality. Finally, in section eight, we will conclude by putting the SEA in a historical perspective. In a nutshell, this treaty was instrumental in allowing the completion of the internal market and the development of flanking policies. It also marked the beginning of a long cycle of treaty reforms. However, the daunting questions of the relationship between economic and po- 1 This piece of research was initiated in my doctoral dissertation: Gilles Grin, The Battle of the Single European Market: Achievements and Economic Thought, 1985–2000 (thèse présentée à l’Université de Genève pour l’obtention du grade de Docteur en relations internationales), Geneva: Graduate Institute of International Studies, thesis n. 637, 2002. A shortened version of the dissertation was published as a book: Gilles Grin, The Battle of the Single European Market: Achievements and Economic Thought, 1985–2000, London / New York: Kegan Paul, 2003 (published in paperback by Routledge in 2016). See also Gilles Grin, "1985, annus mirabilis de l’Europe : le programme d’achèvement du marché intérieur et la relance de la construction européenne", in : Relations internationales, 118, 2004, 215–227. Parts of the present contribution are excerpts from the dissertation; it has however been restructured and incorporates new sources. 149 litical integration and of the purposes of the European project are in need of a renewed answer. Chronology It is possible to pinpoint six periods in the negotiations. The first was the decision to launch an Intergovernmental Conference (IGC) at the European Council meeting in Milan on 28–29 June 1985. Italian Prime Minister Bettino Craxi, as President of the European Council, took the bold decision to put to vote a proposal to convene an IGC to amend the Treaty of Rome. Seven member states voted in favour and three (the United Kingdom, Denmark, and Greece) voted against. The decision was adopted as it required a simple majority of the member states.2 The second period was the preparatory moves during the summer. After consulting the European Parliament (EP) and the Commission, the Council formally convened the IGC on 22 July 1985. At this stage, representatives of national governments had already rallied at the recommendation of the Commission to have a single IGC covering both amendments to the Treaties establishing the European Communities and political cooperation. For the Commission and its President Jacques Delors, it was very important to have only one IGC and one Treaty in order to avoid the creation of a new political community, in which the Commission would be deprived of any say, which would in turn fragment integration efforts and would thus not lead to progress on the way to establish a European Union.3 2 See Articles 148 and 236 of the then Treaty establishing the European Economic Community, as well as the following sources: Conseil européen des 28/29 juin 1985 à Milan (Conclusions de la Présidence), DOC/85/2, 29 juin 1985, Europe (Agence Europe), n. 4121, 30 June 1985, 7–9. Jacques Attali, Verbatim I. Deuxième partie, 1983– 1986, Paris: Fayard, 1993, 1257–8. Jacques Delors, L’unité d’un homme: Entretiens avec Dominique Wolton, Paris: Éditions Odile Jacob, 1994, 223–4. Jacques Delors, Mémoires, Paris: Plon, 2004, 208–17. Hans-Dietrich Genscher, Erinnerungen, Berlin: Siedler, 1995, 373. Geoffrey Howe, Conflict of Loyalty, London, Basingstoke (UK): Pan Books, 1995, 409–10. Margaret Thatcher, The Downing Street Years, London: HarperCollins Publishers, 1993, 548–51. 3 Lord Arthur Cockfield, The European Union: Creating the Single Market, London / New York: Wiley Chancery Law, 1994, 61–2. Lord Cockfield was Vice-President of the Commission responsible for the Internal Market from 1985 to 1989. Delors, Mémoires, 217. Jean De Ruyt, L’acte unique européen : Commentaire, Bruxelles: Édi- Gilles Grin 150 The third period corresponds to the opening of the IGC on 9 September in Luxembourg and to a productive initial period of roughly one month. The United Kingdom, Denmark, and Greece were present even if they had voted against its convening.4 After one month, largely thanks to the Commission, the IGC had most proposals in legal form in its hands.5 The fourth period was more difficult and lasted until the beginning of December. During this period, the Foreign Affairs ministers met five times, between 21 October and 1 December. On the eve of the meeting of the European Council in Luxembourg on 2–3 December, many key issues were in a deadlock.6 The fifth period corresponds to the decisive moment of the European Council meeting. This moment was very important in the history of European integration, and one of the longest as it lasted more than twenty-seven hours, finishing at midnight on the second day.7 The chapter on the internal market – one of the most important of the summit – was only agreed at ten o’clock in the evening of the second day. For a long time, it had seemed as if EC leaders would have left without a consensus. In the end, however, an agreement was reached.8 The sixth period was the final negotiations and the signing of the SEA in February 1986. Some secondary points were resolved by foreign ministers in a meeting in mid-December 1985. In this meeting, foreign ministers made an important decision regarding the form of the Treaty, which would be a Single Act as already advocated by the Commission in July.9 A last British reservation on social policy was solved in January 1986.10 The final text in legal form was adopted by the Foreign Affairs ministers on 27 January 1986. Nine countries decided to sign the SEA on 17 February in Luxembourg. Greece and Italy had decided to wait for Denmark. Things became more complicated when the Danish Parliament refused the Treaty tions de l’Université de Bruxelles, 2e éd., 1989, 67–68. Jean De Ruyt participated to the intergovernmental conference as adviser to the chief of the Belgian delegation. 4 De Ruyt, L’acte unique européen : Commentaire, 70–1. Genscher, Erinnerungen, 373. 5 De Ruyt, L’acte unique européen: Commentaire, 72. 6 Ibid., 70–81. 7 Ibid., 77. Howe, Conflict of Loyalty, 454. 8 De Ruyt, L’acte unique européen : Commentaire, 79. 9 “Intergovernmental conference: work concluded with adoption of “Single European Act”, slightly amended since the conclusions of the Luxembourg summit – Danish and Italian reservations remain – official transmission of the texts to the EP”, Europe (Agence Europe), n. 4227, 18 December 1985, 3–5a. Ibid., 85. 10 De Ruyt, L’acte unique européen : Commentaire, 88. The Negotiations on the Single European Act 151 on 28 January. The partners of Denmark did not want to be blocked and they chose not to accommodate the boisterous northern country. Finally, in a popular vote on 27 February, 56 % of Danish voters approved the SEA. On the following day, Denmark, Greece, and Italy signed the Treaty in The Hague.11 The ratification process went smoothly in all Member States except Ireland. In this country, an appeal by an individual in front of the Supreme Court blocked the process, obliging the Government to organize a popular referendum, in which ‘yes’ won by a landslide of 70 %. The SEA finally entered into force on 1 July 1987, six months later than scheduled.12 Issues and Challenges The issues and challenges of the negotiations can be summed up as completing the internal market, codifying and developing flanking policies, dealing with the monetary dimension, solving institutional questions, and formalising political cooperation on foreign affairs. Altogether, the most widely discussed ideas were those related to the internal market and to the powers of the EP.13 The most important sources of blocking before the Luxembourg Summit were the internal market, the monetary dimension, and research. Doubts then arose about the possibility of reaching an agreement.14 Some national projects were not discussed by the European Council and were subsequently excluded for fear of opening new debates; they dealt with culture, fundamental rights, development, and differentiation.15 From the beginning, the Commission put emphasis on the completion of the internal market and associated required changes to decision-making procedures. Indeed, it was a sound strategy to start with the uncontroversial aim described in the White Paper of 14 June 1985 on completing the internal market and to impose with it some institutional adjustments.16 Discussions at the IGC were still controversial. Some countries were afraid of a decline in prevailing national norms regarding health, safety at work 11 Ibid., 88–90. 12 Ibid., 91, 286. 13 Ibid., 74–76, 79–80. 14 Attali, Verbatim I. Deuxième partie, 1343. Delors, Mémoires, 223–4. Ibid., 74–78, 86. 15 De Ruyt, L’acte unique européen : Commentaire, 86. 16 Ibid., 70–2. Gilles Grin 152 or protection of the environment.17 Without saying so, many feared the encroachment of foreign firms on domestic markets. A key question was raised: to what extent should there be linkages between the completion of the internal market in a strict sense and flanking measures and policies? The debate was intense.18 A French parliamentary report published at the beginning of November 1985 illustrated all the difficulties of the negotiations: “In fact, it seems that the delegations do not agree on the mere definition of the internal market. On the French side, one considers that the latter must not only include economic, commercial and fiscal aspects, but also monetary policy and the creation of a "European social space". This point of view comes up against a more or less latent opposition from several Member States including Britain, Denmark and Greece.”19 The flanking policies under discussion for insertion into the Treaty concerned technology, the environment, economic and social cohesion, and social policy. The most controversial was social policy: it had not been foreseen initially, but had been put on the table by Denmark and France. It had been brought to modest ambitions from the first debates and the British disagreement was only overcome at the end of the IGC.20 17 Delors, Mémoires, 224–5. Ibid., 74. 18 "European Parliament plenary session", Europe (Agence Europe), no 4110, 15 June 1985, 11. Report Drawn up on Behalf of the Committee on Economic and Monetary Affairs and Industrial Policy on the White Paper from the Commission of the European Communities to the European Council (Milan, 28–29 June 1985) on 'Completing the Internal Market' (COM(85) 310 final – Doc. C 2–63/85), European Parliament, PE 101.919/fin., 11 December 1985 (European Parliament Working Documents 1985–1986). Annex to the Report by Mr. G. Patterson on Behalf of the Committee on Economic and Monetary Affairs and Industrial Policy – Opinion of the Committee on Energy, Research and Technology, European Parliament, PE 101.919/fin./Ann., 20 December 1985 (European Parliament Working Documents 1985–1986). Annex to the Report by Mr. G. Patterson on Behalf of the Committee on Economic and Monetary Affairs and Industrial Policy – Opinion of the Committee on the Environment, Public Health and Consumer Protection, European Parliament, PE 101.919/fin./ Ann.2, 9 January 1986 (European Parliament Working Documents 1985–1986). Cockfield, The European Union: Creating the Single Market, 44–8. 19 Assemblée nationale, Délégation de l’Assemblée nationale pour les Communautés européennes, L’achèvement du marché intérieur dans la Communauté, Paris : Assemblée nationale, 6 novembre 1985,18. 20 Delors, Mémoires, 223. De Ruyt, L’acte unique européen : Commentaire, 73, 76–7, 80, 88. The Negotiations on the Single European Act 153 The monetary dimension was also controversial. It was described as the “supreme battle” by Jacques Delors.21 The greatest objections came from the United Kingdom and Germany. The Commission, Belgium, France, and Italy were most in favour of it. Discussions started late on this question, at the ECOFIN Council on 18 November.22 The question of the powers of the EP was difficult because it had no direct link with the completion of the internal market. Initial proposals were made by the Commission and the Luxembourgish Presidency. As there was no consensus among member states to grant the power of legislative co-decision to the EP, the result had to be limited.23 The real decisions regarding the executive power of the Commission were postponed until the adoption of a subsequent regulation, which would very much disappoint President Jacques Delors.24 Most discussions on European Political Cooperation (EPC) took place at the Political Committee and there were few debates among ministers. The discussions were based on a couple of national texts. The objective and the result were largely a codification of existing practices. France was at the forefront of the idea to create a European Union with a General Secretariat in charge of EPC. It made such a proposal jointly with Germany before Milan and brought back the idea before Luxembourg. But this controversial idea was not discussed at Luxembourg.25 Actors The actors of the negotiations in an IGC are the member states and, to some extent, the European institutions. In the 1985–86 IGC, the former can be clustered into four groups regarding their scale of ambition: highest (Italy, Belgium, Netherlands, and Luxembourg); high (France and Germany); positive but worried about cohesion (Ireland, Greece, Spain, and Portugal); moderate (United Kingdom and Denmark). The European insti- 21 Delors, Mémoires, 223. 22 Ibid., 223–4. De Ruyt, L’acte unique européen : Commentaire, 73, 75, 77, 79. 23 Delors, Mémoires, 221. De Ruyt, L’acte unique européen : Commentaire, 79–80. 24 Delors, Mémoires, 221. De Ruyt, L’acte unique européen : Commentaire, 76, 86. 25 Delors, Mémoires, 208–18. De Ruyt, L’acte unique européen : Commentaire, 77, 87. See also the archives of the Secretary General of the Commission, Émile Noël, held at the Historical Archives of the European Union in Florence, EN-1802, 1803 and 1804 (Acte unique européen: coopération politique). Gilles Grin 154 tutions involved were the Commission and its President Jacques Delors, the EP, and, to a much lesser extent, the Court of Justice. Leaders with ambitious integrationist objectives could adhere to the first aim of market integration insofar as it could pave the way for further progress down the road. These personalities did not see the integration of European markets as an end in itself. They hoped that the 1992 objective could help progress flanking policies and institutional reforms. Integrationists, while adhering to the single market programme, also wanted other developments to appear in the revision of the Treaty of Rome.26 Among integrationists, Italy was the most ambitious about extending the powers of the EP.27 The three Benelux countries (Belgium, the Netherlands and Luxembourg, the latter holding the presidency of the Council during the second term of 1985) were also devoted integrationists.28 The Franco-German axis, which lay at the heart of the Community, was integrationist even if there were some differences between the two countries: France was more reluctant than Germany to give important new powers to the EP while, on the monetary side, Germany tended to feel closer to the British position.29 The main concern of Ireland and Greece was cohesion, which they saw as their best chance to be able to cope with the large-scale liberalization induced by the single market programme. Spain and Portugal, who had observer status until the end of 1985, shared this perspective.30 Britain and Denmark were very much attached to their national sovereignty and were only willing to compromise in a careful way to advance some limited objectives. The British government under Margaret Thatcher accepted some qualified majority voting in order to allow the single market programme to be adopted, some modest increase in the competences of the EP and new provisions to favour political cooperation, but it was adamant about keeping its sovereignty on fiscal issues, to be able to maintain border controls in order to fight illegal immigration, crime, drugs and dangerous dis- 26 An important source of inspiration of this paragraph is Cockfield, The European Union: Creating the Single Market, 64–5, 182–3. 27 Attali, Verbatim I. Deuxième partie, 1983–1986, 1345. De Ruyt, L’acte unique européen : Commentaire, 79–80, 83–4. 28 De Ruyt, L’acte unique européen : Commentaire, 78. Thatcher, The Downing Street Years, 551–2. 29 Attali, Verbatim I. Deuxième partie, 1983–1986, 1343–4. Delors, Mémoires, 222. De Ruyt, L’acte unique européen : Commentaire, 77–9. Howe, Conflict of Loyalty, 455–6. Thatcher, The Downing Street Years, 552–5. 30 De Ruyt, L’acte unique européen : Commentaire, 71, 73, 76, 79. The Negotiations on the Single European Act 155 eases, to avoid progress on social policy and economic and monetary union.31 The Danes were the most opposed to an increase of the powers of the EP and wanted to keep their social model with high standards and working conditions.32 Luxembourg took up the rotating presidency of the Council and the European Council during the second term of 1985. The Luxembourgish presidency worked hand in hand with the Commission. This presidency was very effective in organising the work of the IGC. In early September, it handed over a discussion paper that was the basis for subsequent work.33 The Commission played a major role in the intergovernmental negotiations, working in a collegial way. On 22 July 1985, it gave a favourable opinion to the launch of an IGC. It was in favour of a unique conference and a single treaty in order to avoid a fragmentation of integration efforts and a weakening of the Community method. It was successful in obtaining this. From the very beginning, it put emphasis on the completion of the internal market and associated changes to decision-making procedures, thus providing an anchor to the negotiations. At the end of November, when there were important divergences between member states and when it was not clear that a positive result was at hand, the Commission sounded the alarm. In the end, President Jacques Delors considered that the Commission had formulated 90 % of the proposals finding their way into the SEA.34 The EP gave a favourable opinion to the launch of an IGC through a resolution dated 9 July 1985. It took this opportunity to ask for more: a new treaty should be adopted even in the absence of unanimity among member states; it put its own draft treaty to the forefront, voted in February 1984; it asked to be put on an equal footing with the IGC for the drafting and approval of the treaty. These demands were not taken into account by the member states, who could only agree on an informal dialogue with the EP. Due to the Italian decision that it would only ratify the SEA if the EP approved the text, the latter gained a concrete role in the process. On 16 January 1986, the EP approved the SEA even though it criticised its gaps 31 Howe, Conflict of Loyalty, 455–7. Thatcher, The Downing Street Years, 551–7. 32 Attali, Verbatim I. Deuxième partie, 1983–1986, 1345. Jacques Delors, L’unité d’un homme : Entretiens avec Dominique Wolton, Paris: Éditions Odile Jacob, 1994, 245. De Ruyt, L’acte unique européen : Commentaire, 73. 33 Delors, Mémoires, 219, 221, 226. De Ruyt, L’acte unique européen : Commentaire, 70. 34 Delors, Mémoires, 218–20. De Ruyt, L’acte unique européen : Commentaire, 68, 70, 77–8, 86–7. Gilles Grin 156 and asked governments to review the result of their work before the 1989 elections.35 The Court of Justice also had a limited involvement in the discussions. This resulted in the technical update of the ECSC and Euratom Treaties.36 Main Results Despite all criticism, heads of state or government meeting in Luxembourg had been able to find a common ground on nearly all the issues under discussion. Finally, they achieved a result. It might have seemed disappointing to some, but it was on the whole very balanced.37 The SEA was composed of 34 articles divided into four titles: common provisions; provisions amending the Treaties establishing the European Communities; provisions on European cooperation in the sphere of foreign policy; general and final provisions. There was also a Final Act including several declarations, which were not an integral part of the Treaty but assisted in its interpretation.38 Regarding the internal market, several articles were added or amended in the Treaty of Rome establishing the EEC. The internal market was given the following definition: “The internal market shall comprise an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the provisions of this Treaty.”39 However, on British insistence, a general statement was attached to the SEA, stating that “Nothing in these provisions shall affect the right of member states to take such measures as they consider necessary for the purpose of controlling immigration from third countries, and to combat terrorism, crime, the traffic in drugs and il- 35 De Ruyt, L’acte unique européen : Commentaire, 67–8, 81–5. 36 Ibid., 86. 37 Conseil européen des 2/3 décembre 1985 à Luxembourg (Presidency Conclusions), DOC/85/3, 3 December 1985, 11 p. 38 “Acte unique européen”, in Bulletin des Communautés européennes, Supplément 2/86, 1986, 26 p. The following document contains the text (in English) of the Treaty establishing the European Economic Community before and after the changes brought about by the SEA. Cf. Susan Nelson (ed.), Treaty Establishing the European Economic Community: Rome 1957, Oxford: Nelson & Pollard Publishing, 1993, (The Convoluted Treaties, Vol. II). 39 Treaty establishing the European Economic Community (amended by the SEA), Article 8a. The Negotiations on the Single European Act 157 licit trading in works of art and antiques.”40 The SEA made a break with past market integration efforts by mentioning the very ambitious expression “area without internal frontiers”. Some protective mechanisms were nevertheless enshrined in the Treaty, providing member states with possible escape clauses.41 The final completion time of the single market programme appearing in the White Paper, that is to say 31 December 1992, found its place in the Treaty.42 A Statement attached to the SEA specified the nature of the deadline: political with no automatic legal effect.43 In consideration of the situation of weaker economies – those of Greece, Ireland, Portugal and Spain – a text was inserted into the Treaty: “[…] the Commission shall take into account the extent of the effort that certain economies showing differences in development will have to sustain during the period of establishment of the internal market and it may propose appropriate provisions. If these provisions take the form of derogations, they must be of a temporary nature and must cause the least possible disturbance to the functioning of the common market.”44 The SEA amended decision-making procedures, in particular with a view to completing the internal market and to giving more powers to the EP. The scope of qualified majority voting in the Council was greatly increased. We must remember that the original Treaty of Rome foresaw the use of qualified majority voting, then corresponding to some 70 % of the weighted votes of member states, in a number of cases, starting during the second and third stages of the transitional period. After the empty chair crisis and the Luxembourg Compromise of 1966, majority voting was as a matter of fact frozen and the Community had to live with the sword of Damocles that a member state might always invoke its national vital interest and practice a new empty chair policy in order to avoid being put in a minority. Progressively, votes started to take place again during the 1970s and the first part of the 1980s, but the threat of a stalemate and the limited 40 Final Act of the Single European Act, General Statement Relative to Articles 13 to 19 of the Single European Act. See also Cockfield, The European Union: Creating the Single Market, 67–8. Howe, Conflict of Loyalty, 456. Thatcher, The Downing Street Years, 555–6. 41 Treaty establishing the EEC (amended by the SEA), Article 100a par. 4 and 5. 42 Ibid., Article 8a. 43 Final Act of the SEA, Statement Relative to Article 8a of the EEC Treaty. See also Cockfield, The European Union: Creating the Single Market, 66–7. 44 Treaty establishing the EEC (amended by the SEA), Article 8c. Gilles Grin 158 use of qualified majority vote in the Treaty did not make things easy.45 With the SEA, the Luxembourg Compromise was not formally affected. It could nevertheless be hoped that in practice the Compromise could be relegated to a position of secondary importance by a new momentum in European integration. According to an estimate, thanks to the SEA, the number of measures contained in the White Paper and requiring unanimity in the Council decreased from 90 to 30 %; as a corollary, the number of measures that could be adopted by a qualified majority vote in the Council rose from 10 to 70 %.46 The consequences of the SEA on the chances to implement the single market programme were indeed highly significant. There were nevertheless two reservations. The first, which we have just considered, dealt with the continuation of unanimity in the Council in some important cases. A second reservation had to do with possible safeguards on several grounds: public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; the protection of industrial and commercial property; the protection of the environment or the working environment.47 A new cooperation procedure was introduced by the SEA, with the aim of strengthening the EP, but without granting it the right of legislative codecision. Before the SEA, the procedure was the following: using its right of proposal, the Commission submitted a text to the Council. When qualified majority voting was foreseen by the Treaty, the Council could adopt the Commission’s proposal by qualified majority; when the Council wanted to amend the text without the agreement of the Commission, it could do so only by unanimity. Hence, the Council was the decisive authority of last resort, endowed with the right to adopt a text in accordance with the Treaty by unanimity. In case of qualified majority, a countervailing power was enshrined in the Treaty: the Commission had to agree with the Council.48 This procedure was amended to include the EP. However, two aspects did not change. Firstly, the Council would remain the decisive authority of 45 De Ruyt, L’acte unique européen : Commentaire, 114–8. 46 Willy De Clercq / Leo Verhoef, Europe back to the Top, Brussels: Roularta Books, 1990, 22. Willy De Clercq was Commissioner for Foreign Relations and Trade Policy from 1985 to 1989. 47 Treaty establishing the EEC (amended by the SEA), Articles 36 and 100a par. 4 and 5. 48 Ibid., Article 149. The Negotiations on the Single European Act 159 last resort, allowed to adopt the text it wished by unanimity, whether the Commission or Parliament liked it or not. A second aspect that did not change was that the Council would be allowed to take a decision by qualified majority only if the Commission approved the text. Within these two permanent features, the Parliament found a place in the procedure, which can be summarized in the following way. Step 1: the Council should adopt a common position on a proposal from the Commission and after obtaining the opinion of the EP. Step 2: a) if the Parliament approved the common position, the Council should definitively adopt the act; b) if the Parliament rejected (by an absolute majority of its component members) the Council’s common position, the latter could only act on a second reading by unanimity; c) if the Parliament proposed amendments to the Council’s common position (again by an absolute majority of its component members), the initiative would pass to the Commission. Step 3: the Commission would have to decide which amendments by the Parliament it would accept or reject, hence defining its new proposal. Step 4: the Council would examine the Commission’s new proposal and adopt it by a qualified majority. Again, unanimity would be required for the Council to amend the Commission’s new proposal.49 Regarding the powers of the EP, we must add that the SEA gave it a veto right, to be exercised by an absolute majority of its members, on the enlargement of the Community and on association agreements with a third State, a union of States or an international organization.50 Different types of decision-making procedures applied to different components of the programme to complete the Community internal market by the end of 1992: qualified majority voting by the Council in cooperation with the EP; qualified majority voting by the Council without cooperation with the Parliament; unanimity in the Council (in essence no cooperation with the Parliament). Unanimity in the Council would be maintained for some very important issues related to the free movement of persons and taxation. The Single Act also gave a legal basis to the European Council for the first time,51 increased the executive powers of the Commission52 and allowed the Council, acting unanimously, to establish a Court of First Instance in order to disburden the Court of Justice.53 49 Ibid., Article 149. 50 Ibid., Articles 237 and 238. 51 Single European Act, Article 2. 52 Treaty establishing the EEC (amended by the SEA), Article 145. 53 Ibid., Article 168a. Gilles Grin 160 Beyond the internal market, the Single Act introduced a new chapter entitled “Cooperation in Economic and Monetary Policy (Economic and Monetary Union)” into the Treaty establishing the EEC. This chapter merely codified the existing situation but could possibly be used by the proponents of a full economic and monetary union as a stepping-stone for subsequent developments.54 A new article regarding social policy was introduced.55 Its reference to the taking into account of the specific concerns of small and medium-sized undertakings was inserted because of the United Kingdom.56 Social conditions throughout the Community were not homogeneous and the new treaty article, while aiming to bring some convergence, had to take into account this fundamental reality. Three new titles on economic and social cohesion,57 research and technological development,58 and the environment59 were inserted into the EEC Treaty. These three policies were already mature and the elaboration of the SEA offered a chance to codify an already existing reality while at the same time improving decision-making procedures. EPC was also a mature policy, even though very weak. It was codified by the SEA. Main Reactions The Prime Minister of Luxembourg, Jacques Santer, who had presided the summit on 2–3 December 1985, declared that the latter had been “unique if not historic in working for reform and developing the Community towards new horizons”. President Mitterrand said that it was a “compromise of progress” and that the summit had achieved “a large part” of the agenda mentioned at Milan. Chancellor Kohl stated that he could have gone further regarding the powers of the EP. Prime Minister Thatcher reiterated her opinion that an IGC would not have been essential but at the same time was very satisfied with the results obtained, calling the agreement “clear and decisive”. The Prime Ministers of the other member states also expressed their satisfaction. Only the President of the Italian Council of Ministers, Bettino 54 Ibid., Article 102a. 55 Ibid., Article 118a. 56 Cf. De Ruyt, L’acte unique européen : Commentaire, 80, 88. Howe, Conflict of Loyalty, 456–7. Thatcher, The Downing Street Years, 555. 57 Treaty establishing the EEC (amended by the SEA), Articles 130a to 130e. 58 Ibid., Articles 130f to 130q. 59 Ibid., Articles 130r to 130t. The Negotiations on the Single European Act 161 Craxi, expressed his dissatisfaction with the outcome of the Luxembourg summit. For him, the most significant problems concerned the insufficiency of new powers granted to the EP, the distribution of resources inside the Community, and the deficit of cooperation in fields such as social policy.60 Jacques Delors expressed a degree of disappointment about what had been achieved. For the President of the Commission and his two colleagues Natali and Ripa di Meana, the most disappointing part of the agreement concerned the powers of the EP.61 With more hindsight though, Jacques Delors claimed that the SEA was his “preferred treaty”, arguing that “with this text, the Commission had the political tool it needed, not only to put in place the internal market, but also to implement policies that 60 “European Council: agreement on a series of provisional texts, with several reservations (both general and specific), to be finalised by foreign affairs ministers on 16 December”. Europe (Agence Europe), n. 4218, 5 December 1985, 3–6. See also Leon Brittan, A Diet of Brussels: The Changing Face of Europe, London: Little, Brown and Company, 2000, 35–6. Cockfield, The European Union: Creating the Single Market, 159. De Ruyt, L’acte unique européen : Commentaire, 81. Genscher, Erinnerungen, 374. Howe, Conflict of Loyalty, 455–8. Helmut Kohl, Erinnerungen 1982–1990, München: Droemer, 2005, 387–8, 439–40. Thatcher, The Downing Street Years, 555–7. 61 “European Council: agreement on a series of provisional texts, with several reservations (both general and specific), to be finalised by foreign affairs ministers on 16 December”, Europe (Agence Europe), n. 4218, 5 December 1985, 3–6. “Interview Jacques Delors”, L’Indépendant, 13.12.1985, Jacques Delors’ archives, (henceforth: JD)-38 (interviews de Jacques Delors, presse, 12/1985), 4, consulted at the Jean Monnet Foundation for Europe in Lausanne. “Demain à la une”, Paris Match, 11.12.1985, JD-38, 8. Jacques Delors stated the following during a debate with Simone Veil on 4 December 1985 in Paris: “Therefore, what happened last night, as I said before, does not respond to what I wanted. It corresponds to what I was reasonably hoping for. It is a compromise of progress. It will depend on many of us to turn it into a dynamic compromise.” JD-38, 22. See also “Intervention du Président Delors au Parlement européen lors du débat sur les résultats du Conseil européen de Luxembourg des 2 et 3 décembre 1985 – Strasbourg, 11 décembre 1985“, JD-43 (interventions de Jacques Delors, presse), 109–15. “Discours du Président Delors devant le Parlement européen lors du débat sur les résultats des travaux de la Conférence intergouvernementale – Strasbourg, 16 janvier 1986”, JD-43, 104–8. Subsequently, a press release of the Commission stated the following: “Mr Delors admitted that the Single Act fell short of the Commission’s original expectations and he knew that Parliament felt the same way. […] The Single Act was the Europe of the possible.” Source: “Intervention by the President of the Commission, Mr J. Delors, at the End of the Debate on the Single Act”, Brussels: Commission of the European Communities, IP/87/186, 14 May 1987, 1. See also De Ruyt, L’acte unique européen : Commentaire, 81. Gilles Grin 162 would give to the Community the face of a European model of society, an equilibrium between market and regulation, a subtle dialectic between competition, cooperation and solidarity”.62 As for Pierre Pflimlin, the President of the EP, he said that “Even though some partial results have been achieved, this European Council has been a great disappointment for me. This Summit, the final step in an initiative started by the European Parliament, should have provided for a step forward towards European unity. This historic opportunity has been let slip.”63 Other members of the EP, such as Altiero Spinelli, joined by the European Socialist Movement and the European Movement, also expressed their dissatisfaction with the results of the IGC.64 Theoretical Perspective American political scientist Andrew Moravcsik wrote an influential analysis on the negotiations on the SEA. He opposed a widespread idea that the institutional reform resulted from an alliance between EEC officials and Pan-European interest groups. For Moravcsik, neofunctionalism and one of its variants called “supranational institutionalism” did not provide a proper explanation. He argued that European reform resulted from intergovernmental negotiations between the United Kingdom, France, and Germany. The only credible threat against a large state (the UK, as it happened) was the risk of exclusion, used by France and Germany. The 1985 revival was made possible by the convergence before 1985 of the three largest member states of the EEC. For Moravcsik’s thesis, called “intergovernmental institutionalism”, the key factors are the national interest and power of the largest countries, who want to preserve their national 62 Delors, Mémoires, 227–8. 63 “European Council: agreement on a series of provisional texts, with several reservations (both general and specific), to be finalised by foreign affairs ministers on 16 December”, Europe (Agence Europe), n. 4218, 5 December 1985, 3–6. See also Pierre Pflimlin, Itinéraires d’un Européen: Entretiens avec Jean-Louis English et Daniel Riot, Strasbourg: La Nuée Bleue, 1989, 324–5. Pierre Pflimlin, Mémoires d’un Européen : De la IVe à la Ve République, Paris: Fayard, 1991, 351–2. 64 “European Council and reform of the Community: Mr. Pflimlin meets the Dutch presidency – Mrs. Thatcher and Mr. Andreotti appear before their national parliaments – reactions of European parliamentarians to the European Movement”, Europe (Agence Europe), n. 4220, 7 December 1985, 3–3a. “European Parliament plenary session”, Europe (Agence Europe), n. 4222, 12 December 1985, 3–6. Europe (Agence Europe), n. 8601, 9 December 2003. The Negotiations on the Single European Act 163 sovereignty. Negotiations tend to converge towards their lowest common denominator. The final result was thus deemed to be closer to British expectations. Smaller countries could be bought, for example with economic and social cohesion, whereas others, such as the Benelux countries, were ready to go further regardless.65 It is worth remembering a sentence written by Jacques Delors in his Memoirs: “One does not understand anything about the construction of Europe if one does not take into account the role played by each country, from the smallest to the largest.”66 Belgian diplomat Jean De Ruyt, who took part in the SEA negotiations, argued that “Those who closely followed the work of the conference were able to appreciate how the Luxembourg agreement represents the point of balance between the political will of each of the twelve governments of the Community.”67 Indeed, we have tried to show this perspective and the complexity of the negotiations, which is much greater than what supranational institutionalism and intergovernmental institutionalism claim. We must also not forget that the Italian and Luxembourgish Presidencies exerted a real influence. And so did the Commission and the EP. The Single European Act in Perspective We will conclude by putting the SEA in a historical perspective. First of all, this treaty was significantly important in enabling the completion of the internal market and the development of flanking policies in the subsequent years. Debate on the aims of the European integration project has always existed. Even if the motivations for the venture arising from the ashes of World War II appear political at first, there has always been a subtle mixture of economic and political aspects. This debate and the dual nature of the process were perfectly visible in 1985. The move to the internal market at the heart of the SEA, encompassing the free movement of people and the abolition of internal frontiers, went beyond a sheer economic vision. One of Jacques Delors’ favourite expressions was to plead in favour of “competition 65 Andrew Moravcsik, “Negotiating the Single European Act: national interests and conventional statecraft in the European Community”, in: International Organization, n. 1, vol. 45, winter 1991, 19–56. 66 Delors, Mémoires, 220. 67 De Ruyt, L’acte unique européen : Commentaire, 80–1. Gilles Grin 164 that stimulates, cooperation that strengthens, solidarity that unites”.68 Cooperation and solidarity have an important political dimension. The SEA initiated the process of increasing in the competencies of the EP, which has been elected by direct universal suffrage since 1979. The SEA thus set the tone for future treaty reforms towards more parliamentary democracy. The SEA also marked the start of a long cycle of treaty reforms, or the beginning of the institutionalisation of the constitutional IGC in expert Brendan P.G. Smith’s words.69 Several IGCs followed, leading to the Treaties of Maastricht, Amsterdam, Nice and Lisbon. The period of permanent constitutional reform that started in 1985 arguably ended in 2009 with the entry into force of the Lisbon Treaty. This approach brought several incremental developments, a difference in process to the global approach of the Spinelli Project voted by the EP in 1984. The resilience of national sovereignty was behind this gradualism. Now there is arguably a need to find new ways and methods to enable potential progressions in the EU constitutional order. The daunting questions of the relationship between economic and political integration and of the purposes of the European project are arguably in need of a renewed answer. Today’s EU is more diverse and is characterised by increased complexity. There have been conflicts over the method that should be used: should it be supranational? In such a case should it be federal? Or should the Community method be extended? Should it rather be intergovernmental? Would it be possible and desirable to find a hybrid solution? We could take the example of the Common Foreign and Security Policy (CFSP) that is the successor of the EPC first appearing in European treaties through the SEA. It may be argued that the status of CFSP is now between intergovernmental and hybrid, with an uncertain future.70 The international environment of the EU has also changed dramatically, creating new challenges for Europeans.71 68 Delors, Mémoires, 223. 69 Brendan P.G. Smith, Constitution Building in the European Union: The Process of Treaty Reforms, The Hague, London: Kluwer Law International, 2002, 103–11. 70 Gilles Grin, “The Community Method: from Jean Monnet to Current Challenges”, in: The EuroAtlantic Union Review, n. 2, vol. 2, 2015, 15–29. 71 Gilles Grin, “L’Europe dans le monde“, in: Schweizerische Gesellschaft für Aussenpolitik – Association suisse de politique étrangère, Kolumne, mai 2019, The Negotiations on the Single European Act 165 Unzufrieden mit der Einheitlichen Europäischen Akte. Zur Geschichte des italienischen Referendums von 1989 Georg Kreis In der Regel werden in der Historiografie besondere Vorkommnisse auch besonders beachtet – oder gerade wegen ihrer Außerordentlichkeit übergangen. Im Falle des 1989 in Italien durchgeführten Referendums, das eine Aufwertung des Europäischen Parlaments zum Ziel hatte, spielte die zweitere Variante, und dies auch darum, weil der an sich sensationelle Vorgang kaum irgendwelche Folgen hatte. Das Referendum von 1989 verdient es dennoch, beachtet zu werden. Seine Vorgeschichte und die mit dem Referendum verbundenen Hoffnungen zeigen, dass in den 1980er Jahren, vor allem in Italien, Erwartungen bestanden, die mit der Einheitliche Europäische Akte (EEA) vom Februar 1986 nicht erfüllt wurden. Die EEA wird in der Geschichte des europäischen Integrationsprozesses gemeinhin als eine substantielle Vereinbarung, als wichtiger Meilenstein und verdienstvolle Errungenschaft verstanden, zumal sie die Vorstufe und Voraussetzung zum noch wichtigeren Vertrag von Maastricht bildete.1 In der allgemeinen Geschichtsschreibung der europäischen Integration kommt der Vorgang des italienischen Europa-Referendums, den man als historisch werten kann, nicht vor. Selbst in der italienischen Literatur ist seine Beachtung schwach.2 Die vorliegende Studie will dem etwas entgegenwirken. Sie stützt sich in erster Linie auf die Verhandlungen der beiden Kammern des italienischen Parlaments sowie der zeitgenössischen Literatur und konnte die Akten von Pier Virgilio Dastoli, dem persönlichen Mitarbeiter Altiero Spinellis und Sekretär des Intergroupe Fédéraliste pour l’Union Européenne des Europäischen Parlaments, auswerten.3 Der Beitrag will dem Referendum, das doch ein bemerkenswerter Vorgang der zweit- 1 Michael Gehler, Europa. Ideen-Institutionen-Vereinigung-Zusammenhalt, Reinbek: Olzog, 2018, 325–328. 3. Aufl. Eine Langversion dieses Beitrags wird auf Englisch bei Schwabe Basel in der Reihe des Istituto Svizzero Rom erscheinen. 2 Auffallend ist etwa, dass das Referendum mit keinem Wort erwähnt wird in: Ennio Di Nolfo, La polititica estera italiana negli anni Ottanta, Manduria: Lacaita, 2003. 3 Cf. Archivi Storici dell’Unione Europea, Villa Salviati [fortan: HAEU], Fonds Pier Virgilio Dastoli, und die Dokumentation von Sergio Pistone, Turin. 167 en Relance der 1980er war, einen Platz in der Geschichte geben und dabei der Frage nachgehen, aus welchen unmittelbaren Voraussetzungen es dazu kam. Dabei wird für einen Moment auch die ansonsten wenig beachtete Rolle Italiens in der europäischen Integrationsgeschichte und, wie gesagt, auch eine kritische Sicht auf die EEA gezeigt. Berücksichtigt werden, wie der vorliegende Band es vorsieht, die Jahre 1985–1989. Die längere Vorgeschichte, die zu diesem Referendum geführt hat, kann hier aus Platzgründen nicht aufgerollt und die kürzere Geschichte der schnell abklingenden Nachwirkungen kann auch nur angedeutet werden. Das italienische Europa-Referendum Das am 18. Juni 1989 in Italien abgehaltene konsultative Referendum stellte den Bürgern und Bürgerinnen die folgende Frage: “Sind Sie der Meinung, dass die Europäischen Gemeinschaften in eine echte Union mit einer dem Parlament gegenüber rechenschaftspflichtigen Regierung verwandelt werden sollten, wobei das Europäische Parlament selbst mit der Aufgabe betraut würde, einen Entwurf einer Europäischen Verfassung zur direkten Ratifizierung durch die zuständigen Organe der Mitgliedstaaten der Gemeinschaft auszuarbeiten?” Bei einer Stimmbeteiligung von 80,68 % (oder gegen 38 Mio. Votierenden) stimmten 88,03 % dafür und 11,97 % dagegen. Diese Konsultation war den politischen Kräften derart wichtig, dass sie, um dies möglich zu machen, zuvor sogar eine Verfassungsänderung vornahmen. In der Geschichte der Europareferenden nimmt das italienische Referendum von 1989 eine Sonderstellung ein, weil es aus eigenem Antrieb (ohne gegebenen Verfassungszwang und ohne präsidiale Laune wie 1992 und 2005 in Frankreich) angesetzt worden und mit einer überwältigenden Zustimmung ausgegangen ist.4 Das Europa-Referendum nimmt auch in der italienischen Innenpolitik inhaltlich, aber auch formal, eine Sonderstellung ein. Die vorangegangenen Referenden, die es durchaus gab (in den Jahren 1974–1989 waren es immerhin 14), hatten alle restriktiven Funktionen: Sie konnten entweder ein Gesetz aufheben oder unter bestimmten Gegebenheiten die Bestätigung einer Verfassungsänderung verweigern. Um ein Europareferendum abhalten zu können, wurde nach längerem Vorlauf und vier 4 Vollständige Liste der Europareferenden u.a. in Georg Kreis, Gerechtigkeit für Europa. Eine Kritik der EU-Kritik, Basel: Schwabe, 2017, 303 ff. Georg Kreis 168 Lesungen (je 2 in beiden Kammern) am 3. April 1989 eine Verfassungsreform verabschiedet, die erstmals und bisher ein einziges Mal ein positives Referendum (referendum d’indirizzo o consultativo) ermöglichte.5 Das Referendum vom Juni 1989 fiel nicht vom Himmel, es hatte eine Vorgeschichte oder vielmehr zwei Vorgeschichten. Die eine ging auf den Verfassungsentwurf von 1984 zurück, die andere entsprang der Unzufriedenheit mit der EEA von 1986. Das Referendum erscheint als sonderbare Einzelaktion, es verstand sich aber als Teil einer transnationalen Aktion, die über Volksbefragungen oder Beschlüsse nationaler Parlamente anderer Länder der Europäischen Gemeinschaft (EG) zu einer Verfassung verhelfen sollte. Die Wiederbelebung des Verfassungsentwurfs von 1984 Der an sich bekannte, aber bisher nicht in seinem Kontext erfasste “Entwurf eines Vertrages zur Gründung der Europäischen Union” ist weitgehend das Produkt des in Italien stark entwickelten Willens, aus dem Europäischen Parlament (EP) einen europäischen Bundesstaat entstehen zu lassen und damit etwas nachholend zu realisieren, was um 1947/48 bereits angestrebt, aber vom Konzept der in Einzelschritten unternommenen Teil- Integration in den Hintergrund gedrängt worden war. Der Entwurf war zu einem großen Teil das Werk Altiero Spinellis, der führenden Kraft der italienischen Föderalisten, der sich 1979 als Parteiloser auf der Liste der Kommunisten ins Europäische Parlament (EP) hatte wählen lassen. Mit der 1979 zum ersten Mal über direkte Wahlen bestellten EP war bei den Anhängern einer vertieften Vergemeinschaftung die Erwartung verbunden, dass das nun zusätzlich legitimierte Parlament sozusagen automatisch mit der Ausarbeitung einer Europäischen Verfassung beauftragt, also die Funktion einer Konstituante einnehmen würde. Das Movimento Federalista Europeo (MFE), das sich schon in den 1960er Jahren für direkte Wahlen ausgesprochen hatte, nahm für sich in Anspruch, Wesentliches zum Zustandekommen dieses Schrittes beigetragen zu haben.6 Spinelli hatte bereits 1978 die bevorstehenden Direktwahlen enthusiastisch gewürdigt: “La 5 (Dez. 2019). 6 Schon 1974 forderte eine beim EP eingereichte Petition die Politische Union und damit selbstverständlich auch direkte Wahlen. Von den 26000 Unterschriften stammten 19000 aus Italien. Unzufrieden mit der Einheitlichen Europäischen Akte 169 civiltà europea si arricchirà di una nuova esperienza, che non ha precedenti nella sua storia plurimillenaria”.7 Der Historiker Sergio Pistone würdigt die ersten Direktwahlen von 1979 als “salto qualitativo”, weil zum ersten Mal in der Geschichte eine direkte Volksbeteiligung “alle decisioni relative ai rapporti fra gli Stati” möglich geworden war.8 Der Verfassungsentwurf, der gegen Ende der ersten Legislatur am 14. Februar 1984 mit 237 Ja-Stimmen gegen 31 Nein-Stimmen angenommen wurde, sah eine erhebliche Kompetenzerweiterungen des EP vor, insbesondere eine Aufwertung im Sinne einer “co-decisione” zu einer gleichberechtigten zweiten (Volks-) Kammer neben dem Ministerrat (Rat der Union). Die Kommission sollte eine wirkliche Regierung werden. Mit der Einschränkung der Einstimmigkeitsregel im Rat sollte den nationalen Einheiten (deren Regierungen und Verwaltungen) die Möglichkeit genommen werden, mit einem Veto den Integrationsprozess zu blockieren.9 Spinelli hatte schon im Sommer 1983 in einem Vortrag in Florenz ausführlich dargelegt, was er mit dem Verfassungsentwurf vorhatte.10 Das Projekt müsse zum zentralen Thema der bevorstehenden Wahlen von 1984 für die zweite Legislatur werden, ansonsten würde man einen Wahlkampf mit einer Kakofonie verschiedenster Themen erleben. Für Spinelli war es ganz wichtig, dass das von den Bürgern und Bürgerinnen gewählte Parlament die Funktion eines Verfassungsrats wahrnehme und die Arbeit nicht anderen überlasse “a saggi, a diplomatici, a ministri, o ad altri”.11 Ziel sei es dann, dass die vom EP verabschiedete Verfassung die Zustimmung der Mitgliedsländer erhalte, je nach Regeln des Landes durch die nationalen Parlamente oder durch einzelne Referenden, also kein allgemeines EG-Plebiszit. Die Inkraftsetzung der Verfassung müsse aber 7 Altiero Spinelli, “Di fronte alle elezioni europee (1978)”, in: Sergio Pistone, L’Italia e l’unità europea delle premesse storiche all’elezione del parlamento europeo, Turin: Loescher, 1982, 416–424. 8 Pistone, L’Italia e l’unità europea delle premesse storiche all’elezione del parlamento europeo, 9. 9 43 Enthaltungen. – Francesco Capotorti u. a, Der Vertrag zur Gründung der Europäischen Union. Kommentar zu dem vom Europäischen Parlament am 14. Februar 1984 verabschiedeten Entwurf, Baden-Baden: Nomos, 1986. Cf. Walter Lipgens, 45 Jahre Ringen um die Europäische Verfassung, Bonn: Europa Union Verlag, 1986, 711–739. 10 Rede am Europäischen Universitätsinstitut von Florenz vom 13. Juni 1983: „Verso l’Unione europea“, in: Sergio Pistone (Hg.), Altiero Spinelli, Una strategia per gli Stati Uniti d’Europa, Bologna: Il Mulino, 1989, 227–245. 11 Ibid., 244. Georg Kreis 170 keine Einstimmigkeit erfordern, es genüge die Zustimmung einer “massa critica”, zum Beispiel von Staaten, die zusammen zwei Drittel der EG- Bevölkerung ausmachen. Im Juni 1984 gingen die Promotoren des Verfassungsentwurfs des abtretenden EP davon aus, dass dem Parlament der zweiten Legislatur die Weiterführung der Verfassungsarbeit übertragen werden soll. Die Europawahlen von 1984 waren jedoch auch in Italien wie in anderen Ländern ganz von innen- bzw. parteipolitischen Rivalitäten bestimmt. Bemerkenswert ist, dass 1984 alle italienischen EP-Delegierten dem Verfassungsentwurf zustimmten, auch die kommunistischen, während die Kommunisten anderer Länder (insbesondere die französischen Kommunisten, aber auch manche britische Labour-Abgeordnete) dagegen stimmten. Noch am gleichen Tag, am 14. Februar 1984, hiess auch die italienische Abgeordnetenkammer den Vertragsentwurf einstimmig gut und sprach zugleich die Erwartung aus, dass die eigene Regierung das Projekt annehme und sich bei den anderen Regierungen der Gemeinschaft für seine Annahme einsetze. Anschließend nahm der Senat am 10. Mai und am 18. Juli 1984 in gleicher Weise Stellung. Der Gipfel des Europäischen Rats von Mailand vom28./29. Juni 1985 hätte die Gelegenheit bieten sollen, in diesen Bestrebungen einen wichtigen Schritt weiterzukommen.12 Spinelli, forderte die am Vorabend dieses Gipfels auf dem Mailänder Domplatz zu Tausenden zusammengeströmten Menge auf, das Wirken der europäischen Parlamentarier und der nationalen Minister aufmerksam zu verfolgen und darauf zu achten, ob sie sich für eine “wirkliche” Europäischen Union einsetzten.13 Die Unzufriedenheit mit der EEA von 1986 Das Treffen von Mailand der EG-Staats- und Regierungschefs war überschattet von offen ausgetragenen Divergenzen zwischen den drei EG- Mitgliedern (Grossbritannien, Dänemark und Griechenland) mit wenig 12 Otto Schmuck / Wolfgang Wessels, „Die Mailänder Tagung des Europäischen Rats – Weder Fehlschlag noch Durchbruch zur Europäischen Union“, in: Integration, n.3, vol. 8, (Juli 1985), 95–102. 13 Edmondo Paolini, Altiero Spinelli. Appunti per una biografia, Bologna: Il Mulino 1988, 273. Gemäss den Veranstaltern sollen es 100000, gemäss der Polizei immerhin 20000 Manifestanten gewesen sein. Cf. Giuseppe Mammarella, “Il Consiglio Europeo di Milano del giugno 1985”, in: Di Nolfo, La politica estera italiana negli anni Ottanta, 207. Unzufrieden mit der Einheitlichen Europäischen Akte 171 Reformbereitschaft und den sieben anderen EG-Mitgliedern, die sich in Richtung Finalität bewegen wollten. Gegen die drei Opponenten setzte die Mehrheit der Sieben unter italienischer Führung (mit Präsident Craxi und Aussenminister Andreotti) immerhin durch, dass über die Grundsatzfrage der Revision der Römischen Verträge von 1957 überhaupt abgestimmt und dass zur Vorbereitung der Reform, was ebenfalls als Novum gesehen wurde, eine Regierungskonferenz eingesetzt wurde.14 Die Schaffung einer Regierungskonferenz hätte positiv beurteilt werden können, weil Reformfortschritte nicht im Rahmen von bloß kurzen Regierungstreffen unternommen würden. Wegen der im Post-Mailand- Halbjahr von 1985 gemachten Erfahrung, werteten Spinelli und seine italienischen Mitstreiter dieses Verhandlungsinstrument jedoch als eine den Integrationsprozess erschwerende Einrichtung, weil da vor allem Beamte und nicht politisch mandatierte Persönlichkeiten das Sagen hätten. Diese Erfahrungen bestärkten Spinelli in der Meinung, dass das intergouvernementale und bürokratische Europa die ihm nötig erscheinende Reform nicht zustande bringen wird und dass die angestrebte Reform nur im EP verwirklicht werden könne, dieses aber von einer breiten Mobilisierung der öffentlichen Meinung unterstützt werden müsse. Wenn man an einer solchen Konferenz Diplomaten als nationale Akteure aufeinandertreffen lasse, würden die Divergenzen grösser und nicht kleiner.15 Die Unzufriedenheit mit dem sich abzeichnenden Resultat der Regierungskonferenz war eine Unzufriedenheit auch mit der Methode der internationalen Kooperation. Das Ergebnis der Regierungskonferenz wurde im Februar 1986 als Einheitliche Europäische Akte (EEA) von den Regierungen der Mitgliedsländer unterzeichnet.16Vom Resultat enttäuscht, ging Spinelli davon aus, dass man sich zwischen zwei Wegen entscheiden müsse: Entweder ein paar Jahre zuwarten, bis offensichtlich wird, dass die EEA die erhofften Resultate nicht bringe, und mit einem bescheidenen Vorschlag dann den Wahlkampf von 1989 angehen. Oder sogleich darauf hinarbeiten, dass die 14 Martin Grosse Hüttmann, Reformen durch Regierungskonferenzen. Struktur und Wandel von Vertragsänderungen in der Europäischen Union, Baden-Baden: Nomos, 2013. 15 Spinelli an seine Mitstreiter im EP, 29. Oktober 1985. 16 Rocco Antonio Cangelosi, Dal Progetto di Trattato Spinelli all’Atto unico europeo, Cronaca di una riforma mancata, Mailand: Franco Angeli, 1987, 19 ff. 9 Mitglieder unterzeichneten am 17. Februar 1986, und Italien, Dänemark und Griechenland erst am 28. Februar 1986, weil sie das Ergebnis des dänischen Referendums abwarten wollten. Georg Kreis 172 Mehrheit der Mitgliedstaaten dem EP von 1989 ein Mandat zur Ausarbeitung einer Verfassung gebe, dies allerding unter Ausschaltung der Regierungskonferenz und Aufhebung der Einstimmigkeitsregel für die Ratsentscheidungen. Der erste Weg sei derjenige der Kapitulation.17 Für Spinell war klar, dass der zweite Weg beschritten werden und dieser zu einer Mandatierung der EP durch nationale Referenden führen müsse. Bereits am 16. Januar 1986 hatte er, als im EP der EEA vorgelegt worden war, den jüngsten Integrationsschritt als “miserabile topolino” abgetan und darauf den folgenden Fahrplan zu Papier gebracht. In der Zeit vom Oktober 1986 bis Oktober 1987 soll die Institutionelle Kommission im Namen des EP die nationalen Parlamente, die sozialen Kräfte und ein Teil der Regierungen darauf hinwirken, dass Referenden durchgeführt würden, und in der Zeit vom Oktober 1987 bis Januar 1988 sollen die Regierungen die Referenden beschliessen, in der Zeit vom Mai-Juni 1988 sollen die Referenden abgehalten und im Juni 1989 schliesslich soll das EP mit seiner dritten Legislatur als Europäische Konstituante gewählt werden.18 Spinellis Vision fand uneingeschränkte Zustimmung nicht nur in der föderalistischen Bewegung, sondern auch in der italienischen Regierung. Diese hatte sich bereits an der Regierungskonferenz ganz im Sinne der Föderalisten eingesetzt und den Ausbau der EG-Institutionen mit der Einschränkung des Einstimmigkeitsprinzips im Rat und dem Ausbau der Zuständigkeit des EP gefordert. Die beiden italienischen Kammern gaben Januar/Februar 1986 noch vor der Unterzeichnung auf der internationalen Ebene ihre grundsätzliche Zustimmung zur EEA, verbunden jedoch mit der Erwartung, dass sie bis zum 1. Januar 1988 verbessert und insbesondere die Erweiterung der Kompetenzen des EP geprüft würde.19 Die italienische Regierung brachte diese Forderungen im Februar 1986 im Moment der Vertragsunterzeichnung vor. Zugleich drückte sie ihre tiefe Unzufriedenheit mit dem erreichten Resultat aus. Man habe die Gelegenheit, die der Gipfel von Mailand geboten habe, nicht für einen Qualitätssprung genutzt.20 17 Tagebuch, 5. Februar 1986 und 18. März 1986. Cf. Edmondo Paolini (Hg.), Altiero Spinelli Diario europeo, 3. Bd. Bologna: Il Mulino, 1992, 1299, 1313. 18 Pistone, Altiero Spinelli, Una strategia per gli Stati Uniti d’Europa, 247–252. 19 Cangelosi, Dal Progetto di Trattato Spinelli all’Atto unico europeo, Cronaca di una riforma mancata, 209. Italien machte sich im Oktober und im Dezember 1985 u.a. ausdrücklich für die „codecisione piena“ stark. Cf. Ibid., 201 ff. 20 Cangelosi, Dal Progetto di Trattato Spinelli all’Atto unico europeo, Cronaca di una riforma mancata, 216. Unzufrieden mit der Einheitlichen Europäischen Akte 173 Die im Herbst 1986 im Senat schliesslich geführte Ratifikationsdebatte zur EEA brachte die breite Unzufriedenheit mit der bescheidenen Substanz dieser Vereinbarung zum Ausdruck. Von dem an die Regierungskonferenz ergangenen Auftrag, unter anderem auch eine Stärkung der Rolle des EP zur Beseitigung des demokratischen Defizits im gemeinschaftlichen Beschlussfassungssystem vorzusehen, fand sich doch wenig in der EEA.21 Senator Raniero La Valle (Sin. Indip.) von der Linken beispielsweise beanstandete ausdrücklich die “modestia dei suoi contenuti”.22 Senator Alfredo Diana (DC) brachte die etwas positivere, aber nüchterne Einschätzung der Rechten zum Ausdruck: Die EEA habe zwar nicht die zu hoch gegriffenen Erwartungen des Gipfels von Mailand erfüllt, dennoch habe sie einen Fortschritt im Integrationsprozess gebracht. Man müsse eben mit kleinen Schritten zufrieden sein, sofern diese in die richtige Richtung gehe. Diana forderte in seinem mit breitem Applaus entgegengenommenen Votum die Regierung auf, sich zur Wortführerin der europafreundlichen Stimmung der Mitbürger “sentimento europeistico” zu machen.23 Rocco Antonio Cangelosi, ein der italienischen Regierung nahestehender Europadiplomat, wertete 1987 das Ergebnis der EEA ebenfalls als ungenügend. Er meinte aber, das EP könne mit der in der EEA gewährten bescheidenen Aufwertung des EP sogleich Gewicht zulegen und bis zur dritten Wahl von 1989 – “nella terza elezione a suffragio universale europeo” – ein wirkliches Mitwirkungsrecht erreichen.24 Man dürfe sich nicht auf Pragmatismus beschränken, sondern müsse eine “riforma organica” anstreben. Man werde nicht alle dafür gewinnen können, die Gründungsmitglieder beziehungsweise der “fronte di Milano” soll vorangehen. Die EEA wurde hier nicht, wie das generell getan wird, als mit Blick auf den Horizont 92 dynamisierende Integrationsleistung gewürdigt, sondern als etwas abgetan, das für lange Zeit oder für immer die Verwirklichung der Gemeinschaft in eine politische Einheit verhindere, weil mit der Staatsvertragsmethode bloss kleine Integrationsschritte zustande kämen: “L’Atto unico (ha) liquidato per sempre, o almeno per lungo tempo, 21 Mit der Einführung des Kooperationsverfahrens wurde das EP im interinstitutionellen Dialog gestärkt. Die geringen Kompetenzen des EP sind festgehalten in Artikel 149 der EEA. 22 Sitzung vom 30. Sept. 1986, 7503.pdf (Dez. 2019). 23 Sitzung vom 1. Okt. 1986, 504.pdf(Dez. 2019). 24 Cangelosi, Dal Progetto di Trattato Spinelli all’Atto unico europeo, Cronaca di una riforma mancata, 23 ff. Georg Kreis 174 ogni velleità di trasformazione delle attuali Comunità in una vera entità politica”.25 Die europäische “Union” blieb in der Präambel der EEA eine wenig verbindliche Absichtserklärung, und die Aufwertung des EP blieb bescheiden, war doch auf dem Gipfel von Mailand die Stärkung des EP zur Beseitigung des demokratischen Defizits im gemeinschaftlichen Beschlussfassungssystem beschlossen worden. Dem ist allerdings entgegenzuhalten, dass die EEA immerhin eine wichtige Kompetenzerweiterung für das Parlament einführte: Mit dem so genannten Verfahren der Zusammenarbeit war das Parlament nun an der allgemeinen Gesetzgebung beteiligt und konnte offiziell Änderungsvorschläge an Gesetzesentwürfen machen, obwohl das letzte Wort beim Ministerrat blieb. Vorbereitung des Referendums Anstösse für das Referendum kamen vom linken Flügel, das Referendum selber wurde aber in bemerkenswerter Weise von allen Parteien, also auch dem rechten Flügel getragen. In der Europafrage spielte die Parteipolitik in Italien eine geringe Rolle. Die Literatur weist darauf hin, dass die Regierung die europäische Integrationspolitik als Bindeglied und Brücke zwischen den verschiedenen Koalitionsparteien und anfänglich als Gegenideologie zu den Links-Parteien, insbesondere den Kommunisten, genutzt habe.26 Mit dem Einschwenken der Kommunisten auf eine europafreundliche Linie im Laufe der 1960er Jahre herrschte in der Europafrage weitgehende Übereinstimmung. Zudem waren die Europa- Föderalisten27 bestrebt, eine parteiunabhängige transnationale Bewegung zu sein. Für sie waren die klassischen Parteien zu stark in nationalstaatlichem Denken verhaftet.28 Senatspräsident Giovanni Spadolini (Rep.) war ebenfalls überzeugt, das Europaprojekt nur als parteiübergreifendes Anliegen voranbringen zu können. Im Frühjahr 1987 brachte die Radikale Partei in der Abgeordnetenkammer einen Gesetzesvorschlag ein, der, ausgerichtet auf die Verfassungsar- 25 Ibid., 31. 26 Cf. Brigitta Thomas, Die Europa-Politik Italiens. Der Beitrag Italiens zur europäischen Einigung zwischen EVG und EG, Baden-Baden: Nomos, 2005, 249ff: Die Europapolitik sei auch als “Ventil” der Innenpolitik benutzt worden. 27 Die Föderalisten hatten als zusätzliche Bezeichnung auch “ecologista e verdi”. 28 Sergio Pistone, I movimenti per l’unita europea 1954–1969, Pavia: Università di Pavia, 1996, 31. Unzufrieden mit der Einheitlichen Europäischen Akte 175 beit der Europäischen Union, ein konsultatives Referendum in die italienische Rechtsordnung einführen wollte. Wie dem “Jahrbuch der Europäischen Integration” zu entnehmen ist, war aber Außenminister Andreotti der Meinung, dass die Verfassung ein Referendum im internationalen Bereich nicht zulasse. Als Alternative schlug er vor, dass sich an einem bestimmten Tag alle Regional-, Provinz- und Kommunalräte Italiens zum gleichen Zeitpunkt versammeln sollten, um über eine identische, verbindliche Vorlage zugunsten eines verfassungsgebenden Europäischen Parlaments abzustimmen.29 Am 10. Februar 1988 nahm der Auswärtige Ausschuss der Abgeordnetenkammer eine vom Ausschussvorsitzenden Flaminio Piccoli (DC) sowie rund 70 Abgeordneten verschiedener Parteien vorgeschlagene und von der Regierung akzeptierte Resolution, welche die Exekutive beauftragte, darauf hinzuwirken, dass dem EP die notwendigen verfassungsgebenden Befugnisse für eine Änderung und definitive Annahme eines Vertrages zur Europäischen Union zuerkannt werden. Sozusagen als Sofortmaßnahme forderte er, dass 1989 “Generalstände” (Stati generali dei popoli europei) unter dem Vorsitz des Präsidenten des EP und die Parlamente der 12 Mitgliederländer die Präsidenten des europäischen Ministerrats und der Kommission wählen sollen.30 In der Präsentation seines Vorstoßes bezog sich Piccoli ausdrücklich auf Spinelli, er verwies auch auf von anderen Deputierten früher unternommene Vorstöße vom Dezember 1986 und verwies explizit auf das demokratische Defizit der EG. Zwar müsse man mit den Füssen am Boden bleiben, aber mit einem mutigen Schritt auch andere Länder in den Prozess der Konstruktion Europas einbeziehen: “È vero che bisogna stare con i piedi per terra ma occorre anche un rilancio coraggioso per coinvolgere gli altri Paesi nel processo di costruzione europea”. Adolfo Sarti (DC) räumte ein, dass die Resolution ausgesprochen utopischer Natur sei – solche Bekenntnisse seien zurzeit aber sehr wichtig: “La risoluzione ha una forte carica utopica, ma la testimonianza utopica ha una grande importanza nella fase storica a cui si è giunti”. 29 Jahrbuch der Europäischen Integration 1987/88, 389. http://www.wissen-europa.d e/Jahrbuch.91.0.html (Dez. 2019). 30 Resolution (N. 7–00091). 0_00_03.pdf (Dez. 2019) Georg Kreis 176 Carlo Fracanzani (DC) sprach bei dieser Gelegenheit die Überzeugung aus, dass das italienische Parlament das “europäischste” der Gemeinschaft sei “certamente quello più europeista nell’ambito della Comunità”. Piccoli betonte in einem zweiten Votum, dass erfahrungsgemäss die besten Vorsehungen für die Zukunft stets die Utopien gewesen seien und dass es stets die Utopien gewesen seien, die die scheinbar unüberwindbare Realität überwunden hätten “proprio le utopie, che hanno sempre scavalcato quelli che sembravano essere i limiti invalicabili della realtà”. Der europäische Aufbruch sei wegen des schwächer gewordenen Idealismus und Utopismus ins Stocken geraten. Aussenminister Giulio Andreotti lobte Italien ebenfalls als das Land mit einer besonders europafreundlichen Vertretung “il nostro Paese, che ha una rappresentanza europea assai compatta, pressoché unanime” es könne darum im erwarteten Sinne aktiv sein. Er sah in Utopien nicht etwas in jedem Fall Negatives: Bereits Papst Paul VI. habe erklärt, dass in gewissen historischen Momenten der einzige Realismus die Utopie sei “in alcuni momenti storici l’unico realismo è l’utopia”, für die Verwirklichung eines Projekts brauche es stets zwei Vorgehensweisen auf dem Weg in die Zukunft: eine mit dem weiten Blick und eine mit dem Blick auf die unmittelbar möglichen Schritte, doch ohne starken Impetus “un forte scossone” werde man auch den Binnenmarkt bis 1992 nicht schaffen können. Die Bewegung der Europäischen Föderalisten ging davon aus, dass bei positiven Referenden in zwei Ländern die Regierungen der EG der Forderung Rechnung tragen müssten. In Anbetracht des starken Zuspruchs des MFE in Italien ist es kein Zufall, dass ein solches Referendum in diesem Land durchgeführt wurde. Auch in Belgien hatte sich der Senat für ein Referendum ausgesprochen, die Durchführung scheiterte aber am innenpolitischen Widerstand der Monarchisten, die befürchteten, dass das Mittel des Plebiszits einmal auch gegen die Monarchie eingesetzt werden könnte.31 Und in der Bundesrepublik beschränkte man sich, weil Volksabstimmungen auf Bundesebene nicht möglich waren, am 19. Januar 1989 31 HAUE, Fonds Dastoli 33, Gesetzesvorschlag vom 23. Februar 1989 für die Durchführung eines Europareferendums von den Senatoren Dierickx, Lenfant u.a. (R.A. 14679): “Il est contraire à toute logique institutionnelle et démocratique de confier la fonction législative (…) à des réunions d’experts, de fonctionnaires, de diplomates (…) sans guère y associer comme organe de décision le Parlement européen élu directement”. Abstimmung vom 24. Mai 1989 im Senat mit 93 Ja und 53 Nein. Das Geschäft hätte noch in die Kammer gehen müssen, die Gegnerschaft verzögerte das Verfahren, die Befürworter befürchteten, dass es vor den Wahlen ins EP vom 18. Juni 1989 nicht mehr zu einem Beschluss kommen Unzufrieden mit der Einheitlichen Europäischen Akte 177 auf eine Bundestags-Resolution, die, eingebracht vom SPD-Parteivorsitzenden Hans-Jochen Vogel im Sinne des Referendumsvorschlags, mit überwältigendem Mehr (gegen die Opposition der Grünen) angenommen wurde.32 Pier Luigi Dastoli versuchte im Januar 1989 als Generalsekretär der Intergruppe der föderalistischen Mitglieder des EP verschiedene Stellen für die Unterstützung des Referendumsprojekts zu gewinnen. Er tat dies gestützt auf die Umfrageergebnisse und mit nochmaligem Verweis auf die Resolution des EP vom 16. Juni 1988, mit der ein Referendum gefordert worden war. Die Reaktion des Vorsitzenden der Fraktion der Europäischen Volkspartei des EP war ausgesprochen positiv: Die Umfrageergebnisse würden zeigen, dass es weiterhin “unser Ziel” sein müsse, vor allem anderen für eine Unterstützung unserer Anliegen in der europäischen Bevölkerung zu sorgen. Die EVP habe die Resolution vom Juni 1988 einhellig unterstützt: “Wir werden auch in Zukunft an der Verwirklichung dieses Projekts arbeiten”.33 Von der Sozialistischen Fraktion kam hingegen eine klare Absage. Rudi Arndt, ihr Vorsitzender, bemerkte in seiner Antwort vom März 1989, dass die drei letzten Präsidentschaften (Deutschlands, Griechenlands, Spaniens) das Projekt nicht übernommen hätten, also keine Chance für ein Referendum im Juni 1989 bestehe. Das neue Parlament müsse auf einer Stärkung seiner Kompetenzen hinwirken und gewiss auch die EEA überarbeiten.34 Eine Absage kam auch vom britischen EG-Kommissar Leon Brittan: Spinellis Vorschläge seien in Grossbritannien immer nur auf ein schwaches Echo gestoßen.35 Das Bundeskanzleramt würdigte Umfragen gewissermassen als Ersatz für Volksbefragungen, wie sie in der Bundesrepublik nicht möglich seien; es bekannte sich deutlich werde. Für ein Referendum setzte sich auch der Belgier Guy Spitaels, Professor für Politikwissenschaften, Präsident der Sozialdemokraten und zeitweiliger Minister, ein. Der belgische Europaabgeordnete François Roelant du Vivier (Partei der Grünen), lancierte ebenfalls einen Vorstoss für die europaweite Durchführung von Referenden. 32 Cf. Monatsschrift L’Unità Europea, n. 179 vom Jan. 1989, 4. Hinweise auf die positive Haltung anderer Länder gab es bereits 1988 in den Beratungen des Referendums im italienischen Parlament. Der Abgeordnete Adolfo Sarti erklärte in der Beratung vom 4. Dezember 1988: “È realistico pensare che il precedente italiano, la nostra indiscussa primogenitura, susciti imitatori fra i nostri partners europei, anche al di là delle iniziative che già̀ emergono in Belgio, in Spagna e nella Germania federale”. 33 HAUE, Fond Dastoli 37, Klepsch an Dastoli, 2. März 1989. 34 HAUE, Fond Dastoli 37, Arndt an Dastoli, 20. März 1989. 35 HAUE, Fond Dastoli 37, Sir Leon Brittan an Dastoli, 29. März 1989. Georg Kreis 178 zur vereinbarten EEA, gab zugleich aber auch mit diplomatischen Floskeln zu verstehen, dass man eine Stärkung des EP befürworte. Die deutsche Regierung sei für eine weiterführende Entwicklung der EEA und werde “auf diese Weise auch die Strategie des Europäischen Parlaments auf dem Weg zu einer Europäischen Union unterstützen”.36 In diesen Wochen korrespondierte Dastoli mehrmals mit Belgiens Aussenminister Léo Tindemans, mit dem sich die Föderalisten wegen dessen Bericht vom Dezember 1975 verbunden fühlten. Nachdem die italienischen Abgeordnetenkammer das Referendum beschlossen hatten und noch vor der abschliessenden Beratung im Senat hielt er im März 1989 fest, dass sich mit diesem Referendum ein Sechstel der europäischen Bürger für eine demokratische Verwirklichung der Europäischen Union aussprechen könnten. Italien könne zusammen mit Belgien ein “moteur de la relance” werden, und möglicherweise würden sich auch Frankreich, Deutschland, Portugal und Spanien ihnen anschliessen. Dastoli markierte Optimismus: “Ce qui avait été considéré une utopie généreuse est aujourd’hui possible et il sera demain une réalité politique”.37 Tindemans bestätigte, dass auch er in der Schaffung der Europäischen Union das Ziel des Integrationsprozesses sehe. Dem Referendum gegenüber war er jedoch zurückhaltend, ein solches sei eben nicht in allen Ländern möglich. Es gebe auch andere Wege, in Belgien würde eine gemischte Kommission (zusammengesetzt aus nationalen Parlamentariern und Mitgliedern des EP) die Regierung auffordern, sich am nächsten Gipfel für die Stärkung des EP einzusetzen.38 Gesetzesvorschläge konnten und können in Italien gemäss Art. 71 der Verfassung von einzelnen Parlamentariern, von Regionalräten und von Bürgerinitiativen mit mindestens 50000 Unterschriften eingereicht werden. Im Falle des Europa-Referendums gab es Vorstösse in allen drei Varianten, die schliesslich zu einer einzigen Vorlage vereinigt wurden. Die Gruppe der Kommunisten reichte im Senat am 16. Juni 1988 als erste einen Gesetzesvorschlag von Ugo Pecchioli u.a. (PCI) ein.39 Kurz darauf, am 23. Juni 1988, reichten Giovanni Cervetti u.a. (PCI) einen gleichlaut- 36 HAUE, Fond Dastoli 37, Handing für Helmut Kohl, 10. März 1989. 37 HAUE, Fond Dastoli 37, Dastoli an Tindemans, 17. März 1989 und am 12. April 1989. 38 HAUE, Fond Dastoli 37, Tindemans an Dastoli, 26. April 1989. 39 (Dez. 2019) Im Senat folgten weitere, gleiche oder ähnliche Vorstösse aus drei Regionalräten. Unzufrieden mit der Einheitlichen Europäischen Akte 179 ender Vorschlag in der Deputiertenkammer ein.40 Schon am 20. Juni 1988 wurden dem Büro der Deputiertenkammer 114’000 Unterschriften übergeben.41 Die Vorstösse gingen davon aus, dass sich Europa in einer Krise befinde und sein Potenzial nicht ausgeschöpft werde, sie erfolgten unter Berufung auf die nötige Autonomie Europas und die Möglichkeit, im eigenen Interesse mit einer Stimme zu sprechen, und erklärte, sich damit in den Dienst eines Ziels zu stellen, das Altiero Spinell “con grande vigore” verfolgt habe. In beiden Kammern bildete sich ein wie auch der Name besagte parteiübergreifender Intergruppo parlamentare federalista mit insgesamt mehr als 500 Mitgliedern. Ihr Präsident, der Kommunist Diego Novelli, ehemaliger Bürgermeister von Turin verstand das Referendum für Italien als grosse Gelegenheit, die Führungsrolle in einem grossen Projekt zu übernehmen.42 Beratungen zum Referendumsgesetz Der Beratungs- und Zustimmungsreigen mit insgesamt vier Lesungen startete in der Deputiertenkammer mit der ersten Lesung am 2. und am 14. Dezember 1988.43 Die Auftritte der acht Erstvotanten bezeugten eine implizite wie explizite Übereinstimmung. Mehrfach betont wurden die “sostanziale convergenza politica”, die “larghissima convergenza che si è determinata tra le forze parlamentari” und das Bestehen von “molte forze politiche (giovani e adulte) e sindacali” (Francesco Rutelli, Fed.). In der Eintretensdebatte gab es keine wie in Parlamentsdebatten sonst üblichen parteipolitischen Abgrenzungen und Widerreden und mündete in eine einstimmige Zustimmung aller 305 anwesenden Deputierten. Alle Voten gingen grosso modo in die gleiche Richtung. 40 =2905 – (Dez. 2019). 41 Die Unterschriftensammlung wurde von den Föderalisten (MFE) und den Radikalen bestritten. 72000 waren in 467 Städten vom MFE gesammelt worden, 42000 kamen von den Radikalen und 3000 von der Südtiroler Volkspartei. Cf. Virgilio Dastoli: “Dal piano Spinelli all’approvazione del referendum in Italia”, in: Piemonteuropa, April 1989, 3–5. 42 Gemäss der Aussage in: „Ma l’Europarlamento dev’essere più forte?“, La Repubblica vom 17. Juni 1989 1989/06/17/ma-europarlamento-dev-essere-piu-forte.html?ref=search (Dez. 2019). 43 =2905 (Dez. 2019) Georg Kreis 180 Der Abgeordnete Franco Bassanini (Sin. Indip.) beschwor die “volontà politica europeistica, che pure nel nostro paese è sempre apparsa concorde”. Kritisch äusserte sich Adolfo Sarti (DC) vom rechten Lager, der aber ebenfalls ein europeista war, über die unverbindliche “retorica europeistica”; der heutige Akt sei mehr als das, er beschränke sich nicht “all’europeismo recitativo, alla commedia barocca”. Carlo Tassi (MSI) erwartete, dass nicht nur mehr “mercato”, sondern gleichzeitig auch mehr “stato” geschaffen werde, und ging davon aus, dass Europa Staatscharakter haben dürfe, weil es auch eine gemeinsame Nation mit “comuni origini di civiltà” sei. Angestrebt wurde damit die Stärkung der mit dem “Volk” gleichgesetzten repräsentativen Demokratie. Giuseppe Calderisi (Fed.), Präsident der Föderalisten, forderte “un autentico Parlamento e un Governo europeo dinanzi ad esso responsabile”. Er beanstandete die wachsende Übermacht der nationalen Regierungen auf Kosten des Europäischen Parlaments sowie der nationalen Parlamente. Die Europawahlen vom Juli 1989 sollen als “Generalstände” Europas wirken und auch den in direkter Wahl zu bestimmenden Kommissionspräsidenten und den Präsidenten des Europäischen Rats bestimmen. Am 20. Dezember 1988 war der Senat mit seiner ersten Lesung an der Reihe.44 Aus den insgesamt alle in die gleiche Richtung zielen Voten sei hier bloss das von Senator Francesco Tagliamonte (DC) festgehalten. Man erklärte, den von Spinelli etablierten Kurs weiterführen zu wollen. Die zusätzliche Begründung betonte, dass die EG in ihrem jetzigen Zustand die grossen menschlichen Ressourcen nicht genug ausschöpfe, die Arbeitslosigkeit zu wenig bekämpfe, die technischen Erneuerungen nicht vorantreibe und den wirtschaftlichen Globalisierern nicht entgegentrete. Es gehe darum, den vom EP im Februar 1984 mit grosser Mehrheit verabschiedeten “Entwurf eines Vertrags zur Gründung einer Europäischen Union” zu reaktivieren. Man habe lange Zeit vergeblich darauf gewartet, dass aus den bestehenden Verträgen eine Politischen Union geschaffen werde (“dopo tanti anni di speranze andate deluse e di tentativi infruttuosi”). Man wolle eine gegenüber dem Parlament verantwortliche Regierung. Es brauche diese Perspektive, damit die kommenden Wahlen für das EP vom Juni 1989 kein Leerlauf werden (“rischia di svuotare di contenuto”, Eingabe Piemont). Das italienische Volk müsse vorangehen, es sei ein Test und Exempel für die anderen Mitglieder der EG. In der zweiten Lesung der Abgeordnetenkammer vom 15. März 1989 meldete sich nur noch Carlo Tassi vom rechtsnationalen Movimento so- 44 (Dez. 2019). Unzufrieden mit der Einheitlichen Europäischen Akte 181 ciale italiano (MSI), um zu erklären, dass das Projekt einer Flucht nach vorne gleichkomme und er sich in anderen Ländern analoge Projekte gewünscht hätte. Man könne aber zustimmen, da man in guten Dingen stets gerne Vorreiter gewesen sei: “Ma l’avanguardia nelle cose buone a noi è sempre piaciuta e pertanto siamo favorevoli alla proposta di legge costituzionale in discussione”.45 Die zweite Lesung des Senats vom 30. März 1989 fiel dagegen wiederum sehr ausführlich aus; hier kam es zu, obwohl man sich einig war, zu ausführlichen Erklärungen.46 Der Berichterstatter Leopoldo Elia (DC) verwies auf die Resolution des belgischen EP-Mitglieds Fernand Herman, die sich dafür ausgesprochen hatte, dass nicht nur die Mitglieder des eigenen Parlaments, sondern auch die Mitgliedsländer mit Volksabstimmungen die Ausarbeitung einer Verfassung durch das EP fordern sollen, damit neben den kleinen Schritten der EEA auch der grosse Schritt der Konstitutionalisierung Europas verwirklicht und damit auch das europäische Volk einbezogen werden könne (“per far partecipare più da vicino il popolo europeo alla costituzione dell’Unione europea”). Damit werde bestätigt, dass die Initiative des italienischen Parlaments, auch wenn es keine Parallelinitiativen anderer nationaler Parlamente der EG gebe, kein alleingängerisches Vorpreschen ist, sondern sich im Rahmen einer Strategie bewegt, die von einer breiten Mehrheit des EP gutheissen wird. Zugleich kritisierte er den Widerstand, der in den Verhandlungen zur EEA von Grossbritannien, Dänemark und Griechenland gegen eine weitergehende Integration ausgegangen war, aber auch die schwache Haltung der sechs Gründerstaaten (“ad eccezione dell’Italia!”) gegenüber Kooperationsunwilligkeit der anderen drei EG-Mitglieder. Der für die Koordination der Gemeinschaftspolitik verantwortliche Minister Antonio La Pergola (PSI)47 verstand Italien als Vorbild und hoffe, dass von diesem Referendum eine “heilsame Ansteckung” auf andere Völker und Regierungen ausgehe. Italien werde jedenfalls in einer vorteilhaften Position sein, wenn es einmal darum gehe, einen neuen Gemeinschaftsvertrag auszuhandeln, weil es die erste Nation sei, die seine Verfassung im Hinblick auf die historische Zielsetzung modifiziert habe (“l’Italia sarebbe la sola e comunque la prima nazione ad avere modificato in anticipo la propria Costituzione in vista di questo storico traguardo”). 45, 29526 (Dez. 2019). 46, bis 23 (Dez. 2019). 47 War zuvor Mitglied des Obersten Gerichtsrates, 1989–1995 Mitglied des EP. Georg Kreis 182 Für Senator Ortensio Zecchino (DC) erfolgte die Zustimmung zum Gesetzesentwurf konsequenterweise aus der “alten” und von den Gründungsvätern Gasperi, Adenauer und Schuman erfolgreich verfolgten Politik. Die Befürwortung des Referendums sei realistisch, weil es den Einbezug der Bürger brauche, um den Integrationsprozess voranzubringen und insbesondere die blockierende Einstimmigkeitserfordernis in Beschlüssen des EG-Rats zu überwinden. Wenn Italien das einzige Land sei, das zur Europapolitik das Volk konsultiere, dann erfordere das vor allem auch, dass Italien eine neue Rolle in der EG entwickle. Das Referendum müsse, damit es nicht beim rhetorischen Europäismus bleibe, den Anlass bilden, einen “nuovo tipo di presenza dell’Italia in Europa” zu bilden. Senator Giorgio Covi sprach für die Gruppe der Republikaner und erinnerte mit einem Verweis auf Mazzinis Manifest “Junges Europa” von 1834 an das kulturelle Erbe des Landes. Dieser Referendumsversuch sei der erste Moment, durch den sich, wenn auch andere Völker dem Beispiel des italienischen Volkes folgen, die europäischen Völker ihre Stimme einbringen können. Das Referendumsgesetz wurde am 30. März 1989 im Senat mit 247 Stimmen und nur einer Gegenstimmung (diejenige des im Juni 1987 gewählten Umberto Bossi (Lega/Gruppo Misto) gutgeheißen und war damit definitiv verabschiedet. Senatspräsident Giovanni Spadolini (Rep.) stellte in seinem Schlusswort in Aussicht, den Senatsbeschluss “in den kommenden Stunden” allen Präsidenten der nationalen EG-Parlamente, dem Präsidenten der EG-Kommission und dem Präsidenten des EP in der Überzeugung zuzustellen, dass das italienische Parlament ein Beispiel für analoge künftige Initiativen gegeben habe. Unter lebhaftem und allgemeinem Applaus erklärte er, der Senat habe mit seinem Beschluss in Übereinstimmung mit allen italienischen Kräften seinen Glauben in die weitere Entwicklung der europäischen Integration manifestiert. Gestützt auf das aus diesen Beratungen hervorgegangene Verfassungsgesetz (legge costituzionale) vom 3. April 1989 setzte der Präsident der Republik Francesco Cossiga am 21. April 1989 das Referendum auf den 18. Juni 1989 an. Das Organ der italienischen Föderalisten begrüßte den Beschluss, ein Europa-Referendum abzuhalten, als Erweiterung der Demokratie auf die internationale Politik, ja als Einführung einer Demokratie ohne Grenzen. Die Zustimmung zu diesem Referendum sei als historisch zu werten, weil sich erstmals ein Nationalstaat ohne Zwang bereit erklärt habe, auf Teile seiner Souveränität zu verzichten, und bereit sei, in einen größeren Bundesstaat einzutreten. Unzufrieden mit der Einheitlichen Europäischen Akte 183 Was unmittelbar auf das Referendum folgte Auf der europäischen Ebene bildete das Referendum vom Juni 1989 einen Referenzpunkt für weitere Vorstösse, die in die gleiche Richtung gingen. Schon wenige Wochen danach, am 28. Juli 1989, brachte Maria Luisa Cassanmagnago Cerretti (DC), nachdem sie zum dritten Mal ins EP gewählt worden war, den Resolutionsentwurf “strategy for completing the European Union” ein, der die Bestätigung des Verfassungsauftrags und die Mitwirkung des EP in der nächsten Regierungskonferenz forderte. Dabei verwies sie an prominenter Stelle auf die Abstimmung in Italien und sprach die Hoffnung aus, dass andere Länder diesem Beispiel folgen werden.48 Und am 23. Januar 1990 beantragte die Institutionelle Kommission des EP erneut bei seinem Parlamentspräsidium, einen Bericht über die Europäische Verfassung erarbeiten zu dürfen. Diesem Antrag wurde am 2. April 1990 entsprochen. Als die Legislatur 1989–1994 zu Ende ging, wiederholte sich im Februar 1994 jedoch nur, was bereits zehn Jahre zuvor, 1984, stattgefunden hatte. Das Parlament nahm gegen Ende der Legislatur 1989–1994 wiederum einen ausführlichen von der Kommission für Institutionelle Fragen ausgearbeiteten Entwurf für eine Verfassung an, den so genannten Herman-Bericht49, und empfahl dem Parlament der nächsten Legislatur (1994–1999), die Arbeit fortzusetzen “with the view to deepening the debate on the European Constitution, taking into account the contributions from the national parliaments and the members of the public in the Member States and the applicant countries”. In der dazu gehörenden Resolution wurde wiederum auf das italienische Referendum verwiesen.50 Italiens Regierung musste nach dem Referendum keine neue Haltung einnehmen, sie verfolgte ja bereits zuvor den vom Referendum geforderten Kurs. Jetzt konnte sie sich aber auf die von der eigenen Bevölkerung eindrücklich bekundete Meinung berufen. Nach dem Referendum konnte sich Andreotti noch entschiedener als zuvor für die Aufw- 48 Europäisches Parlament, Serie B Doc 3–0007/89 (wahrscheinlich nicht angenommen). 49 Der belgische Ökonom Fernand Herman war auf nationaler Ebene 1975–1980 nacheinander als Minister, Senator und Abgeordneter und 1979–1999 als Mitglied der EVP-Fraktion im EP. 50 Beschluss vom 10. Februar 1994, in: Official Journal, n. C 61/156 vom 28. Februar 1994. Dem Beschluss ging ein von Herman präsentierter sehr ausführlicher Bericht vom 9. Februar 1994 voraus (A3–0064/94). Georg Kreis 184 ertung des EP aussprechen. Für seine Haltung und sein explizites Engagement steht eine von der italienischen Agentur ANSA verbreitete und im EP wohl mit Genugtuung registrierte Erklärung vom 9. November 1989: Die Regierung sei bereit, das EP immer stärker aufzuwerten. Dazu gehöre auch die Schaffung engerer Beziehungen zwischen dem EP und den nationalen Parlamenten; das Desinteresse der nationalen Parlamente und der öffentlichen Meinungen gegenüber dem EP sei besorgniserregend. Andreotti rief in Erinnerung, Italien habe wiederholt erklärt, “che il parlamento di Strasburgo è l’organismo più indicato per fornire una garanzia democratica alla comunità”.51 Im Januar 1990 erklärte Andreotti in der Kommission für Institutionelle Fragen des EP, auf das Referendumsergebnis stolz zu sein, seine singuläre Erscheinung verringere seinen Wert nicht, im Gegenteil “come Italiani e come Europei siamo per altro profondamente fieri”. Er betonte, dass die angestrebte Wirtschafts- und Währungsunion auch eine Europäische Union brauche, das supranationale Parlament grundsätzlich mit den gleichen Kompetenzen ausgestattet sein müsse wie die nationalen Parlamente, Italien werde das Fundament für das “Neue Europa” sein. Wie auch das „Jahrbuch der Europäischen Integration“ festhielt, begrüsste die Regierung in den ersten Monaten des Jahres 1990 mit viel Enthusiasmus den Vorschlag, eine zweite Regierungskonferenz zur Schaffung einer Politischen Union einzuberufen. Sie versuchte, als sie im zweiten Halbjahr 1990 die EG-Präsidentschaft innehatte, eine breite Basis für dieses Projekt zu schaffen, das heisst eine Beteiligung nicht nur der Regierungen der Mitgliedsländer, sondern auch der Kommission und vor allem auch des EP. Aus politischen Überlegungen hielt Andreotti eine detaillierte Diskussion noch nicht für opportun; er stellte aber einer Delegation von Europaparlamentariern und von Parlamenten der Mitgliedsländern, die als erste “Assisen-Versammlung” im November 1990 in Rom zusammengekommen war, in Aussicht, dass Italien keinen neuen Vertrag unterschreiben werde, der nicht die Zustimmung des EP habe. In der Regierungskonferenz über die Politische Union am 15. Dezember 1990 gab es dazu jedoch keinen entsprechenden Beschluss. Gemäss der Jahrbuch-Berichterstattung scheiterten die italienischen Anstrengungen, der Arbeit eine klare föderalistische Prägung zu geben, offenbar an den immer stärker werdenden intergouvernementalen Tendenzen vieler Länder, allen voran derjenigen Frankreichs. Die erwartete Signalwirkung des ital- 51 Aus der Dokumentation der EPRS‑ (Dez. 2019). Unzufrieden mit der Einheitlichen Europäischen Akte 185 ienischen Referendums war nicht nur bescheiden, auch Italiens föderalistische Neigungen wurden in der Folge bezüglich der Politische Union immer schwächer. Nicht aufgrund der Abschwächung der Berufung Roms im Hinblick auf eine supranationale Gemeinschaft, sondern wegen einer Reihe von taktischen Überlegungen im Zusammenhang mit den notwendigen Verbindungen zwischen Vertiefung und Erweiterung priorisierte die italienische Regierung in der Folge die Beitritte der EFTA-Länder und der mittel- und osteuropäischen Staaten. Mit einer zu übereilten Vertiefung, so der Bericht: “riskiere man dagegen, den Beitritt für neue Staaten zu schwierig zu machen: Besser wäre es also, mit kleinen Schritten voranzugehen, man konnte sich vielleicht (in Analogie zum Projekt der WWU) verschiedene aufeinander aufbauende Phasen der politisch-institutionellen Vertiefung überlegen, parallel zu einer Reihe von Verhandlungen über Neuaufnahmen”. Weit davon entfernt, seine eigene föderalistische Strategie aufzugeben, habe Italiens Regierung kürzlich eine Modultaktik ins Gespräch gebracht, die dazu dienen soll, die beiden Ziele einer grösseren vertikalen Integration sowie einer horizontalen Ausweitung der Gemeinschaft kompatibel zu machen: “Wären die verschiedenen ‘Module’ realisiert, könnte man etwa im Jahre 2010 die Vereinigten Staaten von Europa erreichen”.52 Das Referendum und sein Resultat bilden als Manifestation einer begeisterten Zustimmung Italiens zum Europaprojekt einen deutlichen Gegensatz zu den heutigen Verhältnissen, in denen sich neben der weiterbestehenden grundsätzlichen Zustimmung auch eine große Distanz zur EU zeigt. Das Referendum war das Resultat zum einen langjähriger Anstrengungen der Föderalisten in Italien und zum anderen eine Frucht der transnationalen Reformphase, die in der Wende von 1989 ihren fassbaren Höhepunkt fand, aber auch noch weiter wirkte, wie etwa Toto Cotugnos aus der verbreiteten Europa-Euphorie hervorgegangene Canzone „Insieme: 1992 – L’Europa non è lontana” zeigt mit dem hob er Italien 1990 in Zagreb im European Song Contest auf das Siegerpodest. Noch 1992 war Italien gegenüber dem später geschmähten Vertrag von Maastricht sehr zustimmend, inklusive die vorgesehene Haushaltsdisziplin. Inzwischen hat sich in Italien und allgemein in Europa einiges verändert. Es ist gut, wenn man sich in jeweiligen Gegenwarten vergegenwärtigt, wie die Verhältnisse in früheren Zeiten einmal gewesen sind. Die 52 Jahrbuch der Europäischen Integration 1990/9, 339. Georg Kreis 186 Recherchen werden in diesem Fall zu einer Exkursion in eine “verlorene Zeit“. Diese Zeit kann nicht zurückgeholt werden, sie kann uns aber indirekt zeigen, dass sich auch die gegenwärtige Gegenwart wieder ändern und in diesem Fall wohl nur wieder besser werden kann. Unzufrieden mit der Einheitlichen Europäischen Akte 187 The Transformative Impact of European Integration on Member States: The German Länder in Search of a New Role during the Second Half of the 1980s Kiran Klaus Patel One of the harshest criticisms of the European Communities (EC) by any political leader during the Cold War came from Margaret Thatcher in 1988. In a speech at the opening ceremony for the new academic year at the Collège d’Europe, then the prime training ground for the future EC elite, she first ironically congratulated its director on his courage for having invited her. After that, she wasted little time before launching into a diatribe about a “European super-state exercising a new dominance from Brussels”, where “an appointed bureaucracy” made decisions affecting citizens across the member states.1 Research has long shown that Brussels never created a gigantic bureaucracy to subjugate or substitute the member states. Although Thatcher’s polemic quickly became a key point of reference for Eurosceptics in the United Kingdom and beyond, it would also be wrong to argue that European integration simply “rescued” the European nation-state, as Alan Milward famously argued,2 particularly if one focuses on the more recent decades. This chapter argues that European integration challenged and changed both older notions of state sovereignty and the very setup of political systems within its member states. The second half of the 1980s, I argue, was particularly important in this respect. The impact of European integration became transformative: on some issues, member states and the EC permeated each other, on others, the EC turned into an important factor to trans- 1 Margaret Thatcher’s Bruges Speech, 20 September 1988, in Anjo G. Harryvan and Jan van der Harst (eds.), Documents on European Integration, Basingstoke: Macmillan, 1997, 243–244, on the speech, now see Oliver Daddow, Christopher Gifford and Ben Wellings, “The Battle of Bruges: Margaret Thatcher, the Foreign Office and the Unravelling of British European Policy”, in Political Research Exchange, 1, 2019, 1–24. 2 Alan S. Milward, The European Rescue of the Nation-State, 2. ed., London: Routledge, 2000. 189 figure parts of member states’ constitutional and political order.3 The mechanisms through which these developments unfolded were subtle; their depth varied by policy field and issue, and played out differently across the various member states. So this transformation was very different to the picture Thatcher painted, which was based on a very traditional understanding of state sovereignty and a pejorative counterimage of sweeping European federalism. Most actual changes, as I argue, remained under the radar of political debate and beyond the attention of the broader public – which explains why they have found comparably little attention so far. Methodologically, the issues at stake tend to shift the focus away from European integration history’s dominant concern with politics and policies to the very nature of the polities under consideration. The chapter thus builds on the work of political scientists and legal scholars who have already studied this issue in the period at stake.4 Beyond that, the text also goes in new directions and is the first to explore this issue on the basis of archival material from a spectrum of holdings. In so doing, I seek to broaden and nuance our understanding of how Europe was reshaped by European integration during the second half of the 1980s. As a case study, the chapter focuses on the Federal Republic of Germany, which is a very special case. The findings cannot be generalized to other member states, mostly because of the federal angle. Still, I contend that this feature helps us to see broader dynamics that were also unfolding elsewhere; hence, the Federal Republic is a very interesting case in point for wider processes. For my argument, the German Länder, or states, are particularly significant. They form a level in the Federal Republic’s politi- 3 On this and other aspects of this transformation, now also see Kiran Klaus Patel and Hans Christian Röhl, Transformation durch Recht. Geschichte und Jurisprudenz Europäischer Integration, 1985–1992, Tübingen: Mohr Siebeck, 2020; Kiran Klaus Patel, Project Europe: A History, Cambridge: Cambridge University Press, 2020, 176–208. 4 See for the German debate Fritz W. Scharpf, “Die Politikverflechtungs-Falle: Europäische Integration und deutscher Föderalismus im Vergleich”, in Politische Vierteljahresschrift, 26, 1985, 323–356; Wolfgang Wessels, “Staat und (westeuropäische) Integration: Die Fusionsthese”, in Michael Kreile (ed.), Die Integration Europas (PVS Special Issue 23), Wiesbaden: Westdeutscher Verlag, 1992, 36–61; Wolfgang Wessels, Die Öffnung des Staates. Modelle und Wirklichkeit grenzüberschreitender Verwaltungspraxis, Wiesbaden: Leske & Budrich, 2000; Renate Mayntz, “Policy- Netzwerke und die Logik von Verhandlungssystemen”, in Politische Vierteljahresschrift, 24, 1993, 39–56; Paul Kirchhof and Claus-Dieter Ehlermann (eds.), Deutsches Verfassungsrecht und Europäisches Gemeinschaftsrecht (Europarecht, Special Issue 1/1991), Baden-Baden: Nomos, 1991; Fritz W. Scharpf, Optionen des Föderalismus in Deutschland und Europa, Frankfurt/Main: Campus, 1994. Kiran Klaus Patel 190 cal system without exact equivalents in other member states of the time, and it is here that the transformative impact became most visible.5 In order to assess the transformative impact of European integration during the 1980s, the chapter examines two case studies: firstly, the role of the Single European Act of 1986, and secondly, the case of a particularly controversial directive in the field of audiovisual broadcasting. Taken together, they will reveal the deep implications of EC policies for the West German political system of the time. Besides EU documents and primary sources from the German federal level (along with selected papers from other national perspectives), the chapter builds upon archival research in the Länder archives of Bavaria and North Rhine-Westphalia. The latter were the two largest states in West Germany, and are also interesting with respect to their different socio-economic setups and the fact that they were each governed by one of the two major political parties of the time – the social democratic SPD in North Rhine-Westphalia (under Johannes Rau during the period under study), and the Christian democratic and conservative CSU in Bavaria (first under Franz Josef Strauß and, from 1988 onwards, under Max Streibl). Their approaches to European integration differed somewhat, with Bavaria taking much stronger action against dynamics that it saw as infringing upon its own rights. Bavaria thus deserves more attention, and for this reason, the CSU’s party archive was also consulted to include documents from the official state and from the ruling party’s perspective. “Scandalous”: Negotiating the Single European Act The Single European Act (SEA) was the first major reform treaty since the 1957 Treaties of Rome. It posed a serious challenge to the powers of the 5 On this dimension, see, most importantly, Guido Thiemeyer, “Stiefkinder der Integration. Die Bundesländer und die Entstehung des europäischen Mehrebenensystems 1950 bis 1985”, in Vierteljahrshefte für Zeitgeschichte, 65, 2017, 339–363; also Guido Thiemeyer, “Die Europäisierung des deutschen Föderalismus. Die deutschen Länder und die europäische Integration 1950–1958”, in Gabriele Clemens (ed.) The Quest for Europeanization: Interdisciplinary Perspectives on a Multiple Process, Stuttgart: Steiner, 2017, 221–236; Alexander Wegmaier, “Europäer sein und Bayern bleiben”: Die Idee Europa und die bayerische Europapolitik 1945–1979, Munich: C.H. Beck, 2018; Martin Hübler, Die Europapolitik des Freistaats Bayern. Von der Einheitlichen Europäischen Akte bis zum Amsterdamer Vertrag, Munich: Hanns-Seidel-Stiftung, 2002. Besides the book by Hübler, all these studies concentrate on the period prior to the one analyzed here. The Transformative Impact of European Integration on Member States 191 Länder, and led to difficult negotiations within Germany with earnest constitutional implications. The tensions between West Germany’s federalism and the dynamics of European integration, which had already become visible during the 1950s, now flared into a conflict with far-reaching consequences. The debates started as soon as the SEA negotiations reached a definitive stage: on 3 December 1985, a European Council held in Luxembourg arrived at a political agreement on the content of the treaty, calling for the establishment of a single European market by 1992. Only ten days later, Bavarian State Premier Franz Josef Strauß wrote to Chancellor Helmut Kohl, voicing his concern that the Luxembourg outcome had the potential to infringe the rights of the Länder, while there was “no urgent necessity” to take such as step.6 Strauß asked that the rights of the Länder be taken into account in all future negotiating steps. The Bavarian government had already voiced similar concerns six months earlier, before the June European Council in Milan discussed the final report of the ad hoc Intergovernmental Committee chaired by James Dooge that laid the groundwork for the SEA.7 As if this were not enough, Strauß had written to Kohl again in August, after the Milan Council, also insisting on the rights of the Länder.8 For Strauß and other representatives of the Länder, the situation must have felt like a déjà vu. Already in the 1950s, Länder politicians had started to worry about the constitutional implications of European integration. The Paris Treaty and the Rome Treaties created communities composed of the respective member states, regardless of their political order. Whereas most of the original six gravitated towards unitary systems and centralized forms of state organization, West Germany had a federal system. Given that the EC did not have a strong administration of its own, the Länder therefore soon became part of the machinery administering and implementing EC law. And, even more importantly: European integration had the potential to impact and infringe upon their powers. This issue was particularly serious since formally, they had no direct voice or say in the negotiations in Brussels. Already in 1951, North Rhine-Westphalia’s State Premier Karl Arnold feared that the Länder might be “reduced to administra- 6 Politisches Archiv des Auswärtigen Amtes, Berlin (PAAA), Zwischenarchiv, 130.395, Bavarian Minister President Strauß to Chancellor Kohl, 13 December 1985. 7 PAAA, Zwischenarchiv, 134.808, Amtschef of the Bavarian Staatskanzlei, Jaquet, to Chef Bundeskanzleramt, Schäuble, 10 June 1985. 8 See Hübler, Europapolitik, 60–61. Kiran Klaus Patel 192 tive units”.9 A few years later, the country’s foremost expert in European law, Hans Peter Ipsen, bemoaned the EC’s “blindness with regard to the concerns of the Länder” (Landesblindheit).10 This problem remained secondary during the 1960s, when most EC initiatives and policies concerned issues for which West Germany’s federal state held responsibility. It became more serious during the 1970s, as the EC made inroads into fields such as domestic, environmental and cultural policy. These were areas where the Länder were partly or mostly in charge in the German context.11 Against this backdrop, the Länder continuously adjusted their internal procedures to the changing European framework and challenges. This process had already started during the 1950s, when several Länder governments reached out directly to Brussels and established sporadic contacts with the High Authority of the European Coal and Steel Community.12 The federal government and the Länder formalized their division of roles in EC policies in the so-called Lindau agreement of 1957. This guaranteed the Länder involvement whenever the Federal Republic negotiated or signed foreign treaties that touched upon their rights. The federal government was also obliged to inform the Länder in good time where negotiations were relevant to them.13 This procedure was strengthened further in 1979: the way the federal level had to consider the interests of the Länder was defined more precisely in a letter from Chancellor Willy Brandt to the Conference of State Premiers. Yet even this agreement could not resolve the fundamental tension between German federalism and European inte- 9 61st session of the Bundesrat, 27 June 1951, Sitzungsbericht, 445. 10 Hans Peter Ipsen, “Als Bundesstaat in der Gemeinschaft”, in Ernst von Caemmerer, Hans-Jürgen Schlochauer and Ernst Steindorff (eds.), Probleme des europäischen Rechts. Festschrift für Walter Hallstein zu seinem 65. Geburtstag, Frankfurt am Main: Vittorio Klostermann, 1966, 248–265, quote 256. 11 See, e.g., on the internal German debates around EC initiatives and policies in the field of culture, Bundesarchiv Koblenz (BA/K), B 106/121835. 12 See, e.g., Landesarchiv NRW, Duisburg (NW), 74 Nr. 146, Minister President NRW Arnold to President of the ECSC High Authority, Monnet, 6 June 1953. 13 Konrad Zumschlinge, “Die Europakompetenzen der Landesregierungen und die Rolle der Landesvertretungen in Brüssel”, in Hans-Ulrich Derlien and Axel Murswieck (eds.), Der Politikzyklus zwischen Bonn und Brüssel, Opladen: Leske + Budrich, 1999, 53–64; Wessels, Öffnung, 274–301. The Transformative Impact of European Integration on Member States 193 gration. In its details, the letter remained rather vague and did not fully satisfy the Länder governments.14 Besides insisting on being informed by the federal government about ongoing EC issues and involved in the national decision-making, the Länder took their own steps. During the run-up to the Treaties of Rome, they established an Observer for EC Negotiations. But quite tellingly, this seconded Länder official had his office in Bonn, not in Brussels. In 1983, a report by the observer argued that his task was merely to report on developments at the EC level, not to actively influence them.15 In a few cases, the Länder observer functioned as an early warning system,16 but in most instances, his role was rather passive, as also reflected in his files: for the largest part, they consisted simply of official EC documents which he passed on to the various Länder governments.17 While some Länder criticized the costs incurred by the observer and felt that the position was superfluous, others wanted to upgrade his role, for instance by moving his office to Brussels and adding a deputy. Meanwhile, the federal government remained sceptical about the arrangement, partly for constitutional reasons, partly because it feared that a stronger hand for the Länder might reduce its own room for maneuver in EC matters. Such haggling over powers also impacted other parts of the political system, such the role of the Länder in parliament and in the Bundesrat, the legislative body representing the Länder at the national level. Having said this, the debates remained largely technical and of comparably little political salience for the longest time. In these discussions, the Länder did not always speak with one voice, weakening their position vis-à-vis the federal level.18 European integration did add to the tensions between federal and state levels, but by and large, it remained a secondary factor. While this was the wider background to the concerns of the Länder about the SEA, their worries in 1985 were not only over the Act’s content. Another factor was recent experience. In November 1981, German Foreign Minister Hans-Dietrich Genscher and his Italian colleague Emilio Colom- 14 See BA/K, B 136/56126, Chancellor Schmidt to President of the Conference of State Presidents, Rau, 19 September 1979; on the negotiations, see, e.g., also BA/K, B 106/121835. 15 Bayerisches Hauptstaatsarchiv, Munich (BayHStA), StK 16494, EC Länder Observer, Stöger, to Chair of the Study Group of EC Officials of the Länder Ministries of the Economy, Dülz, 27 June 1983 with attachment. 16 Wegmaier, Europäer, 295–296. 17 See, e.g., the files in BayHStA, StK 16490–16494. 18 Wegmaier, Europäer, 287–387. Kiran Klaus Patel 194 bo had presented their European partners the draft of a “European act”. This initiative, popularly known as the Genscher-Colombo proposal, aimed to make decision-making more effective and enhance the EC’s powers in external relations. After fierce resistance from governments including the British, the Danish and the Greek, the initiative was soon shelved. But that was not immediately clear. In March 1982, with the debates still ongoing, the Länder regretted “that the federal government had not informed them about the ‘European Act’ in a timely manner and had not involved them in its realization.”19 Now, a mere three years later, the same story seemed to repeat itself under the label “Single European Act”. No wonder that alarm bells were ringing in Munich, Düsseldorf, Stuttgart and Hamburg. Despite this earlier history, the federal government hardly considered the concerns of the Länder during the SEA negotiations. In the lead-up to the Luxembourg summit, their views played no visible role for the German delegation.20 After the summit, Bonn prepared a short, concluding paper for the Länder, but again without responding to the detailed criticism it had received from them.21 During the following months, the Länder and particularly Bavaria bombarded Bonn with requests and complaints. The criticism intensified further as the SEA reached the ratification stage. In February 1986, days before the federal government tabled its respective draft law, the Bundesrat demanded that its rights in European matters be strengthened; in May, it urged that the SEA draft law be amended.22 19 BayHStA, StK 16473, Minutes of the meeting of the Minister Presidents of the Länder, 4 March 1982; see, e.g., also the documents in BayHStA, StK 16474– 16475; BayHStA, MK 73269–73270 and BA/K, B 136/56126. 20 On these negotiations, see, e.g., Commission Européenne, Archives Historiques, Brussels (CEAH), BAC 408/1991, 227. 21 See the files PAAA, Zwischenarchiv, 130.388, 130.393, 130398–399; also see Michael Ploetz e.a. (ed.), Akten zur Auswärtigen Politik der Bundesrepublik Deutschland (AAPD), Berlin: De Gruyter Oldenbourg, 2016, volume 1985, document no. 325, Conversation Foreign Minister Genscher with Chancellor Kohl, 28 November 1985. 22 See the draft law and a documentation of the debate in PAAA, Zwischenarchiv, 130.399; various documents in Archiv für Christlich-Soziale Politik (ACSP), Hanns-Seidel-Stiftung, Munich, HA Waigel, Abgabe 1 LG, 29; also see Ulrich Lappenküper, “Die deutsche Europapolitik zwischen der ‘Genscher-Colombo-Initiative’ und der Verabschiedung der Einheitlichen Europäischen Akte (1981– 1986)”, in Günter Buchstab, Hans-Otto Kleinmann and Hanns Jürgen Küsters (eds.), Die Ära Kohl im Gespräch. Eine Zwischenbilanz, Vienna: Böhlau, 2010, 133– The Transformative Impact of European Integration on Member States 195 The federal government remained unimpressed by these demands. A letter from State Secretary Otto Schlecht of the Federal Ministry of the Economy, to the Foreign Ministry’s State Minister Lutz Stavenhagen in June 1986 acknowledged that “in view of the SEA’s ratification one or other adjustment of the present coordination procedure might be necessary”. The letter quickly added that changes should be “confined to that sphere”. Schlecht concluded that it would be decisive “to contain centrifugal tendencies and preserve a consistent position externally as well as internally”.23 When Schlecht wrote in the abstract about “centrifugal tendencies”, he was in fact referring to the Länder, and he dismissed the constitutional basis of their claims out of hand. Correspondingly, Bonn adopted a tactical approach to ratifying the SEA. On the one hand, Genscher urged Chancellor Kohl to opt for quick ratification and a consistent German position on European matters.24 On the other hand, the federal government saw the resistance from Bavaria and elsewhere as an obstacle. In internal documents, one of Genscher’s closest FDP collaborators in his ministry criticized the position of the CSU as “inacceptable”.25 The federal government decided to play for time. All member states had agreed to complete the ratification process by the end of 1986. Bonn, however, only tabled its SEA ratification law on 10 November.26 This document did not even include an answer to the Bundesrat’s queries, even though several states had urged the federal government to respond to their pleas.27 In contrast to Bonn’s lackadaisical stance, all other member states had their procedures clearly under way by mid-November. 152; also Rudolf Hrbek and Uwe Thaysen (eds.), Die Deutschen Länder und die Europäischen Gemeinschaften, Baden-Baden: Nomos, 1986. 23 PAAA, Zwischenarchiv, 130.398, Federal Ministry of the Economy, State Secretary Schlecht to Foreign Ministry, State Minister Stavenhagen, 25 June 1986; also see ACSP, HA Waigel, Abgabe 1 LG, 29, Director Bavarian State Chancellery, Stoiber to Foreign Ministry, State Minister Stavenhagen, 9 June 1986, ibidem, Stavenhagen to Stoiber, 2 May 1986. 24 PAAA, Zwischenarchiv, 130.400, Draft, AA, Foreign Minister Genscher, to Chancellor Kohl, 10 October 1986, printed in AAPD, volume 1986, No. 278: draft letter Genscher to Kohl, 10 October 1986. 25 PAAA, Zwischenarchiv, 130.400, RL 011, Nordenskjöld to Minister Genscher, 7 November 1986. 26 Bundestag, 10. Wahlperiode, Drucksache 10/6392, 10 November 1986; also see BA/K, B 102/335499–335500. 27 Hartmut Weber e.a. (eds.), Die Kabinettsprotokolle der Bundesregierung, vol. 1986, Cabinet Meeting 5 November 1986; online: Kiran Klaus Patel 196 Criticism of this approach was loud and clear in the Federal Republic. During a parliamentary debate on 13 November, social democratic deputy Alwin Brück called the government’s stance “scandalous”. The tone of Bavarian State Minister Peter Schmidhuber (CSU) was more polite, the charge very similar. According to Schmidhuber, the procedure guaranteeing the participation of the Länder did not work, with the SEA negotiations providing “impressive proof of its unsuitability”.28 Schmidhuber thus echoed the polemics of Edmund Stoiber, head of the Bavarian State Chancellery, also from the CSU. Already in May, he had fulminated against the SEA in a newspaper article: the “short-sighted concoction” threatened to reduce the German Länder to “remote-controlled provinces” of Brussels.29 The Bavarian government, traditionally proud of the state’s sovereignty, insisted especially strongly on its constitutionally guaranteed federal rights. More important than public ranting was the threat by Bavaria and several SPD-led Länder to veto the ratification process. Bavaria’s Premier Strauß even threatened Kohl with the political bazooka of ending the parliamentary alliance between the CDU and the CSU in Bonn. This represented Kohl’s power base as chancellor and had been the very foundation of conservative rule during most of the preceding four decades.30 Faced with such pressure, the federal government changed its position. The Bundesrat managed to agree a statement, which the government had to consider. The final version of the SEA ratification law included new rights for the Länder in EC policy-making. Clearer in detail and legal implication, the federal government was now obliged to inform the Länder as early as possible about topics and projects at the EC level, and had to consult with them if their interests were affected. Moreover, the federal level was now obliged to consider the statement of the Bundesrat as part of the procedure.31 Compared to the 1957 Lindau agreement and its 1979 reform, the role of the Länder was clearly strengthened. On paper, they had won an /barch/0000/k/k1986k/kap1_1/kap2_39/para3_8.html (last accessed 1 January 2020). 28 Bundestag, 10. Wahlperiode, 246th session, 13 November 1986, quote Brück: 18976; quote Schmidhuber: 18980–18981; on Schmidhuber in this context, see, e.g., also BayHStA, MBE VN 161. 29 Edmund Stoiber, “Warum Bayern jetzt nein sagt”, in Bayern-Kurier, 17 May 1986; also see ACSP, HA Waigel, Abgabe 1 LG, 29, Director Bavarian State Chancellery Stoiber to Bötsch, MdB, 2 July 1986. 30 ACSP, HA Waigel, Abgabe 1 LG, 29, especially Strauß to Kohl, 13 June 1986; also see Hrbeck and Thaysen, Länder, 10; Hübler, Europapolitik, 76–79. 31 Published in Bundesgesetzblatt, part II, 19 December 1986; also see ACSP, HA Waigel, Abgabe 1 LG, 29 on debates in the CSU on this issue. The Transformative Impact of European Integration on Member States 197 important battle. This victory soon proved to be short-lived, however, as the second case study will show.32 The Challenges of “Television without Frontiers” Today, the Eur-Lex website celebrates the “Television without Frontiers” (TVWF) Directive (Council Directive 89/552/EEC of 3 October 1989) as “the cornerstone of the European Union’s audiovisual policy”.33 Its goal was to harmonize the various national audiovisual broadcasting laws and ultimately to achieve a single market for this field. The directive that emerged after several years of intense negotiations did not reach all the original goals associated with transfrontier broadcasting, while adding a highly controversial provision stipulating a local content requirement. The document is very technical and mostly forgotten beyond expert circles, but sheds additional light on the transformative impact of European integration on Germany from the mid-1980s to the mid-1990s. Beyond the dynamics already analyzed for the SEA, the TVWF Directive puts the spotlight on two further factors – the EC’s inroads into new policy domains, and its competition with other international forums. Both these factors demonstrate the complexity of the interplay between European, national and Länder levels. For one, the TVWF Directive is an example of the broader trend in European integration during the 1970s and 1980s of venturing into new policy fields, even if such initiatives were often very controversial. Technological innovation was a major reason for the expansion of EC policies beyond the remit originally defined by the treaties. Satellite technology, on the rise since the mid-1970s, triggered a debate about new transnational standards in audiovisual broadcasting. Governments saw an increasing need for standards to apply across frontiers, and the Commission pushed for new initiatives, also to acquire new powers. As in many other fields, the debate started before the SEA and hence without a clear treaty basis; for this reason, critics of an EC role in this policy domain had an easy 32 See as a account of the legal details Doris Fuhrmann-Mittlmeier, Die deutschen Länder im Prozeß der Europäischen Einigung. Eine Analyse der Europapolitik unter integrationspolitischen Gesichtspunkten, Berlin: Duncker und Humblot, 1991, 287– 296. 33 Quote 1 (last accessed 1 January 2020); also see the actual directive on the website. Kiran Klaus Patel 198 game.34 And, indeed, resistance was vocal: Audiovisual broadcasting was a sensitive issue because it touched on questions of cultural identity. Many countries had long-established state-owned television networks that were considered key instruments of national unity. For this reason the European Commission’s original neo-functionalist, pro-market strategy, which was rather insensitive to identity concerns, soon met national resistance – for instance in France, where the government wanted to protect European television from an influx of American films and insisted on a local content requirement. All in all, the TVWF Directive was a controversial project for many reasons. For our context, it is important that in Germany, many of its aspects touched upon the powers of the Länder, making EC action highly contentious. The TVWF Directive is also a reminder that during the 1980s, the EC was not the only game in town. Long before the EC became active in this field, the Council of Europe (CoE) had made itself into Western Europe’s main international coordination and policy platform for media, culture and telecommunications. As shown elsewhere in greater detail, the 1980s saw parallel negotiations on audiovisual broadcasting in both the EC and the CoE. The debates which ultimately led to the EC’s TVWF Directive were always conducted in view of a possible organizational alternative with a different governance system and a less muscular legal system to enforce its decisions.35 The EC debate about audiovisual broadcasting gained momentum in 1984, when the Commission made its first proposal for such a directive in the form of a Green Paper. A concrete proposal followed in July 1986. By then, the Länder had become increasingly suspicious about the consequences of European integration for their own powers, chiefly because of the thorny SEA negotiations. For this reason, the television proposal triggered a firm response. The Conference of the State Premiers dismissed the EC’s plans in October 1986 on grounds of principle. A few months later, 34 More generally on the EC’s role in new policy domains at the time: Patel, Project, 32–46. 35 Kiran Klaus Patel and Oriane Calligaro, “The True ‘EURESCO’? The Council of Europe, Transnational Networking and the Emergence of European Community Cultural Policies, 1970–90,” in European Review of History, 24, 2017, 399–422. There is rich older literature on this issue, though without archival basis; see, e.g., Miriam Meckel, Fernsehen ohne Grenzen? Europas Fernsehen zwischen Integration und Segmentierung, Wiesbaden: Westdeutscher Verlag, 1994; John David Donaldson, “‘Television without Frontiers’: The Continuing Tension between Liberal Free Trade and European Cultural Integrity”, in Fordham International Law Journal, 90, 1996, 90–180. The Transformative Impact of European Integration on Member States 199 in February 1987, the Bundesrat stressed that “community law provided no sufficient legal basis” for the Commission’s proposal. The Länder were much more open to the legally less ambitious proposal by the CoE, which became active on the very same issue. The German state premiers saw the CoE initiative as less of a challenge to their own rights.36 As in the SEA negotiations a few months earlier, the federal government in Bonn initially chose to ignore the position of the Länder. This dimension played hardly any role during the first phase of official deliberations,37 even after the Bundesrat voiced its concerns. A meeting of representatives of the relevant federal ministries in November 1987 – more than half a year after the Bundesrat statement – concluded that the federal government had no intention “of steering the negotiations – as desired by the state premiers – intentionally towards a solution within the framework of the Council of Europe”.38 The federal government preferred the more farreaching EC solution and tried to avoid a situation in which its room for bargaining at the EC level was compromised by the preferences of the Länder – even if this position clearly diverged from the internal German agreement on how to deal with EC matters. Meanwhile, debates in Brussels dragged on, complicated by issues such as the French insistence on a local content requirement. But the Länder also increased their pressure. Against this backdrop, the Commission tabled a new proposal in March 1988. The revisions did not go far enough for the Länder, however. Bavaria made that clear immediately, leading to negotiations between Chancellor Kohl and the state premiers in April. A dedicated working group with representatives of the two levels was set up; two years earlier, in 1986, the Länder had already established a separate 36 Bundesrat, 10. Wahlperiode, Drucksache 259/86. The various stages of the debate are documented in PAAA, Zwischenarchiv, 160.938; see, e.g., also BayHStA, StK 19324; on the Länders’ interest in a CoE solution, see BayHStA, MBE VN 163, Ausschussinformation 11/2, 30 October 1987. 37 See on these early debates, e.g., Nationaal Archief, Den Haag, The Netherlands (NL-HaNA), Ministerie van Economische Zaken, code-archiv 2.06.107, inv. no. 5469, e.g. the document EC Commission, Summary Record of the Meeting of the Working Party of Government Experts on the Approximation of Copyright Laws in the Broadcasting Field, 27–29 November 1984; NL-HaNA, Ministerie van Economische Zaken, code-archiv 2.06.107., inv. no. 5794; also The National Archives of the United Kingdom (TNA), FCO 33/6044, Council of Europe, Memorandum of FRG on Direct Broadcasting by Satellite, 26 March 1982; moreover BA/K, B 136/35340, EC, Council, Draft Minutes, 922nd Council Meeting, of 27 March 1984, 23 May 1984 with attachment. 38 PAAA, Zwischenarchiv, 160.938, AA, Memo, 20 November 1987. Kiran Klaus Patel 200 working group on this issue – as another sign of how seriously they took this matter.39 During the next phase of negotiations, the German Länder became the biggest threat to an EC solution. Governments of other member states that held a clear preference for the EC approach (as opposed to the CoE) were acutely aware of this, chiefly the British.40 After bilateral talks with Bonn’s representatives in December 1988, the British Foreign Office stressed that the federal government was “under pressure from the Lander [sic]”, explaining the government’s reservations against the EC proposal.41 The pressure exerted on Bonn by the Länder now had a clear impact, on the federal government as well as on European partners. This led to a rather unconventional reaction. Given its interest in the EC directive, the British government consulted directly with Bernhard Vogel, state premier of Rhineland-Palatinate and President of the State Premiers’ Broadcasting Commission. The Länder thus entered the radar of the governments of other member states. It was not the first time this happened, but a rare case in which the policy domain at stake was still in the making, and the EC’s legal basis to act in this field rather shaky.42 Positions converged somewhat over time, and on 8 March 1989 Bonn decided to agree to the draft directive, as long as some last remaining issues were resolved. In May, the Council of Europe established its convention on transfrontier television,43 but this did not stop negotiations in the EC context. In October, the EC Council of Minister agreed on the directive – despite continuous criticism from the Länder. The Bavarian state government in Munich was infuriated by this decision and took the issue to the 39 PAAA, Zwischenarchiv, 160.938, BMI, Report, 25 February 1988; on the Länder working group see, e.g., BayHStA, StK 19324–19325; on Bavaria’s position ACSP, NL Klein, 848/1, especially Director Bavarian State Chancellery, Stoiber to Minister of the Interior Zimmermann, 11 March 1988. 40 As a pre-archival analysis of the negotiation that pays particular attention to the British and the French side, see Matthew William Fraser, “Television”, in Hussein Kassim and Anand Menon (eds.), The European Union and National Industrial Policy, London: Routledge, 1996, 204–225. 41 TNA, FCO 30/7557, FCO, Memorandum on Broadcasting, 23 December 1988; also see TNA, FCO 30/7552, FCO 30/7553. 42 TNA, FCO 30/7555, British Embassy Bonn, Mallaby, to FCO, 4 October 1988; see, e.g., also TNA, FCO 30/7554, British Consulate Munich, Blake-Pauley to British Embassy, Bonn, Uden, 3 June 1988; on the prehistory of such contacts, see Thiemeyer, “Europäisierung”. 43 See (last accessed 1 January 2020); on this convention, see Patel and Calligaro, “EURESCO”. The Transformative Impact of European Integration on Member States 201 Federal Constitutional Court (FCC), accusing Bonn of having breached Article 30 of the Grundgesetz, Germany’s constitutional law. Eight other German states joined this complaint. The FCC’s 1995 ruling – seven years later – confirmed that in principle, the federal government was entitled to decide about EC directives. It had the prerogative and obligation to represent the Federal Republic externally. But in instances which touched upon the rights of the Länder, it had act as their “custodian” (Sachwalter). More concretely, it had the duty to cooperate with the Länder and consider their interests. In case of the TVWF Directive, the government had breached the rights of the Länder: The cabinet decision of March 1989 had been legal, but not the way in which the federal government had exercised the rights of the Federal Republic in the Council subsequently.44 All in all, the FCC ruling demonstrates that the success of the Länder in the SEA ratification process was a pyrrhic victory. It did not provide a robust framework that guaranteed that the federal government would live up to its role as “custodian” in EC matters. The FCC was very clear on that in 1995. Three years earlier, in 1992, the position of the Länder had already been strengthened by a change in the Grundgesetz – their biggest success in securing their place at a time when European integration deepened massively. Article 23 of the Grundgesetz, which in its original version had dealt with the perspective of German unification, had become superfluous after the GDR joined the FRG on that very basis. The revised version that passed parliament on 21 December 1992 was deemed necessary to enable the Federal Republic to accede to the Maastricht Treaty. More generally, however, it clarified the division of powers on Germany’s European policies. No less than five and a half of its seven paragraphs were dedicated to the Bundesrat, and it further expanded the rights of the Länder. Paragraph 6, for example, stated that in an area where the Länder possess exclusive legislative powers, “the exercise of the rights belonging to the Federal Republic of Germany as a member state of the European Union shall be delegated to a representative of the Länder designated by the Bundesrat”.45 This was a clear shift away from the legal situation that had characterized the SEA and the TVWF negotiations. All in all, the revised version of Article 23 defined a new form of participatory federalism with specific rights for the Länder in EU affairs. This is not to say that this amendment to the 44 BVerfGE 92, 203; see, e.g., also PAAA, Zwischenarchiv, 160.938. The other Länder were Bremen, Hamburg, Hesse, Lower Saxony, North Rhine-Westphalia, Rhineland-Palatinate, the Saarland and Schleswig-Holstein. 45 For an official English version of the Grundgesetz, see https://www.bundesregieru (last accessed 1 January 2020). Kiran Klaus Patel 202 Grundgesetz resolved the tension between the two levels on EU matters once and for all. It does, however, demonstrate that European integration had a definite and recognizable impact on Germany’s polity. Conclusions Several conclusions can be drawn from these two case studies. Firstly, they provide deep and surprising insights into the political and institutional cleavages within the Federal Republic. Generally, political affiliation played a much less important role than one might think. The SEA is the best example for this. Throughout the process from negotiation until ratification, Kohl was chancellor of a coalition government of his Christian Democratic Party, the Christian Social Union as its Bavarian counterpart, and the liberal FDP. The SPD, as the largest opposition party, also agreed to ratify the law. The Greens, represented in parliament since 1983, were the only party to oppose it.46 So broad parliamentary support for the SEA was always guaranteed. Among the Christian and Social Democrats, there were only slight differences between their assessments of the treaty. While the CDU praised it as a milestone of European integration, the SPD saw it as an intermediate step on which new initiatives were soon meant to follow.47 So cleavages between parties explain little. Instead, the main conflicts were between the federal and the state levels. Politically they thus played out among the parties in federal government, particularly between the liberals in Bonn and the CSU in Bavaria. Genscher, as foreign minister, clearly prioritized national interests over the views of the Länder, and was very concerned to keep the German position on EC matters consistent. A fragmented view or vote had to be averted at all costs, despite the challenges for German federalism. Among the Länder, Bavaria with its long tradition of insisting on the states’ rights vis-à-vis Bonn proved most vocal in both the SEA and the TVWF cases – and not North Rhine-Westphalia, as a stronghold of Social Democracy. During earlier periods, other states had sometimes spearheaded the Länder camp on European issues, but in this phase the fiercest resistance came from Bavaria. While fights between the regional conservative party in Bavaria and a conservative government in 46 Bundestag, 10. Wahlperiode, Drucksache 10/6663. 47 Bundestag, 10. Wahlperiode, 246th session, 14 December 1986, especially 19717– 19721. The Transformative Impact of European Integration on Member States 203 Bonn were far from unusual, the Bavarian government under Strauß went particularly far in its opposition to EC policies as formulated in Bonn, even threatening to leave the parliamentary partnership over the SEA controversy.48 The TVWF case shows how bitter the tone became on both sides. Voices from the CSU side have already been quoted. On the other side of the divide, the FDP-led Foreign Ministry was eminently critical of Bavarian policies. One example is the long list of comments from the ministry in the margins of the complaint by the Länder during the FCC process. Comments such as “one of the few correct sentences” underscored the ministry’s disagreement with the legal reasoning of the Länder and display a tone rare for internal German administrative documents of the time.49 Meanwhile, Chancellor Kohl tried to find a middle ground. As a former State Premier of Rhineland-Palatinate, he understood the views of the Länder, particularly as soon they increased the pressure upon him in each case. All in all, the debates of the late 1980s reveal a level of inner-German friction over EC policies that goes beyond a simplistic narrative of a pro-EC stance pursued by the Kohl government. Having said this, criticism was rarely about European integration per se, but instead mainly about where powers to decide about European issues were located within Germany. Secondly, the search for the right balance between federalism and a consistent German position was a key factor underlying the whole debate. Sometimes pejoratively referred to as the “German vote”, coordination of European policy had always proved difficult in the Federal Republic, for the longest time mostly due to ministerial particularism, sometimes also because of other veto players such as the federal president.50 From the 1980s, the Länder became an additional factor complicating policy coordination on European affairs. Their Nebenaußenpolitik (parallel or ancillary foreign policy) found expression in direct contacts between the Länder and the British government on the TVWF Directive. All in all, the Länder increasingly became a factor in European politics, reinforcing the (preexisting) tendency of a fragmented “German vote”. 48 This was not the first time the CSU threatened to take this step. In 1976 the party even decided to go that way, but subsequently failed to implement the decision; see Andreas Kießling, Die CSU. Machterhalt und Machterneuerung, Wiesbaden: VS Verlag für Sozialwissenschaften, 2004, 138–140. 49 PAAA, Zwischenarchiv, 160.938, Motion Lerche FCC, 6 April 1989. 50 As a detailed study of these various complications, see Kiran Klaus Patel, Europäisierung wider Willen. Die Bundesrepublik Deutschland in der Agrarintegration der EWG, 1955–1973, Munich: Oldenbourg Verlag, 2009. Kiran Klaus Patel 204 Closely related to this is a third point: The negotiations demonstrate that the Länder, and Bavaria in particular, had fully understood the challenge of European integration at a time when the EC was being reshaped and ultimately morphing into the European Union. The second half of the 1980s saw reforms in the set-up of European policies in various Länder. In 1987, for instance, Bavaria rechristened its “Staatsminister für Bundesangelegenheiten” (state minister for federal affairs) to “Staatsminister für Bundes- und Europaangelegenheiten” (state minister for federal and European affairs). Many other Länder also upscaled their administrative apparatus on EC affairs and made them more visible.51 Several of them also established liaison offices in Brussels. In 1985, the so-called Hanse Office opened its doors as a joint initiative of Hamburg, Schleswig-Holstein and Lower Saxony. As on many other issues, the Länder did not act in concert – the Hanse Office had not been coordinated with the other Länder; they initially reacted with consternation, but soon followed suit with similar projects of their own.52 At the time, most of these offices were one-person shows, warily watched by the federal government which made sure that they remained informal initiatives without real powers.53 Beyond these administrative changes, reform initiatives and attempts to cope with the transformative impact of European integration ran particularly deep in Bavaria. They even started to affect the very DNA of public administration: The late 1980s saw intense debates in the Bavarian State Chancellery on how to improve the information flow with regard to the EC and how to professionalize the training of civil servants on European affairs. Support for participation in classes at the ENA in Paris was one such instrument; systematic efforts to increase the number of Bavarians in the Commission another.54 When, in 1987, the aforementioned Peter Schmidhuber became the first Bavarian politician appointed Commissioner in Brussel, this was 51 Wilhelm Volkert, “Die Staats- und Kommunalverwaltung”, in Alois Schmid (ed.), Handbuch der bayerischen Geschichte, vol. IV, 2, Munich: C.H. Beck, 2017, 74–154, here 82, also see 734; for North Rhine-Westphalia, see, e.g., Heinz Köstering (ed.), Die Bundesrepublik Deutschland. Staatshandbuch. Landesausgabe Land Nordrhein- Westfalen, Cologne: Heymanns, 1996, 23, 81, 148, 197–198. 52 See, e.g., NW 736 Nr. 417, I A 5, Memo Bauer, 10 May 1984; on Bavaria’s reasoning, see ACSP, HA Waigel, Abgabe 1 LG, 29; Stoiber, Director of Bavarian State Chancellery to Stavenhagen, Foreign Ministry, 27 March 1986; also see ACSP, NL Strauß, PV 15760. 53 See, e.g., BA/K, B 102, 335499, Meeting Staatssekretärausschuss, 26 February 1986; Thiemeyer, “Stiefkinder”, 359–361. 54 See, e.g., BayHStA, MBE VN 122, Bayerische Staatskanzlei, A III 3, Verbesserungen der Unterrichtung und Mitwirkung Bayerns in Angelegenheiten der Europä- The Transformative Impact of European Integration on Member States 205 celebrated as a major success in Munich.55 Beyond negotiations and power struggles, the Bavarian administration understood the ultimate paradox resulting from the tensions between German federalism and European integration: it had to Europeanize in order to defend its own regional interests. Taking these first three points on the German level together, it is impressive how the country’s political system dealt with the new dynamics of European integration. The challenges led to crises. But ultimately, the political and administrative system was flexible enough to avert a real deadlock of the kind that political scientist Fritz Scharpf predicted at the time. German federalism remained highly complex and many solutions were improvised. Still, it proved capable of dealing with the issues at stake, also given the many uncertainties resulting from German unification and the end of the Cold War.56 Overall, the Federal Republic’s political system was highly compatible with the systemic changes occurring in European integration at the time; its legal system, the concomitant legal culture, but also the dominant political climate helped to check the systemic challenge posed by the EU’s deep transformation. Maybe the best evidence for the latter are sources of rather mundane provenience, for instance the circular letters Bavarian CSU MEP Fritz Pirkl sent to his constituency: Even in the “hot” period of 1987–88, they did not reflect the concerns of his state government. Bonn was the real challenge, not Brussels, and hence criticism of the EC never came to dominate Germany’s European policies.57 Shifting the focus to the European level, the TVWF case leads to a fourth conclusion. It demonstrates that also during the second half of the 1980s, international cooperation in Western Europe was not all about the ischen Gemeinschaften, June 1988; BayHStA, MBE VN 124, Antwort der Bayerischen Staatsregierung auf Interpellation des Abgeordneten Tandler e.a., 3 February 1988; BayHStA, MBE VN 122, Bayerisches Staatsministerium für Wirtschaft und Verkehr, Note, 30 October 1986; from the perspective of the CSU: ACSP, NL Strauß, PV 16468, Ergebnisprotokoll Konferenz CSU-Abgeordnete, 5 and 19 February 1986. 55 BayHStA, MBE VN 124, Antwort der Bayerischen Staatsregierung auf Interpellation des Abgeordneten Tandler e.a., 3 February 1988; on Schmidthuber’s appointment, also see Peter M. Schmidhuber, Europäische Integration aus historischer Erfahrung. Ein Zeitzeugengespräch mit Michael Gehler, Bonn: ZEI Discussion Paper, 2012, 23; online: schmidhuber.pdf (last accessed 1 January 2020). 56 Scharpf, “Politikverflechtungs-Falle”; my argument is close to the one of Thiemeyer, “Stiefkinder”. 57 See, e.g., ACSP, HA Schmidhuber, Abgabe 1, Europakommission der CSU, e.g. Pirkl, MEP, Brief aus Europa, August 1988 with his assessment of the SEA that did not mention the conflict with Bavaria at all. Kiran Klaus Patel 206 European Communities. On some issues, such as audiovisual broadcasting and cultural policy more generally, there were still important contenders, and Western European states did not opt for the EC by default. Some governments – including those of the Länder – preferred the approach offered by the Council of Europe, and in the end, both forums came to regulate the sector. At the same time, audiovisual broadcasting is only one of many examples that show that it was exactly during the 1970s and 1980s that the EC made inroads into new policy fields, increasingly turning into the dominant forum of cooperation and integration in Western Europe.58 Fifthly and finally, European integration became transformative for its member states during the second half of the 1980s. While Thatcher overemphasized this trend and turned it into a caricature that soon energized populists of various strands, the role of the state and the notion of sovereignty did change. In the German context, the alterations became most visible at the level of the Länder. While the country saw a general trend to strengthen the federal level at the expense of the Länder, there were also important countervailing tendencies, most importantly the 1992 amendment to the Grundgesetz. Sub-national entities were gaining traction elsewhere too, for instance in Belgium, where constitutional reforms beginning in 1970 eventually led to a fully-fledged federal state. Other examples include devolution in the United Kingdom and the autonomous communities in Spain. While Belgium was the other state besides Germany sending representatives of a sub-national tier to the detailed TVWF negotiations,59 we still know little about the implications and links between the German case and the trajectory of sub-national entities in other member states. There are some hints that Bavaria served as a role model during devolution in the United Kingdom,60 but this and other issues deserve further attention, including the history leading to the establishment of the 58 On this issue, also see Patel, Project; Kiran Klaus Patel and Wolfram Kaiser (eds.), Multiple Connections in European Cooperation: International Organizations, Policy Ideas, Practices and Transfers 1967–1992, London: Routledge, 2018; on Bavaria’s preference as an example, ACSP, NL Müller, 158, Director Bavarian State Chancellery, Stoiber, to Müller, MdB, 23 February 1988. 59 See the attendance lists of these meetings: HaNA, Ministerie van Economische Zaken, code-archiv 2.06.107, inv. no. 5794; BayHStA, StK 19324. 60 ngen-2019/die-schotten-und-der-brexit-ilse-aigner-informiert-sich-in-edinburgh/ (last accessed 1 January 2020). The Transformative Impact of European Integration on Member States 207 European Committee of the Regions as a result of the Maastricht Treaty.61 A lot of research therefore still needs to be done to fully assess how Europe was reshaped during the second half of the 1980s. 61 See, e.g., the short and preliminary findings in Undine Ruge, Die Erfindung des “Europas der Regionen”. Kritische Ideengeschichte eines konservativen Konzepts, Frankfurt/Main: Campus, 2003, 297–305. Kiran Klaus Patel 208 Part III: Towards the Single Market Project and the Monetary Union The Single Market Project as a Response to Globalisation: The Role of the Round Table of European Industrialists and other non-state Actors in launching the European Union’s Internal Market (1983–1992) Anjo G. Harryvan When globalization hit Europe from the early 1980s onwards, it first and foremost took the shape of sharply increased East-Asian and American competition. The two sectors to be hit hardest were the automobile industry and consumer electronics. Pehr G. Gyllenhammar of Swedish carmaker Volvo and Wisse Dekker of the Dutch electronics giant Philips, joined forces for the sake of a rescue operation for their beleaguered companies. By founding the Round Table of European Industrialists (RTE), they launched the first pan-European non-governmental driving force for the sake of overcoming the continent’s economic fragmentation. True, since the summer of 1968, the economies of the member-states of the European Economic Community (EEC) were formally united in the EEC’s Customs Union. A plethora of Non-Tariff Barriers to trade (NTBs), however, had made free cross border trade in Europe a farce. The success of RTE’s campaign for the establishment of the EU internal market was the result of its effective cooperation with other NGOs, notably the Action Committee for Europe (ACE), comprising senior men of state, and with the Kangaroo group, uniting members of the European Parliament, as well as the ascendance of a new European Commission under the presidency of Jacques Delors. By establishing a pro-Single Market network of networks, RTE and its coalition allies managed to set the agenda, in convincingly proposing policy options for overcoming market fragmentation and promoting arguments for institutional change in a way that would steer Europe’s national preferences formation and intergovernmental discourse towards making the Single Market its first and foremost priority. 211 Introduction Late June 1985, Philips Chief executive officer (CEO) Wisse Dekker sent a telex to the European Council, at the time deliberating on the Single European Act. He did so on behalf of over 30 captains of leading European industries. In straightforward Netherenglish Dekker did not mince his words: “As leading industrialists based in the European Communities […] we urge you to exercise your full influence so that the forthcoming top meeting […] will produce concrete results. Stop. Not only is the credibility of European political leaders at stake but European industry badly needs a clear signal that the major objectives of the Treaty of Rome will be realized with the next 5 years. Stop.”1 Those major objectives in the Treaty of Rome, which Dekker was referring to, were the clauses in the European Economic Community (EEC) Treaty of 1957 in which the then Original Six member states of the EEC pledged themselves to the creation of a fully fledged common market that would do away with tariffs, quantitative restrictions and other barriers to trade and would trigger free cross-border exchanges of goods, services, capital and labour between the Community member states. One may wonder how it was possible that 27 years after the Treaty of Rome the pledge of a European common market had not been realized. That was precisely the question raised by Dekker and his colleague CEOs. Moreover, their sense of urgency was understandable, since by the mid-1980s the Common or Internal market appeared to have become a distant dream. The start of the project had looked promising enough. The first step towards a common market, the so-called customs union, in which tariffs between the participating countries were to be abolished, had been realized with a certain ease, by July 1968. This was one and a half years earlier than the date prescribed by the EEC Treaty. However, from the early 1970s onwards, the combined upsurge in economic crisis, recession, unemployment, exchange rate volatility and general economic misfortune made governments in the European capitals resort to new protectionist policy measures, the so-called NTBs or non-tariff barriers to trade, to protect their national industries from competition from elsewhere – from within and outside the European Community. 1 As quoted in Justin Greenwood, Interest Representation in the European Union, Houndmills: Palgrave Macmillan, 2003, 99. Anjo G. Harryvan 212 These NTBs were dressed up as quality or health standards or consumer protection regulations, or as rules subjecting imports to highly complicated administrative processes. They tended to be effective, in other words highly prohibitive for producers from abroad, be it from other EC countries or from outside. Such abundance of NTBs and other barriers to trade almost brought Europe back to where it had started in 1957, as an economically fragmented patchwork of relatively small-sized national markets.2 By 1985, the hope for a common market had become an urgent affair for Wisse Dekker and his colleagues, due to a new phenomenon: globalization. From the early 1980s onwards, European industries were confronted with intensified competition, especially from Japan and the United States. This intensified competition in turn was partly due to a number of successful GATT rounds in which the EEC had committed itself to lowering its import tariffs for manufactured goods. It also reflected highly successful corporate strategies by American and Japanese companies, which were developing new high technology products on their large domestic markets. This enabled them to cash in on resulting economies of scale, before penetrating the European national markets with ranges of high quality products, which were cheaper, often considerably cheaper, than the products of their European counterparts. Two vital sectors of the European economy were hit particularly hard by Japanese and American competition. Notably motorcar manufacturing and the electronics industry. European producers saw their markets invaded by a tsunami of Nissans, Toyota’s, Subaru’s and other high quality Japanese motor vehicles and – in the case of electronics – by ditto colour televisions, cd players, cassette recorders, walkmans and other gadgets. No wonder then, the leaders of European car-making and electronics companies took the lead in organizing emergency action against a threatening onslaught. In the spring of 1983, Pehr Gyllenhammar, CEO of Volvo, Umberto Agnelli, his counterpart at the Italian Fiat motorworks and Wisse Dekker of the Dutch electronics giant Phillips took the initiative and founded the European Round Table of Industrialists (ERT). They did so with explicit support of the EC Industry Commissioner, Etienne Davignon, who encouraged them to create a permanent consultative body, which would harness business leaders’ ‘expertise’ in the formulation of 2 At the end of 1982, the European Commission found itself confronted with 770 registered examples of intra-European protectionism to be investigated. Probably the real number was considerably higher. Cf. Nicholas Colchester / David Buchan, Europe Relaunched. Truths and Illusions on the Way to 1992, London: The Economist Books / Hutchinson, 1990, 26. The Single Market Project as a Response to Globalisation 213 Commission policies. In so doing he bypassed the traditional lobby organization of European enterprise UNICE which he deemed unfit for discussing big issues such as the making of a pan-European Internal Market.3 Establishing ERT was an instance of policy network formation for the sake of strengthening rather than hollowing out European governance.4 ERT brought together the CEO’s of Europe’s leading industrial companies; the three mentioned as well as Unilever, Shell, Nestlé, Siemens and many others. By 1985, the ERT members represented some 60 % of Western Europe’s industrial production. The promotion of a unified European market was stated as the core of its activities. In the words of the ERT Charter: “A halt to market fragmentation with Europe and the creation of unified European markets is essential”. It did make perfect sense. Compared with their American and Japanese competitors European industrial companies did not have a vast home market for product development. Rather the contrary: every few hundred kilometers or so goods had to be declared, VAT forms filled in and other often laborious administrative procedures gone through at the hundreds of custom posts within Europe. Philips’ leading intellectual Dr. Coen Ramaer calculated that without internal economic frontiers in Europe his company’s product costs would decrease by 10 % per product unit (before taxes and distribution costs). This decrease could be the difference between surviving external competition or Philips being taken over by one of its Japanese competitors. At the time, the latter prospect was openly discussed at the Philips headquarters in Eindhoven.5 When in May 1988 Dekker 3 Cf. Michael Keanly’s review of Bastiaan van Apeldoorn’s, Transnational Capitalism and the Struggle over European Integration, in: Historical Materialism, vol. 13:3, 263– 284, here 271. In contrast with RTE, UNICE (nowadays ‘BusinessEurope’) members were often small- and medium-enterprises (SME) without burning export ambitions and often rather content with the protection their national markets provided them at the time. Nevertheless, individual UNICE officials entertained contacts with RTE and supported its internal market campaign. Personal Archive J.C. (Coen) Ramaer (henceforth: PA Ramaer), Letter UNICE president Guido Carli to Dekker, 4 August 1983 and infra. 4 Wolfram Kaiser, “Plus ça change? Diachronic Change in Networks in European Integration Governance”, in: Wolfram Kaiser / Brigitte Leucht / Michael Gehler (eds), Transnational Networks in Regional Integration Governing Europe 1945–83, Houndmills: Palgrave Macmillan, 2010, 221–235, here 221–225. 5 PA Ramaer, Note H. Bodt to Dekker, 16 March 1983. Letter J.C. Ramaer to Ms. Geertje Tolsma, 25 July 2004. Apart from Ramaer some 30 Philips product experts were engaged in regular consultations with EEC officials, indicating the significance of European governance for the firm. Anjo G. Harryvan 214 took over from Gyllenhammar as RTE chairman this sense of urgency was stronger than ever.6 The Round Table lobby, academic and political assessments With few exceptions, the ERT lobby has been portrayed as extremely successful. Observers qualify it as the most successful European lobby ever.7 In a documentary on lobbying in the EU ‘The Brussels Business” from 2012, lobby analyst Olivier Hoedeman claims that the Single European Act of February 1986 was a copy paste outcome of the Europe 1990 Plan of Action presented by Philips CEO Wisse Dekker, early in 1985.8 That is an exaggeration, but there is general political and academic support for the thesis how the Dekker Paper did heavily influence Eurocommissioner Cockfield’s famous White Paper on the 292 specific policy measures required to realize the common or internal market by the end of 1992. The most notable exception appears to have been Andrew Moravcsik in his seminal article on the Single European Act as being the outcome of governmental preferences and intergovernmental negotiations. Moravcsik claimed that by the mid-1980s ERT focused primarily on the concerns of its members outside the European Community and that in doing so the Round Table was chiefly involved in European infrastructure projects such as the Channel tunnel. Also, the ERT was based in Geneva; it did not move to Brussels until 1988 when Dekker took over ERT chairmanship.9 Moravcsik’s argument on the supposedly modest role of ERT, however, was taken to the cleaners by Maria Green Cowles who demonstrated the limits of overly intergovernmentalist interpretations, by convincingly demonstrating that the ERT was indeed largely responsible for setting the agenda for the subsequent Single Market negotiations.10 Her findings on the ERTs role were backed up by Bastiaan van Apeldoorn’s research on its 6 s%20and%20Chairmen (20 January 2020). 7 Jonathan Witteman, “Ze maken gebruik van de chaos”, de Volkskrant, 31 August 2012. 8 Ibid. 9 Andrew Moravcsik, “Negotiating the Single European Act: National Interests and Conventional Statecraft in the European Community” in: International Organization 45, 1991, 19–56, here 45. 10 Maria Green Cowles, “Setting the Agenda for a New Europe: the ERT and EC 1992” in: Journal of Common Market Studies, 33, 1995, 501–526. The Single Market Project as a Response to Globalisation 215 contribution to “the neo-liberal transformation of European order”. As an elite platform, ERP successfully sought to shape European socioeconomic governance by means of its privileged access to European and national institutions.11 Commission president Jacques Delors qualified ERT as ‘the right vehicle’, adding that UNICE could not have done the job. Referring to Dekker and CIE. Delors observed: “These men are very powerful and dynamic. (…) When necessary they can ring up their own prime ministers and make their case.” Once he decided to focus his policies on realizing a single European market Delors’ RTE relations provided him with supportive allies.12 How was it possible for a non-governmental framework as RTE to exert such decisive influence on European agenda setting? Access to the private archives of two of the protagonists of the campaign and interviews with their members of staff enable us to throw light on that very question. Tracing the origins of the so-called Dekker paper ‘Europe 1990 – an agenda for action’ may serve as a starting point for analysis. Non-state actor policy impact: the Dekker paper The Dekker paper was an internal Philips project led by that company’s government affairs representative in Brussel, the aforementioned Coen Ramaer. Ramaer’s job had been created precisely because of growing dissatisfaction within the Philips’ management level with the inability of government officials and the European Commission to come forward with a concrete proposal, as well as a strategy and timetable, for the creation of a truly unified European common market. This is why they drafted one themselves. The Ramaer team of experts was instructed to ignore political barriers, potential pitfalls and other complications. Instead, they were to imagine themselves to be ‘the dictators of Europe’, writing down what it would take to overcome European economic fragmentation in the course of a five year programme. The internal market should be reality by 1990. When the experts cried out that such a schedule wasn’t realistic, Ramaer told them that a blueprint – whether realistic or not – was what was called for. Once the experts set to work they grew enthusiastic about the enterprise and 11 Bastiaan van Apeldoorn, “Transnational Class Agency and European Governance: The Case of the European Round table of Industrialists” in: New Political Economy 5, 2000, 157–181, passim. 12 Greenwood, Interest Representation in the European Union, 98. Anjo G. Harryvan 216 within four weeks completed a programme that would – if the political will to implement it would be sufficiently present – indeed unify the EEC countries’ national markets.13 Dekker first presented the plan ‘Europe 1990. An Agenda for Action’ at an expert meeting at the Centre for European Policy Studies (CEPS) in Brussels on 13 November 1984. It was then presented at a public speech in the Brussels Hilton hotel on 11 January 1985 for an audience of 500, including many of the newly appointed Commissioners of the European Commission lead by Jacques Delors. Europe’s poor economic condition and economic fragmentation, Dekker told his audience, were a direct result of the member-states not doing ‘the homework’ given in article 2 of the EEC Rome Treaty of 1957, pledging them to the establishment of a common market and converging their economic policies. An internal market of continental scale and European instead of national standards would decisively promote innovation and lower costs. He finished by stating the time was running out for a European answer to the American and Japanese challenge: “The clock is at five to twelve”.14 The ERT gave the Philips plan and the EEC’s subsequent ‘Europe 1992’ project its full support, before and after Dekker took over the ERT presidency in May 1988. The pressure group also campaigned for simplified and European – rather than national and hence diverging – merger and acquisition rules, as well as for road and railroad connections between England and France and between Denmark and Sweden. After the fall of the Berlin Wall in 1989, the Round Table campaigned for a speedy extension of the European Community to Eastern Europe. We fully underwrite the conclusions of Green Cowles and Van Apeldoorn on the significance of the ERT in affecting the making of Europe’s single market. A few days before its official presentation a copy of the Philips plan was sent to the new EC president Jacques Delors. When Delors attended a UNICE meeting on 8 January, Ramaer reported to Dekker enthusiastically how Delors quoted extensively from the piece.15 In his 13 Anjo G. Harryvan, “Japan, Philips and the Making of Europe’s Single Market, 1984–1994”, in: Journal of European Integration History, 25 (2019), 9–21, here 9–12. 14 Wisse Dekker, “Europe 1990. An Agenda for Action” in: European Management Journal 3, n. 1, 1985, 5–10. “Europa moet Japan in 5 jaar inlopen” Het Vrije Volk, 11 January 1985. Internationaal Instituut voor Sociale Geschiedenis, Amsterdam. Personal Archive Max Kohnstamm (henceforth: PA Kohnstamm), 891; PA Ramaer, J.C. Ramaer to various correspondents ‘Rede Dr. W. Dekker over vrije interne EG-markt per 1990’, 16 August 1984. 15 PA Max Kohnstamm, 891, letter J.C. Ramaer to Dekker, 09.01.1985. The Single Market Project as a Response to Globalisation 217 speech for the European Parliament on 14 January, Delors announced the Commission’s intention to propose to the European Council to pledge itself to completing a fully unified internal market by 1992.16 With the Council’s assent, Eurocommissioner Lord Cockfield then translated and extended the Philips plan in his famous White Paper ‘Completing the New Europe’, detailing near 300 concrete policy measures for making the single market a reality. Building up public support Precisely to build up political will to realize the proposed common European market, ERT started a public information campaign, resulting in brochures, articles in the major European newspapers and magazines, interviews with Gyllenhammar, Dekker, Agnelli and other big shots of the European industries. The message was repeated time after time. If a real European internal market, without economic frontiers and enabling free cross border exchanges of goods, services, capital and labour was not realized, the economies of Europe were doomed. In some instances these warnings took the form of veiled threats – like the telex to the European Council this article set out with – and also in interviews with Dekker and other ERT figureheads in the Financial Times and other leading newspapers in which they stated they would have no other option but to move their companies overseas if Europe’s political leaders did not follow through with their plans for an economically united Europe.17 With its Europa 1990 campaign, ERT significantly affected the agenda of the subsequent Single European Act negotiations.18 However, a public information campaign was in itself no guarantee for a successful acceptance and implementation of Round Table aims at the governmental level, both national and European. The newly consulted archival materials and 16 Jacques Delors, Mémoires Plon: Paris 2004, 185; Green Cowles, “Setting the Agenda for a New Europe: the ERT and EC 1992”, 515. For the (subtle) differences between a common market, single market and common market see Ibid., 515, ft. 31. 17 Michael Nollert (in collaboration with Nicola Fielder), “Lobbying for a Europe of big business: the European Roundtable of Industrialists” in: Volker Bornschier, State-building in Europe. The revitalization of Western European Integration, Cambridge: Cambridge University Press, 2000, 187–209. 18 Paul Betts, “The quiet knights of Europe’s round table”, Financial Times, 20 March 2001. Anjo G. Harryvan 218 interviews provide us with indicators that ERT cooperation with other lobbying actors has been of overriding importance for its success. Among these other lobbying actors, the so-called Action Committee for Europe (or ACE) conducted an influential campaign. The Action Committee was the successor of Jean Monnet’s Action Committee for the United States of Europe – and hence is sometimes referred to as the Second Action Committee established in March 1984 when twelve veteran statesmen, met at Stuyvenberg Castle, near Brussels. Among them were former prime ministers Leo Tindemans (Belgium), Edward Heath (United Kingdom), Helmut Schmidt (West Germany), Emilio Colombo (Italy) and Joop den Uyl (Netherlands), assembling under the chairmanship of Max Kohnstamm, former Jean Monnet confidant and former president of the prestigious European University Institute in Florence. Along with ERT, the Action Committee too, was to select the making of a pan-European single market as its central lobbying issue.19 Previously, on 19 August 1983, hence before ACE’s inception, Kohnstamm had contacted Philips CEO Dekker in a letter which in later communications was characterized by Ramaer as the “‘Noodkreet van Kohnstamm” (“Kohnstamm’s cry for help”). In his letter to Dekker, Kohnstamm exposed his worries about Europe’s failure to “create the economic space our countries need in order to avoid lagging behind the United States, Japan, in future possible China too, Brazil etc.” He then expressed his disappointment with the June 17–19 Stuttgart summit meeting of the ten EC heads of state and government earlier that year, which agreed upon a ‘Solemn Declaration on European Union’ without backing it up with any supporting policy measures. The prospects for their next meeting in Athens towards the end of the year were just as bad: “It looks as if the EEC will get bogged down evermore by yesteryear problems – steel, agriculture etc. – and won’t be able to create the common internal market needed for the industries of the future”. Hence, a new impetus should be launched by those member-states willing to make progress. “And the only economic issue suitable for such an impetus appears to be the creation of a European market for electro-technical and communication industries”. Kohnstamm then stated that he had noted how Dekker, too, in magazine and newspaper interviews, had repeatedly called for European action for overcoming the continent’s economic disunity. Since it was of the essence to have plans on the table at the outbreak 19 Emanuele Gazzo, “Action Committee for Europe plans push for unity. New group brings together politicians, industrialists, labor leaders” in: Europe, September / October 1985. The Single Market Project as a Response to Globalisation 219 of the crisis which was to be expected, Kohnstamm asked to be informed about the thoughts on this topic “undoubtedly collected at Philips” and would Dekker kindly send a member of his staff, familiar with this thinking, over for further consultations.20 Dekker was more than willing to do so. As a result, since August 1983 Kohnstamm, Ramaer and Dekker corresponded, consulted and exchanged information.21 This enabled the protagonists of the Philips – and later RTE – lobby and the ACE campaign to demonstrate carefully orchestrated convergence and division of labour. Non-state actor cooperation, the broader picture The ACE campaign was as secretive as the ERT campaign was public. The political clout of its members secured them entrance to the highest governmental circles. Indeed, there appears to have been a certain complementarity between the two lobbies. While Dekker’s ERT directed their attention to the European public at large and then at the governments of the individual member-states, Kohnstamm’s influential men of state focused first and foremost on the new European Commission and its president Jacques Delors. That made sense, Philips’ intellectual frontman Ramaer explained. The business lobby could spell out in technical terms what it took to create a unified European market. But the issue of what institutional and hence legal treaty changes would be needed to bring about its realization was better left to the statesmen’s lobby: “We at Philips did not know sufficiently about it.”22 It was Kohnstamm in particular who, in his capacity as trusted advisor of Delors, made the latter share his analysis that for the sake of realizing Cockfields 292 policy measures, unanimity voting would not do. Jérôme Vignon, Delors’ right hand man at the time, vividly recalled the process: “Max Kohnstamm was very deep involved. I can remember one of those specific meetings, which took place in Brussels, I think late October 1984, and 20 PA Ramaer & PA Kohnstamm, n. 89, Letter Max Kohnstamm to Wisse Dekker, 19 August 1983. 21 PA Ramaer, Note “Europe 1990. An agenda for Action. Korte historie. (henceforth: “Korte historie”). 22 Letter J.C. Ramaer to Ms. Geertje Tolsma, 25 July 2004. In this letter, Ramaer stated a second reason for Philips/RTE for staying in the background on the institutional issue: “engagement of industry, especially big industry, with political affairs was a source of suspicion for many (‘private interests’, ‘big business’ etcetera. We did understand, however, that the Single Act was a dire necessity.” Anjo G. Harryvan 220 Delors participated in a meeting in a private hotel with a group of selected people, to which Max Kohnstamm belonged, but there were also some experienced civil servants of the Commission and then Delors explained his project to shape a true borderless European Community, a single economic space. And I think it is correct to underline that Mr. Kohnstamm insisted that this was not a new project, this was already embedded in the Treaty of Rome, but it failed to deliver during the seventies and there was still hesitance in the first half of the eighties, so we had to think about why the project had failed, if you wanted to go along the same route. Max Kohnstamm insisted that it failed because there was an institutional failure. The institutions at that time had not really been adapted since the 25 years of the Treaty of Rome and there really needed to be thought about adapting the Treaty, so that the Commission could really receive the power to implement effective legislation. The lack of efficiency, the lack of effectiveness, was attributed by to the unanimity voting.” Hence – to cut a long story short – the 1986 Single European Act added art. 100a to the EEC treaty, introducing Qualified Majority Voting in the Council of Ministers. Which has been the default rule ever since.23 How come, one may ask, that in the literature on the issue, the RTE campaigns are in the limelight whereas very little was said about the role of the Action Committee? Partly because the Committee’s campaign was based on personal contacts, partly because private correspondences and interviews that disclose the Committee’s role have only now become available in the 21st century. Moreover, Kohnstamm’s attitude to his success was adamant: An effective lobbyist wants to stay out of the limelight and leave the bragging rights to the politicians. As a self-declared ‘lobbyist for Europe’ for over four decades, the Dutch diplomat knew what he was talking about.24 Campaigning and lobbying cooperation for overcoming Europe’s market fragmentation, however, did not remain limited to The RTE/Philips teaming up with ACE. For effective framing of the common market issue, a broader network was called-for. To secure constructive relations with the European Parliament Ramaer started consultations with the Kangaroo Group. This latter association had started in 1979, when two members of the first directly elected European Parliament, Basil de Ferranti and Karl 23 Interview Jerôme Vignon (of Delors’ Cabinet) with Geertje Spanjaard – Tolsma, Brussels, 4 May 2004. 24 Anjo G. Harryvan / Jan van der Harst, Max Kohnstamm. A European’s Life and Work, Baden-Baden: Nomos, 2011. The Single Market Project as a Response to Globalisation 221 von Wogau exchanged horror stories about protectionist practices in the European Community. De Ferranti told about an English forklift firm being blocked from selling its trucks in France due to French rules demanding a particular layout of pedals in the cabin. Von Wogau responded with a story about a plumber from the Black Forest who had to undergo time wasting customs rituals when endeavouring to do a job over the border in France. The two pledged to tackle such NTBs in cross-border trade in Europe. The Kangaroo Group they founded – so called given the ability of kangaroos to jump over boundaries – drew members of the European Parliament from across the political spectrum, interested in breaking down barriers between the member-states, pouring ‘good humoured scorn’ on Europe’s petty protectionism in the process. From August 1984, Ramaer was actively working on a coalition of RTE, SAC and the Kangaroo Group.25 The Kangaroo Group proved a natural ally for the RTE/SAC coalition. Tellingly, it was Kangaroo frontman De Ferranti – instead of Philips or RTE – who invited the newly appointed Commissioner for the common market Arthur Cockfield to the presentation of the Dekker Europe 1990 plan in January 1985: “We are all of us at Kangaroo thrilled to bits to hear that your appointment as commissioner for the internal market has been confirmed. […] We have, over the years, received great support from Dr Dekker, the chairman of Philips. Philips, living so close to the frontiers of Holland, know only too well how vital the effective working of the internal market is to the future of their great European enterprise […] and they support it with clear thinking and excellent staff work. Dr. Dekker himself is presenting his latest ideas on concrete measures to free the internal market at a luncheon at the Hilton hotel in Brussels on 11 January. This has been a very important date in the Kangaroo calendar for a long time and now that your appointment is announced, may I respectfully put forward the view that your presence there of itself would represent an important step towards our common goal.”26 Thus, the RTE/SAC advocacy coalition drew actors from a wide variety of backgrounds to its cause. Essential for its future success were the contacts it managed to establish within the Council of Ministers and the European Commission. On 29 October 1983, Ramaer had made the acquaintance of 25 PA Ramaer, letters Ramaer to Dekker, 16 August 1984 and 17 September 1984. 26 PA Ramaer, Telex De Farranti to Ramaer, comprising the text De Ferranti sent to Cockfield earlier that day, 12 December 1984. Anjo G. Harryvan 222 Emile a Campo, Director General of the Council of Ministers. From then on, Ramaer, Kohnstamm and a Campo would meet regularly.27 Other regular guests at these meetings were, amongst many others, Edmund (Mom) Wellenstein, a highly influential former DG and friend of Kohnstamm as well as UNICE Director-General Sassen. In January 1989, a Campo reminisced on this cooperation in an article in Kangaroo News under the heading ‘The start of something big’: “In 1983 a ‘brainwave’ session on how to get Europe moving again took place at the home of Max Kohnstamm. Edmond Wellenstein, Boz, Karl von Wogau and Dr. Ramaer, the Brussels representative of Dr. Dekker of Philips, were present. This resulted in a plan of action, which established a clear time-schedule for the abolition of physical barriers, technical barriers, public procurement and fiscal barriers. For eighteen months I collaborated intensively with Dr. Ramaer in the preparation of Dr. Dekker’s Europa 1990 which led directly to Lord Cockfield’s White Paper Europe 1992.”28 After the launching of Cockfield’s White Paper on the completion of the internal market, RTE’s network of networks, in which Max Kohnstamm and Coen Ramaer served as kingpins, directed its attention at promoting the institutional changes deemed necessary for its realization, above all the introduction of qualified majority voting (QMV) in the Council for internal market related policy measures. Lastly, the coalition established a ‘watchdog committee’ to monitor its implementation, resulting in the drafting and dissemination of several ‘progress reports’.29 The partners in the coalition did not see eye to eye on all policy issues. The end date for the single market project proposed in the Dekker plan – 1990 – was deemed ‘unrealistic’ by Eurocommissioner Cockfield, who wrote later on that the choice for 1992 emerged in the conversations of the latter with prospective EC president Jacques Delors. In his memoirs, however, Delors revealed that is was Max Kohnstamm who convinced him of the necessity to adopt 1992 as the end date. This finds confirmation in the testimony of Jérôme Vignon, in charge of macro-economic issues in the Delors cabinet: 27 PA Ramaer, “Korte historie”. 28 Emile a Campo, “The start of something big”, Kangaroo News, January 1989. 29 PA Ramaer, Ramaer to Dekker and Davignon ‘Single Act and necessity of Watchdog Committee’, 7 May 1986 and PA Ramaer, Ramaer to various correspondents, ‘First progress Report on the Implementation of the White Paper on Completing the Internal Market’, 12 May 1986. The Single Market Project as a Response to Globalisation 223 “[…] Mr. Kohnstamm insisted that the progress in the EC was always related to the capacity to set out agendas with precise targets and I think that Max even added that two terms would be far enough to be credible. Without being too far away to be discouraging for people to engage in the project. […] This time frame, from Max’ point of view, was very important to explain the peaks and the downs in the Commission activity, and having an eight-year period, would avoid the down in Commission activity which normally took place at the end of one term. The prediction of Max proved to be very true […]”30 The prolongation from 1990 to 1992, however, came as a disappointment to Ramaer and his team. Conclusion The RTE’s campaign’s success for the establishment of the EU internal market was the result of its effective cooperation with other NGOs, notably the Action Committee for Europe (ACE), comprising senior men of state, and with the Kangaroo group, uniting members of the European Parliament, as well as the ascendance of a new European Commission under the presidency of Jacques Delors. By establishing a pro-Single Market network of networks, RTE and its coalition allies managed to set the agenda, convincingly propose policy options for overcoming market fragmentation and promote arguments for institutional change that steered Europe’s national preferences formation and intergovernmental discourse towards making the Single Market its first and foremost priority. Hence, non-governmental actors have been pivotal for the construction of what “may represent the most ambitious instance of multilateral cooperation since the construction of the post-World War II international order.”31 The fact that Dekker, Ramaer and the latter’s ‘Europe 1990’ team of experts, as well as their counterparts and contacts in the Council and Commission, Emile a Campo and Kohnstamm’s old friend former EC director- 30 The Rt. Hon Lord Cockfield PC, The European Union, Creating the Single Market, London: Wiley Chancery Law, 1994, 32–33. Delors, Mémoires, 185. Interview Jerôme Vignon with Geertje Spanjaard – Tolsma, Brussels, 4 May 2004. Letter J.C. Ramaer to Ms. Geertje Tolsma, 25 July 2004. 31 Geoffrey Garrett, “International cooperation and institutional choice: the European Community’s internal market”, in: International Organization 46 (1992), 533–560, abstract. Anjo G. Harryvan 224 general Edmund Wellenstein, as well as ACE president Kohnstamm and UNICE Director-General Sassen were all Dutch nationals, may have acted as an extra incentive: Since the time of its establishment, the 1957 European Economic Community Treaty and its promise of overcoming market fragmentation in Europe, were deemed quintessential for the Netherlands’ economic future as an export dependent trading state. Hence, the EEC Treaty was considered the most significant success of the Netherlands’ post WW2 European diplomacy. Its perspective of a pan-European market had to be realized. For the sake of the realm, as well as for Europe.32 32 Anjo G. Harryvan, In Pursuit of Influence. The Netherlands’ European Policy during the Formative Years of the European Union, 1952–1973, Brussels: P.I.E. – Peter Lang, 2009, passim. The Single Market Project as a Response to Globalisation 225 Le Livre Blanc sur le marché intérieur objectif et instrument de la relance Delors Eric Bussière La relance européenne des années 1980 est fondée sur deux documents fondamentaux autour desquels une dynamique s’est construite: le Livre Blanc publié le 14 juin 1985 qui pose les bases de l’achèvement du marché intérieur en 1992 et le rapport Delors du 12 avril 1989 qui jette les bases de l’union monétaire réalisée en 1999. Les deux textes sont étroitement liés, le second relevant d’une forte continuité avec le premier dont il prolonge les impulsions. Le Livre Blanc se situe au cœur du processus qui conduit à l’Acte Unique mais doit être analysé sous plusieurs angles. Le Livre Blanc ne représente pas à lui seul tout le contenu de l’Acte unique mais seulement une de ses dimensions. Au delà du marché intérieur, l’Acte unique comporte l’insertion dans les traités de plusieurs politiques développées depuis les années 1970 comme la politique régionale ou celle de la recherche, le lancement de nouvelles politiques comme celle de l’environnement, l’insertion dans le domaine communautaire de la capacité monétaire, base de développements à venir dans un futur proche pour l’action de la Communauté. Le Livre Blanc ne représente pas non plus l’ensemble de la politique lancée par Jacques Delors à l’occasion de son discours devant le Parlement européen du 14 janvier 1985. Même si ce discours pose comme objectif l’achèvement du marché intérieur pour 1992, il couvre de nombreux autres aspects de l’action que le nouveau président entend mener ne seraitce qu’au plan économique et social. La démarche politique de la Commission Delors au cours de la première moitié de l’année 1985 se présente ainsi en trois temps : d’abord la présentation dans le discours du 14 janvier d’une action ample de redynamisation économique et sociale de l’Europe selon un grand nombre de lignes d’action, discours relayé par le programme de travail de la Commission pour l’année 1985 présenté devant ce même parlement le 12 mars; dans un deuxième temps une concentration de l’action politique autour de la priorité absolue que représente le Livre Blanc dont l’objet se limite à présenter le programme d’achèvement du marché intérieur; dans un troisième temps le retour à une perspective élargie, la mise en œuvre effective du marché intérieur étant conditionnée 227 par le développement d’un large spectre de politiques dont la liste renoue avec l’inventaire présenté en janvier puis en mars. Ce mouvement de concentration sur un objectif spécifique et fondamental puis d’élargissement de la perspective qui le prolonge s’inspire nettement de la méthode Monnet dont Delors se réclame. La logique fonctionnaliste est à l’œuvre pour la deuxième fois depuis les années 1950, en tous cas avec une dimension et un impact de cette importance.1 Quant à son contenu, l’achèvement du marché intérieur s’inscrit luimême dans une dimension plus large, construite autour d’une perspective de moyen/long terme, celle d’une rénovation des structures économiques de l’Europe communautaire dans le contexte d’une mondialisation économique où l’Europe semble à la traîne derrière les Américains et les Japonais. Perspective qui la situe dans une forte continuité avec l’action des Commissions Jenkins et Thorn que porte la communication de la Commission de juin 19842, dont les acquis et les prolongements sont revendiqués par la Commission Delors. Rénovation des structures économiques également au cœur des réflexions que porte le Comité Dooge constitué à l’issue du Conseil de Fontainebleau de juin 1984 et où s’exprime la vision des gouvernements. L’année 1985 peut ainsi être considérée comme celle du lancement d’une nouvelle dynamique fondée sur un changement de paradigme dont la perception et la conscience guide l’action de Jacques Delors jusqu’à Maastricht. Le moment du Livre Blanc et de l’Acte unique est probablement celui de la dernière manifestation d’une logique d’inspiration fonctionnaliste forte. C’est le passage d’une structuration des Communautés autour de logiques sectorielles organisées en silos à une structuration autour de politiques communes, nombreuses, interconnectées et relevant d’un pilotage et d’une vision politique d’ensemble. D’où l’obstination manifestée par la Commission en faveur de l’unicité du traité à établir au moment de la négociation de Maastricht. Le Livre Blanc revêt ainsi un caractère central dans l’histoire de l’intégration européenne que l’on peut analyser, d’un point de vue historique autour de trois temps. D’abord l’analyse des bases d’un consensus de moyen terme construit autour du marché intérieur comme condition de la restructuration des structures productives de l’Europe. Dans un second temps l’apport et la part d’initiative de la Commission Delors autour du Livre Blanc de juin 1985, véritable point d’impact de sa démarche. En- 1 Jacques Delors, Mémoires, Plon : Paris 2004, 457–458. 2 Com (84) 305 final, 4 juin 1984. Eric Bussière 228 fin le moment du retour à la politique et de la traduction de ces impulsions dans les traités. Construction d’un consensus Le programme mis en œuvre au milieu des années 1980 et dont le Livre Blanc est devenu le symbole repose sur un objectif prioritaire : renforcer la performance globale de l’économie et des entreprises européennes en s’appuyant pour ce faire sur l’achèvement du marché intérieur. L’analyse sousjacente est celle développée depuis les origines du projet économique européen des années 1920 aux années 1950.3 Elle est confortée par le contexte de retour au marché du début des années 1980 même si elle n’en tire pas son origine. Sur le plan institutionnel l’organigramme de la Commission depuis 1977 rend compte de ce double objectif suivi avec continuité à travers le regroupement du marché intérieur et de la politique industrielle en une seule direction générale, la DG III, placée sous l’autorité de Fernand Braun. L’unité de vue et d’action dans la conduite de ces deux politiques est fortement affirmée à travers l’autorité du commissaire Etienne Davignon qui exerce la responsabilité sur ces deux domaines sous Jenkins entre 1977 et 1981 puis largement préservée sous Thorn entre 1981 et 1984 même si la responsabilité de ces deux domaines est désormais partagée entre deux commissaires, Davignon pour l’industrie, Karl Heinz Narjes pour le marché intérieur.4 Les réflexions développées au sein de la commission depuis la fin des années 1970 mettent explicitement en relation les deux domaines. Le Rapport sur certains aspects industriels de la croissance de 1978 expose que « l’accès sûr et libre d’entraves à un marché de dimension continentale (...) demeure un des principaux éléments moteurs dans la mutation des structures industrielles ».5 La Communication de la Commission de 1981, Pour développer 3 Michel Dumoulin et al., La Commission européenne, 1958–1973. Luxembourg : OPOCE, 2007. 4 Voir Eric Bussière et al., La Commission européenne, 1973–1986, Luxembourg : OPOCE 2014; Vincent Dujardin et al., La Commission européenne 1986–2000,, Luxembourg : OPOCE 2019. 5 Arthe van Laer, « Quelle politique industrielle pour l’Europe » in : Eric Bussière / Michel Dumoulin / Sylvain Schirmann (dir.), Milieux économiques et intégration européenne au Xx e siècle. La relance des années 1980 (1979–1992), Paris : CHEFF, 2007, 14. Voir également Com (78) 52 final, Programme d’action 1978, 10 février 1978. Le Livre Blanc sur le marché intérieur objectif et instrument de la relance Delors 229 l’industrie en Europe, une stratégie communautaire, reproduit ce type d’analyse.6 Il s’agit de développer un espace industriel européen comportant notamment l’unification des normes techniques et l’ouverture des marchés publics à toutes les entreprises de la Communauté. L’ensemble de ces réflexions sert de support à un Conseil spécial réuni en septembre 1983 portant sur la Compétitivité internationale des entreprises européennes puis au programme d’action économique adopté à l’occasion de la réunion du Conseil européen à Fontainebleau en juin 1984.7 Ces deux conseils se réunissent sur la base d’un programme de travail de la Commission visant à renforcer la compétitivité des entreprises européennes.8 Cette double ligne inspire l’action conduite par la Commission en matière de marché intérieur depuis la fin des années 1970. Cette action s’appuie sur l’exploitation par les services de la Commission de l’arrêt Cassis de Dijon de la cour de justice des Communautés du 20 février 1979, services qui en perçoivent immédiatement la portée politique. A la suite d’un débat au Parlement européen animé par Davignon, la Communication interprétative sur les suites de l’arrêt Cassis de Dijon du 3 octobre 1980 expose la possibilité de modifier radicalement la logique suivie jusque-là en matière de marché intérieur.9 Elle pose le principe de la reconnaissance mutuelle des réglementations nationales sous réserve qu’il n’existe pas de règles communautaires contraignantes liées à des impératifs de sécurité ou de protection des consommateurs. C’est sur la base de ces principes qu’une nouvelle approche en matière d’harmonisation limitée aux exigences essentielles de santé et de sécurité va devenir la règle. Dès lors les Etats membres ne sauraient refuser l’accès de leur marché national aux « produits importés, fabriqués sur la base de règles techniques d’un autre Etat », dans la mesure où ces produits répondent « de façon convenable et satisfaisante » à l’objectif d’intérêt général fixé à l’échelon communautaire. D’un point de vue pratique on distingue désormais les réglementations nationales spécifiques aux traditions et usages nationaux que l’on renonce à har- 6 Com (1981) 639, 29 octobre 1981, citée par Arthe van Laer, « Quelle politique industrielle pour l’Europe ». 7 Van Laer, « Quelle politique industrielle pour l’Europe », 21–22. 8 Com (83) 547, Communication pour contribuer aux délibérations du Conseil spécial des 20–21 septembre sur le thème de l’amélioration de la compétitivité mondiale des entreprises européennes, 14 septembre 1983. 9 Bussière, La Commission européenne, 1973–1986, 271. Alfonso Mattera, « La reconnaissance mutuelle : une valeur historique ancienne, un principe juridique intégrationniste, l’assise politique d’un modèle de société humaniste », in : Mélanges en l’honneur de Jean Paul Jaqué, Paris : Dalloz, 2010. Eric Bussière 230 moniser et les règles essentielles en matière de santé ou de protection du consommateur que l’on décide d’élaborer en commun. L’achèvement du marché intérieur, objectif recherché par la commission et entravé par le contexte du néo- protectionnisme à base réglementaire développé depuis les années 1970 devient donc un objectif plus facilement atteignable. L’action de la Commission prend alors l’aspect d’une véritable politique de relance à travers une série de communications sur le marché intérieur de 1981 (octobre) et de 1982 (juin et novembre). Elle est suivie par le Conseil européen de Copenhague de décembre 1982 qui valide la démarche des paquets de directives impulsée par la Commission qui demande la validation d’ensembles de directives dans un délai donné. Le Conseil des ministres innove de son coté en siégeant en formation « marché intérieur » tandis que la directive 83/189/CEE du 28 mars 1983 pose le principe de l’information préalable en matière de normes et de réglementations techniques.10 S’ajoute à cette démarche d’ordre général le renvoi de l’élaboration des normes européennes aux grands organismes de normalisation tels que le CEN, le CENELEC ou le CEPT, renvoi qui décharge la Commission de tâches qu’elle n’a pas les moyens de remplir en direct et permet également de renforcer la capacité de normalisation européenne face à ses grands concurrents au plan international. La constitution du marché intérieur rejoint ainsi les objectifs de compétitivité exposés plus haut.11 La double logique d’achèvement du marché intérieur et de renforcement des structures économiques européennes est donc à la base de la politique mise en œuvre depuis la fin des années 1970 et engage la dynamique qui portera l’action de la Commission Delors à partir de 1985. Depuis le milieu de l’année 1984, moment où Jacques Delors est désigné pour prendre la tête de la Commission, l’achèvement du marché intérieur est placé sur une nouvelle dynamique dont témoigne le programme de Consolidation du marché intérieur du 4 juin 198412, dynamique dans laquelle s’inscrira totalement le Livre Blanc qui y fait explicitement référence en juin 1985 en exposant que ce programme « garde (...) toute sa valeur ».13 10 Van Laer, « Quelle politique industrielle pour l’Europe », 33. 11 Commission des Communautés européennes, Dix-huitième rapport général d’activité, 86. Cf. Alfonso Mattera, « La reconnaissance mutuelle : Une valeur historique ancienne, un principe juridique intégrationniste, l’assise politique d’un modèle humaniste » in : Mélanges en l’honneur de Jean-Paul Jacqué, Dalloz. 12 Com (84) 305 final, 4 juin 1984. 13 Com (85) 310 final, L’achèvement du marché intérieur, 14 juin 1985. Le Livre Blanc sur le marché intérieur objectif et instrument de la relance Delors 231 De fait, le programme du 4 juin 1984 prend la forme d’un projet à la fois « ambitieux et réaliste » permettant de réaliser « un saut qualitatif » similaire à celui réalisé au cours des années 1960 affichant l’objectif de la « suppression progressive de toutes les formalités aux frontières internes touchant les produits industriels et agricoles, la convergence des réglementations techniques et fiscales, la création d’un cadre juridique uniforme pour les entreprises facilitant ainsi leur coopération et la libre circulation des personnes et des capitaux », le tout complété par « des éléments tangibles pour les voyageurs et des progrès dans le secteur des transports ». Il s’agit donc d’une démarche globale prenant la forme d’un ensemble de mesures qui ne se limite pas à l’harmonisation des normes et des réglementations techniques.14 Le but est bien « un saut qualitatif » et notamment « la suppression progressive de toutes les formalités aux frontières internes touchant les produits industriels et agricoles ».15 Dans le domaine de l’harmonisation des normes et des règles techniques, le principe de la reconnaissance mutuelle devient la règle. « En principe, une marchandise légalement fabriquée et commercialisée dans un Etat membre, doit être admise également dans les autres Etats membres, et une marchandise qui a déjà été soumise au contrôle technique dans l’Etat membre d’exportation ne doit pas supporter un deuxième contrôle dans l’Etat membre d’importation. (...) La reconnaissance des règles et contrôles ainsi que les diverses formes de coopération administrative pourraient réduire la nécessité de recourir à l’uniformisation des législations ».16 D’où une série de procédures impulsées par la Commission qui « orientera les travaux d’harmonisation (...) vers des formules qui se limitent à fixer les objectifs à atteindre et renvoient à des instituts de normalisation la tâche de définir les caractéristiques techniques des produits ». Cette démarche, combinée à la méthode des « paquets » de directives, aux procédures d’information préalable des Etats, à la mise en place de documents douaniers uniques se substituant à plusieurs dizaines d’autres, à des délégations de compétence élargies pour la Commission permettant une mise en application rapide et un ajustement facilité des directives du conseil constituent la base d’une politique 14 Archives Commission Européenne, Bruxelles (désormais : A. Com Bx), BAC 224/94/25 DG III, Note de dossier 10 avril 1984. Schéma général de la communication du 4 juin 1984 faisant suite à une réunion du « groupe ouvert des membres de la Commission » traitant du marché intérieur. 15 Note d’information, consolidation du marché intérieur, groupe du porte-parole, juin 1984. 16 Com(84) 305 final par. 24, 25,30,44. Eric Bussière 232 que réinvestiront le comité Dooge créé à la suite du Conseil européen de Fontainebleau en juin 1984 puis la Commission Delors.17 Les projets de la Commission comportent un volet essentiel en matière de politique industrielle et de recherche qui rejoint les préoccupations des Industriels et de plusieurs gouvernements. L’approche suivie est en effet globale, appuyée sur le marché mais faisant intervenir l’ensemble des directions générales concernées par la compétitivité de l’industrie européenne. Au sein de la Commission elle organise la coopération entre directions générales autour de structures semi-permanentes telles que la task force innovation créée en 1980. Elle trouve son relai à travers des réunions des ministres de l’industrie puis par celles, très régulières, des directeurs généraux de l’industrie nationaux.18 Elle s’appuie également sur une concertation organisée avec les grands industriels réunis en tables rondes spécifiques puis à travers l’ERT (European Round-table of Industrialists) constituée à l’initiative de Davignon et d’Ortoli en 1983. Cette politique d’ensemble rencontre également l’intérêt de plusieurs gouvernements nationaux. Le gouvernement français est ainsi à l’origine d’une démarche développée dans le cadre européen, une fois acquise la nouvelle orientation de sa politique macro-économique à partir de mars 1983. Il engage une réflexion sur les modalités d’un renouveau industriel de l’Europe alimenté par des études réalisées sur une base nationale et par des contacts développés avec Etienne Davignon et ses collaborateurs à la Commission, le tout relayé par les industriels de l’ERT.19 Le tout aboutit à la rédaction d’un Mémorandum « Une nouvelle étape pour l’Europe : un espace de l’industrie et de la recherche » adressé par la France à ses partenaires en septembre 1983 qui rencontre notamment l’intérêt britannique.20 Les conclusions du Conseil européen de Fontainebleau des 25 et 26 juin 1984 témoignent de la convergence des thématiques développées par les gouvernements et la Commission au cours des années antérieures : convergence des politiques économiques, achèvement du marché intérieur, développement du potentiel scientifique et technique. Le Conseil de Fontainebleau prend deux décisions qui marqueront l’évolution des Com- 17 Ibid., par. 48–49. 18 Van Laer, « Quelle politique industrielle pour l’Europe », 28, 40, 41. 19 Georges Saunier, « Le gouvernement français et les enjeux économiques européens à l’heure de la rigueur 1981–1984 » in : Bussière / Dumoulin / Schirmann (dir.), Milieux économiques et intégration européenne au Xx e siècle. La relance des années 1980 (1979–1992). 20 Saunier, « Le gouvernement français et les enjeux économiques européens à l’heure de la rigueur 1981–1984 », 42–143. Le Livre Blanc sur le marché intérieur objectif et instrument de la relance Delors 233 munautés jusqu’au début des années 1990 : la nomination de Jacques Delors à la présidence à compter de janvier 1985, la création du comité Dooge qui posera les bases d’une relance d’ensemble du processus d’intégration, notamment dans le domaine économique. Le Comité Dooge, mis en place à la suite du Conseil de Fontainebleau, précise et développe au cours des mois qui suivent le contenu et les modalités de mise en œuvre de cet ensemble d’objectifs. Composé pour l’essentiel de représentants des Etats, ses travaux s’inscrivent dans un dialogue suivi avec la Commission dont les membres sont tenus au courant du contenu des discussions par de nombreux canaux.21Le rapport intérimaire du comité Dooge transmis au conseil de Dublin le 3 décembre 1984 pose les bases générales du texte définitif qui figure sur la table du Conseil européen du 29 mars 1985. Si les deux documents s’inscrivent dans un projet global de relance économique articulé sur une série d’inflexions sur le champ institutionnel, la comparaison du rapport intérimaire de décembre 1984 avec le rapport définitif transmis au conseil à la fin mars témoigne d’une maturation de la réflexion et d’évolutions allant dans le sens d’une priorité accordée à la mise en place du marché intérieur. Comme dans la communication de juin 1984, la nouvelle approche se situe au centre de la procédure. On expose que la mise en place d’un véritable marché intérieur implique, « en attendant l’adoption de normes européennes, la reconnaissance mutuelle immédiate des normes nationales en posant le principe que toute marchandise produite et commercialisée légalement dans un État membre doit circuler sans entrave dans toute la Communauté ». Trois mois plus tard on précise les choses sur le plan opérationnel en mentionnant « la réalisation d’un véritable marché intérieur d’ici à la fin de la décennie, sur la base d’un calendrier précis. » Si en décembre 1984 comme en mars 1985 le texte fait explicitement le lien entre marché unique et mise en place de l’UEM sur laquelle le texte de décembre 1984 propose un assez long développement quant à ses modalités de mise en œuvre, le texte de 1985 21 A. Com Bx, BAC/224/1994/24 Cabinet Andriessen à F. Braun et H. von Moltke : « veuillez trouver ci-joint une note de travail de M. Malcom Rifkind sur le marché intérieur. Cette note sera discutée prochainement au sein du Comité Dooge. Monsieur Andriessen aimerait avoir votre commentaire sur cette note ainsi que sur toute autre suggestion utile pour la discussion au sein du comité sur le marché intérieur. » En note manuscrite rédigée en marge on lit : « ce texte aurait pu être écrit par nous » Mais Braun indique que la note ne comporte cependant « aucune proposition opérationnelle pour débloquer les travaux ». Malcom Rifkind est le représentant britannique au comité Dooge. Eric Bussière 234 accorde la priorité au marché intérieur considéré comme l’« étape essentielle vers l’objectif final de l’Union économique et monétaire souhaitée depuis 1972 ». L’objectif présenté en mars 1985, en retrait sur l’unification monétaire, va à la convergence des politiques économiques à travers « l’établissement d’un climat favorable à l’investissement et à l’innovation par des politiques économiques, financières et monétaires stables et cohérentes dans les États membres et dans la Communauté ». Le texte de mars 1985 plus ambitieux de ce point de vue que celui de décembre, préconise « un véritable marché commun des services financiers », complément indispensable du marché intérieur pour les entreprises. Enfin la mise en place d’un espace commun pour l’entreprise est présenté en des termes identiques entre les deux documents en insistant sur sa dimension fiscale : « la mise en œuvre d’un environnement propre à la coopération entre les entreprises européennes et notamment l’élimination des différences fiscales qui gênent la réalisation des objectifs communautaires ». Deux éléments sont spécifiques au texte de mars 1985. D’une part un développement important sur la politique de la concurrence, peu développé dans le texte de décembre. Il est question de « l’abolition de toutes les mesures qui faussent le jeu de la concurrence dans le Marché commun, notamment en appliquant des règles nationales et communautaires de concurrence adaptées à la nouvelle situation industrielle et un contrôle rigoureux des aides d’État, conformément aux règles des traités. On mentionne également l’instauration de la transparence nécessaire dans les industries nationalisées, afin de sauvegarder le respect des principes énoncés dans les traités ». Le document de mars 1985 développe un dernier aspect, simplement mentionné en décembre 1984, « la création d’une communauté technologique », normes, coopération internationale en recherche-développement, la « libéralisation des procédures de passation de marchés publics (...) concernant notamment la fourniture et l’utilisation d’équipements électroniques et de télécommunications la libéralisation des échanges de services liés à l’utilisation des technologies de pointe (...) la promotion et l’encouragement d’une coopération industrielle accrue entre sociétés européennes, y compris le lancement de projets transnationaux dans des secteurs clés; (...) le développement, en évitant toute distorsion, de l’échange international de technologies et de produits de la technologie avancée grâce à une politique commerciale commune active, conformément aux obligations découlant du GATT ». Le rapport Dooge marque donc très clairement la convergence d’objectifs entre la Commission et les gouvernements autour d’une synthèse sur la Le Livre Blanc sur le marché intérieur objectif et instrument de la relance Delors 235 base de laquelle la Commission Delors va pouvoir travailler: priorité au marché unique d’un coté, objectif d’une Europe industrielle et de la technologie de l’autre, avec un positionnement prudent quant aux progrès à réaliser vers l’UEM et une affirmation renouvelée des liens entre marché intérieur, normes communes devant fournir une des bases de la coopération entre entreprises européennes, et affirmation de la politique de la concurrence. Ainsi au moment où Delors rejoint Bruxelles comme président de la Commission européenne, il peut tabler sur un consensus que les contacts qu’il a pu établir au cours des derniers mois de 1984 mais aussi ceux noués entre le Comité Dooge et les services de la Commission entre janvier et mars ont pu consolider. Les apports de la Commission Delors Jacques Delors dispose en héritage d’une structure qui assure la continuité de pensée et de projet sur lesquels la relance qu’il construit au début de 1985 va reposer. D’une part c’est la continuité d’une structure de gouvernance à la tête de la Commission. Si la responsabilité du marché intérieur va au britannique Cockfield, la politique industrielle se trouve entre les mains de Narjès jusqu’à la fin de la première Commission Delors en 1988. Les deux commissaires continuent de s’appuyer sur le directeur général Fernand Braun qui assure continuité de vue et cohérence d’action entre les deux domaines. C’est principalement lui qui assumera la coordination de la préparation du Livre Blanc. Delors a pu également appuyer l’élaboration de son projet de relance européenne sur ses contacts étroits avec Etienne Davignon et François-Xavier Ortoli, en charge des questions économiques au cours des deux commissions précédentes, avec qui il eut une série d’entretiens durant les mois qui précédent sa prise de fonction. Il put également bénéficier de leur connaissance du monde patronal et de leur rôle au sein de l’ERT qu’ils avaient contribué à fonder en 1983 et dont ils devinrent membres comme chefs d’entreprises par la suite.22 Delors était donc dès sa prise de fonction en janvier 1985 en mesure de capitaliser à partir des bases établies depuis plusieurs années autour du projet d’achèvement du marché intérieur, bases fortement consolidées au cours du deuxième semestre 1984. 22 Delors, Mémoires, 124, 183. Eric Bussière 236 L’innovation que porte l’action de la Commission Delors au cours des premiers mois de 1985 consiste donc moins en l’élaboration d’un programme nouveau de relance économique dont les éléments sont déjà présents dans la communication de la Commission de juin 1984 déjà mentionnée, que dans la concentration de l’effort autour d’un objectif faisant déjà consensus au sein des milieux économiques et politiques : l’achèvement du marché intérieur. Le discours du Président Delors prononcé le 14 janvier devant le parlement européen à l’occasion de sa prise de fonctions recouvre en effet un large programme inscrit dans une forte continuité avec les objectifs antérieurs de la Commission. Mais l’annonce de l’objectif 1992, « est-il présomptueux d’annoncer puis d’exécuter la décision de supprimer toutes les frontières à l’intérieur de l’Europe d’ici 1992? », représente une initiative majeure. A travers cette initiative Delors recherche la voie d’une politisation en appuyant son action sur un objectif limité mais central porteur de développements ultérieurs conformément à la méthode Monnet. Le point d’entrée choisi repose sur un consensus tel qu’il puisse fournir la clé des développements futurs que l’on souhaite mettre en œuvre selon la logique de l’engrenage. Le Livre Blanc fonctionne comme le manifeste de cette démarche. L’exploitation de l’initiative Delors ne prend pas immédiatement sa forme définitive, celle du Livre Blanc publié en juin. Les réflexions internes à la Commission se développent en deux temps. En janvier et février il s’agit de transformer le contenu du discours du 12 janvier en un programme d’action pour 1985 en s’appuyant, quant à sa dimension marché intérieur, sur les données et acquis antérieurs, en particulier sur la communication du 4 juin 1984. Ce large programme de travail pour l’année 1985 est présenté par Delors au parlement européen le 12 mars. Mais son discours confirme aussi l’objectif d’achèvement du marché intérieur et annonce pour le mois de mai la publication d’un agenda précis.23 Ce sera le Livre Blanc autour duquel la réflexion est engagée le début mars et qui sera rendu public en juin. Si tous les services de la Commission sont engagés dans la préparation du programme de travail pour 1985, les réflexions relatives au marché intérieur se développent au sein des services de Lord Cockfield, commissaire en charge de ce domaine. Début janvier, Cockfield considère qu’il dispose d’une fenêtre d’opportunité qu’il cherche à exploiter rapidement et avec réalisme de sorte à obtenir rapidement des résultats tangibles. Mais 23 Archives de l’Union européenne, Florence (désormais : A. Com FI), papiers Lamoureux (désormais : FL), FL 658, note de dossier, 18–12–1992. Le Livre Blanc sur le marché intérieur objectif et instrument de la relance Delors 237 dans un premier temps, les premières semaines de janvier, il s’en tient à une action à court terme devant se développer pour l’essentiel sur l’année 1985. Il demande donc à ses services l’élaboration d’un programme stratégique assorti d’un échéancier pour chacun de ses aspects. Dans un courrier, adressé à ses principaux chefs de file, il fait connaître son souhait d’une approche globale, centrée sur des priorités atteignables en 1985 et capables d’avoir « un impact réel sur le monde des affaires et l’opinion publique ».24 Les réunions de travail organisées autour de Cockfield et des directeurs généraux concernés débouchent sur un document commun à Cockfield (marché intérieur) et à Narjes (politique industrielle), daté du 24 janvier et validé dès le lendemain par Pascal Lamy, chef de cabinet de Delors. Il comporte trois rubriques principales: « the creation of a truly competitive internal market, the improvement of the European business environnement, a greater european industrial and scientific cooperation ». Ces trois lignes de force, très proches de la ligne du rapport Dooge en cours de préparation, s’inscrivent dans la perspective développée depuis la fin des années 1970 associant achèvement du marché intérieur, renouveau des structures industrielles de la Communauté, appui de ce renouveau sur des programmes de recherche impliquant une forte coopération entre entreprises européennes, mobilité des chercheurs et des professionnels.25 Une nouvelle note de Cockfield datée du 1er février exprime plus clairement encore les liens entre marché intérieur et renouveau économique de l’Europe avec pour cibles la compétitivité, le développement de nouvelles technologies et de nouveaux produits grâce à un marché vaste, en expansion, libre et flexible. Mais la perception qu’en a Cockfield comporte aussi une forte dimension politique : frapper l’opinion, les imaginations des acteurs concernés, montrer que la libre circulation des biens n’est pas un objectif en soi mais seulement un moyen. Le Grand Marché devient ainsi la pièce centrale du programme pour 1985 même si l’essentiel de la programmation reste conçu dans une perspective de court terme prolongeant les actions déjà engagées.26 24 A. Com Bx, BAC/224/1994/27, Cabinet de Lord Cockfield, note to Braun, Henriksen et Klein, 21–1–1985. 25 A. Com Bx, BAC 224/1994/31, Birch, Cabinet Cockfield, à J. Vignon, cabinet Delors. « Final draft of the joint short paper by Lord Cockfield and M. Narjes as agreed this evening after M. Lamy’s meeting, 25–1–1985. 26 A. Com Bx, BAC/224/1994/27Note de Lord Cockfield, 1–2–1985. Eric Bussière 238 Le programme de travail finalement présenté par Delors au Parlement européen le 12 mars bouleverse cependant la perspective.27 Les objectifs propres au marché intérieur pour l’année 1985 s’insèrent désormais clairement dans un programme à moyen terme calé sur l’échéance 1992 dont on annonce la publication détaillée pour le mois de mai 1985 et dont la mise en œuvre demandera l’engagement politique des Chefs d’Etat et de gouvernement. Delors renvoie ainsi à son discours du 12 janvier en posant un défi de nature politique aux gouvernements. Des arguments nouveaux du discours comme le « coût de la non-Europe » destinés à frapper les esprits accompagnent la présentation de l’objectif fondamental : le renouveau économique de l’Europe fondé sur les nouvelles technologies. Prolongeant les prises de positions antérieures de la Commission, le discours du 12 mars associe achèvement du marché intérieur et coopération monétaire renforcée, politique de la concurrence rigoureuse mais pragmatique facilitant la coopération entre entreprises dans le champ de la recherche et de l’innovation. C’est en effet à la fin février, alors que la préparation du programme de travail pour 1985 est quasiment achevée que la Commission prend la décision de rédiger un Livre Blanc et d’en faire le cœur et le manifeste de la relance. L’accord se fait sur la base de la présentation d’un programme sur 8 ans à publier en vue du Conseil européen de juin. Il présenterait les objectifs de la Commission quelque soient les hésitations des Etats-membres, des objectifs ambitieux ne pouvant être réalisés qu’avec une volonté politique suffisante comme la Communauté l’avait fait dans les années 1960 pour l’union douanière. Le livre Blanc serait exclusivement consacré à l’achèvement du marché intérieur et organisé autour de trois chapitres : élimination des frontières intérieures, élimination des obstacles à la circulation des biens et services subsistants liés aux réglementations de tous ordres, possibilité pour les entreprises et les professionnels d’opérer librement dans l’espace communautaire. Le Livre Blanc différerait donc fondamentalement du programme de travail pour 1985 car focalisé sur un seul objectif tout en portant le regard plus loin avec une échéance irréversible à 8 ans assortie d’étapes intermédiaires.28 La préparation du Livre Blanc commence dès le 7 mars immédiatement après le bouclage du programme de travail pour 1985. Elle est centralisée par Fernand Braun (DG III). Les premières réflexions transmises à Braun 27 Bulletin des Communautés 1985, supplément 4. 28 A. Com Bx, BAC 224/1994/31, Lord Cockfield à Braun, Klein, Henriksen, 28 février 1985. Le Livre Blanc sur le marché intérieur objectif et instrument de la relance Delors 239 montrent que si l’ampleur du champ à couvrir est bien identifiée les éléments de programme dont on dispose au départ dépassent rarement la perspective temporelle des dossiers en cours soit environ deux années.29 Une dizaine de directeurs généraux ainsi que le directeur général du service juridique sont réunis le 19 mars afin de préciser l’architecture du Livre Blanc de couvrir tous les aspects de son contenu. Les grandes options étant déjà prises on fait savoir aux directeurs généraux que l’objectif de la réunion est non d’engager une discussion d’ordre général mais « de les informer en détail sur la nature de (leurs) contributions (…) à ce programme ».30 Fernand Braun, directeur général du marché intérieur et de la politique industrielle, tire les conclusions de la réunion dans une note de synthèse adressée aux participants le 22 mars. Accord sur trois axes : définition des objectifs à atteindre en deux étapes de 4 ans d’ici 1992; définition des moyens pour y parvenir; définition d’un calendrier d’action. On se cale sur les trois volets indiqués par Cockfield : contrôles aux frontières, grand marché, libre établissement des professions. On veut aller vite : contribution de chaque direction générale transmises à la DG III pour le 29 mars puis mise en circulation des contributions entre DG, enfin réunion interservices autour du 15 avril.31 Braun fait comprendre à ses services que les temps ont changé et adresse en complément une note interne à ses principaux collaborateurs de la DG III le 25 mars destinée à préciser les thèmes les plus importants et les méthodes de travail.32 Il fixe à nouveau pour ses principaux chefs de file l’esprit dans lequel on travaille le 3 avril : « je n’attends pas de vous un simple « digest » qui se contenterait de reprendre les actions déjà indiquées dans le programme de consolidation du marché intérieur de l’année dernière » (celui de juin 1984). Cet aspect est couvert dans le programme de travail de la commission pour 1985. Braun indique qu’il veut une réflexion portant sur « l’ensemble des actions à accomplir (...) d’ici 1992 », assortie d’une présentation « de toutes les solutions envisageables » (au plan priorités, méthodes...).33 La rédaction du Livre Blanc fit l’objet d’un suivi de la part du cabinet du Président Delors qui insiste sur la dimension politique du document et ses liens avec les autres domaines d’action. Conformément à l’objectif poli- 29 A. Com Bx, BAC/224/1994/31, note Möhler DG III pour Braun en vue réunion du 7 mars avec Cockfield, 6 mars 1985. 30 A. Com Bx, BAC/224/1994/31, Braun à DG concernés, 15 mars 1985. 31 A. Com Bx, BAC/224/1994/31, Braun aux DG concernés, 22 mars 1985. 32 A. Com Bx, BAC/224/1994/31, Braun à collaborateurs, 25 mars 1985. 33 A. Com Bx, BAC/224/1994/31, note à collaborateurs, 3 avril 1985. Eric Bussière 240 tique recherché on prévoit de centrer le Livre Blanc sur la réalisation du marché intérieur sans aborder d’autres champs d’action pourtant importants mais qui ne lui sont pas directement liés : transport, technologies de l’information, concurrence. On indiquera cependant dans introduction que l’achèvement du marché intérieur n’est pas un objectif en soi mais est un point passage essentiel vers d’autres objectifs : convergence des économies, des structures industrielles. On marquera aussi liens entre achèvement du marché intérieur avec d’autres politiques : transports, politique sociale. Braun expose à ses collègues que, comme pour le traité de Rome, le marché intérieur sera présenté comme un objectif irrévocable à atteindre assorti d’un calendrier d’actions à mettre en œuvre dans une période transitoire, un objectif qui « serait de toute manière réalisé dans la période définitive », c’est à dire à partir de 1992. En cas de difficultés particulières on pourrait admettre des exceptions temporaires qui ne devraient pas réintroduire d’obstacles aux frontières. Conformément à la nouvelle approche il demande d’ores et déjà aux services d’identifier les propositions de réglementations en cours qui ne sont plus en rapport avec la nouvelle politique en vue de les retirer.34 Il s’agit de tirer immédiatement les conséquences de la nouvelle approche. Le texte définitif du Livre Blanc s’inscrit à la suite des décisions du Conseil des 29 et 30 mars 1985 qui valide le projet d’achèvement du marché intérieur sans frontières et demande à la Commission un programme assorti d’un échéancier.35 Il se situe dans une perspective d’ensemble de renouveau économique qui place en son centre l’entreprise et la compétitivité. Le texte du Livre Blanc aborde un aspect essentiel et central de ce projet mais ne prétend pas en tirer toutes les conséquences qui devront faire l’objet d’autres développements. Le texte lui même constate les effets de la crise sur le marché intérieur non seulement bloqué dans son évolution vers l’achèvement mais remis en cause par de nouvelles barrières tarifaires internes et la prolifération d’aides publiques « en vue d’aider et de maintenir des sociétés non viables ». Quant à la libre prestation de services elle reste à établir. Le livre Blanc a avant tout pour objet de promouvoir un « environnement propre à la stimulation de l’entreprise, de la concurrence et des échanges ». Cet environnement sera fondé sur un « marché intérieur libre » pour les biens, les personnes, les services et les capitaux. Son fonction- 34 A. Com Bx, BAC/224/1994/31, note de Cecchini à Braun après approbation Defraigne, 18 avril 1985. Braun à autres directeurs généraux concernés, 24 avril 1985. 35 Com (1985) 310 final. Le Livre Blanc sur le marché intérieur objectif et instrument de la relance Delors 241 nement sera assuré par des « garanties contre les distorsions de concurrence, par le rapprochement des législations (...) par l’harmonisation de la fiscalité indirecte ». L’objectif est donc celui de la « fusion des marchés » en un marché unique, « que ce marché unique soit un marché en expansion (...) « suffisamment flexible pour canaliser les ressources (...) vers les domaines d’utilisation optimale ». L’introduction et la conclusion du texte situent l’objet du Livre Blanc dans sa perspective d’ensemble. Le rôle moteur du marché intérieur dans le redressement des structures industrielles devra être complété par des « actions qui renforceront la base technologique et la recherche de l’industrie de la Communauté ». L’achèvement du marché intérieur devra s’appuyer sur le renforcement du contrôle par la commission du respect des règles de la concurrence », des dispositions seront à prendre afin que les aides d’Etat et les pratiques restrictives des entreprises ne contribuent pas à la reconstitution d’un marché cloisonné. Cet achèvement impliquera le renforcement de la convergence des politiques économiques et du SME, l’affirmation de l’identité commerciale de la Communauté. Au total, la réalisation du marché intérieur implique le développement de plusieurs politiques mises en interconnexion entre elles et avec le grand marché lui même : transports, politique sociale, environnement, protection du consommateur. Les objectifs à remplir pour aboutir à un marché intérieur sans frontières relèvent de trois points : élimination des frontières physiques, des frontières techniques, des frontières fiscales. L’élimination des frontières physiques doit être le « signe le plus flagrant de la transformation de l’Europe ». L’élimination des barrières techniques doit « donner au marché sa véritable dimension économique et industrielle » grâce au passage « de la notion d’harmonisation au profit de la notion de reconnaissance mutuelle et d’équivalence ». La mise en place de ce nouveau cadre dans un temps limité rend souhaitable « que le conseil décide le non recours au vote à l’unanimité »pour leur élaboration. La suppression des barrières fiscales impliquant le rapprochement- et non l’uniformisation- des régimes de fiscalité indirecte avec le temps et les dérogations nécessaires. En 1984 la Commission avait établi un programme de consolidation établi sur la base de propositions à adopter par le conseil en 1984 et 1985. Le « Livre Blanc prolonge cette initiative dans une perspective élargie ». La nouvelle approche en matière de normes et de reconnaissance mutuelle associée aux simplifications qu’elle induit et à une nouvelle procédure de vote en matière de vote au conseil rend crédible le projet unification du marché intérieur pour 1992 au plus tard à travers un « échéancier réaliste et contraignant ». Eric Bussière 242 Retour à la politique A travers son discours d’investiture de janvier puis l’énoncé du programme de travail de la Commission du 12 mars Delors a fait savoir que la mise en œuvre du programme d’achèvement du marché intérieur nécessiterait l’engagement politique des Chefs d’Etat et de gouvernement. Le rapport Dooge du 29 mars convergeait avec les exigences de la Commission en concluant ses travaux sur la nécessité d’une réforme institutionnelle intégrant l’achèvement du marché intérieur dans un projet de beaucoup plus vaste ampleur associant introduction dans les traités de nouvelles politiques et révision des procédures de décision, notamment au sein du conseil. Il rejoignait ainsi la stratégie de la Commission puisqu’il s’agissait bien pour elle, à partir de l’objectif spécifique d’achèvement du marché intérieur, de promouvoir le développement de nouveaux champs d’action dont dépendait cet achèvement. Delors a confié au directeur général des Affaires juridiques, Claus-Dieter Ehlermann, le soin de coordonner un groupe de travail destiné à fixer les positions de la Commission en matière de révision institutionnelle. Ehlermann avait été associé depuis les années 1970 aux projets de réforme institutionnelle d’ensemble impulsés par la Commission et depuis sa nomination comme directeur général en 1977 à l’exploitation par la Commission de l’arrêt cassis de Dijon puis au recours en carence du Parlement européen devant la Cour de justice des Communautés relatif à la politique des transports en 1984–1985 qui aboutit à la condamnation du Conseil le 22 mai 1985.36 Ehlermann se voit ainsi poser par Delors une série de questions relatives à la mise en œuvre du Livre Blanc mais dont la plupart sont de portée beaucoup plus large : extension du vote au Conseil, différenciation, co-décision, identification des nouvelles compétences.37 L’incertitude quant à la convocation effective d’une Conférence intergouvernementale subsiste cependant jusqu’à ce que la décision soit prise à Milan le 29 juin. La Commission connait les incertitudes quant à la réunion d’une CIG et quant à l’ampleur de son mandat. La Commission est active sur le terrain politique notamment du coté de Paris où elle dispose de contacts privilégiés et dont l’appui est indispensable pour faire basculer les choses du bon coté. François Lamoureux se rend à Paris le 24 mai. 36 Eric Bussière / Sigfrido Ramirez-Perez, « La politique des transports en transition », in: Eric Bussière et al. (dir), La Commission européenne, 1973–1986 : histoire et mémoires d’une institution, Luxembourg : OPOCE, 380–381. 37 A. Com FI, FL 158, note pour le Président, 3–4–1985. Le Livre Blanc sur le marché intérieur objectif et instrument de la relance Delors 243 Son entretien avec Elisabeth Guigou, au cabinet du président Mitterrand, lui laisse l’impression que la réunion d’une CIG n’est pas encore assurée. La réunion qu’il tient au Parti socialiste le même jour lui montre les réticences et les incertitudes qui dominent quant aux aspects institutionnels. Il conclut une note de cabinet sur l’opportunité politique qu’il y a à mettre en avant aux yeux des Français l’Europe technologique et le grand marché. Ce dernier est bien le point d’entrée en vue d’une réforme d’ensemble.38 Ces incertitudes conduisent Delors à une politique de relatif « profil bas » dans les semaines qui précèdent Milan. Le lancement du projet Eurêka est venu perturber la stratégie de la Commission qui, depuis 1984, a lancé la politique des programmes-cadre en matière de recherche scientifique. Une communication de mars 1986 lance la préparation du second programme-cadre.39 Le cabinet du Président Delors est hostile à initiative française mais les inquiétudes formulées par Elisabeth Guigou quant à l’avenir d’Eurêka en cas d’initiatives prématurées de la Commission dans le domaine de la recherche conduisent à un profil de conciliation prudent dont rend compte Delors dans ses Mémoires.40 La position de Delors à Milan témoigne également d’un profil de prudence. La Commission tient une réunion informelle à Villiers le Temple les 31 mai et 1er juin. La ligne suivie est celle d’une certaine réserve en matière institutionnelle afin de préserver le grand marché et l’Europe de la technologie, soit les points d’appui essentiel du projet de relance d’ensemble de la Commission. Les notes préparatoires à Milan mettent aussi en avant le concept de différenciation qui doit permettre le développement des nouvelles actions « en laissant la place à la plus grande flexibilité dans les modalités de participation ».41 La position tenue par Delors à Milan telle qu’il en rend compte dans ses Mémoires est conforme aux options prises à Villiers le temple.42 La position prise par la Commission durant la négociation de l’Acte Unique vise dès lors pour l’essentiel à préserver l’unité d’action qui doit 38 A. Com FI, FL 156, note de dossier, réunion de Paris intitulée : déclaration du PS sur l’Union européenne, 28–5–1985. Note de dossier entretien avec Elisabeth Guigou, 28 mai 1985. Les entretiens ont eu lieu le 24 mai. 39 Veera Mizner, « La politique européenne de la recherche » in : Dujardin et al., La Commission européenne 1986–2000, 330–344. 40 A. Com FI, FL 158, note Lamoureux, Projet Eurêka 23–4–1985; FL 156 entretien Guigou, 24 mai 1985. Delors, Mémoires, 215. 41 A. Com FI, FL 658, réunion informelle de la Commission à Villiers le Temple. 14–6–1985. FL 658, Lamoureux à Delors projet de lettre aux chefs d’Etat et de gouvernement, non envoyée, 24–6–1985. 42 Delors, Mémoires, 213–214. Eric Bussière 244 être celui de la Communauté. Elle y parvient en obtenant que les lignes économique et politique posées à Milan soient intégrés en un seul instrument juridique et que la capacité monétaire de la Communauté, élément essentiel de la réforme posée par la Commission depuis 1984, soit reconnue. Ainsi l’Acte unique préserve-t-il la perspective d’une marche vers l’intégration graduelle et globale qu’elle souhaite.43 La Commission parvient également à obtenir que les décisions prises en matière de comitologie n’affaiblissent pas ses pouvoirs réglementaires et ne permettent pas aux gouvernements de reprendre par la voie des procédures de réglementation les compétences auxquelles ils ont renoncé dans le cadre de la mise en œuvre du marché intérieur. La procédure consultative sera donc préservée dans la pratique et la commission s’emploiera immédiatement à ce qu’elle s’impose.44 Conclusion Le Livre Blanc représente le point d’impact majeur de la politique de relance des années 1980. Il représente un télescopage volontaire à double dimension. Son objectif spécifique – le marché intérieur – se situe au centre d’une plus ample dynamique : il implique le développement d’actions tous azimuts débouchant sur la mise en place institutionnelle de nouvelles politiques qu’elles soient entièrement nouvelles ou déjà engagées depuis les années 1970. Télescopage temporel aussi à travers l’insertion d’une démarche de très court terme dans une perspective de longue haleine qui conduit au Traité d’Union européenne et au projet qu’il porte. Il marque aussi la transition entre deux époques : celle de la méthode Monnet ou prédominent des lignes d’actions verticales et dont le Livre Blanc représente l’un des points d’orgue; une nouvelle ère largement inachevée à ce jour, marquée par la structuration horizontale de l’action communautaire qui implique une politisation des modes de gouvernance. L’action des trois Commissions Delors représente le transfert, conscient mais inachevé, d’un modèle vers un autre. 43 A. Com FI, papiers Peter Sutherland 395, CIG, note de background 1–1–1985, note O’Sullivan 3–10–1985. 44 A. Com FI, FL 165, note Lamoureux pour Lamy. Le Livre Blanc sur le marché intérieur objectif et instrument de la relance Delors 245 The Implementation of the Single Market Programme, 1985–1992 Laurent Warlouzet Introduction As exemplified by the Brexit negotiations, the Single Market is at the core of the European integration process. The EU-UK talks stalled mainly because of this issue, especially in trying to avoid the reestablishment of a physical border in Ireland. The origins of this programme date back to 1985, when it was officially launched by European Commission President Jacques Delors.1 It quickly became the European Economic Community’s flagship programme, after being officially endorsed by member states with the 1986 Single Act Treaty.2 Even if it was eventually replaced at the forefront of the European integration dynamic by the project of European 1 On the origins of the Single Market Programme, see the contribution by Eric Bussière in this volume, as well as Bussière, “Devising a strategy : the internal market and industrial policy,” in Bussière, Vincent Dujardin, Michel Dumoulin, Piers Ludlow, Jan Willem Brouwer and Pierre Tilly (eds.), The European Commission, 1973–86. History and Memories of An Institution, Luxembourg: Publications Office of the European Union, 2014, 263–276. 2 The bibliography on the Single Market programme in the 1980s that is not based on an archival approach includes: Michelle Egan, Constructing a European Market, Oxford: Oxford University Press, 2001; Gilles Grin, The Battle of the Single European Market. Achievements and Economic Thought, 1985–2000, London: Paul Kegan, 2003; Kenneth Armstrong and Simon Bulmer, The Governance of the Single European Market, Manchester: Manchester UP, 1998; Simon Bulmer, “Completing the European Community’s Internal Market: The Regulatory Implications for the Federal Republic of Germany”, in Kenneth Dyson (ed.), The politics of German Regulation, Aldershot: Dartmouth, 1992, 53–78; David Howart, Tal Sadeh, The Political Economy of Europe’s Incomplete Single Market, London: Routledge, 2012; Nicolas Jabko, Playing the Market : a political strategy for uniting Europe, 1985–2006, Ithaca: Cornell University Press, 2005; Neil Fligstein, and Alec Stone Sweet, “Constructing Polities and Markets: An Institutionalist Account of European Integration”, American Journal of Sociology, vol. 107, n° 5, The University of Chicago Press, Chicago, 2002, 1221–1243; Bernard Jullien and Andy Smith (eds.), The EU’s Government of Industries: Markets, institutions and politics, Routledge: London, 2015; Andrew Moravcsik, The Choice for Europe: Social Purpose and State Power from Messina to Maastricht, Itha- 247 Monetary Union, the removal of controls at many border posts in late 1992 remained a major breakthrough. In his inaugural speech before the European Parliament in January 1985, Delors announced that this would become a reality in 1992, with his prediction becoming reality on schedule. In contrast to the Common Market, which was completed in 1968 after the removal of internal customs duties and the adoption of a common external tariff, the notion of a Single Market included the removal of all nontariff barriers. There were many of them, ranging from technical barriers to national commercial laws. A large number of national laws had to be harmonized in order to remove such obstacles, hence the need to adopt qualified majority voting for Article 100 EEC, which addressed the convergence of national regulations. The principle of mutual recognition popularized by the Cassis de Dijon ruling of 1979 was not enough to create a Single Market on its own, as it contained four exemptions, which is to say four types of legislation that had to be harmonized (“the effectiveness of fiscal supervision, the protection of public health, the fairness of commercial transactions, and the defence of the consumer”).3 The Commission recognized the limitations of Cassis de Dijon early on,4 with most of its proposals subsequently being stuck in the Council during the early 1980s due to the unanimity rule. Beyond the harmonization of standards, the notion of a Single Market also includes some form of tax harmonization directly linked to the removal of border controls, such as those dealing with the value added tax and excise duties, which were the primary source of verifications (exemption and then new taxation) during border controls. By extension, it entailed the development of common tools for managing the Single Market, such as competition policy, notably through the Europeanization and liberalization of the air transportation and telecommunication sectors, which ca: Cornell University Press, 1998; for books based on fresh archival research; Laurent Warlouzet, “The internal market and competition”, in Vincent Dujardin, Éric Bussière, Piers Ludlow, Federico Romero, Dieter Schlenker and Antonio Varsori (eds.), The European Commission, 1986–2000. Histories and memories of an Institution, Luxembourg: Publications Office of the European Union, 2019, 257–280. 3 Judgment of the Court of 20 February 1979, Rewe-Zentral AG v Bundesmonopolverwaltung für Branntwein, case 120/78; Karen Alter and Sophie Meunier, “Judicial Politics in the European Community: European Integration and the Pathbreaking Cassis de Dijon Decision”, Comparative Political Studies, 26, 4, 1994, 535–561; Michelle Egan, Constructing a European Market, 94–103. 4 Laurent Warlouzet, Governing Europe in a Globalizing World. Neoliberalism and its Alternatives following the 1973 Oil Crisis, London: Routledge, 2018, 183. Laurent Warlouzet 248 began in 1987–88, along with public procurement. More generally, the completion of the Internal Market encompassed the four freedoms of movement for goods, services, capital, and citizens. Article 13 of the Single European Act (SEA) stated that: “The internal market shall comprise an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the provisions of this Treaty.” The adoption of the Single Market Programme in the 1986 Single Act, combined with the adoption of qualified majority voting at the Council for the removal of most non-tariffs barriers, unleashed a sustained momentum. Article 13 SEA specified that “The Community shall adopt measures with the aim of progressively establishing the internal market over a period expiring on 3l December 1992,” thus setting in stone the deadline of 31 December 1992 set by Jacques Delors in his keynote speech to the European Parliament on 14 January 1985. Based on various materials collected in national and European archives, and in keeping with the recent enlargement of the historiography of European integration towards new arenas,5 this article will argue that the implementation of the Single Market Programme was not unequivocal: while it was dominated by a market-oriented approach, it encompassed other dimensions including neoliberal, social, and neomercantilist orientations. The first part of this contribution will define these categories in the context of the Single Market, and the final two sections will focus on two examples of conflict between different visions of economic Europe: the 1989 car-emission directive, and competition policy regarding state aid and mergers. Amultifaceted Single Market Programme Article 13 SEA gives an extensive definition of the internal market. The push to build it translated not only into directives harmonizing standards, but also into directives touching on public procurement, capital flows, the harmonization of Value Added Tax (VAT) regimes, and the “television A 5 Kiran Klaus Patel, “Widening and deepening? Recent advances in European Integration History,” in Neue Politische Literatur, 64, 2, 2019, 327–357. The Implementation of the Single Market Programme, 1985–1992 249 without border” directive, all of which were adopted before the 1993 deadline.6 The broad definition of the Single Market promoted by the European Commission was also present in the “Cecchini Report,” named after the former Deputy Director-General for the Internal Market at the European Commission, Paolo Cecchini. This report, which was commissioned and disseminated by the Commission, completed an in-depth evaluation of the estimated benefits of the Single Market, which were estimated at gains of approximately 5 % for the gross national product, i.e. approximately ECU 200 billion. He concluded with four points: • “business must respond to the challenge and seize the new opportunities on offer. Corporate management should also seek to make industrial relations less conflictual, encourage employee involvement in the life of the enterprise, and ensure that workers share in the jointly achieved productivity gains; • competition policy must be effectively enforced; • the distribution of gains must be fair, as must be the distribution of cost; • monetary stability and the necessity to strengthen ... the European Monetary System.” Hence, according to this definition, which was later endorsed by the Commission, the Single Market extended to competition and monetary policy, and contained a dimension of fairness and harmonious industrial relations. The single market is actually multifaceted, since the Single Act left ample room for divergent interpretations. On the whole, one can argue that the implementation of the Internal Market Programme was dominated by a market-oriented approach, but that this approach nevertheless was multifaceted, thereby triggering conflicts within the Commission. Since the Single Market program covered many different policies ranging from trade to taxation, a huge number of different facts, concepts, and notions must be covered. In order to facilitate comparison across countries and move beyond the mere juxtaposition of facts, the various conceptions of the inter- 6 For further details on this legislation, see Laurent Warlouzet, “The internal market and competition”, in Vincent Dujardin, Éric Bussière, Piers Ludlow, Federico Romero, Dieter Schlenker and Antonio Varsori (eds.), The European Commission, 1986–2000. Histories and memories of an Institution, Luxembourg: Publications Office of the European Union, 2019, 257–280; for the TV Without Borders directive, see also Kiran Klaus Patel’s contribution in this volume. Laurent Warlouzet 250 nal market program have been grouped into three models for economic policy: social, neo-mercantilist and market-oriented.7 Supporters of a social Europe seek to protect vulnerable groups such as the poor and minorities, for instance women. More broadly, they are willing to tackle the negative externalities of markets that diminish quality of life. “Social policy” thus includes measures of legislation and redistribution in terms of social insurance, working conditions (including the democratization of companies), health, environmental protection, regional solidarity, and so on.8 A social Single Market is based on high norms, in accordance with article 100-A-3 of the Single Market: “The Commission, in its proposals envisaged in paragraph 1 concerning health, safety, environmental protection and consumer protection, will take as a base a high level of protection.” German Länder were especially attentive to ensuring that future EEC norms do not downgrade earlier DIN standards.9 Neo-mercantilist policies combine mercantilism’s aggressive stimulation of national industrial potential with the insertion into the international free-trade order (hence the prefix “neo”). Blatant protectionism was no longer possible beginning in 1960s, although more discreet measures such as state aid, cartels, or technical norms favouring national producers are still possible. A neo-mercantilist Single Market would promote norms favourable to European industrialists, and possibly discriminate against non-European producers. This neo-mercantilist approach was particularly favoured by the French government, and when coupled with a more Europeanized angle, by Delors as well.10 Lastly, “market-oriented” policies strove to foster free-market dynamics, which according to the neoclassical doctrine are believed to unleash growth. A market-oriented Single Market focuses on removing obstacles rather than erecting new constraints on business. More generally, this translated into a debate as to whether more regulation was needed via harmonization towards higher standards—hence the paradox captured by the expression “freer markets, more rules”11—or whether a broad interpreta- 7 More information on this typology can be found in Laurent Warlouzet, Governing Europe, op. cit. chapter 1. 8 See Aurélie Andry’s recent PhD dissertation: Aurélie Andry, Social Europe in the long 1970s. The Story of a Defeat, PhD diss., European University Institute (Florence), 2017. 9 Laurent Warlouzet, Governing Europe, op. cit., p. 183. 10 Laurent Warlouzet, Governing Europe, op. cit., pp. 192–4 and chapter 8. 11 S.K. Vogel, Freer Markets, More Rules : Regulatory Reform in Advanced Industrial Countries, Ithaca: Cornell UP, 1996. The Implementation of the Single Market Programme, 1985–1992 251 tion of mutual recognition would lead to less legislation and constraints for trade. The latter solution ran the risk of a “race to the bottom” in terms of standards. It embodied the “neoliberal” dimension of EEC/EU policies, which fostered a radicalization of market-oriented policies, especially by emphasizing a retreat from the welfare state.12 This vision was embodied at the time by British Prime Minister Margaret Thatcher’s crusade for “deregulation,” which was at the heart of the British memorandum from March 1985 entitled “The Creation of Wealth and Employment in the Community.”13 It requested a report on “the burden imposed on businesses by existing Community legislation and the way to reduce it [and] take business costs into account in future legislation,” and on decreasing some welfare state expenditures. The British prime minister tried to coordinate with the Belgian and Dutch governments (of Martens and Lubbers, respectively), but to no avail, as both of these countries were more supranational.14 These models are useful because they overcome the vocabulary differences that often hamper comparison; they also shed light on conflicts within EEC institutions, as exemplified by the debates surrounding the caremission directive and competition policy. Environment and Industrial Interests: The Car-emission Directive (1989) The environment became a new field of public policy in the 1970s in the West, and within the EEC in particular.15 It therefore represented a sizeable part of the Single Market programme. The European Parliament played an important role in this field thanks to the new cooperation procedure established in the Single Act. This Treaty included environmental policy within the range of EEC competences thanks to a whole new chap- 12 This classification is different from the one used in the history of ideas, since the term “neoliberal” as defined after the Lippmann conference was much broader, and therefore not applicable for a cross-country comparison. See, among others, Hagen Schulz-Forberg and François Denord’s work on the history of neoliberal ideas. 13 British archives, PREM19/1490/1, “The creation of wealth and employment in the Com- munity,” Brussels European Council, 29–30 March 1985. 14 Laurent Warlouzet, Governing Europe, 196. 15 Thorsten Schulz-Walden, “Between National, Multilateral and Global Politics: European Environmental Policy in the 1970s”, in Claudia Hiepel (eds.), Europe in a Globalising World. Global Challenges and European Responses in the 'long' 1970s, Baden-Baden: Nomos, 2014, 299–318. Laurent Warlouzet 252 ter. It inserted certain provisions over environmental protection within the remit of article 100-A-3, as long as they were directly related to the Internal Market Program. This is especially relevant since they could be adopted by qualified majority voting instead of requiring unanimity. The Commission usually supported the European Parliament in its extensive interpretation of article 100 in order to put additional pressure on the Council, although the Commission and the European Parliament were not always in agreement. For example in October 1987, the Commission refused to consider that radioactivity in food (a follow-up to the Chernobyl disaster) fell under article 100 A—as argued by the European Parliament’s rapporteur, the German Social Democrat Mrs. Undine-Uta von Blottnitza—and instead preferred article 31 Euratom.16 The “car-exhaust directive” was singled out by Nicole Fontaine, a former president of the European Parliament and a member of the European Parliament (MEP) in those days, as one of the most important battles in the assertion of the European Parliament.17 Aimed at diminishing the most harmful car emissions, namely those linked to leaded petrol, it was a major stepping-stone in the assertion of both EEC environmental policy and the European Parliament in implementing the Single Market. The origins of this debate are twofold. Those supporting a social Europe stressed the causal link between car emissions and acid rain, and thereby the destruction of forests in Central and Northern Europe, while neo-mercantilist leaders insisted on the need for European cars to follow tighter US standards in order to keep this market open for their exports. The grassroots movement against “Waldsterben” gained powerful momentum in Germany but not in France, because the former was more affected by acid rain than the latter, and because ecological movements were stronger East of the Rhine. In Germany they were associated with the post-1968 movement, whereas in 1960s and 1970s France they were still tainted—according to Birgit Metzger and Laurent Schmit—with an antimodernization spirit reminiscent of the Vichy era.18 Acid rains were not caused by led in petrol but by the emission of two gases, sulfur dioxide and nitrogen oxide. One of the main emitter of nitrogen oxide were cars, and 16 EUHA, minutes of the Commission meeting, 28 October 1987. 17 Interview of Nicole Fontaine by Laurent Warlouzet in Paris, 18 July 2017. 18 Birgit Metzger et Laurent Schmit, “Shades of Green: Ökologische Modernisierung im deutsch-französischen Vergleich (1970–1990)”, in Martin Bemman, Birgit Metzger, Roderich von Detten (ed.), Ökologische Modernisierung. Zur Geschichte und Gegenwart eines Konzepts in Umweltpolitik und Sozialwissenschaften, Francfort: Campus Verlag, 2014, 257–286. The Implementation of the Single Market Programme, 1985–1992 253 catalytic converters were the main tool to reduce those emissions. However, catalytic converters requried unleaded petrol. Since acid rain was in particular a problem in Germany, Bonn was one of the main proponents to introduce EEC legislation aimed at promoting unleaded petrol and catalytic converters. In Germany, car manufacturers also became convinced that it was in their interest to follow tighter rules. The mobilization against car emissions also affected the United Kingdom.19 In France the opposition to tighter emissions was driven by neo-mercantilist concerns. If legislation on unleaded petrol became law, carmakers would have to add a catalytic converter to their cars. While the price of these catalytic converters and the loss of motor power they entailed were relatively negligible for expensive cars, such as those produced in Germany (with the exception of Volkswagen), they were huge for small cars (such as those produced by French and Italian carmakers). Moreover, German carmakers had invested in this new technology for quite some time, while their French counterparts remained more conservative in this regard. Negotiations at the Council of Ministers were thus stalled by the French government, thereby delaying an agreement in order to protect its car industry. Thereafter, a high-level French-German political rapprochement between Mitterrand and Kohl softened this opposition. A compromise was struck at the Council in March and June 1985, whereby the French government secured less constraining norms for mid-sized and smaller cars (i.e., those massively sold by French carmakers).20 The adoption of the directive was blocked by a Danish veto (for other reasons) until July 1987.21 The 19 Martin Chick, “The changing role of space and time in British environmental policy since 1945”, Revue française d’histoire économique, 1, 2015, 72–89. 20 European Parliament archives, PE2_AP_RP!ENVI.1984_A2–0132!880010EN, Report on the proposal from the Commission of the European Communities for a Council directive amending Directive 70/220/EEC on the approximation of the laws of Member States relating to measures to be taken against air pollution by gases from the engines of motor vehicles (European emission standard for cars below 1.4 litres), Com (87) 706, rapporteur: K. Vittinghof, 29 June 1988, document A 2–0132/88; British archives, PREM 19/1490/1, brief, Environmental Issues, 26 March 1985. 21 European Parliament archives, PE2_AP_RP!ENVI.1984_A2–0132!880010EN, Report on the proposal from the Commission of the European Communities for a Council directive amending Directive 70/220/EEC on the approximation of the laws of Member States relating to measures to be taken against air pollution by gases from the engines of motor vehicles (European emission standard for cars below 1.4 liters), Com (87) 706, rapporteur: K. Vittinghof, 29 June 1988, document A 2–0132/88. Laurent Warlouzet 254 new procedures of the Single Act entered into force at this time, making it possible to circumvent unanimity. The Council eventually struck an agreement on 21 July 1987 by qualified majority, voting on a new limitation for motors with different standards for large (powered by a motor of more than 2 litres), intermediate (between 1.4 and 2 litres), and small cars (less than 1.4 litres). Some decision-makers considered this agreement imperfect in terms of competitiveness. Several member of the European Parliament “pointed out that the maximum emission levels proposed by the Council were the highest in the world and thus constituted a serious handicap to the competitiveness of the European Industry.”22 From a neo-mercantilist perspective, adopting low standards would actually make it more difficult to export to non-EEC markets with higher standards, such as the US or Sweden. In the end, a first directive was adopted by the Council on 3 December 1987 by qualified majority voting. It established standards close to those in the US, except for the smallest cars, for which only an intermediate standard was adopted in 1989. The Commission therefore announced a second directive on small engines to complement the first one.23 A major debate unfolded surrounding this second directive. On 10 February 1988, the Commission issued its draft second directive for cars with motors smaller than 1.4 litres. The EEC Council discussed it and adopted a so-called “Common position,” which would serve as the basis for discussions at the European Parliament. This body debated the draft directive on 13 September 1988 as part of a first reading, with the German SPD MEP Kurt Vittinghof authoring the report on the draft directive.24 He believed that the Council had taken a “halfhearted and industry friendly” stance, chiefly because the proposed standards were still too lenient. He stressed that car emissions played a role not only in “dying forests,” but also in damage to public monuments and public health, thereby widening the issue. Other MEPs, such as the British Labourite Carol Tongue, the German Christian Democrat Siegbert Alber, and the Belgian Green François Roelants du Vivier, went even further by directly or indirectly challenging the lobbying of French carmakers, in particular Peugeot CEO Jacques Calvet. Calvet became an early and leading voice in the French media for Eurosceptic arguments that the EEC posed a 22 EUHA, Florence, GSPE 77/2379, note on the Environmental Committee, session of 30 September 1987–1/2 October 1987. 23 EUHA, GSPE 77/2524, political report, 16–20 November 1987. 24 European Parliament archives, PE2_AP_DE!1988_DE19880913–169900FR, debates in plenary session on 13 September 1988. The Implementation of the Single Market Programme, 1985–1992 255 threat to French neomercantilism. The situation was further complicated by many Danish and Dutch MEPs, who called for even more stringent caps. Copenhagen threatened to take unilateral measures, and the Commission considered accusing the Danish government of hindering the free flow of goods through its stricter national car emission standards!25 The commissioner in charge of this regulation, the British Labour member Clinton-Davies, nevertheless reinstated the Commission’s original position. In accordance with the Council, he rejected the European Parliament’s amendment for tighter emission standards. A few months later, in December 1988, the EEC Council logically adopted a Common position that still ignored the European Parliament’s call for a stringent cap.26 After further discussion at the Council, the text returned to the European Parliament on 11 April 1989, but the context had changed in the meantime. The Commission was now represented by a new Commissioner for the Environment, Carlo Ripa di Meana, a former MEP and pioneer of environmental activism in Italy. He proved more willing to act than Clinton-Davies, for he proposed anticipating the adoption of the new standards.27 The rapporteur Vittinghof actually drew applause when he praised the new commissioner during the debate in plenary session.28 In his speech during the plenary session, Ripa di Meana underscored what he considered to be a “watershed in the history of Community policy over environmental protection.” This was linked to the Single Act, which “built [environmental protection] into the Community’s other policies.” The ensuing discussion followed a predictable pattern, with constant criticism of the lobbying by the French carmaker Peugeot. MEPs from various political groups stressed the importance of rejecting the Council’s common pos- 25 EUHA, European Commission archives, special minutes of the meeting of 14 December 1988. 26 European Parliament archives, PE2_AP_RP!ENVI.1984_A2–0026!890020FR, Recommendation by the Committee on Environment, Public Health and Consumer Protection on the Common Position of the Council with a view to the adoption of a directive amending Directive 70/220/EEC on the approximation of the laws of the Member States relating to measures to be taken against air pollution by gases from the engines of motor vehicles (European emission standards for car below 1,4 litres), 28 March 1989, part A (document A2–26/89/Part A) and part B (document A2–26/89/Part B). 27 On commissioner Ripa di Meana’s inclination for environmental issue, see interview of François Roelants du Vivier by Laurent Warlouzet in Brussels on 18 October 2017. 28 European Parliament archives, PE2_AP_DE!1989_DE19890411–149900FR, debate in plenary session on 11 April 1989. Laurent Warlouzet 256 ition, should the Commission refuse to accept the amendments.29 Interestingly, the debates also led to a broader discussion on environmental policies, including new concepts. Siegbert Alber, a German Christian Democrat, referred to the “polluter pays principle,” a concept coined by the OECD in 1970, and later taken up by early Green activists in the EEC beginning in 1972.30 Another German MEP, Kurt Vittinghof, stressed the issue of “global warming,” making reference to a meeting of experts in Turin in January 1989, who considered car emissions to be “one of the main causes of climatic change.”31 MEPs eventually adopted the amendments by a large majority,32 which were then included by the Commission in a new draft proposal. The Council ultimately struck a compromise in June 1989, with Directive 89/491/EEC from 17 July 1989.33 In this case implementation of the Single Market was characterized by an emphasis on Social Europe (in the sense of environmentally-friendly). It could muster support by relying not only on environmental concerns, but on industrial ones as well (the need to follow norms already adopted outside the EEC). The Neo-mercantilist Delors vs. the Neoliberals Sutherland and Brittan The creation of a unified Single Market entailed monitoring private nontariff barriers: if companies could thwart the removal of trade barriers by market sharing via cartels, or by dominating it via abuse of dominant position, or by receiving excessive state aid, then the benefits of trade liberalization for consumers would be wiped out. This task of monitoring private practice was entrusted to the European Commission, which has implemented EEC competition policy since the Treaty of Rome. This treaty, which created the EEC, established provisions on competition policy including innovative monitoring of state aid, although they were not firmly implemented during the first thirty years. 29 EUHA, Florence, GSPE 79/468, Political report of the Socialist Group, 10 to 14 April 1989. 30 Jan-Henrik Meyer, “Who should pay for pollution? The OECD, the European Communities and the emergence of environmental policy in the early 1970s”, European Review of History, 24, 3, 2017, pp. 377–398. 31 European Parliament archives, PE2_AP_DE!1989_DE19890411–149900FR, debate in plenary session on 11 April 1989. 32 European Parliament archives, PE2_AP_RP!ENVI.1984_A2–0026!890001FR. 33 Commission Directive 89/491/EEC of 17 July 1989 adapting to technical progress Council Directives 70/157/EEC, 70/220/EEC, 72/245/EEC, 72/306/EEC, 80/1268/EEC and 80/1269/EEC relating to motor vehicles. The Implementation of the Single Market Programme, 1985–1992 257 However, beginning in the 1980s competition policy became one of the flagship policies of the EEC/EU. It became more assertive in monitoring state aid, and enlarged its scope to new fields such as the control of concentration, through merger regulations in 1989,34 the directive on the liberalization of air transport in 1987,35 and regulations concerning telecommunications in 1988.36 This evolution was supported by a context favourable to market-oriented ideas. During the 1980s, regulation of the market by competition policy rules replaced direct state management of markets through price and industrial policy, on the European level as well as that of many Western European countries.37 Jacques Delors had a somewhat ambiguous position towards EEC competition policy. He was broadly supportive, as in his groundbreaking speech of January 1985, where he emphasized the need to get rid of “obstacles to healthy competition.”38 He stated that “competition can kill competition if the market does not permit fair contest between the different rivals,” therefore national laws had to be harmonized to a certain extent. Yet his vision was not purely market-oriented, as he integrated a neomercantilist perspective by calling for the development of a common industrial policy “instead of the costly and ineffective escalation of national aid and incentives.” His aim was to improve industrial policies by Europeanizing them, rather than exporting French dirigisme. While the literature usually links the reinforcement of EEC competition policy to the Single Market Programme,39 this domain was actually left largely untouched by the Single Act Treaty. The articles of the 1957 Rome Treaty addressing this domain remained in place. Competition policy was mentioned only in relationship to other policies (such as cohesion policy 34 On the adoption of this regulation, including a historiographical review of the literature, see: Laurent Warlouzet, “The Centralization of EU Competition Policy: Historical Institutionalist Dynamics from Cartel Monitoring to Merger Control (1956–91)”, in Journal of Common Market Studies, 54, 3, 2016, 725–741. 35 Hussein Kassim, Handley Stevens, Air Transport and the European Union. Europeanization and its Limits, Basingstoke: Palgrave Macmillan, 2010. 36 Mark Thatcher, Internationalisation and Economic Institutions: Comparing the European Experience, Oxford: Oxford University Press, 2007. 37 Laurent Warlouzet, Governing Europe,159–161. 38 “The thrust of Commission policy,” Statement by Jacques Delors, President of the European Commission to the European Parliament, Strasbourg, 14 and 15 January 1985,” in Bulletin of the European Communities, Supplement 1/85. This document is a translation of the original speech given in French. 39 For example John Gillingham, European Integration, 1950–2003. Superstate or New Market Economy?, Cambridge: Cambridge UP, 2003. Laurent Warlouzet 258 in article 130f-3). As a result, the rise of EEC/EU competition policy did not derive from automatic interpretation of the Single Act, but instead from the activism of competition policy commissioners, in this case Peter Sutherland (1985–89) and Leon Brittan (1989–1993). As a French Social Democrat, Delors was sometimes disturbed by the neoliberal tendencies of his two commissioners for competition policy. In their recent accounts, both Delors and Sutherland believed that they got along well, since they both shared an ambitious agenda for European integration, although they also recognized specific conflicts over state aid.40 The archives reveal that one such instance involved Boussac, the largest textile firm in France. Under the insistence of Sutherland, the Commission targeted very substantial French aid to the firm totalling close to FF 1 billion.41 French officials argued that this powerful company was on the verge of bankruptcy, and that the subsidy was justified in order to avoid massive layoffs in regions of Northern and Eastern France already crippled by the industrial crisis in other sectors of traditional manufacturing (coal mining, steelmaking, shipbuilding). But Sutherland stressed that since Boussac was an export firm, the aid would affect intra-European trade. In any event, since the subsidies were granted without a corresponding restructuring plan, they were clearly illegal.42 The bold Irish commissioner was also motivated by the clumsiness of French officials, who blatantly ignored EEC rules on state aid, and were unwilling to disclose information.43 Other countries also helped their textile industry, notably Belgium with its Claes plan also targeted by the Commission, although the most high-profile case was the French one. During internal debates at the Commission, Sutherland proposed requesting a massive repayment of FF 999 million by the company. This triggered a hostile reaction from the Frenchman François Lamoureux, a prominent member of Delors’s cabinet, who estimated that there was an 40 EU archives, oral archives, interview of Peter Sutherland by Laurent Warlouzet on 8 September 2011, interview of Jacques Delors by Vincent Dujardin, Anne-Sophie Gijs, and Sophie Kaisin on 20 June 2017. 41 EU archives, European Commission, BAC 327/1994/159, note from the Director General to Sunnen, 11 October 1985; letter from Andriessen to Cryer, 28 November 1984. 42 EU archives, European Commission, BAC 327/1994/159, note Thies for Sunnen, 11 October 1985; note on a meeting with representatives of the French government, 18 October 1985. 43 EU archives, European Commission, BAC 327/1994/159, note Thies for Sunnen, 11 October 1985; BAC 408/1991/201, note on the Commission’s meeting of 8 October 1986. The Implementation of the Single Market Programme, 1985–1992 259 “unprecedented disagreement” within the Commission on this question.44 Lamoureux was a staunch French Socialist who later became deputy head of Edith Cresson’s cabinet when she was the French Prime Minister under the Socialist government (1991–2). More precisely, two issues sparked controversy within the Commission. First, many Commission officials contested the Directorate General for Competition’s calculations for the illegal aid. The Directorate General in charge of Industrial Affairs, DG III, followed a more neo-mercantilist line of reasoning, insisting on the importance of taking into account the intensity of Boussac’s restructuring, and the problem of international competition.45 Second, commissioner Sutherland dared to challenge evidence provided by a national government, an accusation that was extremely controversial from a political point of view. Sutherland compromised in the end, securing the Commission’s support to sanction the French government, but settling for a repayment of FF 338 million.46 Interestingly, the neoliberal vision embodied by Sutherland annoyed other Social Democrat commissioners. This demonstrated that this was not just a matter of nationality, with the Frenchman Jacques Delors being concerned by the fate of a large French company. In July 1986, when the College of Commissioners discussed Sutherland’s draft directive seeking to impose stricter control of state aid for shipbuilding, he faced opposition from multiple commissioners, all of whom belonged to the centre-left (with the exception of the Christian Democrat Lorenzo Natali, probably because Italy’s large nationalized industries were often the target of the European Commission): the Spanish Socialist Manuel Marin (Social Affairs), the Italian Socialist Carlo Ripa di Meana (Institutions and Culture), the Greek Socialist Grigori Varfis (Regional Policy), and the British Labourite Stanley Clinton-Davies (Transport).47 In December 1986, the 44 EU archives, European Commission, BAC 408/1991/201, note Lamoureux for Delors, 2 and 11 December 1986. 45 EU archives, European Commission, BAC 327/1994/160, note SG SEC (87) 1147/8, 13 July 1987; BAC 408/1991/201, note Lamoureux for Delors, 11 December 1986. 46 EU archives, European Commission, BAC 327/1994/159, minutes of the Commission meeting 17 December 1986; Decision of the Commission n° 87/585/CEE of 15 July 1987 « relative aux aides accordées par le gouvernement français à un fabricant de textiles, d’habillement et de produits à base de papier Boussac Saint Frères ». 47 EU archives, European Commission, BDT 323/93/210, note on the meeting of commissioner, 4 July 1986, note on the meeting of the chef de cabinet, 11 July 1986. Laurent Warlouzet 260 Italian Socialist Carlo Ripa di Meana accused Sutherland of being “too repressive towards European industry.”48 All of these commissioners estimated that competition policy should also take into account social and neomercantilist considerations. Later on, the conflict with the neoliberal commissioner for competition intensified under Leon Brittan, the British Thatcherite who held the Commissionership for Competition from 1989 to 1993.49 The most famous conflict occurred in 1991, when Brittan decided to ban the merger between two aircraft companies, with French-Italian ATR due to take control of the Canadian De Havilland.50 The case was sensitive for a variety of reasons. From the institutional point of view, it was the first time the Commission used its power to ban concentration between companies since the merger regulation was adopted in late 1989. The merger made sense from the economic point of view, since other competitors existed both within Europe (British Aerospace and Fokker in particular) and without. From the political point of view, this operation was hailed as a symbol for an EEC industrial policy in high technology seeking to create European champions that could compete with mightier US firms. Indeed, it was the French-Italian firm ATR, itself an example of European industrial cooperation, that bought its Canadian competitor De Havilland. This operation embodied a new form of Europeanized neomercantilism in high technology, an approach that the British commissioner sought to deter. Brittan opposed it on competition grounds by adopting a narrow definition of the relevant market, in order to demonstrate that the new companies would have a dominant position.51 The decision triggered reservations even within DG Competition.52 During the debate with the College of Commissioners, Delors opposed Brittan, but ultimately abstained when he saw that he would 48 EU archives, European Commission, BAC 327/1994/159, note Ripa di Meana to Sutherland, 16 December 1986. 49 On Leon Brittan, see Jean Joana, Andy Smith, Les commissaires européens. Technocrates, diplomates ou politiques? Paris: Presses de sciences-po, 2002. 50 Mark Pollack, The Engines of European Integration. Delegation, agency, and agenda setting in the European Union, Oxford: Oxford University Press, 2003, pp. 292–299; Michelle Cini, Lee Mc Gowan, Competition Policy in the European Union, Basingstoke: Palgrave, 1998, p.129. 51 Frédéric Jenny, « Droit européen de la concurrence et efficience économique », in Revue d’économie industrielle, 63, 1993, pp. 202–3; Catherine Goybet, « La CEE a-t-elle une politique industrielle? », in Revue du Marché Commun, 352, 1991, p. 753. 52 On the reservation of DG Competition, listen to the record of the following interview: EU archives, oral archives, interview of Helmut Schröter by Laurent War- The Implementation of the Single Market Programme, 1985–1992 261 lose the case to a coalition of mostly centre-right commissioners.53 Delors’s position was logical, for he had long favoured an EEC industrial policy in high technology that combined neomercantilism with international free trade.54 As a result, while Delors was generally supportive of strengthening EEC policies in general, and EEC competition policy in particular, he opposed the neoliberal orientations of Sutherland and Brittan, sometimes with the support of other Social Democrat commissioners, albeit with limited success. Conclusion The European Internal Market Programme was implemented as a mostly market-oriented project, but with visible neoliberal, social, and neo-mercantilist features. This was particularly true for Delors, who combined socially-oriented, neo-mercantilist, and market-oriented visions of Europe. This compromise can be seen in the adoption of the car-emission directive in 1989 with strong support from the European Parliament, which acquired a higher profile in EEC decision-making thanks to the Single Market Programme. The neoliberal approach nevertheless quickly gained traction, as demonstrated by the ATR/De Havilland example. This triggered internal conflicts within the Commission, particularly between Delors and competition policy commissioners. This neoliberal orientation became even more prominent from the 1990s onwards, and is one explanation for the current crisis in legitimacy faced by the EU. Paradoxically, this was recently exemplified by the Brexit vote, even though the British government was at the vanguard of the neoliberal transformation of Europe. louzet, 30 September 2016; on the reservation of other DGs, see: EU archives, oral archives, interview of Martine Reicherts by Laurent Warlouzet on 14 December 2017. 53 George Ross, Jacques Delors and European Integration, Cambridge: Polity Press, 1995, 178. 54 On Delors’s commitment to develop an EEC industrial policy in high technology : Laurent Warlouzet, Governing Europe, 192–194 and 200–202; Arthe Van Laer, “Research : towards a new common policy”, in Eric Bussière et al. (eds.), The European Commission, 1973–86. History and Memories of An Institution, Brussels: European Commission, 2014, 277–290. Laurent Warlouzet 262 Too Big a Club? The 1980s Common Agricultural Policy Crisis and Differentiated Integration Marko Lovec Introduction: How many make a crowd? Since the 1950s, the European Economic Community (EEC, renamed with the Treaty of Maastricht to European Union – EU) has been in a constant process of widening. Greater heterogeneity has increased the perception of membership-related costs. Soon after the accession of member states of Central and Eastern Europe, the EU faced ‘enlargement fatigue’, followed by a series of crises related to its one-size-fits-none policies or inability to respond collectively – such as the Eurozone and migration crises – and, finally, by the historic decision of the UK to leave the EU. In its response, namely the White paper on the future of Europe, the European Commission proposed several scenarios that included differentiated integration by de-mutualising certain policy areas (“doing less more efficiently”) and allowing some countries to proceed forwards faster (“those who want more do more”).1 The Commission’s response to the integration crisis – differentiated integration – is closely related to club theory, according to which increasingly heterogonous membership increases the so-called interdependence costs, i.e. the sum of costs of being unable to respond collectively, and of responding against one’s interest.2 However, this argument heavily relies on an abstraction of ‘club shopping’, i.e. a rational actor taking multiple decisions on club membership in a static context, which is not affected by those decisions. Such an abstraction is questionable given the unique historical process of European integration with one-time decisions on mem- 1 European Commission, White paper on the future of Europe, mmission/future-europe/white-paper-future-europe_en2017 (accessed: 10 December 2019). 2 Clara Brandi / Michael Wohlgemuth, “Strategies of Flexible Integration and Enlargement of the European Union: a Club-theoretical and Constitutional Economics Perspective”, in: Freiburger Diskussionspapiere zur Ordnungsökonomik, n. 06/7, Albert-Ludwigs-Universität Freiburg, Institut für Allgemeine Wirtschaftsforschung, Abteilung für Wirtschaftspolitik: Freiburg i. Br., 2006, 1. 263 bership and their long-term impact on the agency rationale. Moreover, it neglects ‘inherent’ institutional and policy flexibility and the negative effects of differentiation for the goods provided by the club compared to the non-membership context. The purpose of this paper is to test the club theory argument against a more historical political ‘bounded rationality’ approach by looking at the example of the Common Agricultural Policy (CAP), which resulted in a European integration crisis in the 1980s due to a lock-in in decision-making and growing redistribution (in the context of growing membership). The CAP has been chosen intentionally due to its deadweight costs and strong redistribution; if anywhere, this is where differentiated integration should have been pursued. Against what club theory would suggest, agricultural policy was sustained as a club good with solutions sought through renegotiation and deepening of some of the integration rules and goods, in particular by the signing of the Single European Act (SEA) in 1985. Among other things, the SEA introduced a qualified majority vote (QMV) in different policy areas, followed by a series of substantial CAP reforms.3 This paper argues that this should be viewed in the context of (the perceptions of) membership costs depending on multiple interrelated issues (goods) and institutions (rules) as well as the dynamic impact of club membership on non-membership alternatives (e.g. the EEC/EU as a bloc in international agricultural trade negotiations). The paper proceeds by elaborating a conceptual framework – starting with definitions, the club goods theory argument – and questioning some of its assumptions. This is followed by the research section – the (embedded liberalism) interests and institutional setting of the 1960s, the 1980s CAP and European integration crisis, and subsequent policy changes – and an analysis of implications for key interests and actual (in)flexibility of club rules, as well as a discussion on policy relevance. Conceptual framework: European integration as a club The terms ‘differentiated’ and ‘flexible’ integration are often used inconsistently. According to a common definition, differentiation refers to a non- 3 Brigid Laffan, “The big budgetary bargains: from negotiation to authority”, in: Journal of European Public Policy, 7, 2006, 725–743; Andrew Moravcsik, “Negotiating the Single European Act, National interests and conventional statecraft in the European Community”, in: International Organization 45, 1991, 1. Marko Lovec 264 homogenous approach towards integration. Flexibility, on the other hand, can be defined as relaxation of common rules and ability to accommodate them to a particular situation. Flexibility and differentiation can be related, i.e. there can be either a non-homogenous approach to flexibility ‘by differentiation’ that allows different arrangements for individual (groups of) countries and opt-outs, or a homogenous (non-differentiated) one. In the latter case, a certain level of flexibility is available to all, meaning that it is part of a uniform arrangement. Another related term is ‘subsidiarity’; it refers to a principle according to which policies should be designed and implemented at the lowest possible level to provide for a direct link between decision-makers and stakeholders. While differentiation and flexibility address horizontal distribution of competences (i.e. between states), subsidiarity is about the vertical distribution. Permanence and expected change through time give rise to different models of differentiated integration. ‘Multi-speed integration’ refers to situations in which a group of countries, based on their capabilities and willingness to do so, decides to pursue common objectives at a higher pace – i.e. by engaging in deeper integration – whereas others are expected to follow as soon as they can.4 Historical examples of this sort of flexibility by temporary differentiation are the Euro and Schengen, both of which include provisions for universal membership of (almost all) member states at a certain point in time, upon the condition of fulfilling certain specific criteria. In contrast to multi-speed integration – a situation where some countries move forwards faster in pursuing common objectives while others are not expected to do so (in order not to block the overall integration from deepening) – differentiation by ‘concentric circles’ refers to differentiation that may potentially be permanent. A practical example of non-homogenous integration where flexibility is provided for by permanent differentiation can be seen in specific opt-outs for individual countries, such as those of the UK (before Brexit) and Denmark on the Euro and Schengen. Another approach, known as ‘à la carte’, is based on the assumption that countries can at any moment “chose, as from a menu, in which policy area they would like to participate and cooperate more closely, while at the 4 Brandi / Wohlgemuth, “Strategies of Flexible Integration and Enlargement of the European Union: a Club-theoretical and Constitutional Economics Perspective”, 2–5; Alexander C. Stubb, “A Categorization of Differentiated Integration”, in: Journal of Common Market Studies, 34, 1996, 283–295, 287. The 1980s Common Agricultural Policy Crisis and Differentiated Integration 265 same time holding only to a minimum number of common objectives”.5 Similar to the concentric circles model, á la carte differentiation is permanent. The difference is that countries are able to also move backwards, i.e. to disengage from more intense forms of integration, which could be interpreted as disintegration. An example of a permanent, multi-directional model of differentiated integration is the Permanent Structured Cooperation (PESCO). Modes of differentiated integration Permanence Temporal Permanent Direction of change Progressive Multi-speed Concentric circles Multidirectional Á la carte Source: own elaboration The ideas of differentiated European integration emerged along with the process of widening and deepening. The model of multi-speed Europe was, according to Stubb, Brandi and Wohlgemuth6, initially discussed in the context of the first enlargement of the European Community in 1973. Willy Brandt proposed the idea of a two-speed Europe in 1974, followed by the Tindemans Report in 1975 with further proposals for differentiated development. In similar terms, French Prime Minister Édouard Balladur proposed in 1994 the concentric circles model. Shortly afterwards, the Schäuble-Lamers paper (1994) made a similar, only more detailed, proposal. In 2000, Joschka Fischer, Jacques Delors and Jacques Chirac discussed forming avant-garde or pioneer groups. In December 2003, in an attempt to isolate Tony Blair, Jacques Chirac and Gerhard Schröder once again put forwards the abovementioned idea. Angela Merkel and Emmanuel Macron promoted PESCO, introduced with the Treaty of Lisbon, in order to proceed towards a Defence Union as a European pillar of NATO. Table 1: 5 Brandi / Wohlgemuth, “Strategies of Flexible Integration and Enlargement of the European Union: a Club-theoretical and Constitutional Economics Perspective”, 2–5; Stubb, “A Categorization of Differentiated Integration”, 288. 6 Brandi / Wohlgemuth, “Strategies of Flexible Integration and Enlargement of the European Union: a Club-theoretical and Constitutional Economics Perspective”, 2–5. Marko Lovec 266 According to a common definition, clubs are “voluntary groups formed by individuals to pursue a common goal – the provision of a club good”.7 Club goods are excludable (i.e. potential beneficiaries can be excluded) and non-rival (i.e. consumption does not affect their availability). According to Buchanan and Tullock8, being part of a club comes at certain costs, which are embodied in two types of risks. The first type of risks, also known as the issue of external costs or externalities, consists in the possibility that provisions serving a country’s interests are not taken. This results from the actions of others over which one has no direct control. These actions are often based on dispersion of costs, which makes it costly for an affected individual to claim correction or compensation without making other individuals free riders. The second type of risks lies in the possibility that provisions are taken against a country’s interests, e.g. by outvoting or as a median decision. These are also known as decision-making costs, which are incurred due to participation in an organised activity. For each decision-making area, increased heterogeneity leads to an increase in decision-making and external costs at the level of collective choice, since it makes internalisation and optimum agreements more difficult. The sum of external and decision-making costs is embodied in the interdependence costs. If interdependence costs are higher than the benefits, clubs can be considered too big in terms of either having too many members or providing too many goods. Concerning European integration, Alesina et al.9 demonstrated that centralisation of policymaking brings benefits based either on economies of scale reducing costs for the provision of a good or on the internalisation of different forms of cross-country externalities via a system of taxes and compensations. At the same time, however, this increases both decisionmaking and external costs. The more heterogeneous EU membership becomes, the larger the spillovers have to be for centralised decision-making to improve welfare. In line with theory, one way to address the issue of interdependence costs is to reduce membership size, which, however, might be politically unacceptable. Another way is to reduce the number of club goods provided on a once-and-for-all basis, i.e. through differentiated inte- 7 Ibid., 7. 8 James M. Buchanan / Gordon Tullock, The Calculus of Consent, Ann Arbor: University of Michigan Press, 1962, 45. 9 Alberto Alesina / Ignazio Angeloni / Ludger Schuknecht, “What Does the European Union Do?”, in: NBER Working Paper, 8647, Cambridge, Mass, 2001; Alberto Alesina / Ignazio Angeloni / Federico Etro: “The Political Economy of International Unions”, in: NBER Working Paper, 8645, Cambridge: Mass, 2001. The 1980s Common Agricultural Policy Crisis and Differentiated Integration 267 gration.10 Lord Dahrendorf famously expressed the standpoint that the issue regarding the kind of integration pursued should not be based on ideology but rather the result of a rational fact-based analysis: I have often been struck by the prevailing view in Community circles that the worst that can happen is any movement towards what is called a Europe à la carte. This is not only somewhat odd for someone who likes to make his own choices, but also illustrates that strange puritanism, not to say masochism, which underlies much of Community action: Europe has to hurt in order to be good.11 Alesina et al.12 examined different policy fields to identify where allocation of competencies is optimal and where the EU should de-Europeanise to achieve an optimum relation between benefits and costs. Based on their analysis, policymaking should be assigned to the EU level in the areas of trade and internal market in order to minimise blockades and preserve competition. The areas of money and finance, environment and international relations should be both under national and EU jurisdiction, depending on the scope of externalities – e.g. to prevent competitive devaluation, regulate cross-border pollution and enable the pooling of resources of small European countries in the global arena. Sectorial policies in the areas of agriculture and fisheries, industry and transport, social rights, education, research and culture should remain under national control due to the high level of heterogeneity, as well as potential externalities and decisionmaking costs. Agriculture, which has historically been an important Community policy accounting for substantial share of EEC/EU expenditure, is an interesting case study. According to Brandi and Wohlgemuth, as far as agriculture is concerned, the optimal size of a club is rather small – if abolition of protectionism, privilege and waste is in the general interest and unless people want to be taxed (i.e. rational ignorance, package deals).13 However, opinions differ on whether structural and cohesion policy and the CAP are Europe-wide public goods. An argument against is that they cannot qualify as club goods in a strict sense, because the respective funds are used in redis- 10 Brandi / Wohlgemuth, “Strategies of Flexible Integration and Enlargement of the European Union: a Club-theoretical and Constitutional Economics Perspective”, 11. 11 Ralf Dahrendorf, A Third Europe, 3rd Jean Monnet Lecture, Florence: European University Institute, 1979, quoted in Brandi and Wohlgemuth, 1. 12 Alesina / Angeloni / Schuknecht, “What Does the European Union Do?”. 13 Brandi / Wohlgemuth, 10. Marko Lovec 268 tributive way, which results in rivalry in consumption (while club goods are by definition non-rival).14 The club goods approach applied to European integration as a unique historical political process is arguably too static and economistic. Agreements on forming and joining European integration as clubs have been made by a relatively small number of state actors (in economic terms) with specific preferences and historical contexts in particular. To a notable extent, these decisions have been irreversible (among other things, there is no anti-monde situation available for comparison) and have thus had a permanent impact on the (perception of) interests (goods) provided, the club (rules) as well as the internal-external context dynamics. This, however, does not mean that club goods and rules have been fixed on a once-andfor-all basis. Quite the opposite, change and flexibility through political innovation have been a common feature of these historical political formations (politics, as opposed to economics, is the art of the possible). Firstly, in contrast to an economistic view of European integration as a club, political agreements normally do address distributional issues. In fact, this is an essential part of politics. In practical terms, it is difficult to separate individual interests and goods from one another, from the institutions (rules) and from their effects. Mutualisation of distributional policy could still reduce the total costs through policies of scale, as well as the uncertainty and externalities between club members that would occur anyway, and externalisation of costs to third parties (or balancing powers towards them) by acting as a block. All these elements are non-rival (at least from the perspective of club members). Secondly, in political terms, joining international organisations and fora, as a form of internationalisation in a dynamic international environment, is generally not understood as a constraint but rather as an opportunity for governments to gain unique political powers through so-called two-level games.15 The design of representative institutions and decisionmaking typically corresponds to key governmental interests and issues or policy areas. For example, the governments of member states can decide to take part in individual forms of cooperation based on their political calculations (i.e. interests of their constituencies). Within the EEC/EU, member states retained substantial powers in decision-making and implementation. There are various externalities and decision-making costs, especially in 14 Ibid., 8. 15 Robert D. Putnam, “Diplomacy and Domestic Politics: the Logic of Two-Level Games”, in: International Organization, 42, 1988, 428–460. The 1980s Common Agricultural Policy Crisis and Differentiated Integration 269 more specific issue areas, those of lesser interest and where costs are widely dispersed. Discrepancies may also occur in situations when external contexts change swiftly, especially in the short run. However, decision-making forums such as the European Council exist to address broader issues and make new ‘grand bargains’.16 Thirdly, contrary to the economistic club-shopping view, power in terms of dependence symmetry also plays a role, including as a specific good if it is affected by an agreement. Even without joining the club (or, perhaps, precisely because of this), interdependence costs can be high. Any benefits and costs have to be measured against the alternatives available, which include the issue of uncertainty and possible international coalitions. Thus, to sum up, the roles of specific elements as opposed to general ones and of the dynamic relation between actors and contexts indicate the possible limitations of abstract hyper-rationalistic and decontextualized models as well as the essentialist approach towards differentiation, and call for a more bound rationality approach and historical analysis. Research: The Common Agricultural Policy as a ‘Sinatra case’ The present research is based on a case study of the CAP. As explained above, the CAP is a distributional policy that many do not even regard as a club good. Due to status quo decision-making, it led to growing overall costs and a crisis of the Community in the 1980s. The CAP can be taken as a ‘Sinatra case’ – if limitations of the club theory approach show here where it should be the strongest, it is very likely they will also appear elsewhere. The research is based on historical political analysis and mostly secondary data. It is divided into two parts. The first, historical part presents the setting in which CAP was designed as a specific policy and decisionmaking framework, as well as the 1980s crisis, characterised by change in the external context, resulting in growing costs due to a lock-in in decisionmaking, and the subsequent reforms based on changes introduced in the late 1980s as a part of a new grand bargain. In the second part, club-based constraints are assessed with respect to key interests (and contexts), and overall institutional and policy flexibility. 16 Moravcsik, “Negotiating the Single European Act, National interests and conventional statecraft in the European Community”. Marko Lovec 270 The setting The ground for the CAP was laid in the Treaty of Rome, which set the objectives that remain valid to this day: enhanced productivity, higher incomes based on efficient use of production factors, especially labour, price stability and available foods at accessible prices. The objectives were designed in a context of structural issues in European agriculture, such as large number of small and relatively uncompetitive farms facing competition from world markets.17 CAP principles – community preference, common market and financing – were agreed upon in the early 1960s, which is considered the beginning of the CAP. The CAP was introduced gradually, based on removal of internal barriers and harmonisation of external tariffs. It was based on common market organisations for individual products that involved various intervention mechanisms. Due to consensus decision-making in the Council of Agricultural Ministers (CoAM), intervention price levels for individual products corresponded to the higher ones among national price interventions. Especially heavily supported were northern products such as cereals, dairy and beef. The input and substitutions–based link between individual product prices created a further positive price spiral. Since production was already near selfsufficiency (consumption), they were already aware in the 1960s that sustaining high price levels would – due to stronger incentives to produce that would result in overproduction – soon require expensive removal from the market. Secondly, high price supports asymmetrically benefited larger farms efficiently applying capital-intensive technologies boosting productivity, while the relative price pressures on a high number of smaller ones grew, making a reduction of price support difficult. Thus, the Commission proposed early on an alternative plan that involved lower price supports and structural support measures (also known as the Mansholt plan, named after Dutch Commissioner Sicco Mansholt). However, most of the member states and farm unions rejected the proposal as too radical.18 Soon after the CAP was introduced, exchange rate changes caused inflation pressures in countries with weak currencies (e.g. France) and competi- 17 Michael Tracy, Government and Agriculture in Western Europe 1880–1988, 3rd ed. London: Granada, 1989. 18 Isabelle Garzon, Reforming the CAP, History of a paradigm change, Houndmills: Palgrave Macmillan, 2006, 26. The 1980s Common Agricultural Policy Crisis and Differentiated Integration 271 tive pressures in countries with strong currencies (e.g. Germany). To balance macroeconomic and sectorial pressures, the Commission allowed countries to introduce varied support levels based on a currency-adjusted ‘green rate’. To prevent products from being sold in high-support countries, internal border measures (levies and payments) were reintroduced. In the 1970s, the problem of overproduction started to appear occasionally. In 1970, an amendment to the Treaty of Rome made spending on the CAP compulsory, meaning that policy reform (based on consent of member states) was needed to curb spending. Since storage of food was expensive, they started to use export subsidies, i.e. to pay for the difference between the domestic price and the price on the global markets. This was only a temporary solution due to the low absorption capacity of world markets that would soon lead to a world price decline and rising costs. However, in the 1970s, depreciations of EEC currencies and relatively high world prices related to oil crises blurred and postponed the problem. The 1970s also saw the accession of the UK, Denmark and Ireland, and the introduction of certain structural measures such as LFA payments, early retirement, etc., which were however only a small addition to the price and production supports. The 1980s crisis and reforms Towards the end of the 1970s, the EEC started to produce more than it consumed in all key sectors. According to Kay, “price support drove up production, which drove up surpluses, which drove up the budget costs”.19 Between 1974 and 1979, the cost of the CAP rose by 23 %. The European Council gave the Commission a mandate for more substantial reform proposals. The Commission envisaged a reduction of price support and an introduction of income payments, but farm unions rejected the proposal as they were against “social handouts”. In 1980 and 1981, world prices briefly recovered. In 1981, integrated rural (structural) development programs were introduced. A year later, CoAM introduced guarantee thresholds, which meant that exceeding certain levels of production wold trigger negotiations on price cuts. In 1983, a decline in world prices resulted in expenditure increasing by 30 %. Projections showed that budget resources would run out before the end of the 19 Adrian Kay, The Dynamics of Public Policy, Cheltenham: Edward Elgar Publishing, 2006, 84. Marko Lovec 272 marketing year. The UK, which was a food importer and a net contributor, threatened to veto budget agreements. By 1984, the CAP accounted for almost 70 % of the EEC budget. The budget crisis was at the heart of the agenda of the European Council at Fontainebleau in 1984. Heads of state agreed to increase the size of the budget by raising the VAT call-up rate from 1 to 1.4 %, and rebating to reduce the UK’s net contribution. In line with the new guidelines for budgetary discipline, CAP spending would be kept at the growth rate of own resources.20 On the expenditure side, a specific problem was dairy production, where surpluses were already high in the 1960s. It accounted for a third of CAP spending and a quarter of all EEC spending. It also affected the beef sector. Since price cuts sufficient to curb production and cost growth were politically unacceptable, agriculture ministers agreed to accept the proposal of the German minister to introduce maximum guaranteed quantities (MGQs)—i.e. quotas for each country. Quotas were already applied for sugar where, similar to milk deliveries, sugar beet processing facilities enabled controlling production. The implementation models for the quotas differed among countries (e.g. in some countries they could be bought and sold on the market, while in others their allocation was regulated by the state). Production exceeding quotas would be taxed.21 Quotas acting as a tax on economy of scale–related investments were economically suboptimal. Furthermore, the limit was set too high, 10 % above domestic consumption, meaning that structural overproduction continued to exert downward pressures on small farms. These were also the reasons why quotas were unpopular. In spite of the 1984 agreement, expenditures continued to rise. The new issue area was cereals. World wheat stocks rose by 70 % in the early 1980s, and prices fell by 44 % in the period 1981–1986. In contrast to dairy, quotas could not be introduced, as 60 % of product was used as feed and competed with imported foodstuffs. Moreover, some major farm groups such as competitive producers from the French basin were against them. For the 1982/1983 marketing year, CoAM fixed the guarantee threshold 20 Robert Ackrill, The Common Agricultural Policy, Sheffield: Sheffield Academic Press, 2000, 63; Marko Lovec, “The Common Agricultural Policy Crisis of the 1970s/1980s: Accommodating the Logics of Appropriateness and Consequences”, in: Journal of European Integration History 23 (2), 2017, 245–262, 254–255. 21 Michel Petit / Michele de Benedictis / Denis Britton / Martijn de Groot / Wilhelm Heinrichsmeyer / Francesco Lechi, Agricultural Policy Formation in the European Community: The Birth of Milk Quotas and CAP Reform, Amsterdam: Elsevier, 1987. The 1980s Common Agricultural Policy Crisis and Differentiated Integration 273 for cereals at 119.5 million tonnes, but this was pending on the import of cereal substitutes. In 1985, on the eve of the European Council meeting in Milan, which was to negotiate a draft Treaty on European Union – whose main advocate was the Federal Republic of Germany – the German agriculture minister blocked a reduction of cereal prices.22 The next year, the year when it would enter into force, a breach of the Fontainebleau agreement was expected. In 1985, a new Commission led by Jacques Delors took office. The General Directorate for Agriculture under Commissioner Frans Andriessen published a green paper in July pointing out the distributional unfairness of price supports (80 % of support going to 20 % of farmers), growing negative publicity due to ‘butter mountains’ and ‘wine lakes’ and the need to reorient to environmental sustainability and viable rural areas.23 The 1986 agreement on the SEA deepening the community market would give the Commission new authorities. By draining community resources, the CAP was becoming a stumbling block for new policies such as enlargement, cohesion and monetary union.24 A specific new front was external trade. Growing production and export subsidies widened the price gap. The aggregate level of support went from ECU 30 billion to ECU 59 billion between 1979–1981 and 1986. A substantial part was due to exchange rate fluctuation—in the 1984–1987 period, the weakening of the dollar contributed 40 % of the CAP rise from ECU 18.4 billion to ECU 27.3 billion. The use of subsidies and measures to protect feed producers (the USA were allowed to import oilseeds at zero tariff as a compensation for imposing external tariffs in the 1960s) triggered a spiral of countermeasures by the USA and growing costs. Under GATT, where agriculture was an exception, no mechanisms existed to effectively address this issue. In 1986, the Cairns Group and USA put agriculture as a key issue on the agenda of the Uruguay Round.25 In 1987, the UK proposed a MGQ of 155 metric tonnes (1987 production) and a 15 % intervention price cut for overproduction. Together with Denmark, it threatened not to contribute any further resources until expenditures were brought under control. France and Germany would agree 22 Gisela Hendriks, Germany and European integration: The Common Agricultural Policy: an area of conflict, New York: Berg, 1991, 100. 23 European Commission, “Perspectives for the Common Agricultural Policy”, in: Green Europe Newsflash, 33 (July 1985), Foreword. 24 Wyn Moyer / Tim Josling, Agricultural Policy Reform: Politics and Process in the EC and the USA, Hemel Hempstead: Harvester Wheatsheaf, 1990, 79. 25 Ibid., 26. Marko Lovec 274 with 165 metric tonnes and a 3 % price cut. No agreement could be reached during the Dutch presidency in 1987. In January 1988, West Germany took over the presidency and in February an agreement on 160 metric tonnes and a 3 % cut was eventually achieved. It also introduced stabilisers to other major crops, as well as other measures, such as a voluntary set-aside.26 It was agreed that the new multiyear financial frameworks would draw on a new budgetary resource based on GDP and a total ceiling at 1.2 % of GDP in order to keep agricultural guarantees growth below 74 % of own resource growth. Based on the agreement, Germany would contribute an additional amount of ECU 5 billion over a 5-year period (30 % increase in contributions). The agreement would allow the implementation of other major Community projects. As for agriculture, the ceilings were still set relatively high and penalties were low.27 The 1992 MacSharry reform and after: price support reduction and compensatory payments The North American draught decreased export subsidies expenditure for the period of 1988–1989. This was followed by a fast increase. In a reflection paper published in February 1991, the Commission spoke about rural policy, transition from price supports to big cereals and animal producers in the north, to compensatory payments to small farmers in the south of Europe.28 Within the second Delors Commission, closed circles were formed involving agriculture (MacSharry), budget and trade commissioners (Andriessen). Continuity and closed circles strengthened the Commission. Even though the EEC tried to keep trade negotiations separated, there was a clear connection since fast track authority was about to run out and the new US administration was expected to be less inclined towards the deal. The proposal published in July 1991 was not so radical – it envisaged a reduction of price support and introduction of compensatory payments. Following French pressure and last minute deals, a reform was brokered in 26 Ann Lee Patterson, “Agricultural Policy Reform in the European Community: A Three-Level Game Analysis”, in: International Organization 51, 1, 1997, 150. 27 Ibid., 137. See also Robert W. Ackrill / Robert C. Hine / Anthony J. Rayner, “CAP reform and implications for member states: budget and trade effects”, in: Ken A. Ingersent / Anthony J. Rayner / Robert C. Hine (Eds.), The Reform of the Common Agricultural Policy, Basingstoke: Macmillan, 1998, 104–131. 28 European Commission: COM(91) 100 of 1 February 1991. The 1980s Common Agricultural Policy Crisis and Differentiated Integration 275 May 1992: a 29 % decrease in cereal prices over three years, a 15 % decrease in beef support and a 5 % reduction in butter intervention with substantial direct compensation. Large farms were expected to set aside 15 % of land. Support for environmental friendly practices was introduced.29 EU expenses on arable agriculture Source: European Commission Based on the reform, farmers continued to receive substantial support and were in fact overcompensated. The arrangement would not really work with a production decrease predicted at up to 10 %. Expenditure was also expected to grow. However, the budget increase (from ECU 32.5 billion in 1991 to ECU 37 billion in 1997) was below that of a no-reform scenario (EUR 42.7 billion).30 Direct compensation, which was somehow like the one in the USA, would help bring agriculture under the rules of the Figure 1: 29 Adrian Kay, The Reform of the CAP: The Case of the MacSharry Reforms, Wallingford: CABI International, 1998. 30 Agra Europe no. 1448, 12 July 1991. Marko Lovec 276 Uruguay Round Agreement and future WTO rules.31 It was more transparent than consumer transfers, and would enable fixing expenditure nominally within the multiyear financing frameworks, thus creating a basis for the future reforms. Analysis: Why the Common Agricultural Policy club survived From the theoretical perspective, we come to the question as to why, against the club goods theory, the CAP club survived in spite of growing heterogeneity of interests, which led to growing costs and redistribution due to the particular design of the CAP and decision-making rules. As this section will try to demonstrate the main reasons – apart from the complex network of various interests (goods) and the institutional setting (rules) – include sufficient policy flexibility and innovativeness provided by the policy and institutional design, and the dynamic impact on the contexts as non-membership alternatives. Embedded liberalism The EEC, established with the Treaty of Rome, was basically a common market with an agricultural policy. The common market was in the interest of German industry, which feared competitive currency devaluations, while the agricultural policy provided support of France, which was facing fiscal pressures for aiding its strong export-oriented agricultural sector due to external price declines. The tariff union also helped balance trade and economic power with the USA. Other member states, Benelux countries and Italy, took part for relative dependence, while the UK, a net food importer, decided not to join due to institutional constraints and trade relations with the Commonwealth. Consensus decision-making was proposed in the early 1960s by Germany, which feared a reduction of price supports in CoAM resulting in competitive pressures on their farmers (their domestic price levels were higher). For France, the key interest was to assure community financing. While most of the costs were effectively transferred to third-country producers (which was easier to achieve within an economic bloc), some were 31 Patterson, “Agricultural Policy Reform in the European Community: A Three- Level Game Analysis”, 137. The 1980s Common Agricultural Policy Crisis and Differentiated Integration 277 borne by consumers, especially in France and Italy. Here the green rate provided governments with substantial flexibility to balance sectorial and macroeconomic effects and even beyond that. In the 1970s, the real price support difference based on the green rate was as high as 50 %, and contributed to Germany applying one of the highest support levels and actually becoming the largest producer and recipient of support in the EEC.32 The UK, which joined the EEC in the 1970s due to higher growth rates in the bloc – a sign of positive effects of the EEC as a club – was actually able to take advantage of the CAP to keep food prices below those on the world markets, which were high in the 1970s. After that, the UK made substantial use of the green rate. Moreover, general inflation was above the growth of agricultural prices throughout the 1970s,33 meaning that (most) farmers could hardly be seen as collateral policy beneficiaries. In line with the club goods theory, the early CAP would be harmful for net contributors, who had to pay a higher bill. Since the latter – especially Germany – were politically influential players, this would show the negative effects of the club and would lead towards differentiation. However, David Harvey specifically looked at state preferences, and found that, as late as in the end of the 1970s and the early 1980s, the CAP was “broadly consistent with national interest” – specifically with those of Germany and the Netherlands, where despite high expenditures, farmers’ and national revenues were also high.34 Thus, even without considering the bigger picture of the importance of the CAP for the EEC, the CAP as a policy and institutional framework was broadly in line with the key interests. Dynamic relation with the contexts As explained in the research part, things started to change in the 1980s. Due to growing overproduction, budget expenditures grew in dramatic proportions. Net budget effects became more important than macroeconomic considerations (food expenditure in total consumption was no longer that important), and member states which had previously applied low support, such as France, Italy and even the UK, started to apply high 32 Lovec, “The Common Agricultural Policy Crisis of the 1970s/1980s: Accommodating the Logics of Appropriateness and Consequences”, 250–251. 33 Ackrill, The Common Agricultural Policy, 457–458. 34 David Harvey, “National interests and the CAP”, in: Food policy, 3, 1982, 174–190, 187. Marko Lovec 278 support levels. As a result, the budget position of Germany and other more developed countries started to turn negative. The decision-making setting, with agricultural ministers deciding by consensus and the issue of budget costs separated, resulted in the so-called restaurant-table effect: the opportunity to transfer a larger part of costs to others through a common bill (and the risk that others will do this) resulted in a maximisation of spending (as opposed to optimisation, which would occur if each minister were responsible for the costs resulting from the national price support). The effect was aggravated further by the fact that decisions were made on one product at a time, creating uncertainty with regard to individual agriculture ministers’ positions on products important for their countries. Moreover, the total costs were not known at the time of making the decisions, since they would depend on the actual market situation in the future.35 Thus, it seems that the supranational institutional setting put agricultural lobbies in a privileged position. According to Armstrong and Bulmer, “those engaged in agricultural policy-making were able to isolate themselves from broader issues of public policy – including the financial aspects – and thus exploit supranational policy-making to enhance their own power resources”.36 In such a context, the accession of Greece, Spain and Portugal, which were expected to become net beneficiaries due to relatively large agricultural sectors, seemed as if a sinking ship was taking new passengers. However, CoAM did introduce several changes following the late 1970s. The 1982 guaranteed thresholds and the 1984 milk quota—proposed by the German agriculture minister—were status quo measures, which aimed to prevent countries with more competitive agriculture (i.e. other than Germany) from turning higher support into production growth and putting the financial burden on the shoulders of net contributors (i.e. Germany). Moreover, with the 1984 and 1988 reforms, the European Council was effectively used as a court of appeal,37 discussing agriculture in the same package as budgetary issues where net contributors could use the 35 Guenther Schmitt, “Agricultural Policy Decisions in the EC”, in: Food Policy, 5, 1986, 334–345; Alan Swinbank, “The CAP and the Politics of European Decision Making”, in: Journal of Common Market Studies, 2, 1989, 303–322; Ulrich Koester, “Decision-making Problems in the Council of Agriculture Ministers”, in: Intereconomics, 9, 1978, 211–215. 36 Kenneth A. Armstrong / Simon J. Bulmer, The Governance of The Single European Market, Manchester and New York: Manchester University Press, 1998, 55. 37 Simon Bulmer / Wolfgang Wessels, The European Council, London: Macmillan, 1987. The 1980s Common Agricultural Policy Crisis and Differentiated Integration 279 consensus requirement for new budget contributions as a leverage in the CAP reform. As indicated above, Germany was in a difficult situation since budget reduction would harm its farmers while high supports would result in growing distribution to other countries. Existing policy solutions proved far from satisfactory from the perspective of the German government. In the 1984 European Parliament elections, 2.5 months after the introduction of milk quotas, the CSU lost 700.000 votes. In the 1987 general election, at the time of financial restrain and price freezes, the CDU lost 254.000 votes, half of it from rural areas.38 Chancellor Helmut Kohl, facing federal elections in 1988, depended on support from farmers, which is why he agreed to paying the bill for the reform agreed upon the same year. The budget stabilisers included in the same package would enable curbing long-term spending. At the time, not only Germany but also France became a net contributor due to Mediterranean enlargements.39 In 1988, the German net contribution was ECU 4 billion, French was ECU 1.1 billion and the UK’s (post rebate) was ECU 1.4 billion. This explains why France did not go against the introduction of budget stabilisers to effectively curb expenditure in the long run. As seen from the share of growing costs resulting from exchange rate fluctuation, unpredictable external factors contributed importantly to the negative policy effects. After replacing the USA as the world’s largest agricultural exporter in the early 1980s, the EEC was put in the late 1980s in a position of merely reacting to the changing external environment and pressures from competitors.40 This called for a more proactive approach as well as a change in the status quo–biased institutional and policy design. As Laffan41 points out, this was done with a new integrative deal, the SEA. The SEA, which deepened the common market (the interests of Germany and the UK), abandoned the veto procedures to remove blockades and strengthened the role of the Commission as a supranational authority. The change of contexts that pressured for policy change put the Commission, which had exclusive authority to propose legislative changes – in combination with abandoning the veto in CoAM – in a much stronger position. 38 Patterson, “Agricultural Policy Reform in the European Community: A Three- Level Game Analysis”, 147. 39 Moyer / Josling, “Agricultural Policy Reform: Politics and Process in the EC and the USA”, 86, 92. 40 Louis-Pascal Mahé / Terry L. Roe, “The Political Economy of Reforming the 1992 CAP Reform”, in: American Journal of Agricultural Economics, 78, 1996, 1314–1323. 41 Brigid Laffan, The Finances of the Union, London: Routledge, 1997. Marko Lovec 280 Cohesion policy, introduced to compensate southern members, on the other hand, required additional funds as well as multiyear financial agreements to secure funding. Additional funds on other policy areas secured the agreement of net beneficiaries on control of agricultural spending. Finally, the across-the-board international trade negotiations further helped the Commission and governments prevent domestic sectorial blockades with package deals. The 1992 MacSharry reform, which was revolutionary in that it replaced price and production support with fixed budgetary compensations, was made possible by a combination of budget pressures, trade negotiations and a stronger role of the Commission. While, as explained by Ackrill and Kay,42 the 1992 reform in fact overcompensated farmers to ensure their support, the fixing of allocations enabled effective control over costs and distribution of support in the long run. This was also important from the perspective of future enlargements, such as the accession of countries of Central and Eastern Europe.43 In the late 1980s and early 1990s, Germany faced fiscal pressures due to the reunification with Eastern Germany. International trade negotiations were in the interest of German industry, but were also taken as an opportunity to exclude farmers unions from the negotiation table.44 From the French perspective, a rise in production and costs would lead to more status quo measures such as quotas, which is why they supported the 1992 reform, which put only limited constraints on production.45 Not quantity but quality matters The purpose of this research was to test the club goods theory approach towards European integration, which argues that growing membership and heterogeneity of interests tend to produce differentiated integration as a more rational form of governance. This is confronted with more bound rationality–based approaches, pointing at specific, complex and dynamic re- Conclusion: 42 Robert Ackrill / Adrian Kay, “Historical Institutionalist Perspectives on the Development of the EU Budget System”, in: Journal of European Public Policy, 13, 2006, 113–133. 43 Lovec, “The Common Agricultural Policy Crisis of the 1970s/1980s: Accommodating the Logics of Appropriateness and Consequences”, 258. 44 Patterson, “Agricultural Policy Reform in the European Community: A Three- Level Game Analysis”, 145. 45 Ibid., 157–158. The 1980s Common Agricultural Policy Crisis and Differentiated Integration 281 lations between agency and structure within historical-political formations, such as those of European integration, by using the CAP as a typical case of a club good where the club goods theory should work most conclusively. The research results indicate limitations of a static economistic view of the club goods theory, exposing the relationships between various specific issues as club goods, as well as the dynamic impact on the contexts, making clear-cut rationalisation more difficult. This is as relevant for decisionmakers as it is for research, since in both cases a small number of highly specific units and interactions in a complex and changing environment and absence of clear alternatives for comparison make it hard to assess individual actions in a robust way. Rather, this calls for historical political analyses, process tracing, use of various counterfactuals, etc. Still, within the limits of embedded decision-making, the institutional and policy design not only enabled satisfying key interests (goods) but also proved quite flexible in addressing the changing contexts, which included new grand bargains, such as the one in the SEA in 1986. From a broader perspective, the research shows that differentiation is much less contingent than suggested by the club goods theory. It depends on particular interaction between socio-historical contexts and actors, which, potentially, includes the role of leadership and framing. In other words, it is not necessarily the number of members but also the “quality” of integration that matters. From the perspective of the current European integration crisis, the research demonstrates that the possible array of future scenarios is much more diverse and unpredictable than depicted by abstract models, and that any hyper-rationalisation of future scenarios could be biased and political. Marko Lovec 282 In search of the Holy Grail: France and European Monetary Unification, 1984–1989 Frédéric Bozo* On 30 November 1989, Hans-Dietrich Genscher, the foreign minister of the Federal Republic of Germany (FRG), came to Paris to meet with President François Mitterrand at the Elysée palace. Over the previous years, Genscher and Mitterrand had established a friendly personal relationship, based on their shared commitment to the unification of Europe. Yet the November 30 conversation was emotional, even tense. Less than two weeks later, the twelve heads of states and governments of the European Community were to meet at Strasbourg for a European Council meeting under the French semestrial presidency of the EC. Since the Fall, Mitterrand had clearly indicated that his priority at Strasbourg was for the Twelve to agree to the summoning of an intergovernmental conference (IGC) whose task would be to negotiate a treaty on Economic and Monetary Union (EMU). The previous month, Helmut Kohl, the West German Chancellor, had bowed to Mitterrand’s pressure, but now he seemed to renege: any decision to summon an IGC should be postponed until December 1990, Kohl had told Mitterrand late November. Notwithstanding Kohl’s justifications based on the need to better prepare the ground for an IGC, the French suspected that Kohl’s reversal was in fact the result of the fall of the Berlin Wall less than three weeks before, which had suddenly reopened the German question. Was the prospect of German reunification now trumping that of European unification? Be that as it may, Mitterrand used Genscher’s visit to put maximum pressure on Bonn. Telling his visitor that the strengthening of the European Community was a must in order for the reunification of Germany not to lead to the destabilization of the whole continent, he warned that it was “vital” that a decision be made at Strasbourg on the IGC.1 * The author wishes to thank Olivier Feiertag, Bastian Knautz and Emmanuel Mourlon-Druol for their comments on an earlier draft. 1 Genscher-Mitterrand meeting in Paris, November 30, 1989, in: Andreas Hilger (ed.), Diplomatie für die deutsche Einheit. Dokumente des Auswärtigen Amts zu den 283 At Strasbourg on December 8–9, Mitterrand carried the day. The French president obtained the Twelve’s formal consent to the summoning of an IGC, whose work would start before the end of the Italian EC presidency in the second semester of 1990. In a separate declaration on Central and Eastern Europe, the heads of states and governments, who once again affirmed their objective of a European Union, also endorsed the end goal of German unification based on self-determination and in the perspective of European integration. Much has been written on the developments of the last weeks of 1989, not least because of the conflation at Strasbourg of the two major issues of the time, i.e. European integration and German unification. Was there a quid pro quo between the two, and was the acceptance of a future single European currency the price to be paid by the Germans for their unification – in essence exchanging the deutschemark for German national unity?2 This contribution will not once again discuss this issue and, in particular, Mitterrand’s much debated role vis-à-vis German unification. Rather, it will focus on France’s approach to European monetary unification in the months and years leading up to the events of the end of 1989. Why had EMU become an absolute priority for the French president by the time of the Strasbourg meeting, and with what consequences? Today’s European Union – with both its indisputable successes and the major challenges it faces – is to a large extent the outcome of the decisions made then. As a result, understanding the willingness of French leaders – not least Mitterrand – to prioritize monetary unification and the process that allowed them to prevail at Strasbourg and make EMU the central pillar of the future European Union is key. As will be seen, in these decisive months and years the French acceptance of the German blueprint for economic and monetary unification was, in many ways, the price to be paid for making monetary union possible. While the French had long advocated EMU as the best way to obtain a European Germany rather than a German Europe, was this the case in the end?3 deutsch-sowjetischen Beziehungen 1989/90, Munich: Oldenburg, 2011, Document 11, 56 ff. 2 See e.g. Frédéric Bozo, Mitterrand, the End of the Cold War and German Unification, Oxford / New York: Berghahn Books, 2009, 111 ff; Wilfried Loth, “Helmut Kohl und die Währungsunion”, in: Vierteljahrshefte für Zeitgeschichte, 4, vol. 61, 455–480. 3 Although comprehensive archive-based studies of this issue are still lacking, an authoritative account of European monetary choices in that period and, in particular, those of France, can be found in Kenneth Dyson / Kevin Featherstone, The Road to Frédéric Bozo 284 The contribution will follow France’s road to EMU in the second half of the 1980s in three steps. Part one looks at the years 1984–1986, when France successfully managed to put the strengthening of European monetary cooperation and the long term objective of monetary unification back on the European agenda, in particular in the Single European Act. Part two focuses on the years 1986–1988, when this objective unexpectedly got traction. The issuance by Genscher in February 1988 of a memorandum on EMU marked a turning point in that it signaled the FRG’s possible acceptance of a single currency. The French seized this opportunity to promote their monetary agenda, leading to the Hanover European Council in June 1988, where the creation of a committee, chaired by the president of the European Commission, Jacques Delors, was decided upon in order to chart the way forward. Finally, the third part of the contribution zooms in on the developments of 1989, which in the wake of the issuance of the Delors report in April and the Madrid European Council meeting in June culminated in the dramatic events of the fall and the Strasbourg European Council meeting. Reviving the European monetary agenda, 1984–1986 By the mid-1980s, France was not alone in wanting to promote European monetary unification. This objective was shared by other key actors, not least the European Commission and other member states such as Italy. Yet, since the French input turned out to be decisive in reviving the European monetary agenda, it is important to understand how and why this objective became central in France’s European policies in that period. The emergence of monetary unification as a major French objective in the mid-1980s was first and foremost the result of the European relance which Mitterrand helped to engineer in the wake of the June 1984 Fontainebleau European Council, leading in less than two years to the signing of the European Single Act (SEA). To be sure, cooperation among Maastricht: Negotiating Economic and Monetary Union, Oxford: Oxford University Press, 1999, 62–255. For a well-informed journalistic account, see also David Marsh, The Euro: the Battle for the New Global Currency, New Haven / London: Yale University Press, 2011. The political science literature focusing on the sequence of events spanning from the SEA to EMU is vast; see e.g. Nicolas Jabko, Playing the Market: A Political Strategy for Uniting Europe, 1985–2005, Ithaca: Cornell University Press, 2006; and Andrew Moravcsik, The Choice for Europe: Social Purpose and State Power from Messina to Maastricht, London: UCL Press, 1999. In search of the Holy Grail: France and European Monetary Unification, 1984–1989 285 European countries in this field had been a French concern since the late 1960s and – from the launch of the soon-to-be moribund European monetary “snake” in 1972 to the successful creation of the European monetary system (EMS) in 1979 – it had become a growing priority in the 1970s.4 In the wake of the setting up of the system, the French, together with the EC Commission, had pushed for its strengthening within two years of its existence, as called for by the December 1978 Brussels EMS agreement, including by enhancing the role of the ECU (the European currency unit) and creating a European Monetary Fund (EMF) involving the pooling of reserves.5 Yet this effort had remained fruitless as a result of persisting economic and monetary divergences among member states, not least between the FRG, the guardian of monetary orthodoxy, and France, which in the wake of Mitterrand’s May 1981 election had set out to implement resolutely expansionary policies. Things did not change much even after France’s adoption of rigorous economic and financial policies in June 1982 and Mitterrand’s landmark March 1983 decision to keep the franc in the EMS. Faced with continuing German resistance (not least from the Bundesbank), Paris decided against making the strengthening of the EMS a central priority under the French presidency of the EC during the first semester of 1984.6 Discussions on these matters among member states took place in the wake of the fifth anniversary of the EMS in March 1984, with 4 The definitive, archive-based, account of the creation of the EMS and France’s input in it is to be found in Emmanuel Mourlon-Druol, A Europe Made of Money: The Emergence of the European Monetary System, Ithaca: Cornell University Press, 2012. See also Emmanuel Mourlon-Druol, “A New Monetary System in a Changing Polity: Central Banks, the EEC and the Creation of the European Monetary System”, in: Olivier Feiertag / Michel Margairaz (eds.), Les Banques centrales et l’État-nation, Paris: Presses de Science Po, 2016; Laurent Warlouzet, Governing Europe in a Globalizing World: Neoliberalism and its Alternatives following the 1973 Oil Crisis, London/ New York: Routledge, 2018, 136–55. See, as well, Dyson / Featherstone, The Road to Maastricht: Negotiating Economic and Monetary Union; Marsh, The Euro: the Battle for the New Global Currency. 5 See Resolution of the Brussels European Council on the establishment of the EMS, Brussels, December 5, 1978, 6 Archives Nationales, Pierrefitte-sur-Seine (henceforth: AN), sous-série Archives de la Présidence de la République sous François Mitterrand, AG/5(4)/EG/87/dossier 1, ministère de l’économie, des finances et du budget (henceforth: MEFB), direction du Trésor, note pour le directeur, objet : le SME, pierre d’angle de la construction européenne, June 10, 1983; le directeur du Trésor, note pour le ministre [no date but probably spring 1983], objet : proposition pour un renforcement du SME; and note pour le ministre, objet : perspectives d’évolution du SME pendant la présidence française, December 22, 1983. Frédéric Bozo 286 the Commission in the lead in pushing for a strengthening of the system, including measures to increase the use of ECU. Yet by the end of 1984, no agreement had been reached on even a minimal package of measures.7 The year 1985 was a watershed. The freshly appointed president of the European Commission, Jacques Delors (who had previously been France’s economics minister), wanted to make monetary unification one of his top priorities alongside the achievement of the single market. The Italians, who held the presidency of the Community in the first semester of 1985, shared this objective.8 The approaching European Council in Milan on June 28–29, 1985, which Mitterrand hoped would mark a decisive step in the European relance, prompted the Élysée to put monetary issues once again on top of France’s European priorities. Elisabeth Guigou, Mitterrand’s adviser for European affairs, wrote that it would be “desirable” for Milan to give a fresh impetus to the strengthening of the EMS in order to overcome the “German deadlock”.9 Accordingly, the memorandum submitted by the French government in preparation for the European Council stated that “the strengthening of the EMS,” including an increased role for the ECU, “is indispensible in view of the realization of the single market” as set forth in the Commission’s White Paper to be discussed at Milan.10 7 AN, AG/5(4)/EG/87/dossier 1, MEFB, direction du Trésor, note pour le ministre, objet : compte-rendu des débats sur le bilan du système monétaire européen au Comité monétaire du 27 février, March 6, 1984; note, objet : approfondissement du système monétaire européen; préparation du sommet franco-allemand, October 4, 1984; note pour le ministre, objet : approfondissement du système monétaire européen/ Discussions sur les rapports du Comité monétaire et du Comité des gouverneurs des banques centrales, September 11, 1984; note, objet : Conseil européen de Bruxelles. Etat d’avancement des négociations sur le renforcement du SME, March 21, 1985; Elisabeth Guigou note for Mitterrand, objet : sommet de Dublin. Système monétaire européen, November 29, 1984. 8 See Delors’ account in Jacques Delors, Mémoires, Paris: Plon, 2004, 171 ff. For an analysis of the underpinnings of the European relance of the mid-1980s, see Warlouzet, Governing Europe in a Globalizing World: Neoliberalism and its Alternatives following the 1973 Oil Crisis, 180 ff. 9 AN, AG/5(4)/EG/86, Guigou note for Mitterrand, objet : Milan. Système monétaire européen, June 18, 1985. 10 AN, AG/5(4)/EG/41, Mémorandum pour un progrès de la construction européenne [no date]. The White Paper stated that the strengthening of the EMS “will constitute an essential factor” in the functioning of the single market. Cf. Livre blanc sur l’achèvement du marché intérieur, June 1985, The Commission was on the same wavelength, believing that the single market would not be sustainable absent increased monetary integration. This had been, in particular, a central concern for Tommaso Padoa-Schioppa, the high-flying Italian economist In search of the Holy Grail: France and European Monetary Unification, 1984–1989 287 The omens for Milan looked good: on the eve of the meeting, the Élysée noted that Kohl had declared publicly in favor of a “common currency,” which Guigou interpreted as “a gesture of good will towards us.”11 Yet the result of the European Council came as a relative disappointment. The Twelve had endorsed the White Paper and the goal of achieving the single market by 1992, but strengthening the EMS did not emerge as a particularly strong priority in the conclusions of the presidency, especially when compared with free movement of capital – which the French believed should only be discussed after progress was made on the EMS. True, the decision was made, based on article 236 of the Rome Treaty, to convene an intergovernmental conference (IGC) in order to “improve the operation” of the EC and achieve “concrete progress” towards a European Union. Yet it remained to be seen what this entailed when it came to monetary cooperation, let alone unification.12 The can was in effect kicked down to the IGC, which was meant to start in September under Luxembourg presidency.13 In light of the difficult debates that had taken place at Milan, the French expected the IGC to be a complicated affair, and they had only modest ambitions in the monetary realm. Although the EMS had been created and developed informally based on decisions taken by the council of ministers and central bank governors, they wanted it to be at least mentioned in the revised EEC treaty as a “visible and active symbol” that it was a major part of the “acquis.”14 The EMS, in effect, emerged late in the negotiation and it turned out to be one who had been director-general of the Commission’s DG II from 1979 to 1983 (and who, in addition, had spotted early onthe increasing freedom of capital movement as a major factor that made necessary an enhanced EMS and, down the road, an EMU): see Ivo Maes, Tommaso Padoa-Schioppa and the origins of the euro, National Bank of Belgium, Working Paper Document n. 222, March 2012, 16–17. 11 AN, AG/5(4)/EG/42, AFP dispatch, June 27, 1985, with Guigou handwritten note for Mitterrand. 12 See Milan European Council, Conclusions of the Presidency, June 28–29, http://c, and AN, AG/5(4)/EG/86, Guigou note for Mitterrand, Milan. Système monétaire européen, June 18, 1985. 13 On France and the negotiation of the SEA, see Georges Saunier, “La France et l’Acte unique européen”, in: Georges Saunier (ed.), Mitterrand. Les années d’alternance, 1984–1986 et 1986–1988, Paris: Nouveau Monde éditions, 2019, 307–53. 14 AN, AG/5(4)/6538, letter from Catherine Lalumière (secretary of state for European affairs), to Mitterrand, August 21, 1985; see also Guigou and Jean Musitelli note for Mitterrand, objet : votre rencontre avec le chancelier Kohl (Brégançon, le 24 août), August 23, 1985. However, before the IGC, the French Treasury believed that including the EMS in a revised Rome treaty was legally not necessary Frédéric Bozo 288 of the toughest issues. The French, who were not willing to confront the Germans head-on on monetary issues, were content to rely on the Commission to bring it up. When in late October Delors submitted a proposal to the effect that the revised EEC treaty should include articles relating to the EMS, the Elysée was supportive; Guigou judged that the proposal was carefully drafted so as not to antagonize the Germans, and so she recommended that Mitterrand discuss it with Kohl.15 Yet Paris and Brussels underestimated the German resistance, not only, predictably, on the part of the Bundesbank, but also from prominent members of the cabinet, including finance minister Gerhard Stoltenberg.16 A crisis soon emerged. At an Ecofin Council meeting in mid-November, the UK and the German ministers teamed up against the Commission’s proposal, asking the issue to be removed from the IGC agenda altogether, which provoked a strong rebuttal from the French minister and an angry reaction from Delors himself.17 The same day, Delors met with Kohl in order to weigh in personally with the Chancellor. The French would not accept the single market package without progress on EMS, Delors warned Kohl, adding that, in his own view, the emergence of a single market, strengthened monetary cooperation, and increasing the cohesion funds, formed a triangle. Delors extracted a formal concession from Kohl: Bonn would not insist on removing monetary issues from the IGC, the Chancellor promised.18 The Luxembourg presidency also weighed in: the objective of an economic and monetary union must appear in the outcome of the IGC, Prime Minister Jacques Santer wrote to Mitterrand.19 and would deprive the EMS institutional setup of its flexibility, which in turn could well lead to blocking any future evolution in view of the German reticence to move forward. In this regard, see AN, AG5(4))/EG/44, MEFB, direction du Trésor, note, objet : intégration du SME dans le Traité CEE, August 17, 1985. 15 AN, AG/5(4)/EG/45, Guigou note for Mitterrand, objet : votre entretien avec M. Delors, mercredi 6 novembre à 18h, November 5, 1985. See also AN/AG/ 5(4)/EG/44, Guigou and Hubert Védrine note for Mitterrand, objet : 46ème consultations franco-allemandes au sommet. Bonn, 7–8 novembre 1985, November 6, 1985. 16 See Hans-Peter Schwarz, Helmut Kohl. Eine politische Biographie, Munich: DVA, 2012, 416–8. 17 AN, AG/5(4)/EG/44, Guigou note for Mitterrand, objet : Conférence intergouvernementale. Système monétaire européen, November 19, 1985. 18 Gespräch Delors mit Kohl, in:Akten zur Auswärtigen Politik der Bundesrepublik Deutschland (AAPD), 1985, vol. II, Doc. 311, 1617–25; Schwarz, Helmut Kohl. Eine politische Biographie, 416. See also AN/AG/5(4)/EG/44, Guigou note for Mitterrand, November 19, 1985. 19 AN, AG/5(4)/EG/41, letter Santer to Mitterrand, November 26, 1985. In search of the Holy Grail: France and European Monetary Unification, 1984–1989 289 Still, days before the Luxembourg European Council on 2–3 December complete uncertainty reined over the outcome of the IGC, not least in the monetary realm, which now was clearly Mitterrand’s priority. True, in addition to Luxembourg and the Commission, there was strong support on the part of the Italians and the Belgians. Yet the Germans continued to oppose the Delors language, in particular on the role of the Commission in the management of the EMS and the transformation of the European Monetary Cooperation Fund (EMCF) into a fully-fledged EMF. They also wanted any treaty language to specify that future changes to the EMS would be decided based on article 236 of the Rome treaty – meaning with unanimity and parliamentary ratification –, which the French saw as allowing the Germans to block future progress.20 As to the British, they rejected any mention of the EMS altogether. The French in the run up to Luxembourg felt they were facing a German-British front of refusal in the monetary dossier, which was now central in the overall negotiation. At that point, the Dutch tabled a compromise formula, which the Germans seemed ready to accept. Only the British now stood in the way, prompting the French – as they had done before Fontainebleau the previous year – to contemplate the possible signing of a treaty at eleven. Yet agreement was finally reached by the heads of states and governments on December 2 at Luxembourg after the Germans, egged on by the French, had given a green light to the formula – to the dismay of Margaret Thatcher, who felt let down by Kohl but did not use her veto provided it did not oblige the UK to join the Exchange Rate Mechanism (ERM).21 20 The French believed that the Germans were ready to do whatever it took to block any substantive progress on EMS: when in late November there was a sudden outburst of speculation on the currency markets that pushed the deutschemark upward, the French economics minister suspected that the Bundesbank was behind the speculation and that it was using it to signal to the French that they needed the German monetary support in the hope of dissuading them from insisting on including the EMS in the treaty. See AN, AG/5(4)/6162, Guigou note for Mitterrand, objet : Marché des changes du 29 novembre, November 29, 1985. 21 AN, AG/5(4)/EG/43, Jacques Attali note for Mitterrand, objet : Conseil européen de Luxembourg, 2–3 décembre 1985; note de synthèse, November 29, 1985; Guigou, Fiche n. 4 [no date but late November 1985], volet monétaire; Guigou note for Mitterrand, objet : conférence intergouvernementale. Compte-rendu des travaux des 30 novembre et 1er décembre; Guigou note for Mitterrand [no date but early December 1985], objet : volet monétaire du Traité.AN, AG/5(4)/EG/45, Guigou note for Mitterrand, objet : conférence intergouvernementale. Etat des travaux après la réunion des 25 et 26 novembre, Novembre 27, 1985; Guigou note for Mitterrand, objet : votre entretien avec M. Delors, vendredi 10h30, November Frédéric Bozo 290 The French could live with the outcome of the IGC, which in February 1986 would be formalized in the signing of the SEA by the Twelve. Rather than an umpteenth political declaration on European monetary cooperation, the SEA included language that for the first time confirmed the “acquis” of the EMS in legally binding treaty terms while mentioning a European “monetary capacity,” including developing the ECU, and recalled the long-term goal of creating a European monetary union. To be sure, this was a compromise; Paris, in particular, had to accept mention of article 236 as the framework for future developments. But the French retained that, for the first time, the rules of the EMS had been clearly accepted by all member states, and they noted the Germans’ “very positive attitude” as well as the UK’s ability, in the end, to overcome its initial reticence.22 Altogether, this outcome allowed an initially skeptical Mitterrand to describe the SEA as “a compromise for progress”.23 As seen from Paris, the balance sheet of the IGC was satisfactory in the monetary dossier. The French had established a linkage between moving forward on the single market and reinforcing the monetary dimension. The result was at least a relative success on which they could hope to build a momentum towards more progress in that vital dimension in the future. So from Milan to Luxembourg, what had been their motivations in making the strengthening of the EMS and reviving the longer term goal of EMU their priorities? Self-evidently, these motivations were first and foremost of a monetary nature. In a nutshell, prioritizing monetary issues in the discussions leading up to the Luxembourg European Council was in line with the “turn” of 1982–1983 and France’s adoption of monetary “orthodoxy.” Much has been written on this. It has been shown in particular that the March 1983 decision to keep the franc in the ERM – and the amplification of the June 1982 adjustment program that came with that decision – was not the reflection of the French socialists’ supposed embrace of “neo-liberalism”. Rather, it derived from the nation’s perceived economic and monetary interest faced with an increasingly pressing balance of payments problem and with the unpalatable prospect of having to turn to the International 28, 1985. See also Delors, Mémoires, 223–5; Margaret Thatcher, The Downing Street Years, New York: HarperCollins, 1993, 554–5; and Saunier, Mitterrand. Les années d’alternance, 1984–1986 et 1986–1988. 22 AN, AG/5(4)/EG/43, argumentaire du texte monétaire, no date [but early December 1985], no author [but likely Guigou]. 23 Quoted in Pierre Favier / Michel Martin-Roland, La Décennie Mitterrand, vol. 2, “Les Épreuves”, Paris: Le Seuil, 1991, 218. In search of the Holy Grail: France and European Monetary Unification, 1984–1989 291 Monetary Fund (IMF) for rescue, as the UK and Italy had done in the 1970s.24 Regardless of the persistent fragility of the country’s external finances over the following months, the 1983 decision soon became the cornerstone of the country’s economic policies.25 By 1985, the Élysée boasted that there had been no new realignment of exchange rates since 1983. Because it encouraged participating countries to converge on economic and monetary policies, the EMS was now unequivocally seen in Paris as vital for financial and monetary stability.26 Unsurprisingly, the corollary of France’s newfound commitment to the EMS was its growing determination to strengthen the system, both internally and externally. Internally, the French wanted to redress the congenital “asymmetry” of the EMS, whereby countries with weaker currencies were de facto obliged to align themselves with the policies of countries with stronger currencies. Hence, their key demand of a stronger role for the ECU, including as a possible reserve currency, which they believed would diminish the “supremacy” of the deutschemark and allow France to regain a measure of economic autonomy. In short, Paris longed for a more “solidary” monetary system in which the burden of adjustment would be more equally shared.27 Externally, the French – in line with their approach since the 1970s – saw a strengthening of the EMS as both an indispensible step in order for European countries to better cope with a world of floating currencies – not least an imperious and capricious dollar – and as the cornerstone of the necessary reorganization of the international monetary system (IMS). The EMS, they believed, could serve as a model for stable exchange rates and the ECU become a “pillar” of monetary stability along- 24 On this, see e.g. Laurent Warlouzet, “Le spectre de la crise financière de 1983. Influences et solidarités européennes”, in:Vingtième siècle. Revue d’histoire, 2018/2, n. 138, 93–107; and Georges Saunier, “Le gouvernement français et les enjeux économiques européens à l’heure de la rigueur 1981–1984,” in: Eric Bussière / Michel Dumoulin / Sylvain Schirmann (eds.), Milieux économiques et intégration européenne au XXè siècle. La relance des années 80 (1979–1992), Paris: CHEFF, 2007, 109–146. 25 AN, AG/5(4)/EG/89 dossier 2, le premier sous-gouverneur de la Banque de France et le directeur du Trésor, 297ème session du comité monétaire, 16 décembre 1983 [no date but late 1983]. 26 AN, AG/5(4)/EG/41, argumentaire en faveur du renforcement du SME [no author], June 12, 1985. 27 AN, AG/5(4)/EG/86, Guigou note for Mitterrand, objet : Milan. Système monétaire européen, June 18, 1985. Frédéric Bozo 292 side the dollar and the yen.28 The bottom line was clear from a monetary point of view: strengthening the EMS was in “our national interest,” wrote Guigou in the run up to the Luxembourg European Council.29 French motivations were also of a broader, more political character, reflecting the country’s longstanding approach to European construction. Alongside the politico-strategic dimension, which they also wanted to promote, the French saw the monetary dimension as central to the European project as a whole. In their view, monetary unification was to become one of the two “pillars” of a future European Union as called for by the 1972 Paris summit statement and the 1983 Stuttgart declaration. By the mid-1980s, those in charge in Paris were beginning to see progress in monetary matters as the most decisive yardstick of France’s influence over the course of European integration and as the touchstone of the success of the post-Fontainebleau relance on which Mitterrand now premised his European policies; hence their satisfaction with the result of the IGC in the monetary dimension, which they believed “gives a new impulse to the political construction of Europe.”30 More specifically, they saw monetary unification – just like politico-strategic cooperation – as part and parcel of the French approach to “Europe-puissance,” i.e. a Europe able to assert its values and interests and to weigh in on international equilibriums: “a more intensive monetary cooperation” was seen in Paris as a vehicle “for the assertion of Europe’s identity vis-à-vis the outside world”.31 Relations with Germany were another major political – or geopolitical – factor behind France’s renewed interest in monetary cooperation from the mid-1980s onward. Ever since the 1970s, monetary cooperation was seen as a central instrument to assuage France’s growing German “problem,” i.e. the FRG’s mounting economic might in Europe as well as its renewed po- 28 AN, AG/5(4)/EG/87/dossier 1, MEFB, direction du Trésor, note pour le directeur, objet : le SME, pierre d’angle de la construction européenne, June 10, 1983; and AN, AG/5(4)/EG/44, Guigou and Védrine note for Mitterrand, objet : 46ème consultations franco-allemandes au sommet. Bonn, 7–8 novembre 1985, November 6, 1985. On the French approach to the reform of the IMS and its connection with European monetary unification, see Olivier Feiertag, “La France, le dollar et l’Europe (1981–1989). Aux origines globales de l’euro”, in: Histoire@Politique. Politique, culture, société, n. 19, January-April 2013, 128–42. 29 AN, AG/5(4)/EG/45, Guigou note for Mitterrand, objet : votre entretien avec M. Delors, mercredi 6 novembre à 18h, November 5, 1985. 30 AN, AG/5(4)/EG/45, Guigou note for Attali, objet : principaux résultats du sommet de Luxembourg, décembre 17, 1985. 31 AN, AG/5(4)/EG/41, Guigou and Védrine, Canevas de mémorandum pour le Conseil européen de Milan [no date, but probably late May 1985]. In search of the Holy Grail: France and European Monetary Unification, 1984–1989 293 litical assertiveness. Mitterrand’s predecessor, Valéry Giscard d’Estaing, had hoped that the EMS would allow France – at the price of aligning its economic and monetary policies with those of its neighbor – to preserve an overall balance of power with the FRG while strengthening the latter’s European orientation and, ultimately, its anchorage to the West. Meanwhile Helmut Schmidt, Kohl’s predecessor, was acutely aware of the importance of European monetary cooperation in order to provide a “European mantle” for Germany’s growing clout. The EMS, in other words, was central to the perennial and complex nexus of cooperation, competition, and Europeanization that characterized Franco-German relations since the 1950s.32 These geopolitical considerations were still quite present in the 1980s, against the backdrop of the looming Euromissile crisis and amid fears of a weakening of the FRG’s Westbindung. Hence, in 1983, France’s possible exit from the ERM was seen at the Élysée as a dangerous option because it would likely lead to a Franco-German rupture and “encourage the FRG to turn its back on Europe and strengthen its ties to the East.”33 True, by spring 1985, such motivations were less pressing as a result of the diminishing East-West crisis in the wake of Mikhail Gorbachev’s assent to power; but they were no doubt still present under the surface in the French push for monetary unification after Milan. Finally, there were economic reasons behind France’s prioritization of European monetary unification, though in hindsight they appear somewhat puzzling. Oddly, strengthening the EMS and resurrecting the objec- 32 On all this see Mourlon-Druol, A Europe Made of Money: The Emergence of the European Monetary System; and Guido Thiemeyer, “The Economic and Monetary Dimension of the German Question: A French Perspective, 1969–1979,” in: Frédéric Bozo / Christian Wenkel (eds.), France and the German Question 1945– 1990, New York / Berghahn Books, 2019, 169–84. See also the recollections of Helmut Schmidt, Die Deutschen und ihre Nachbarn.Menschen und MächteII, Berlin: Siedler, 1990, 219 ff. 33 AN, AG/5(4)/EG/86/dossier 2, note, “Scénarios monétaires” [no date but late June 1983; no author but probably François-Xavier Stasse, Mitterrand’s economic adviser]. Mitterrand’s landmark speech in the Bundestag on January 20, 1983, in which he had declared his support for the possible deployment of U.S. Pershing II missiles in the FRG, had been motivated by the same willingness to prevent a West German Alleingang in the Euromissile crisis. The sequence of events leading from the Bundestag speech to the March 1983 decision to keep the franc in the ERM can thus be seen as illustrating the linkage between strategic and economic issues in Franco-German relations, including a possible quid pro quo between Mitterrand’s strategic support and Kohl’s monetary support in the March 1983 monetary crisis. On this, see e.g. David Marsh, The Euro: the Battle for the New Global Currency, 108. Frédéric Bozo 294 tive of an EMU was seen by French decision makers (and by Delors) as the best way to thwart the emergence of a market-based, “neo liberal” Europe. The single market project was of course a challenge for France, a country which was known never to have wholeheartedly favored the market as the privileged vehicle for European integration. Unsurprisingly, the French socialist government judged the approach of the Commission’s White Paper to be overly “liberal” and too exclusively centered on eliminating obstacles to internal exchanges.34 True, Paris was far from rejecting the single market project altogether, as illustrated by their acceptance of the extension of qualified majority voting (QMV) under article 100 of the Rome Treaty, in retrospect the most decisive treaty change contained in the SEA. Paris had long been in favor of eliminating non-tariff barriers within the EEC, so the single market project was seen by the French as a welcome objective provided – as the Commission itself emphasized – that it was not an “end in itself”. Rather, in the French view, the single market should contribute to strengthening the internal fabric of the Community. Hence, it should be flanked by common policies in new areas such as technology and include a harmonization of social and fiscal conditions in order to create a level-playing field as well as bolster its external “identity” (meaning it should be protected from unfair international competition).35 Yet by the time of the Luxembourg end game in December 1985, it was becoming clear that Paris, in spite of having accepted the 1992 objective, had obtained little on these scores, in particular with regard to tax harmonization (which remained decided by unanimity) or a “social Europe” (on which France’s proposals were rejected). “Our approach”, wrote Guigou, “continues to be challenged by the free-market approach of our UK and German partners”.36 The French were left with asking that flanking measures they believed were vital preconditions for the market project such as tax harmonization – not least on value added tax (VAT) – be the object of a mere political 34 AN, AG/5(4)/EG/41, Ministère du redéploiement industriel et du commerce extérieur, le Ministre, Edith Cresson note for Mitterrand, objet : Livre Blanc de la Commission sur l’achèvement du marché intérieur, June 20, 1985; and SGCI, note, marché intérieur, June 20, 1985. 35 AN, AG/5(4)/EG/45, Guigou note for Mitterrand, objet : marché intérieur, October 24, 1985, with attachment, “Le marché intérieur;” and Mitterrand handwritten note for Guigou, October 23, 1985. 36 AN, AG/5(4)/EG/43, Guigou, Fiche No 4 [no date but late November 1985]; Attali note for Mitterrand, objet : Conseil européen de Luxembourg, 2–3 décembre 1985. Note de synthèse, November 29, 1985. In search of the Holy Grail: France and European Monetary Unification, 1984–1989 295 commitment from member states.37 But most of all Paris now wagered on EMS/EMU as their best hope to offset the “liberal” orientation that prevailed in the Luxembourg negotiation. “Progress on EMS is the necessary quid pro quo for market liberalization”, Guigou told Mitterrand in early November 1985, adding: “In 1958, France accepted the opening of borders in exchange for the common agricultural policy. If today we accepted the liberalization of the internal market without obtaining a German and UK commitment in favor of the EMS, this would amount to an evolution toward the kind of Europe the Germans and the British desire”.38 The EMS issue “illustrates the opposition between our concept of Europe and an Anglo-Saxon concept in which Europe becomes a large free-trade area,” Guigou added when the deadlock emerged at Ecofin in mid-November. She pointed to a dilemma: the French could either “yield to the Anglo-German vision,” which would have serious consequences for the future of the Community and condone an “Anglo-German axis;” or they could dig in their heels and test Germany’s resistance but at the risk of “exposing the Franco-German conflict” and provoke the failure of the IGC.39 In short, EMS/EMU had become a possible deal breaker in the SEA negotiation: “You cannot be sure to be able to count on German support,” Guigou warned Mitterrand before Luxembourg, adding that all would depend on his exchanges with Kohl at the summit.40Yet Mitterrand ultimately carried the day: during their by now traditional breakfast meeting on the margins of the European Council, Kohl essentially conceded to Mitterrand on EMS/EMU, with the article 236 safeguard, no doubt in order to save his “dream” of a “political Europe”.41 So what was the bottom line after Luxembourg? Monetary issues were now clearly at the top of France’s European agenda, and they had become a gauge of success for its Europe policies in general—though it remained 37 AN, AG/5(4)/EG/43, Guigou note for Mitterrand, objet : conférence intergouvernementale. Compte-rendu des travaux des 30 novembre et 1er décembre. 38 AN, AG/5(4)/EG/45, Guigou note for Mitterrand, objet : votre entretien avec M. Delors, mercredi 6 novembre à 18h, November 5, 1985. 39 AN, AG/5(4)/EG/44, Guigou note for Mitterrand, objet : Conférence intergouvernementale. Système monétaire européen, November 19, 1985. 40 AN, AG/5(4)/EG/45, Guigou note for Mitterrand, objet : votre entretien avec M. Delors, vendredi 10h30, November 28, 1985. 41 Helmut Kohl, Erinnerungen 1982–1990, Munich: Droemer, 2005, 387–8; and Schwarz, Helmut Kohl. Eine politische Biographie, 417. Frédéric Bozo 296 to be seen whether Paris could obtain further progress any time soon given the article 236 provision. Although monetary issues had been prioritized on their own merits in the wake of the March 1983 decision, such prioritization increasingly appeared to be a politically-driven process, as illustrated by the dominant role in these issues of the Élysée and the foreign ministry (and the more guarded input of the ministry of the economy). It addition, like Fontainebleau eighteen months before, Luxembourg confirmed the centrality of relations with Germany in France’s European policies. Conversely, the success of these policies depended on the ability of the French to detach the Germans from the British; with monetary issues now on top of the agenda, preventing London from vetoing further progress was becoming key. At the same time, given the continuing resistance in Bonn, and, even more so, in Frankfurt, the prioritization of monetary issues inevitably put the French in a position of demandeurs vis-à-vis the Germans if they wanted further progress. Mitterrand, though, could hope, as shown at Luxembourg, to convince Kohl thanks to their increasingly trusting rapport. All the above would remain key features of France’s European policies in the years to come, culminating at the end of decade and ultimately at Maastricht. At the same time, in the wake of Milan/Luxembourg, the rationale behind France’s prioritization of monetary issues already appeared somewhat perplexing against the backdrop of the 1992 project and in a context of increasing globalization.42 Faced with the resistance of its partners to robust flanking measures designed to offset the “neo-liberal” inspiration of the single market through enhanced common policies, fiscal and social harmonization as well as increased cohesion, the French had come to wager on EMS/EMU as the best vehicle for creating the kind of Europe they cherished, i.e. one in which the market would not be the alpha and the omega. Yet wasn’t this a risky calculation, and wouldn’t the possible emergence of a common currency in and of itself lead to the opposite result, i.e. an increasingly market-based Europe? Hence, by the mid-1980s, the complete freedom of capital movement – which had nominally been an objective since the Rome treaty and was once again seen as an urgent priority in many quarters, including Bonn, London and Brussels – was clearly emerging as a condition sine qua non for further progress in monetary integration, as the Germans loudly insisted and the French had reluctantly recog- 42 For a discussion of the emergence of a “neo-liberal” economic model, see Warlouzet, Governing Europe in a Globalizing World: Neoliberalism and its Alternatives following the 1973 Oil Crisis. In search of the Holy Grail: France and European Monetary Unification, 1984–1989 297 nized in the run up to Luxembourg.43 This issue, as seen below, would become central over the next two years. Wasn’t the prioritization of monetary integration putting France and Europe on a slipway to liberalization?44 Accelerating the pace, 1986–1988 The years 1986–1988 dramatically confirmed France’s prioritization of monetary cooperation in the relaunch of the European project. In spite of initial skepticism after Luxembourg that the objective of strengthening the EMS and moving towards an EMU could rapidly gain traction faced with continued German reticence, a major breakthrough occurred in February 1988 with the Genscher memorandum and, in its wake, the setting up of the Delors committee at the June 1988 Hanover European Council. To understand this sequence of events, one must keep in mind the context of these two years, which was characterized by the beginning of the implementation of the single market project, by the growing issue of capital movement liberalization, and by the monetary and financial disorders that culminated in the October 1987 global stock market crisis (the “Black Monday”). Meanwhile Franco-German relations had entered a new, dynamic phase, culminating in the signing in January 1988 of a protocol to the 1963 Élysée treaty that included an economic and financial component. As will be seen, the “cohabitation” between Mitterrand and a centerright government led by Jacques Chirac -the result of the March 1986 legis- 43 Since 1968, France had retained a robust system of foreign exchange control, which it only began to dismantle progressively starting in 1985. This was carried out both under the growing pressure of the European commission and of its key European partners (the FRG to begin with) and as a way to showcase France’s new gained financial and monetary credibility, not least in the hope of obtaining concessions on the strengthening of the EMS in return. See e.g. AN, AG/5(4)/ 6162, MEFB, Direction du Trésor, Daniel Lebègue note for economics minister Pierre Bérégovoy, objet : contrôle des changes : renouvellement de l’autorisation de la CEE, October 16, 1984; and Guigou note for Attali and Bianco, objet : petit déjeuner du 26 février, February 26, 1985. 44 AN, AG/5(4)/EG/43, Guigou note for Mitterrand, objet : conférence intergouvernementale. Compte-rendu des travaux des 30 novembre et 1er décembre. See also AN, 5AG(4)/EG/46 Guigou note for Mitterrand, objet : votre entretien avec le premier ministre, mardi 20 mai : libéralisation du contrôle des changes et système monétaire européen, May 16, 1986; and Conclusions of the Luxembourg European Council (2 and 3 December 1985), Frédéric Bozo 298 lative elections – was both a complicating factor and a catalyst of this new Franco-German dynamic. In the aftermath of the signing of the SEA, the French were not hopeful that progress would happen soon on the monetary front. When Mitterrand met with Kohl in late August 1986 in Heidelberg, the French president seemed resigned to the enduring character of the two countries’ disagreements in these matters.45 When Giscard d’Estaing in the fall of that year publicly pronounced in favor of moving beyond the SEA based on defense and money, Jean-Louis Bianco, Mitterrand’s chief of staff, told the president that this was “illusory” for the time being.46 Still, by the time of the December 1986 European Council in London, the French, faced with a predictable push for increased freedom of capital movement, believed it was necessary to once again call for the strengthening of the EMS and the ECU.47 The events of 1987 soon confirmed this, starting with the January exchange rates adjustment, which led to a three percent DM revaluation. In a context of persistent dollar weakening, the French and the Commission once again raised the issue of EMS strengthening faced with the need to deal with third currencies in a coordinated fashion. In February 1987, economics minister Édouard Balladur submitted a memorandum to the EC’s monetary committee (where representatives of the treasuries and central banks of members states met) asking for more internal symmetry (including a stronger role for the ECU) and external coordination. The Commission followed suit in March, and an informal discussion took place at an Ecofin meeting in Knokke in April. Meanwhile, the Louvre agreement aiming at stabilizing the IMS and obtaining a soft landing of the dollar had been signed in February. These efforts culminated in the September Basel-Nyborg agreement, involving more coordinated interventions among European central banks. Although the French considered these arrangements – effective during the October global financial crisis – still insufficient, they nevertheless saw these developments as reflecting a wel- 45 Gespräch des Bundekanzlers Kohl mit Staatspräsident Mitterrand in Heidelberg, 26. August 1986, AAPD, 1986, vol. II, Doc. 225, 1199–1205. 46 AN, 5AG(4)/EG/89 dossier 3, Heidelberg-Bremer Tabak Kollegium, Valéry Giscard d’Estaing, La France et l’Allemagne dans la construction économique et politique de l’Europe, November 13, 1986, with Bianco handwritten notes. 47 AN, 5AG(4)/EG/48, Guigou note for Mitterrand, objet : Conseil européen, December 3, 1986. In search of the Holy Grail: France and European Monetary Unification, 1984–1989 299 come realization on the part of German authorities of the dangers facing the EMS in a context of increased financial volatility.48 Throughout 1987, in parallel with these technical discussions – and in a context characterized by Mitterrand and Kohl’s willingness to relaunch Franco-German cooperation -the French increased the pressure on the Germans at the political level. In a major speech at Chatham House in London in January, Mitterrand had singled out progress in the functioning of the EMS as a touchstone of success for European integration. On a more pressing note, Chirac – at the end of a difficult conversation on CAP – told Kohl and Stoltenberg in June that the EMS needed to be built on “solidarity” and that it was at risk of “disappearing” if things went on as they did.49 By summer 1987, Mitterrand himself was hardening his tone, though he carefully avoided confronting the German government directly. Hence, in July, he told opposition leader Hans-Jochen Vogel that strengthening the EMS was indispensible for the single market to function; and to Spanish Prime Minister Felipe González in August: “We must move towards a European currency,” he said, adding: “The development of the ECU is crucial. Of course, the Germans resist this […] but we must make Germany yield.”50 By summer 1987, the French were intent on using Bonn’s (and in particular Kohl’s) willingness to step up military cooperation with them – a domain in which the Germans were the clear demandeurs – to extract economic and monetary concessions. Hence, Paris insisted on the creation of a Franco-German economic and monetary council as a quid pro quo for 48 AN, 5AG(4)/EG/87 dossier 1, Guigou note for Mitterrand, objet : compte-rendu des négociations de Bruxelles, January 11, 1987; Guigou note for Mitterrand, objet : SME : nouveaux progrès, September 11, 1987. AN, 5AG(4)/EG/86 dossier 3, Projet de mémorandum des membres français du comité monétaire, February 9, 1987; Guigou note for Mitterrand, objet : observations sur le mémorandum de M. Balladur, February 10, 1987; Commission des Communautés européennes, le Président, note au président du Conseil, objet : le renforcement du SME, March 31, 1987; ministère de l’économie et des finances [henceforth: MEF], direction du Trésor, note de D. Lebègue pour le Ministre, objet : conseil Ecofin informel de Knokke, April 3, 1987. See also Eric Bussière, “Le ministère des finances et les enjeux économiques européens à l’heure de la cohabitation, 1986–1988,” in : Bussière / Dumoulin /Schirmann (eds.), Milieux économiques et intégration européenne au XXè siècle. La relance des années 80 (1979–1992), 147–163; and Feiertag, “La France, le dollar et l’Europe (1981–1989). Aux origines globales de l’euro”. 49 Gespräch des Bundeskanzlers Kohl mit Ministerpräsident Chirac, 11. Juni 1987, AAPD, 1987, vol. II, Doc.169, 827–33. 50 AN, AG5(4)/ 4450, Mitterrand-González meeting, Latche, August 25, 1987; AN, AG5(4)/CD/73 dossier 1, Mitterrand-Vogel meeting, 9 July 1987. Frédéric Bozo 300 the Defense and Security Council which Bonn wanted to set up in order to display the stepping up of military cooperation. By the fall of 1987, the French were becoming more pressing faced with German reticence. In a crucial meeting with his counterpart, Horst Teltschik, in late September, during which the terms of the relaunch of bilateral relations were discussed, Attali said that the Franco-German dynamic would be at risk if the Germans continued to stonewall on economic and monetary issues. In November, Chirac used the same tough language with Kohl; he both complained about German inflexibility in monetary cooperation and asked for parallel progress in security and economic matters.51 The Germans were not surprised by the French insistence on such parallelism: “Each side is demandeur in a key domain,” the Auswärtiges Amt noted.52The January 1988 protocol to the Élysée Treaty, signed on its twenty-fifth anniversary, created both an economic and monetary council and a defense and security council, seemingly giving satisfaction to the French; yet it remained to be seen what the two bodies would actually achieve on substance. By the end of 1987, the pressure was beginning to yield results. During a meeting of the French and German foreign and defense ministers on the margins of the bi-annual Franco-German summit in Karlsruhe in November, Genscher expressed himself in favor of giving a “signal” in favor of the reinforcement of the EMS and making a “decisive” step towards an EMU.53 In January 1988, Balladur sent his Ecofin colleagues a fresh memorandum arguing once more in favor of a more symmetrical and cohesive EMS and calling in the longer term for the further monetary construction of Europe.54 The following month, Genscher issued his own memorandum calling for a “European monetary space” and a European central bank 51 Aufzeichnung des Vortragenden Legationsrats Bitterlich, Bundeskanzleramt, 29. September 1987, AAPD, 1987, vol. II, Doc. 273, 1386–91; Gespräch des Bundeskanzlers Kohl mit Staatspräsident Chirac in Karlsruhe, 12. November, 1987, AAPD, 1987, vol. II, Doc. 315, 1582–9; see also ibid. docs. 239, 1203–10, and 223, 1117–26. 52 Aufzeichnung des Ministerialdirigenten von Ploetz, 2. September 1987, AAPD, 1987, vol. II, Doc. 241, 1215–7. This growing “Junktim” is well described in Dyson / Featherstone, The Road to Maastricht: Negotiating Economic and Monetary Union, 166 ff. 53 Gespräch der Bundesminister Genscher und Wörner mit dem französischen Auβenminister Raimond und Verteidigungsminister Giraud in Karlsruhe, 12. November 1987, AAPD, 1987, vol. II, Doc. 316, 1590–1600. 54 AG5(4)/EG/86 dossier 3, Edouard Balladur, La construction monétaire de l’Europe [no date]. AN, AG5(4)/EG/87 dossier 1, SGCI, Construction monétaire européenne, March 3, 1988. In search of the Holy Grail: France and European Monetary Unification, 1984–1989 301 (in other words, the creation of an EMU), which would soon prove to be a turning point.55 The Genscher memorandum was indeed seen in Paris as a major event, if not a divine surprise. The head of the Quai d’Orsay’s economic cooperation division, Pierre de Boissieu, was no less than ecstatic. De Boissieu deciphered the complex political-institutional backdrop in Bonn: the document had been presented in Genscher’s personal capacity as leader of the Liberal Democrats (FDP) rather than as foreign minister, but Kohl had been careful not to disavow his coalition partner. As for the Bundesbank and the finance ministry, they had not been associated with the initiative and they remained silent. All this seemed to indicate, in the eyes of de Boissieu, that the memorandum was a “trial balloon” released by Genscher and Kohl. Crucially, de Boissieu noted that the document had been skillfully calibrated in order to elicit France’s interest by taking into account the perennial demand for more “symmetry” and by striking a balance between the (German) concern for “stability” and the (French) objective of “growth”. Altogether, he noted, the memorandum allowed for a possible Franco-German monetary initiative over the next few months, which could be launched under German presidency at the Hanover European Council in June 1988 and be made to culminate under French presidency in the second half of 1989. De Boissieu’s verdict was clear: the Genscher memorandum was “a present on a silver platter […] We have been waiting for this moment for five years […] the ‘momentum’ will last one or two years and it will be decisive”.56 The French were inclined to accept the “present.” Mitterrand’s May 1988 election against Chirac to a second presidential term was a crucial step. Intensifying the emerging Franco-German relance in the service of the European project had been at the center of his bid for reelection, and monetary integration was now high on his agenda. As to Kohl, he was clearly pleased with the outcome of the French presidential contest. The cohabitation had been a notoriously complicated affair for Franco-German rela- 55 AN, AG5(4)/EG/86 dossier 3, Hans-Dietrich Genscher, mémorandum pour la création d’un espace monétaire européen et d’une banque centrale européenne (traduction), February 26, 1988. On the origins of the Genscher initiative from the German viewpoint, see Dyson / Featherstone, The Road to Maastricht: Negotiating Economic and Monetary Union, 326 ff. 56 AN, AG5(4)/AH19 dossier 4, MAE, direction des affaires économiques et financières, de Boissieu note A/S Propositions de M. Genscher pour une banque centrale européenne, March 3, 1988; and note A/S Memorandum de M. Genscher sur la réaction (sic) d’un espace monétaire européen, March 2, 1988. Frédéric Bozo 302 tions, with Kohl having to strike a delicate balance between the two heads of the French executive. Yet, in spite of the political connection between Kohl and Chirac as conservatives, Kohl had quickly become convinced that Mitterrand was a better partner for Franco-German cooperation (Chirac’s and Balladur’s more aggressive stance in EC and, in particular, in monetary issues, no doubt played a role).57 In the wake of his reelection – which occurred in the midst of the German EC presidency of the first semester of 1988 –, Mitterrand was keen to ensure that EMU would be a priority at the June 27–28 Hanover European Council. To that end, he knew that he would have to help Kohl make his EC presidency a political success, not least by advancing the sensitive issue of capital movement liberalization. This issue was now seen as a priority by the Germans and by the Commission, who wanted to push through its proposed directive on this matter.58 The Junktim between capital liberalization and monetary unification was now self-evident, with further progress on the latter being conditioned on the former. This created a conundrum for the French, who were reluctant to move forward on this front absent a prior harmonization of capital taxation – which of course was subject to unanimity among the Twelve – for fear of a fiscal “race to the bottom”. In that context, the two leaders’ June 2, 1988 meeting in the French Alps resort of Evian on Lake Geneva was decisive. Mitterrand and his entourage were ready to drop the harmonization of taxation on capital as a formal precondition for its complete liberalization, but they nevertheless wanted to obtain a firm commitment that such harmonization would effectively take place at some point. At Evian, Mitterrand, therefore, accepted the liberalization of capital movement in exchange for a mere pledge from Kohl that the issue of tax harmonization would be dealt with in due course. The road to Hanover was now cleared. This was no doubt a very important concession to the Germans, who knew they had made Mitterrand “swallow a toad”.59 Evian was a reflection of Mitterrand’s growing personal trust in Kohl and of his determination to move towards EMU come what may. Economics minister Pierre Bérégovoy and some of Mitterrand’s own 57 On “cohabitation” and Franco-German relations, see Hélène Miard-Delacroix, “ Les rapports franco-allemands dans la politique de François Mitterrand (1984– 1988),” in: Saunier (ed.), Mitterrand. Les années d’alternance, 1984–1986 et 1986– 1988, 354–81. 58 AN, AG5(4)/CD166 dossier 2, handwritten letter from French ambassador in Bonn Serge Boidevaix to Dumas, May 14, 1988; see also Dyson / Featherstone, The Road to Maastricht: Negotiating Economic and Monetary Union, 178–80. 59 See e.g. Schwarz, Kohl. Helmut Kohl. Eine politische Biographie, 436. In search of the Holy Grail: France and European Monetary Unification, 1984–1989 303 Élysée advisers, who had preferred a more conditional approach, were dismayed; yet the directive was formally adopted by the Ecofin ministers on June 13, clearing the way for the European Council.60 Mitterrand now wanted to push for decisive progress in the monetary dossier. In the run-up to Hanover, Kohl wrote to his counterparts to let them know that he wanted to examine the “conditions” and “steps” for the strengthening of monetary cooperation and the realization of an EMU.61 As seen from Paris, the outcome of Hanover was nevertheless uncertain given Thatcher’s opposition to any progress on the monetary front and Kohl’s own prudence faced with resistance in some quarters in Bonn, not least from Stoltenberg and Pöhl. In addition to the scope and timeline of the exercise, the main possible stumbling block before Hanover was the composition of the body that would be charged with charting the way forward. Stoltenberg and Pöhl rejected Genscher’s idea (contained in his February memorandum) of a committee of five to seven “wise men”; instead, they favored entrusting the committee of central bank governors with the task. Mitterrand and Delors were reluctant, believing that giving control to the governors was a recipe for inaction. Mitterrand suggested forming a committee with the twelve governors, each flanked with another national, but Delors believed a group of twenty-four would be unwieldy; he proposed an intermediary formula that consisted in setting up a group of “experts” and having the committee of governors work in parallel, with Delors (who would chair the former and sit on the latter) ensuring the necessary coordination. Mitterrand was willing to push for such a 60 Private papers (henceforth: “Private papers” [This refers to photocopies of documents made available to the author by former French officials]), Guigou note for Mitterrand, objet : votre entretien avec le chancelier Kohl, jeudi 2 juin à Evian. Conseil de Hanovre, June 1, 1988. See also Dyson / Featherstone, The Road, to Maastricht: Negotiating Economic and Monetary Union, 178–80; Eric Aeschimann / Pascal Riché, La Guerre de sept ans. Histoire secrète du franc fort, 1989–1996, Paris: Calmann-Lévy, 1996, 45. At the June 13, 1988 Ecofin, Bérégovoy had obtained – with great effort faced with UK resistance – that the Commission would by the end of the year submit propositions on tax harmonization on which the Council would pronounce at the latest on June 30, 1989, with the directive entering into force at the latest on June 30, 1990. This was seen in Paris as a relative success, though Guigou told Mitterrand that “we have no guarantee of results” given unanimity voting on these matters and the UK’s probable continued opposition. See AN, AG5(4)/EG/86 dossier 3, Guigou note for Mitterrand, objet : réunion hier à Bruxelles du Conseil des ministres des affaires étrangères et du Conseil des ministres des finances, June 13 [sic!], 1988. 61 AN, AG5(4)/CD/166 dossier 2, Kohl letter to Mitterrand, Bonn Telegramm n. 1253, June 23, 1988. Frédéric Bozo 304 formula, but it remained to be seen what Kohl’s verdict would be. The French were the demandeurs and thus could hardly impose their views.62 Mitterrand’s approach paid off. At Hanover, the Twelve, recalling the language of the SEA, confirmed the objective of a “progressive realization” of an EMU and decided to examine at the European Council meeting in Madrid in June 1989 the means of achieving it. In order to study and propose “concrete stages” to that end, they set up a committee chaired by Delors and formed by the governors as well as three other personalities. The compromise on committee membership was of course closer to the German view of the governors’ central role, but Delors’ role as chair and the presence of three “outsiders” were seen as a concession; and, of course, the EMU objective had been formally restated, vindicating Mitterrand’s tactics of inviting the Germans to take ownership of the project in order for them to accept it.63 Seen from Paris, Hanover was thus an important step forward. Even Thatcher had agreed to the setting up of the Delors committee, though, as would later become clear, she had done so in the belief that the exercise would remain essentially academic.64 To be sure, the French president, in the wake of Hanover, remained aware that the EMU project faced continued resistance across the Rhine, not least from the Bundesbank. Mitterrand was skeptical that Germany would budge. Germany “holds on to its [economic] power”, he told his ministers on August 17, 1988, adding: “the deutschemark is its nuclear force. I don’t think we’ll convince the Germans of the need to change their 62 Gespräch des Bundeskanzlers Kohl mit Staatspräsident Mitterrand in Toronto, 20. Juni 1988, AAPD, 1988, vol. I, Doc.183, 993–7; AN, AG5(4)/EG/86 dossier 3, MAE, Direction des affaires économiques et financières, note à l’attention de M. le Ministre d’Etat, A/S Conseil européen de Hanovre : positions des Etatsmembres sur le projet de banque centrale européenne, June 8, 1988; Guigou note for Mitterrand, objet : Conseil européen de Hanovre, June 7, 1988; MEFB, Direction du Trésor, note, objet : préparation du sommet européen de Hanovre. Construction de l’union monétaire européenne : questions de procédure, June 14, 1988; SGCI, note, objet : Conseil européen de Hanovre (27 et 18 juin 1988). L’Europe monétaire, June 16, 1988; Guigou note for Mitterrand, objet : Conseil européen de Hanovre. L’union économique et monétaire, June 22, 1988; and (attached to the former) Projet d’intervention sur l’Union économique et monétaire, no date, unsigned. 63 Conclusions of the Hanover European Council (27 and 28 June 1988), http://cvce. eu. See also Dyson / Featherstone, The Road to Maastricht: Negotiating Economic and Monetary Union, 180. 64 See Delors, Mémoires, 352. In search of the Holy Grail: France and European Monetary Unification, 1984–1989 305 policies”. Yet he concluded: “Still, I hope we will”.65 Mitterrand, in fact, was once again ready to go the extra mile in the hope of making the Germans move. Hence, meeting Jacques de Larosière, the Governor of the Banque de France, on December 1, 1988, to hear about the work of the Delors committee so far, Mitterrand did not object when de Larosière told him that any future European central bank system would have to be independent on the Bundesbank model, as the Genscher memorandum had clearly specified, a feature which, especially for a socialist, ran contrary to the long-standing French approach to monetary policy as a prerogative of the state. The conversation led de Larosière to conclude that he had received a “yellow light” from the president, a “yellow light” which, he believed, was in effect, if tacitly, a “green light”.66 By the end of 1988, the Delors committee was well on its way to delivering a blueprint for future European monetary unification. In the space of two years, the evolution of the monetary dossier had been spectacular, with the Genscher memorandum marking a major turning point. Creating an EMU was now officially recognized as being on the European agenda by the German government, and it had become a central component of the Franco-German relaunch of European unification. In all this, the French input had been decisive, quietly bringing the Germans to take ownership of a project which they had long resisted.67 So how is the dramatic intensification of the French activism in favor of EMU in 1986–88 to be explained? Three factors played a role in the growing French prioritization of monetary unification in those crucial two years. The first was the overall continuity of economic and monetary policies under the cohabitation with those waged after the 1983 turn. The new center-right government was committed to further liberalizing the 65 Private papers, Bianco summary for Georgette Elgey, September 1, 1988 [Elgey was in effect the Elysée’s in-house historian, tasked by Mitterrand with collecting documents and testimonies on the presidency]. 66 Jacques de Larosière, 50 ans de crises financières, Paris: Odile Jacob, 2016, 151. See also Jacques de Larosière, “La conversion des banques centrales européennes à l’euro,” in : Olivier Feiertag / Michel Margairaz (eds.), Les banques centrales à l’échelle du monde, Paris: Presses de Science Po, 2012, 251–61; andAN, AG5(4)/EG/90 dossier 2, Guigou note for Mitterrand, objet : votre entretien avec M. de Larosière, le jeudi 1er décembre à 11h30, November 29, 1988. See also Dyson / Featherstone, The Road to Maastricht: Negotiating Economic and Monetary Union, 184–5. 67 On the French “indirect” strategy for pushing through EMU, see ibid., 124 ff. Frédéric Bozo 306 French economy against the backdrop of the implementation of the SEA.68 To be sure, the new government pursued a more aggressive policy towards the EMS, at the risk of tensions with the Germans. This more muscular approach was illustrated by the April 1986 and January 1987 exchange rates realignments, in which the French plaid hardball with their partners. Starting in spring 1986 and throughout 1987, the French authorities were prone to insinuate that they were ready to consider letting the franc float if they did not obtain satisfaction, a tactic that had not been used since 1983 —and was now severely criticized by the Élysée in the name of monetary rigor.69 Yet at the end of the day there was no radical departure from previous policies and, by the end of 1987, it was becoming clear that Balladur (a disciple of former President Georges Pompidou, who had withdrawn the franc from the “snake” in 1974), though initially skeptical of the EMS, was now in favor of its strengthening. This had led, as seen above, to his January 1988 memorandum.70 As previously, the French goal was to obtain more “symmetry” and cohesiveness in the system in the hope, in particular, of assuaging the persistent pressure on French interest rates. The bottom line was clear: the EMS, during the 1986–8 cohabitation, remained the cornerstone of French economic and monetary policies against the backdrop of a growing consensus among decision makers on the merits of “orthodoxy”. “Money is not an instrument of economic policy, it is one of its constraints”, the former governor of the Banque de France, Renaud de 68 On this see Bussière, “Le ministère des finances et les enjeux économiques européens à l’heure de la cohabitation, 1986–1988”.For the larger context of the evolution of France’s economy and economic policies throughout the 1980s, see Vivien A. Schmidt, From State to Market? The Transformation of French Business and Government, Cambridge: Cambridge University Press, 1996. 69 AN, AG5(4)/EG/87 dossier 1, Guigou note for Mitterrand, objet : réaménagement des parités dans le système monétaire européen, April 4, 1986; Guigou and Hannoun note for Mitterrand, objet : réaménagement monétaire du 6 avril, April 8, 1986; Guigou note for Mitterrand, objet : compte-rendu des négociations monétaires de Bruxelles, January 11, 1987; Guigou note for Mitterrand, objet : sortie du mécanisme de change du système monétaire européen, November 7, 1987; and Michel Charasse note for Mitterrand, objet : système monétaire européen. Respect du dispositif. Attributions constitutionnelles du président de la république, November 12, 1987. See also several documents concerning these same issues in AN, AG5(4)/6162 and EG/141. On all this, see also Dyson / Featherstone, The Road to Maastricht: Negotiating Economic and Monetary Union, 159 ff. 70 AN, AG5(4)/EG/87 dossier 1, Guigou note for Mitterrand, objet : discours de M. Balladur à la rencontre Euro-92, organisée par M. Valéry Giscard d’Estaing, December 11, 1987. In search of the Holy Grail: France and European Monetary Unification, 1984–1989 307 la Genière, declared in the fall of 1987.71 Against this backdrop and given his strong personal commitment to the EMS/EMU project, Mitterrand’s reelection in the spring of 1988 came as a confirmation of the overall continuity in France’s economic and monetary policies since 1983. The second factor was the growing international monetary turmoil. In 1986–88, the need to stabilize a volatile IMS was another reason why the French held on to the objective of strengthening the EMS, which appeared increasingly vulnerable to external shocks.72 The French more than ever believed that the built-in “asymmetry” of the system and its lack of internal cohesiveness were all the more problematic because “weak” currencies such as the franc were unduly impacted by international monetary disorders. The growing tensions within the EMS throughout 1987 derived in their view from the combination of a weakening dollar and persistently high German interest rates, not from economic or financial difficulties in France, and therefore had to be dealt with through deutschemark revaluation rather than a devaluation of the franc.73 The conclusion was clear: the EC “must play a prominent role in the IMS and emerge as a [monetary] pole just like the dollar and the yen”, Mitterrand declared at Hanover, adding that “one must go further” than what had been agreed to at Nyborg.74 A third factor behind France’s activism in monetary issues in that period derived from increased capital mobility. In the wake of the SEA, the French understood that the free movement of capital was an unstoppable evolution, as Mitterrand himself had recognized at Luxembourg. Starting in spring 1986, the new center-right government was willing to move even more quickly in that direction. (The Élysée accepted this in principle, with the caveat that it should be made more conditional on progress on 71 AN, AG5(4)/TB/61 dossier 1, La Genière marks at the Association des membres de l’inspection générale des finances, L’avenir de la coopération monétaire européenne, May 12, 1987. 72 AN, 5AG(4)/EG/86 dossier 3, Projet de mémorandum des membres français du comité monétaire, February 9, 1987. 73 AN, AG5(4)/EG/89 dossier 2, Le directeur du Trésor, le sous-gouverneur de la banque de France, compte-rendu de la trois-cent-trente et unième session du comité monétaire, February 12, 1987. 74 AN, AG5(4)/EG/86 dossier 3, Projet d’intervention sur l’union économique et monétaire, no date [late June 1988]. On this, see Feiertag, “La France, le dollar et l’Europe (1981–1989). Aux origines globales de l’euro”. Frédéric Bozo 308 strengthening the EMS).75 Yet it was becoming clear that increased capital mobility was a game changer. As the Commission remarked in its contribution to the April 1987 meeting at Knokke, in the past the relatively limited mobility of capital had played an important role in allowing the EMS to function and in shielding it from external shocks; national economic and monetary divergences, in essence, did not preclude exchange rate stability. Yet with increased capital mobility, the effects of such divergences were bound to augment, in essence reflecting the so-called “Mundell trilemma”. The consequence in the eyes of the Commission was clear: since the increased flexibility of exchange rates ran contrary to the single market project and would be incompatible with the “spirit” of the EMS, “strengthening [the latter] will be necessary”; European monetary integration, the Commission believed, was therefore “at a crossroads”.76 The French Treasury agreed, noting that the views of the Commission were “very close” to theirs, which, no doubt, was welcome in Paris.77 True, the French observed that the Germans – who, unsurprisingly, remained eager to defend their prerogatives in these matters – were not yet ready to recognize that, within a system of stable parities, complete freedom of capital movement went against preserving the autonomy of national monetary policies.78 Yet they also sensed that in an increasingly volatile financial 75 AN, AG5(4)/EG/141, Guigou note for Mitterrand, objet : votre entretien avec le Premier ministre, May 16, 1986; and Guigou note for Mitterrand, objet : suppression du contrôle des changes, September 3, 1986.See also AN, AG5(4)/EG/48, Guigou note for Mitterrand, objet : Conseil européen, 3 décembre, December 3, 1986. On this issue see, as well, Olivier Feiertag, “Le tournant de la libéralisation financière (1984–1988). Big Bang à la française?”, in : Saunier (ed.), Mitterrand. Les années d’alternance, 1984–1986 et 1986–1988, 511–36. 76 AN, 5AG(4)/EG/86 dossier 3, Commission des Communautés européennes, le Président, note au président du Conseil, objet : le renforcement du SME, March 31, 1987. Although he had left DG II to join the Bank of Italy in 1984, Padoa- Schioppa remained influential in Brussels, not least through his personal contacts with Delors. In a 1987 report (commissioned by Delors) on the implications of the single market for the future of the Community, he once again stressed increased capital mobility as a factor which – in the larger context of the completion of the single market – should lead to further monetary integration: Maes, Tommaso Padoa-Schioppa and the origins of the euro, 23 ff. 77 AN, 5AG(4)/EG/86 dossier 3, Lebègue note, objet : conseil Ecofin informel de Knokke, April 3, 1987; Ministère de l’économie et des finances (henceforth: MEF), direction du Trésor, note, objet : conseil Eco-Fin informel du 5 avril 1987, April 2, 1987. 78 AN, AG5(4)/EG/89 dossier 2, Le directeur du Trésor, le sous-gouverneur de la banque de France, compte-rendu de la trois-cent-trente et unième session du comité monétaire, February 12, 1987. In search of the Holy Grail: France and European Monetary Unification, 1984–1989 309 environment, the Germans were becoming worried about the future of the EMS, which was key to their European exports; this concern, the French believed, was one of the motives behind the Genscher memorandum.79 Be that as it may, at Hanover, Mitterrand cited the complete freedom of capital movement as the first reason for strengthening the EMS.80 While in 1986–1988 monetary and financial considerations remained crucial in the French renewed push for monetary integration, political – or geopolitical – motivations were on the rise during these years. Monetary unification, which was becoming the spearhead of European unification in the broader sense, was increasingly seen in Paris as a necessary response to the rising German challenge. In the final years of the decade, the perception of the FRG’s growing economic and monetary clout was becoming inescapable. The country’s self-confidence was obvious: by the end of the 1980s, Kohl could boast – though he refrained from doing so publicly – that Germany “had become once again number one in Europe”.81 In such a context, those in charge in Bonn – in particular Genscher, who increasingly appeared as the principal figurehead of the FRG’s European policies – were aware that German leadership in Europe was conditioned on the FRG’s ability to legitimize its growing might through European integration and Franco-German cooperation. Meeting with Genscher in early 1987, the historian and public intellectual Michael Stürmer remarked that the FRG was not in a position to “play the role of ‘Europe’s director’”. Genscher agreed, replying that “Germany could only act as the intellectual engine (Denkmotor) in Europe together with France”.82 Such thinking was, no doubt, behind Genscher’s February 1988 initiative on EMU. The French could hardly escape the reality of Germany’s economic superiority, not least, as Mitterrand conceded to Kohl in summer 1986, as a major export nation.83 No doubt, the economic imbalance between the two countries was becoming a matter of concern in Paris. “Because [the 79 AN, AG5(4)/AH19 dossier 4, MAE, direction des affaires économiques et financières, de Boissieu note A/S Propositions de M. Genscher pour une banque centrale européenne, March 3, 1988. 80 AN, AG5(4)/EG/86 dossier 3, Projet d’intervention sur l’Union économique et monétaire, no date [late June 1988]. 81 Quoted in Schwarz, Helmut Kohl. Helmut Kohl. Eine politische Biographie, 403. 82 Gespräch des Bundesministers Genscher mit dem Professor für Mittlere und Neuere Geschichte, Stürmer, 30. Januar 1987, AAPD, 1987, vol. I, Doc. 18, 74–82. 83 Gespräch des Bundekanzlers Kohl mit Staatspräsident Mitterrand in Heidelberg, 26. August 1986, AAPD, 1986, Vol. II, Doc. 225, 1199–1205. Frédéric Bozo 310 Germans] do not have a diplomatic and military power commensurate with their economic power”, Mitterrand told González in summer 1987, “they transpose their domination to the economy, with money as its most obvious incarnation”.84 Implicitly, Mitterrand was confirming that a central reason for France’s mounting insistence on creating an EMU was to harness Germany’s growing economic and monetary clout in a European framework in order to preserve an overall balance between the two countries thanks also to France’s maintained politico-strategic margin of superiority; in essence, French nuclear power (“the bomb”) was seen as balancing German monetary power (“the deutschemark”). The evolving East-West context was another important geopolitical factor behind France’s European activism in 1986–1988, including in monetary matters. While Gorbachev’s coming to power in March 1985 had put an end to the “new” Cold War, the renewed East-West détente that emerged starting in 1986 once again raised the issue of Germany’s Westbindung. Kohl was convinced that Gorbachev would one day be tempted once again to play the “German card” in order to divide the West, offering, in essence, German unification in exchange for German neutrality. Gorbachev, he prophesized, will try to move towards a “sort of Rapallo” (i.e. trying to establish a privileged partnership with Germany with a view to detaching it from the West); but he would “resist” by leaning on Franco- German relations and Europe,” he said, excluding any future German “Sonderweg”.85 Genscher, too, saw European unification – in particular in the monetary sphere – as a response to the Gorbachev challenge. Meeting with Mitterrand in October 1987, he minimized the risk of German neutralism contrary to what some in France feared, arguing that the economic strength as well as the unity of purpose of the Europeans – not least the French and the Germans – would allow them to “weigh in” on the course of East-West relations; “hence,” he added, “I am in favor of the strengthening of the EMS”.86 Mitterrand’s reasoning was similar. Although German reunification was still seen in Paris at best as a distant possibility in those years, the French president was aware of a possible reopening of the Ger- 84 AN, AG5(4)/ 4450, Mitterrand- González meeting, Latche, August 25, 1987. 85 AN, AG5(4)/CD 73 dossier 1, Kohl-Mitterrand meeting, Chambord, 28 March 1987; see also Gespräch des Bundeskanzlers Kohl mit Staatspräsident Mitterrand auf Schloß Chambord, 28. März 1987, AAPD 1987 (I), Doc. 89, 423–45. 86 AN, AG5(4)/CD 73 dossier 1, Genscher-Mitterrand meeting at Schloß Gymnich, 20 October 1987. In search of the Holy Grail: France and European Monetary Unification, 1984–1989 311 man question and of the need to accompany this evolution thanks to a new push towards European unification.87 The year 1987 was decisive in making apparent the emerging linkage – which would culminate in the fall of 1989 – between the European and the German questions, contributing in no small part to the relaunch of Franco-German relations and European unification. To a large extent in response to the Gorbachev challenge and the looming reopening of the German question, defense and money in that period were increasingly identified as the two pillars of a future European Union as well as the essential elements of the Franco-German contract, with both elements ensuring the maintenance of a balanced “tandem.” There are two priority issues in Franco-German relations, Mitterrand told Vogel in July 1987, namely the “monetary issue” and the “military aspects”.88 True, the French and the Germans did not see eye to eye on this: Kohl was interested first and foremost in a quantum leap in military cooperation, including in the nuclear dimension; Mitterrand was growingly focused on the monetary dimension, as signaled in his Chatham House speech.89 The equivalence between the “deutschemark” and “the bomb” was becoming a trope in the Franco- German conversation. Yet Mitterrand, in 1987–1988, skillfully managed to steer the conversation in favor of his monetary priority, not least by using his good personal contact with Genscher (as well as the friendly relationship between Genscher and his close confidante and former foreign minister Roland Dumas) in the knowledge that he was more likely than Kohl to push the issue domestically. The issuance of the Genscher memorandum proved him right, giving a major boost to the EMU project.90 While geopolitical factors explain France’s increasing prioritization of monetary integration in the years 1986–1988, the purely economic rationale behind this choice was beginning to raise questions. Against the backdrop of the implementation of the SEA, the French were willing to keep a balance between market liberalization and the strengthening of flanking 87 Hubert Védrine, Les Mondes de François Mitterrand. A l’Elysée, 1981–1996, Paris: Fayard, 1996, 406. 88 AN, AG5(4)/CD/73 dossier 1, Mitterrand-Vogel meeting, 9 July 1987. 89 On Franco-German military cooperation and the nuclear issue, see Frédéric Bozo, “The sanctuary and the glacis: France, the Federal Republic of Germany and the nuclear factor in the 1980s,” to be published (in two parts) in: Journal of Cold War Studies, n. 3, vol. 23, Summer 2020, and n.4, vol. 24, Fall 2020. 90 On this see Schwarz, Helmut Kohl. Eine politische Biographie, 434 ff.; and Dyson / Featherstone, The Road to Maastricht: Negotiating Economic and Monetary Union, 167. Frédéric Bozo 312 policies, not least the harmonization of taxation, social protection, an increased EC budget etc.91 Yet they were facing the continuing reticence of their European partners, not least the Germans, more than ever opposed, in particular, to increasing the European budget and intra-EC transfers as part of the “package” proposed by Delors to accompany the single market. In a conversation with Genscher in February 1987, Mitterrand did not hide his frustration: “we are facing two imperatives”, he said “a rigorous budgetary policy, and the need for more Europe which, if not satisfied, will lead to stagnation”.92 In that context, as was already detectable in the negotiation of the SEA late 1985, the prioritization of monetary integration was increasingly seen in Paris as a compensation for the lack of significant progress in policies aimed at correcting the logic of liberalization – in the hope, as mentioned, that a strengthened EMS and eventually an EMU would prevent the emergence of a purely market-based Europe. Yet in addition to being a disputable mode of reasoning (increased monetary integration, let alone a common currency, were more likely in and of themselves to act ultimately as enablers of liberalization), this approach created a sort of headlong rush which was likely to accelerate the emergence of the “neo liberal” Europe Paris wanted to prevent. As the French made increased monetary integration their central objective, they not only had to accept capital liberalization as a quid pro quo but also to make concessions on accompanying measures such as tax harmonization, not least on savings. This, in turn, led them to double down on their monetary objective, if only in the hope of assuaging the destabilizing consequences of capital liberalization on the European monetary system. The June 1988 Kohl-Mitterrand meeting at Evian – where Mitterrand, as seen above, had agreed to the liberalization of capital movement – had been revealing of this logic: “Now that we have accepted the liberalization of capital movement,” Guigou wrote to Mitterrand in its wake, “it becomes all the more imperative to strengthen the European monetary system in order to shield it from the shocks created by 91 AN, AG5(4)/EG 47, Guigou note for Mitterrand, objet : marché intérieur, June 23, 1986. Such a balancing act was particularly necessary faced with the liberalization of capital movement, which made accompanying measures (including tax harmonization) “imperative”: see AN, 5AG(4)/EG/86 dossier 3, Trésor, note, objet : conseil Eco-Fin informel du 5 avril 1987, April 2, 1987. 92 Private papers, Mitterrand-Genscher meeting, February 6, 1987. See also Gespräch des Bundesministers Genscher mit Staatspräsident Mitterrand in Paris, 6. Februar 1987, AAPD, 1987, Vol. I, doc. 26, 121–5. In search of the Holy Grail: France and European Monetary Unification, 1984–1989 313 the increased volatility of capital”.93 By the end of 1988, it was becoming clear that, given the need for unanimity among member-states in these matters, the harmonization of taxation on capital – which Mitterrand, at Evian, had dropped as a formal precondition of capital movement liberalization – could well remain in limbo for a long time.94 More generally, French economic authorities were just barely beginning to look into the profound economic consequences of a single market equipped with a monetary union, including the need for increased labor market flexibility and competitiveness policies at the national level as vital tools of economic adjustment absent the possibility of exchange rate modifications. This tardy concern for the consequences of monetary integration seemed to confirm the increasingly political – or geopolitical – motivation behind its prioritization by French decision makers in that period.95 By the end of 1988, with the Delors Committee fully at work, three main features of French policy towards European monetary unification were becoming apparent. First, a future European common currency was emerging as the dominant objective of France’s European policies. It was becoming, in the eyes of French decision-makers, no less than the Holy Grail in their quest for a unified Europe as well as, rightly or wrongly, an insurance policy against the perceived risk of German dominance in Europe. Second, against the backdrop of a vigorous push by both countries and their leaders for a new phase of European unification, the European monetary issue was increasingly framed as a predominantly Franco-German affair and, indeed, as the central dossier that conditioned relations between Paris and Bonn and their ability to advance the European project in general. Meanwhile, London was seen, particularly in Paris, as the main potential source of opposition that had to be neutralized. Third, a major question was now looming, as made clear at critical junctures (not least when Mitterrand yielded to Kohl at Evian on capital movement, or when he gave his implicit green light to de Larosière on a future European cen- 93 AN, AG5(4)/EG/86 dossier 3, Guigou note for Mitterrand, objet : réunion hier à Bruxelles du Conseil des ministres des affaires étrangères et du Conseil des ministres des finances, June 13, 1988. 94 AN, AG5(4)/EG/90 dossier 2, Guigou note for Mitterrand, objet : votre rencontre avec Mme Thatcher. Union économique et monétaire, harmonisation de la fiscalité de l’épargne, November 30, 1988. See also Jean-Louis Bianco, Mes années avec Mitterrand. Récit, Paris: Fayard, 2015, 276–7; and Védrine, Les Mondes de François Mitterrand. A l’Elysée, 1981–1996, 416–7. 95 AN, 5AG(4)/EG/87 dossier 1, MEF, Direction de la Prévision, Note, objet : monnaie européenne : premières réflexions, November 14, 1988. Frédéric Bozo 314 tral bank’s independence). It was the following: how far should France go in espousing German preferences in the economic and monetary realm in order to convince the Federal Republic to play ball? Wasn’t the Quest for the Grail, in other words, making the French oblivious of the rest? The 1989 upheavals and the road to Strasbourg The year 1989 was decisive for European monetary unification. From the completion of the Delors report in April to the Madrid European Council under Spanish presidency in June to the Strasbourg European Council in December, the acceleration of the project was remarkable. This acceleration cannot be understood without taking into account the larger geopolitical context, which was characterized, starting in the summer, by the intensification of the democratic revolutions in the East and the looming reopening of the German question in the wake of the East German refugee crisis, the fall of the Honecker regime and the fall of the Berlin Wall. Against that backdrop, the de facto Junktim between European unification and German reunification emerged as a crucial factor. Hence the need for a detailed account of the 1989 developments in order to understand how France’s push for monetary unification culminated decisively at Strasbourg – and with what consequences. Four major steps can be discerned on the road to Strasbourg. The first was the issuance of the Delors report in mid-April. Predictably, in light of the gaps that continued to prevail between the skeptics and the believers in further monetary integration, the drafting of the report over the previous seven months had not been easy.96 De Larosière and Pöhl, in particular, had clashed over issues such as the immediate creation of a European re- 96 This is not the place for a detailed account of the work of the Delors committee; on this, see Harold James, Making the European Monetary Union: The Role of the Committee of Central Bank Governors and the Origins of the European Central Bank, Cambridge, MA / London: The Belknap Press of Harvard University Press, 2012, 210–64. See also Harold James, “Making a Central Bank Without a State” in: Feiertag / Margairaz (eds.), Les banques centrales à l’échelle du monde. On the French input, see Larosière, “La conversion des banques centrales à l’euro”, and Olivier Feiertag, “Le tournant de la mondialisation : la Banque de France et le Comité Delors (1988–1989),” in: Feiertag / Margairaz (eds.), Les banques centrales à l’échelle du monde. See also Dyson / Featherstone, The Road to Maastricht: Negotiating Economic and Monetary Union, pp. 172 ff., and Marsh, The Euro: the Battle for the New Global Currency, 124 ff. The archival records of the Delors committee, which are kept at the European Central Bank, will soon be available on line: In search of the Holy Grail: France and European Monetary Unification, 1984–1989 315 serve fund aiming at a partial mutualization of central bank reserves.97 In March, Pöhl had made a last-ditch, and rather brutal, attempt at influencing the report (which by then was almost complete) along the usual Bundesbank views, including by watering down the language of the report on the possible role of the ECU as the future European currency.98 Compromises had nevertheless been reached among members on the major issues under discussion, including on the latter point; the ultimate objective of a single currency was recognized as well as the role of the ECU, which had the “potential” to become the common currency. Crucially, the report recognized the need to immediately start preparatory work for the negotiation by an IGC of a treaty on reaching an EMU in three steps, with step one beginning on July 1, 1990. Overall, the French – at least monetary authorities – believed that the unanimous report contained the “essential milestones of a coherent and organized advance towards an EMU”.99 Still, the report was not well received in all quarters in Paris. True, de Larosière believed that he had successfully countered the “skeptics” – not least Pöhl and the governor of the Bank of England Robin Leigh-Pemberton – by obtaining that the report include a clear call for an early start of a treaty negotiation. He was also satisfied that the final draft contained his proposal to mutualize foreign exchange reserves at step two, and that it mentioned the need for the future European central bank to act in accordance with the economic policies decided upon by the Council.100 Yet Bérégovoy, predictably, was more skeptical. While approving of the report .en.html. 97 AN, AG5(4)/EG/90 dossier 2, De Larosière, Note, “Premières étapes vers la création d’une banque de réserve européenne,” October 28, 1988, and “Note complémentaire sur la proposition tendant à créer un fonds de réserve européen (FRE),” December 6, 1988; Guigou note for Mitterrand, objet : compte-rendu d’une séance de travail avec Jacques de Larosière, gouverneur de la Banque de France, sur l’union monétaire européenne (comité présidé par Jacques Delors), November 9, 1988; Banque de France, CR de la réunion du comité Delors du 10 janvier 1989 and CR de la réunion du comité Delors du 14 février 1989; Guigou note for Mitterrand, objet : Union économique et monétaire. État des travaux du comité Delors, March 22, 1989. 98 AN, AG5(4)/EG/90 dossier 2, Banque de France, CR de la réunion du comité Delors du 14 mars 1989, March 16, 1989. 99 AG5(4)/EG/90 dossier 2, Banque de France, CR des réunions du comité Delors des 11 et 12 avril 1989, April 13, 1989. 100 AN, AG5(4)/EG/90 dossier 2, Guigou note for Mitterrand, objet : rapport du comité Delors, April 13, 1989; and Guigou note for Mitterrand, objet : Union économique et monétaire. État des travaux du comité Delors, March 22, 1989. Frédéric Bozo 316 in public, he expressed concerns in private. Reflecting his well-known unease with central bank independence on the Bundesbank model, he believed the document empowered the central bank governors too much at the expense of the role of the ministers of economy and finance.101 In fact, as Guigou told Mitterrand upon the completion of the Delors report, the government was split as to whether an EMU was in France’s interest. Prime minister Michel Rocard believed – like de Larosière and Delors – that an EMU was “the only way to end the current German monetary hegemony” by setting up “a decision-making process that takes into account the interests of all member-states”, and that France “had nothing to lose” from the creation of an EMU since its economic and monetary policies – not least interest rates – were today “very dependent on those of Germany”. Bérégovoy feared, though, that an independent European central bank would inevitably be dominated by the Germans.102Another wellknown skeptic was of course minister of defense Jean-Pierre Chevènement, a representative of the “statist” left of the socialist party who in March 1983 had resigned as minister of research and industry over Mitterrand’s decision to keep the franc in the EMS.103 Coming so late in the day, Guigou’s observation to Mitterrand that the government was not in unison on further European monetary integration was revealing of the way in which France’s choice for monetary unification – which was, fundamentally, a political choice – was made in these crucial months. By the time of the publication of the Delors report and almost a year after Hanover, no debate on the economic and monetary merits of EMU – which, Guigou recognized, was “a wager” – had taken place within the government. Yet at this stage, Mitterrand clearly did not want to be bothered by second thoughts and second guessing, even from close associates or government members.104 101 AN, AG5(4)/EG/90 dossier 2, Guigou note for Mitterrand, objet : votre entretien avec P. Bérégovoy, mardi à 16h30, April 17, 1989. Interestingly, Bianco, who as Elysée chief of staff was Mitterrand’s closest associate, shared Bérégovoy’s misgivings about the Delors report, which he deemed “maximalist”: see Guigou note for Mitterrand, objet : Union économique et monétaire. État des travaux du comité Delors, March 22, 1989. 102 AN, AG5(4)/EG/90 dossier 2, Guigou note for Mitterrand, objet : union économique et monétaire. Vos entretiens avec MM. de Mita [sic!], Gonzales [sic!] et Kohl, March 29, 1989. 103 AN, AG5(4)/CD/168 dossier 1, Chevènement note for Bianco, October 16, 1989. 104 AN, AG5(4)/EG/90 dossier 2, Guigou note for Mitterrand, objet : union économique et monétaire, March 29, 1989; seeMitterrand’sminimalist comment (“vu”) on Bianco’s observation on the “maximalist” character of the Delors report: AN, In search of the Holy Grail: France and European Monetary Unification, 1984–1989 317 The Elysée wanted to move forward based on the momentum created by the Delors report, prioritizing process over substance. All eyes were on the French EC presidency of the second semester, for which Guigou saw the monetary dossier as the most promising way to obtain a success and one in which public opinion had the strongest expectations. By contrast, she observed, other domains – not least social Europe, which inevitably would offer modest results at first – were less likely to make the French presidency successful.105 Reading the final report in mid-April, she retained that “nothing stood in the way” of the Madrid European council endorsing the report and, most crucially, of the European council under French presidency later in the year summoning an IGC sometime in the first semester of 1990.106 Yet was Kohl really willing to play ball? True, the Chancellor had let it be known that he approved the Delors report in general terms. Yet at the same time rumors circulated in Bonn to the effect that the German government – under pressure from the new finance minister Theo Waigel, who had seemingly made this a precondition for his joining the government of an increasingly weakened Kohl – was considering withdrawing the recently introduced withholding tax on savings, which was seen in Paris and Brussels as an indispensible step towards the Europe-wide harmonization of capital taxation so desired by the French as a complement to capital movement liberalization.107 Two months earlier, Mitterrand during a meeting of the council of ministers had once again reiterated that the latter was not possible on July 1, 1990 without “a certain” tax harmonization and at least the “beginning” of a social Europe.108 Of course, without the liberalization of capital movement EMU was simply not on the cards. So when on April 27 Kohl confirmed in the Bundestag the withdrawal of the withholding tax, consternation prevailed in Paris, all the more so because Kohl had not even mentioned EMU in his declaration. Guigou wrote to Mitterrand the next day that Bonn’s decision was “preoccupying”. “In spite of his AG5(4)/EG/90 dossier 2, Guigou note for Mitterrand, objet : Union économique et monétaire. État des travaux du comité Delors, March 22, 1989. 105 AN, AG5(4)/EG/90 dossier 2, Guigou note for Mitterrand, objet : union économique et monétaire, March 29, 1989. 106 AN, AG5(4)/EG/90 dossier 2, Guigou note for Mitterrand, objet : rapport du comité Delors sur l’Union économique et monétaire, April 14, 1989. 107 AN, AG5(4)/EG/90 dossier 2, Guigou note for Mitterrand, objet : sommet franco-allemand. Votre entretien avec le chancelier Kohl. Questions européennes, April 18, 1989. On this see Aeschiman /Riché, La Guerre de sept ans. Histoire secrète du franc fort, 1989–1996, 50–1. 108 Private papers, Bianco summary for Georgette Elgey, March 2, 1989. Frédéric Bozo 318 personal commitment in favor of Europe,” she said, Kohl “for the first time since he is in office” has taken a decision “that will make it very difficult and perhaps impossible” to reach a common Franco-German position.109 Yet the Elysée soon decided that the issue of tax harmonization, however crucial, should not stay in the way of EMU, and that the insufficiencies of the Delors report – not least the contrast between the report’s precise description of the monetary union (including the future independent central bank) and its vagueness when it came to economic union, which entailed the risk of an uncontrollable monetary power – should not either. What mattered was setting objectives for Madrid, and how to proceed from there during the French presidency and up to the end-of-year European council.110 Like before Hanover the previous year, a signal from Bonn (albeit a somewhat ambivalent one) opened the way for progress at Madrid, marking the second step on the road to Strasbourg. By mid-May, Kohl’s closest associates, Horst Teltschik and Joachim Bitterlich, met with their Élysée counterparts, Attali, Védrine and Guigou. The Germans clearly wanted to reassure the French on Kohl’s European intentions. Kohl, they said, was ready to confront and isolate Thatcher at Madrid and to commit himself to the goal of an EMU, including the negotiation of a new treaty, though he didn’t want an IGC to be summoned at Madrid. Work still needed to be conducted in order to refine the findings of the Delors report, they said, adding that this could be done during the French presidency. The Germans went to great lengths in order to dissipate the misunderstandings of the previous month. Kohl, his advisers said, had “not forgotten” the Evian commitment to proceed to capital liberalization in parallel with the harmonization of capital taxation. But Waigel – who they said, as if to excuse the snafu of the previous month, had no previous experience in government – must hear from his counterpart Bérégovoy that the French still 109 AN, AG5(4)/EG/90 dossier 2, Guigou note for Mitterrand, objet : quelques réflexions à la suite du discours du chancelier Kohl devant le Bundestag, April 28, 1989. The French sensed that Kohl had betrayed his Evian commitment on capital tax harmonization—if not the promise of a social Europe, which was conditioned on the avoidance of a race to the bottom when it came to tax policy. In effect, Paris was left with no other choice than to proceed to a downward revision of capital taxation in France—at considerable cost for public finances: see Aeschimann /Riché, La Guerre de sept ans. Histoire secrète du franc fort, 1989–1996, 51–2. 110 AN, AG5(4)/EG/90 dossier 2, Guigou note for Mitterrand, objet : votre réunion avec J. Delors, le Premier ministre et les ministres sur l’union économique et monétaire, May 10, 1989. In search of the Holy Grail: France and European Monetary Unification, 1984–1989 319 clang to the Evian “Junktim” and that they firmly believed that the SEA could not be limited to the single market. There was also need for common policies, in particular in the monetary and the social domains, in order to avoid “wild competition”. In sum, Teltschik and Bitterlich said – ostensibly displaying understanding for the position of their opposite numbers –, the French wanted to “restore a balance” thanks to accompanying policies, and this, too, had to be clearly conveyed by Bérégovoy to Waigel. As to tax harmonization, Kohl’s associates said, it must be discussed “indepth” bilaterally. Bonn’s willingness to placate the French was clear. Bitterlich and Teltschik’s performance was vintage Kohl. Via his and Mitterrand’s closest associates, the Chancellor, ever the consummate tactician, in essence told his French counterpart that he endorsed EMU, which he portrayed as a Franco-German project to be pursued against the UK and Thatcher’s opposition. This, of course, was a presentation he knew appealed to Mitterrand’s view of the exclusivity of the Paris-Bonn relationship. Yet at the same time Kohl refrained from giving a clear commitment to launch EMU now (hence the desired postponement of the summoning of an IGC) and from explicitly accepting Mitterrand’s conditions, not least regarding capital tax harmonization. By putting the blame on Waigel for the withholding tax reversal while unashamedly asking for Bérégovoy’s advocacy with his German counterpart in these matters, he managed both to showcase his personal complicity with Mitterrand and to deflect responsibility faced with the complicated political situation within his government coalition.111 In spite of Kohl’s continued prevarication, the Élysée still hoped a momentum could be built in the run-up to Madrid. True, at an Ecofin ministerial meeting at S’Agaró on Spain’s Costa Brava a few days later, Waigel had continued to refuse any progress on capital taxation, leading an annoyed Bianco to observe that Kohl “doesn’t seem to be able to control his own minister”. Delors was exasperated too, telling Guigou that he had summoned the German COREPER representative for a dress-down. Delors believed that Waigel was not being fundamentally obstructive: he only thought EMU to be Kohl’s personal dossier, hence his apparent lack of enthusiasm for the project. At any rate, Delors noted, discordances on EMU between finance ministers and heads of governments were not confined to 111 AN, AG5(4)/EG/90 dossier 2, Guigou note for Mitterrand, objet : compte-rendu des discussions avec les collaborateurs du chancelier Kohl sur les questions européennes (mercredi 17 mai, après-midi), May 17, 1989. Frédéric Bozo 320 the German case.112 Be that as it may, by early June, the Élysée – in tandem with Delors – was focused on making Madrid a success in order to allow for decisive progress during the French presidency, not least by pressuring González to put EMU at the center of the meeting of the European Council in Spain’s capital late June, and isolate Thatcher. More than ever, the French were looking at process rather than substance: after all, as González also believed, the objective of EMU had already been affirmed in the SEA and at Hanover, so there was no need to discuss it further at Madrid.113 Dumas and Genscher were especially active in tandem in the run-up to Madrid, once again confirming at a crucial juncture the importance of their personally close bilateral relationship; the two accomplices even cooked up draft conclusions in advance of the summit in order to better influence the outcome of Madrid.114 The Élysée strategy worked to some extent. On the positive side, Bonn told Paris shortly before Madrid that Kohl was ready to reaffirm his commitment to the EMU project based on the Delors report and that he agreed that the report’s three-step approach had to be taken as a whole, with the first phase beginning on July 1, 1990. London, by contrast, only wanted to commit to phase one, which only included non-institutional measures, so Kohl was in effect clearly distancing himself from Thatcher. Even more crucially, because phases 2 and 3 required a new treaty, Kohl recognized that an IGC was necessary and that preparatory work to that effect could start quickly. But, on the negative side, Kohl confirmed that he was not in favor of the planned IGC starting before the end of 1990 (in contrast with Genscher, who was in favor of an early IGC) for domestic reasons. He realized the mounting opposition to an EMU in the FRG and he wanted to defuse criticisms thanks to the complementary work to be pursued in order to “operationalize” the Delors report. He also wanted to avoid the likely interference of the debate on EMU with the general elections that were scheduled to take place in late 1990. Delors was worried by what he saw as 112 AN, AG5(4)/EG/90 dossier 2, Guigou note for Mitterrand, objet : votre entretien avec M. Bérégovoy, mardi 23 mai. Compte-rendu du conseil informel des ministres des finances de la CEE à S’Agaro [sic!] les 19–20 et 21 mai, May 23, 1989. 113 AN, AG5(4)/EG/90 dossier 2, Guigou letter to Dumas, June 13, 1989; and Guigou note for Mitterrand, objet: votre déjeuner avec M. F. Gonzalez [sic!], jeudi 8 juin à 13h, June 7, 1989. 114 AN, AG5(4)/EG/90 dossier 2, Guigou note for Mitterrand, objet : préparation du conseil européen de Madrid. Votre entretien le mardi 20 juin avec J. Delors, le Premier ministre et les ministres, June 18, 1989; and Guigou note for Mitterrand, objet : préparation du conseil européen de Madrid. Compte-rendu des entretiens entre MM. Dumas et Genscher, hier à Paris. In search of the Holy Grail: France and European Monetary Unification, 1984–1989 321 dangerous procrastination on the part of Kohl: to wait another eighteen months before an IGC, Delors feared, opened the door to German backpaddling. The French agreed with Delors that it was important to keep the momentum. Still, they thought the right response to Kohl’s procrastination was – as Dumas suggested – to ask him to agree that the European Council in Strasbourg in December fix a date for the beginning of the IGC, knowing that this date could be set in the second semester of 1990 under Italian presidency.115 Seen from Paris, the June 26–27 European Council in Madrid was a semi-success: the Twelve restated their “determination progressively to achieve economic and monetary union, [which] must be seen in the perspective of the completion of the internal market and in the context of economic and social cohesion”, and they endorsed the Delors report while deciding that the first stage of the realization of EMU would begin on 1 July 1990 and that the preparatory work for the organization of an IGC could start. The process was, however, still vague, and there was still no fixed date for the beginning of the IGC itself.116 In that context the French presidency of the EC in the second semester of 1989 turned out to be a decisive third step. From day one – on July 1 Delors and the commissioners were in Paris to meet with Mitterrand and the government to organize the work for the following six months – it was clear that the primary concern in Paris was to advance EMU decisively before the end of the year. Although the social dimension (including the adoption by the Twelve of a social Charter) was seen as a “predominant subject” and although other issues such as industrial policy, environmental policy, research and technology – not to mention the still not resolved issue of tax harmonization – were among the proclaimed priorities of France’s presidency, the monetary dossier clearly trumped all other subjects.117 Process was more than ever of the essence. The French objective was to advance the preparatory work mentioned at Madrid sufficiently for 115 AN, AG5(4)/EG/90 dossier 2, Guigou note for Mitterrand, objet : préparation du conseil européen de Madrid. Déjeuner avec le chancelier Kohl, jeudi 22 juin à 13h, June 21, 1989; Guigou handwritten note for Mitterrand, June 22, 1989; Guigou note for Mitterrand, objet : Union économique et monétaire, June 24, 1989. 116 Conclusions of the Madrid European Council: extract concerning economic and monetary union (26 and 27 June 1989), 117 AN, AG5(4)/EG/90 dossier 2, Guigou note for Mitterrand, objet : réunion avec la Commission des Communautés européennes, samedi 1er juillet 1989, June 30, 1989. Frédéric Bozo 322 Strasbourg to be a “major step” towards an IGC; hence Dumas’s idea, which he discussed with Genscher, to set up a high level group comprised of representatives of the Commission as well as representatives of foreign ministries and finance ministries of the Twelve and tasked with “putting on track” the preparatory work.118 By late July, Dumas had sold the idea to his colleagues and he proposed to Mitterrand that Guigou be picked as chair of the high-level group, which the president readily accepted. Although Guigou was reluctant to take on a task which she thought would be “demanding and delicate”, her profile as presidential adviser was an asset in Dumas’s view because it would facilitate coordination between the officials of the foreign ministry and those of the finance ministry and, crucially, encourage the Germans to engage in similar coordination, which would prompt the Chancellor to arbitrate between Waigel and Genscher’s divergent views.119 It quickly emerged that the main roadblock was the UK continued reluctance to agree to any effective advance toward an EMU. In the early fall, London made a last-ditch attempt at stalling the process by trying to postpone the launch of the Guigou group. Meeting in early September with Mitterrand at Chequers, the prime minister’s country residence, Thatcher argued that the Delors report approach was “not necessarily” the right one and that it was up to the ministers of finance to decide on the characteristics of a possible EMU. Yet Mitterrand conveyed to Thatcher his firm intention to “put the train on track” by using the full powers of the EC presidency. The preparatory work for an IGC, he said, must begin, so that the issues to be included in a treaty – and dealt with in an IGC – could be identified before the end of the year.120 Mitterrand’s only, formal, concession to Thatcher was to slightly postpone the beginning of work on substance among the Guigou group, which was nevertheless launched in September. The group worked swiftly, delivering a report in mid-October. 118 AN, AG5(4)/EG/90 dossier 2, Dumas note for Mitterrand, July 7, 1989; and Guigou note for Mitterrand, objet : union économique et monétaire. Procédure proposée par R. Dumas, July 10, 1989. 119 AN, AG5(4)/EG/90 dossier 2, Guigou note for Bianco, objet : avis sur la note de R. Dumas au Président concernant le groupe à haut niveau pour préparer la conférence intergouvernementale sur l’union économique et monétaire, July 27, 1989; Dumas note for Mitterrand, July 26, 1989; and Alain Holeville note, compte-rendu UEM, réunion du 24 juillet (3ème réunion), sous la présidence d’Elisabeth Guigou, July 27, 1989. 120 AN, AG5(4)/EG/90 dossier 2, Guigou note [probably for Bérégovoy], objet : rencontre entre le président de la République et Mme Thatcher. Union économique et monétaire. In search of the Holy Grail: France and European Monetary Unification, 1984–1989 323 Paris believed the exercise was a success in spite of the UK’s continued reluctance: there was consensus at eleven to move forward towards an EMU based on the Delors report, and there was agreement on the key issues to be dealt with in an IGC. All this represented the “considerable progress” made since the Madrid European Council.121 Crucially, Bonn now seemed to be fully on board. As her report was in its final phase, Bitterlich called Guigou to convey that Kohl would be “ready to accept” a timetable whereby the IGC would start in the second semester of 1990 and end in the second semester of 1991 under Dutch presidency, with the ratification of the treaty carried out in 1992 and its entry into force in early 1993. With the Strasbourg European Council less than two months away, this could only be seen in Paris as an encouraging signal that Kohl was now clearly willing to move forward.122 Yet the fourth step – which would eventually culminate at Strasbourg – turned out to be fraught with uncertainties, making for a dramatic endgame. It is not the place here to recount these events, on which much has been written.123 The fall of the Berlin wall on the night of November 9, 1989 – and, more generally, the reopening of the German question – was a game changer. Kohl now clearly engaged in foot-dragging when it came to summoning the IGC, invoking the need to avoid its opening prior to the December 1990 German general elections. As for Mitterrand, he doubled down on his objective to have a firm date set at Strasbourg. The Chancellor’s ten-point plan for German unity, announced in the Bundestag on November 28, was vague on the need to strengthen the European Community (but not on the need to open it up) in response to the events in the East, and it contained no mention of EMU. Might not a reunified Germany be tempted to abandon its commitment to the European project? Even more preoccupying as seen from Paris: Kohl on November 27 had sent a letter in which he seemed to renege on his intention to endorse Mitterrand’s timetable for the IGC at Strasbourg, as Bitterlich had 121 AN, AG5(4)/EG/91, De Boissieu note for Dumas, A/S Union économique et monétaire : rapport du groupe à haut niveau, October 17, 1989. See Secrétariat Général du Conseil, Projet de rapport sur les principales questions posées par la mise en place d’une union économique et monétaire, October 24, 1989, http://cv 122 AN/AG5(4)/EG/90 dossier 2, Guigou note for Mitterrand, objet : message de M. Bitterlich, collaborateur du chancelier Kohl pour les questions européennes, October 13, 1989. 123 On this, see e.g. Bozo, Mitterrand the End of the Cold War and German Unification, 111 ff; Loth, “Helmut Kohl und die Währungsunion”. Frédéric Bozo 324 conveyed to Guigou. Mitterrand’s objective of advancing EMU under the French presidency suddenly seemed in jeopardy, briefly creating tensions and giving rise to a trial of strength between Paris and Bonn in the run-up to the meeting of the European Council. In an emotional conversation on November 30 with Genscher – whom he knew was his best ally in Bonn – Mitterrand applied maximum pressure on the Germans. Telling Genscher that the reunification of Germany should be “absorbed in an even stronger European Community” in order to avoid going back to “1913” and a “Europe full of threats” (by which he meant a Europe where others, including Britain and the Soviet Union, and, implicitly, France as well might be tempted to coalesce against a dominant Germany), he said it was clear that the Federal Republic was now “pulling the brakes” when it came to EMU and to the strengthening of the European project in general. France and Germany, he went on, would have different positions at Strasbourg, which would only work in favor of those, like the UK, who did not want European construction to proceed. Restating that he believed German unification to be “unstoppable”, Mitterrand said he wanted to help the Germans, “but not to the detriment of Europe”. The Germans, he concluded, “were facing a very important choice”, adding: “At Strasbourg, I will ask you that question in full clarity.”124 Mitterrand’s tactics paid off. Shortly before Strasbourg, Bitterlich once again called Guigou, this time to say that Kohl was ready to yield. Indeed, on the first day of the European Council meeting in the Alsatian town, the German Chancellor said he agreed on Mitterrand’s calendar for EMU. This allowed the French president, based on article 236 of the Rome Treaty, to observe that the Twelve gave their formal consent to the summoning of an IGC, which was due to begin work under Italian presidency, i.e. before the end of 1990. Although this was not the end of the journey, Strasbourg was seen in Paris as a major success, and the culmination of four years of intensive efforts to prioritize monetary unification. Kohl had justified his change of heart by saying that it was “necessary to move forward.”125 124 Genscher-Mitterrand meeting in Paris, November 30, 1989, in: Hilger (ed.), Diplomatie für die deutsche Einheit. Dokumente des Auswärtigen Amts zu den deutsch-sowjetischen Beziehungen 1989/90, 56 ff. 125 AN, AG5(4)/AH/14, French presidency, handwritten notes on the European Council meeting, Strasbourg, December 8, 1989. In hindsight, it seems quite possible that the apparent procrastination on the part of Kohl, ever the tactician, in the last weeks of 1989 was, in fact, calculated and that the Chancellor deliberately waited until the last moment to give his final consent to the summoning of the IGC with a view to maximizing the political price of his acceptance. Hence, In search of the Holy Grail: France and European Monetary Unification, 1984–1989 325 Conclusion: the meaning of Strasbourg and beyond This is not the place to discuss once again the quid pro quo which allegedly took place at Strasbourg between German unification and EMU. Suffice it to note that the existence of such a quid pro quo is hard to reconcile with the basic fact that Paris was not opposed to German reunification and that Bonn was not opposed to EMU, in essence making the discussion moot.126 It is indisputable, however, that Strasbourg marked the culmination of a Junktim, which had steadily built up throughout the year 1989 and was in line with the long-held notion that any German reunification should take place in the framework of European unification – the cornerstone of French and German policies since the early days of European integration in the 1950s. So why did this Junktim culminate at Strasbourg in December 1989, decisively clearing the way for an IGC and the negotiation of a treaty on EMU? Two observations are in order. First, for the French, European monetary unification had clearly become an end in itself in the wake of the completion of the Delors report in the spring of 1989. The debate on the merits of EMU never really took place within the decision-making apparatus at that critical juncture. Rather, it was overshadowed by the procedural issue. In on December 3, a few days before Strasbourg, Kohl had told U.S. President George H. W. Bush that “nobody does more for Europe than he” and that “without him there would have been no progress in the development of the EC”, adding that “he had done all this together with President Mitterrand,” a remark that in retrospect can be interpreted as a sign that Kohl had already decided to make a concession on EMU at Strasbourg. See Gespräch des Bundeskanzlers Kohl mit Präsident Bush, Laeken bei Brüssel, 3. Dezember 1989, in: Hanns Jürgen Küsters / Daniel Hofmann (eds.), Deutsche Einheit. Sondereditionaus den Akten des Bundeskanzleramtes 1989/90, Munich: Oldenbourg, 1998, Doc. 109, 600–9. Shortly after the European Council meeting, Kohl told U.S. Secretary of State James Baker that “he was pleased to give France her moment of glory for the success at Strasbourg but without him it wouldn’t have happened”, adding that he had agreed to the EMU “against the German interest” because it was “politically important”. Gespräch des Bundeskanzlers Kohl mit Auβenminister Baker, Berlin (West), 12. Dezember 1989, in: Küsters / Hofmann (eds.), Deutsche Einheit, Doc. 120, 636–41. Kohl was clearly eager to make the best of his acceptance of EMU, in many ways also preparing the ground, perhaps unconsciously, for the narrative of the alleged “sacrifice” of the deutschemark on the altar of German unity. 126 See Bozo, Mitterrand, the End of the Cold War and German Unification, and Frédéric Bozo, “From ‘Yalta’ to Maastricht: Mitterrand’s France and German Unification”, in: Frédéric Bozo / Andreas Rödder / Mary Sarotte (eds.), German Reunification: A Multinational History, Abingdon/ New York: Routledge, 2016. Frédéric Bozo 326 the run-up to the Madrid European Council, the French priority became to maximize the chances of a decisive advance during the French EC presidency, knowing that the solidity of Kohl’s commitment remained uncertain against the backdrop of a complicated domestic situation – namely tensions and disagreement within the governing coalition and a looming general election in 1990 – a risk which in the fall became compounded by the effects of the reopening of the German question. Hence a second observation: the prioritization of EMU throughout 1989 unmistakably led the French to silence their long-held preferences in that realm in the knowledge that this was a conditio sine qua non for Germany’s acceptance, not least when it came to the functioning of a possible European central bank system. As noted above, the independence of any European central bank system had been, at least implicitly, accepted by Mitterrand during his December 1988 meeting with de Larosière. By the end of summer 1989, Bérégovoy, who had been initially extremely reluctant in that regard, had all but rallied to the German conception, conceding to Waigel during an important meeting on Lake Tegern in Bavaria that the French and the Germans “were very close to an agreement” on the “status and functioning” of a possible European central bank system.127 Beyond the strictly monetary aspects, the French were also less inclined to affirm their vision of the functioning of a future EMU. True, in the wake of the Guigou report, the French highlighted what in their view would become the decisive issue in the following months and years: the need for a “counterweight to the new [European] monetary power” to emerge in the framework of EMU in order for future economic policies not to be organized “around the sole pole of monetary stability”; in other words, the need for the emergence in the future of a so-called “economic government”, which would remain a central French preoccupation well beyond the Maastricht treaty. Yet, although Paris continued (and would long continue) to be fixated on the need for institutional balance between monetary and economic powers within the future EMU, it was clear by the time of Strasbourg that their other longtime economic preferences – such as the need for flanking policies devised to attenuate the effects of market liberalization, including through tax harmonization or social policies – were now seen as lesser priorities. “One must not overload the boat”, the 127 AN, AG5(4)/EG/88 dossier 1, MEF, Guillaume Hannezo note for Hervé Hannoun [Bérégovoy’s chief of staff], August 28, 1989; and Trichet note for Bérégovoy, objet : conseil franco-allemand. Union économique et monétaire, August 24, 1989. See also Dyson / Featherstone, The Road to Maastricht: Negotiating Economic and Monetary Union, 192–3. In search of the Holy Grail: France and European Monetary Unification, 1984–1989 327 Quai d’Orsay warned in the run-up to Strasbourg.128 As a matter of fact, the harmonization of capital taxation was now de facto abandoned as a short to medium-term goal, and the social charter more and more looked like an empty shell. It was increasingly clear that the absolute prioritization of EMU in French policies led to muting other long-standing priorities in order to obtain the German consent. So how is the French choice of promoting EMU as the central project in European integration even at the expense of other long-standing priorities to be explained? In retrospect, studying the French activism in European monetary integration from the 1984–85 relance to the December 1989 Strasbourg European Council helps provide an answer. On the monetary level, France’s prioritization of EMU was of course the reflection of the country’s economic and monetary trajectory since the March 1983 “turn”, which over the course of just a few years had led policymakers to all but espouse the German approach in these matters. By 1989, the March 1983 decision was seen as a major success, not least in terms of finally bringing down France’s perennial high inflation rate.129 As he was preparing to meet Waigel in Bavaria in late August 1989, Bérégovoy wanted to deliver a strong message in that regard: France had become “serious” in these matters, as shown by an inflation rate that was now just 0.5 percent higher than that of the FRG and a public deficit that was now well below 2 percent of the country’s GDP. “France, like Germany”, Bérégovoy said, wanted “a Europe of stable currencies”.130 The feeling that the post 1983 transformation of French economic policy was now a clear success and that 128 AN, AG5(4)/EG/91, De Boissieu note for Dumas, A/S Union économique et monétaire : rapport du groupe à haut niveau, October 17, 1989. On the notion of an economic government, see Dyson / Featherstone, The Road to Maastricht: Negotiating Economic and Monetary Union, 221 ff. 129 In preparation for an interview Bérégovoy was meant to give to the economic weekly L’Expansion in spring 1989, his staff drafted talking points that paid tribute to the economic and monetary policies waged since 1983 and declared a definitive break with past inflationary policies and competitive devaluations, which were now to be replaced by a policy of “competitive disinflation”: “We pursue in that realm the same policy as Germany,” the document said, adding: “Our economic results converge for the first time since several years with those of our best European partners”. Cf. AN, AG5(4)/EG/90 dossier 2, Note for Bérégovoy, n.d. [probably spring 1989], unsigned [probably Hannoun], objet : éléments de discours pour l’interview à l’Expansionsurl’Europe. On the notion of “désinflation competitive”, see Dyson / Featherstone, The Road to Maastricht: Negotiating Economic and Monetary Union, 76 ff. 130 AN, AG5(4)/EG/88 dossier 1, Trichet note for Bérégovoy, objet : conseil francoallemand, August 24, 1989. Frédéric Bozo 328 France’s conversion to the German model – which to a large extent had motivated the creation of the EMS ten years earlier – was well on its way could only encourage the French to desire further progress along the road toward an EMU based on their newly acquired monetary credentials. The hope was, not least, to finally abolish the premium on interest rates which the country had to consent in order to maintain a stable exchange rate with the deutschemark within the EMS – a premium that, by the end of the decade, French policymakers believed had become all but unjustified in view of the country’s actual performance. This was all the more so because since 1987 the destabilizing effects of the increased mobility of capital had led policymakers to recognize the limitations of a system of adjustable currencies – hence the appeal of a quantum leap towards a single currency. As we have seen, the views of the Commission in these matters were very close to those in Paris in that crucial period, which was of course seen as an important factor. Another reason for the French prioritization of EMS/EMU in those years resides in the (with hindsight) perplexing notion that a strengthened EMS, let alone a fully-fledged EMU, was the best antidote against the supremacy of the free market and a German-dominated Europe. As seen above, in the course of the SEA negotiation and in its wake, the French had come to realize that their insistence on flanking policies such as tax harmonization or a social Europe in order to preserve a level playing field and their willingness to promote new common policies in exchange for market liberalization – a vision which, by and large, was shared by the Commission – were not getting much traction with most other member states. As a result, French policymakers came to identify monetary integration and, eventually, unification as the single most desirable objective in order both to equip the single market with what they believed would constitute the functional equivalent of the CAP in the original common market (i.e. a common policy with a potential for reining in the logic of the market in a vital sector) and as the most promising way to assuage the increasing German economic and monetary dominance in the EC. This is a rather puzzling finding since, in retrospect, the objective of a strengthened EMS and eventually an EMU could but accelerate the drive toward the liberalization of exchanges in general and of capital in particular, without checks such as tax harmonization being put in place. By 1989, whatever flanking policies the French had tirelessly wanted to promote over the years were simply no longer seen in Paris as having equal priority compared with the by now vital objective of moving towards an EMU. The bottom line is clear: the French, implicitly, had put themselves in a position of demandeurs with the Germans, silencing their preferences in other In search of the Holy Grail: France and European Monetary Unification, 1984–1989 329 realms and, as a result, de facto accepting an increasingly “neo-liberal” model of economic integration. Of course, it would be exaggerated in retrospect to say that the French, in that decisive period, opened the way to German economic and monetary dominance in the hope of containing such dominance in the first place. True, as seen above, any EMU based on the Delors report was seen in Paris in the spring of 1989 as something of a leap into the unknown, or, at least, in the words of Guigou, as a “wager”. But in the context of 1989 this was a wager that was seen as having reasonable chances of being successful given the perceived success of France’s post-1983 economic and monetary policies and the hoped-for spill-over effects that a common currency would trigger in the long run, not least the emergence of an “economic government” to counterbalance monetary power. We now know that things did not turn out exactly that way, but we should avoid hindsight bias. Finally and perhaps even more vitally, geopolitics were central to France’s European monetary choices of the second half of the 1980s. The increasing prioritization of monetary integration in Paris from 1985 onwards and its 1989 culmination in an all-out wager in favor of EMU would likely not have taken place absent a fundamental geopolitical motivation that derived from the acceleration of events in the East: building a “Europe puissance” in response to the end of the Cold War and, crucially, embedding a soon-to-be unified Germany in an ever more unified Europe. By 1989, obtaining the German consent to EMU had become for the French no less than a Holy Grail whose attainment would determine the destiny of Europe and France’s role in it faced with the looming prospect of German unification. In retrospect, then, France’s prioritization of monetary unification in the last years and months of the decade was, first and foremost, the consequence of a long established strategy to bring about a European Germany rather than a German Europe. Whether this was a reasonable calculation in light of the current situation of the continent evidently escapes the scope of this article. Frédéric Bozo 330 Between France and the Bundesbank: Hans-Dietrich Genscher, Helmut Kohl and the Breakthrough of the Monetary Union Wilfried Loth With the consolidation of the EMS in the early 1980, its further development into a monetary union came onto the agenda once again. François Mitterrand became a particularly strong advocate of such a move after having decided over the course of 1983 to make the expansion of the European Union into a central theme of his presidency. A memorandum produced by Roland Dumas with support from the Quai d’Orsay and the French Finance Ministry was presented on 1 June 1984. It emphasized the necessity of increased co-ordination of monetary policy and the development of common economic framework planning so as to safeguard stability and growth. Private use of the ECU was still to be promoted. Lastly, the European Monetary Cooperation Fund ought to be expanded into a European Monetary Fund with which the European currencies could be defended against the dollar. In this way, a genuine European and international currency should be developed out of the ECU.1 The resumption of plans for a monetary union was justified in the Dumas Memorandum primarily by citing the necessity of overcoming subordination to swings in the dollar exchange rate and American interest-rate policy. With the growing self-commitment to the mark there was a second motive: one-sided subordination to the dollar policy and interest-rate policy of the West German Bundesbank. This was all the more difficult to bear because the Bundesbank was contributing far less to preserving the parities than the central banks of the weaker countries; this was due to the prevalence of preventative unilateral intervention before the intervention threshold had been reached. The “deviation threshold” on an ECU basis, at which the Bundesbank too would be forced to intervene, was seldom reached; and over time, this instrument for balanced promotion of convergence was practically forgotten.2 1 Reported in Kenneth Dyson and Kevin Featherstone, The Road to Maastricht. Negotiating Economic and Monetary Union, Oxford: Oxford University Press, 1999, 152ff. 2 Horst Ungerer, A concise history of European monetary integration: From EPU to EMU, Westport CT: Quorum Books, 1997, 163. 331 Along with the comfortable position that the Bundesbank had attained through this development, there also grew the opposition to mutualizing monetary reserves or monetary policy. Bundesbank President Karl Otto Pöhl did guard against appearing as the principle opponent of a European Monetary Union. However, by demanding that before any individual reform measures were taken, a definitive institutional design for this union be agreed upon, he did consciously raise the hurdles for realizing such a plan. Kohl was not able to reduce them very easily because Finance Minister Stoltenberg, who worked closely with the Bundesbank, was increasingly gaining popularity and soon constituted a potential rival of the chancellor. In principle, Kohl was already in favor of the monetary union; he regarded it as self-evidently belonging to his vision of a unified Europe. He had to be careful however to succeed with it in consensus with West German politics or at least with those of his party, and that led him to hesitate to embrace the French initiatives. The concessions that he found himself willing to make during the formulation of the Single European Act did not go nearly as far as Mitterrand had hoped.3 Why this time the French initiative was successful? Why, instead of another vague promise to promote monetary cooperation, Mitterrand’s demands now led to the breakthrough towards the monetary union? To understand this outcome we have to look at eight main actors: French President François Mitterrand and German Foreign minister Hans-Dietrich Genscher on the one side, supported by an tireless Commission president Jacques Delors; German finance minister Gerhard Stoltenberg and his successor Theo Waigel as well as Bundesbank President Karl Otto Pöhl, and British Prime minister Margaret Thatcher on the other; and German chancellor Helmut Kohl in the middle of the scene. Genscher’s memorandum A first breach in the West German defensive front came in the winter of 1986–87, when a dramatic drop in the dollar put the French franc under devaluation pressure and also put pressure on the mark to rise. Jacques Chirac, who had been prime minister under Mitterrand ever since the Gaullists’ victory in the parliamentary elections of March 1986, blamed this on the hike in money-market interest rates by the Bundesbank. 3 Wilfried Loth, Building Europe. A History of European Unification, Berlin/Boston: De Gruyter Oldenbourg, 2015, 277–281. Wilfried Loth 332 Stoltenberg defended the Bundesbank against the public criticism from Paris. Internally, however, he had to acknowledge the legitimacy of the criticism and drew the conclusion that the monetary system had to be equipped with better mechanisms to protect against speculative pressure. The Bundesbank was in this way to be prompted to take a more flexible approach and at the same time be protected against further attacks. The Franco-German confrontation ended on 12 January 1987 with a decision of the finance ministers to raise the value of the mark and Dutch guilder by a modest three percent and the Belgian-Luxembourg franc by two percent. The demand for devaluing the French franc was dropped. At the same time, the finance ministers commissioned the Monetary Committee and the Committee of the Central Bank Governors to develop a concept for strengthening the intervention mechanisms of the monetary system. This was passed by the central bank governors on 8 September 1987 in Basel and then confirmed without revision by the finance ministers in Nyborg in Denmark on 12 September. Notably, the Basel-Nyborg Agreement contained two concessions that the Bundesbank had rejected in a similar initiative by the European Commission in March of 1982: Very short-term EMS credits could in the future also be used for financing preventative “intra-marginal” interventions, and repayment of intervention credits could in the future be paid entirely in ECUs, not only half in ECUs as had been the case up to that point. Additionally, the central bank governors were to make increased efforts to call attention to cases of inconsistency in national monetary policies and also pursue interest-rate policy with the goal of preserving parities. Pöhl also succeeded in having his colleagues explicitly commit themselves to greater internal and external stability.4 Foreign Minister Genscher was obviously not yet satisfied with the increased commitment of the Bundesbank to the goal of monetary union as contained in the Basel-Nyborg Agreement. For him, the valuation crisis of late 1986 and early 1987 had made it clear that monetary union needed to be put on Bonn’s agenda despite the temporizing opposition of the Bundesbank. Not only was he pressured by Dumas, to whom it was abundantly clear that a public initiative needed to come from the German side in order to succeed. Genscher moreover feared that the monetary system could not survive the continuance of the existing asymmetries much longer. The goal of Political Union would also be endangered by such a prospect—and 4 Ungerer, Concise history, 180. On this and the following, cf. Dyson and Featherstone, Road, 156–180 and 306–342. Between France and the Bundesbank 333 at a point in time when it was needed more than ever, given the reform initiatives of Soviet General Secretary Mikhail Gorbachev. The reforms in the Soviet Union and the efforts to overcome the Cold War being undertaken by Gorbachev gave the project of a European Monetary Union a wholly new urgency in Genscher’s view: “The East-West rapprochement called for nothing less than an EC more capable of acting, one that worked closely together rather than drifting apart. Moreover, in light of the new developments, the German attitude on this was watched keenly not only in Paris: Would the Germans remain on board the European Union ship or would they again go their own way? As soon as German reunification became an issue, this question would heat up; there could be no uncertainties, no ambiguities, because these would have had devastating consequences.”5 Genscher clearly perceived that behind the growing pressure from the French side there also lay worries about an emancipation of the Germans from the European Community. These worries could only be countered by timely efforts for more strongly integrating the Germans. The West German foreign minister therefore sought an opportunity for substantially reducing the Bundesbank’s influence over Bonn’s attitude toward the monetary-union project. He found it when in the national elections of January 1987 his FDP gained significantly and when Stoltenberg lost appreciable influence in the autumn and winter of 1987–88 due to the “Barschel Affair” in his political base of Schleswig-Holstein. After the German success in passing the “Delors Package” at the Brussels Council meeting of 11 and 12 February 1988 had further increased Genscher’s esteem in the West German public as well as his European partners, he publicly presented a carefully-worked-out plan for creating a “European monetary area” on 26 February. This was intended to outmaneuver the opposition of the Bundesbank and to force the hand of the still-hesitant chancellor. The memorandum was deliberately not coordinated within the government and therefore functioned as a personal statement by Genscher, not as an official declaration of the foreign minister. It took up the objectives for a monetary union that had been expressed by Pöhl and other representatives of the Bundesbank and combined them with a proposed procedure that aimed for realization in short order. The centerpiece of the monetary union was to be the establishment of a European Central Bank, which was to be as autonomous as the Bundesbank and likewise committed to the goal of price stability. In order to get this underway, the European Council was 5 Hans-Dietrich Genscher, Erinnerungen, Berlin: Siedler, 1995, 387. Wilfried Loth 334 to create at its next meeting in June an “expert committee” with “professional and political authority”; within a year’s time, this body was to determine the key points for creating a European economic space, to work out the statutes of the European Central Bank, and to develop plans for the transition period up to the completion of the monetary union, which were to be guided by the principle of parallelism in economic and monetary integration.6 It was now the case that the opponents of the currency union could only raise objections as to the process, and they did so immediately. On 15 March, Stoltenberg sent the State Secretary Committee for European Affairs and monetary committee of the EC Council of Ministers a countermemorandum that had been developed in close cooperation with the Bundesbank. This document listed a whole series of preconditions to be fulfilled before a European Central Bank was established: further “augmentation” of monetary cooperation and orientation on the stability goal, irrevocable freedom of capital movement in the Community, increased convergence of economic development, unrestricted participation of all member states in the monetary system, guaranteed independence of the national central banks, and a substantial transfer of national sovereign rights to the Community level—a transfer that went beyond the field of monetary policy.7 From this perspective, the monetary union remained a long-term goal that could be realized only if all member states had adjusted to German conditions, thus in keeping with the “crown theory” that was so beloved of German financial experts. Genscher’s arguments made obvious sense to Kohl. In light of the nowpublic conflict within his government, however, the chancellor continued to lie low, awaiting further reactions to Genscher’s initiative. Only after representatives of industry and commerce had expressed themselves overwhelmingly positively and after Mitterrand had been re-elected on 7 May did the chancellor decide take up the proposal for creating a committee of experts. In order to ensure success, he insisted that the membership must include not only a group of independent personages but also the central bank governors. At the Franco-German summit of 2 June in Evian, Kohl proposed that Delors—with whom he was in the meantime working closely—be the chairman of the committee. At the same time, the chancellor 6 Henry Krägenau and Wolfgang Wetter, Europäische Währungsunion. Vom Werner- Plan zum Vertrag von Maastricht. Analysen und Dokumentation, Baden-Baden: Nomos Verlag, 1993, 310–312. 7 Ibid., 337ff. Between France and the Bundesbank 335 asked that Mitterrand fulfill a precondition that was especially important to Stoltenberg: the free movement of capital in the Community.8 After the French had acceded to this request and after the EC Council of Ministers on 24 June had decided that capital should move freely no later than 1 July 1990, the way was clear for Kohl to emerge at the next Council meeting as the initiator of the monetary union. Stoltenberg’s opposition could be neutralized by reference to the success in liberalizing capital movement. The Delors Committee At the Council meeting in Hannover on 27 and 28 June, Kohl first sought to persuade Thatcher in a private conversation that she had nothing to fear from a committee that consisted essentially of orthodox central bankers. Then, just after the members of the Council had confirmed Delors for another term as Commission president, Kohl made the proposal at dinner that the Frenchman be appointed chairman of the committee. The entity was also to consist of all twelve central bank governors along with Frans Andriessen (as an additional member of the European Commission) as well as Miguel Boyer (president of the Foreign Trade Bank of Spain), Alexandre Lamfalussy (general director of the Bank of International Settlements), and Niels Thygesen (an economics professor in Copenhagen) as independent members. With this constellation, the proposal was accepted by one and all. Thatcher only insisted that the issue of creating a European Central Bank not be explicitly written into the committee’s mandate. And Tietmeyer, who once again was part of the delegation as “watchdog” from the finance ministry, succeeded at the last moment in adding a provision that the central bank governors act only in their own names and not for their institutions. In the closing press conference, Kohl—then serving as Council president—stated that he was “ninety percent sure” that the European Central Bank would be realized by the year 2000.9 With the creation of a committee to develop a roadmap to monetary union, the transition to a common currency had in fact once again been put on the agenda of the Community; and with the inclusion of the central bank presidents, the opposition of the Bundesbank had been neutral- 8 Noted in Jacques Attali, Verbatim. Tome 3: Chronique des années 1988–1991, Paris: Fayard, 1995, 32. 9 Europa-Archiv 43 (1988), D443-D447; on the course of the meeting, also Jacques Delors, Erinnerungen eines Europäers, Berlin: Parthas Verlag, 2004, 383–385. Wilfried Loth 336 ized. Pöhl did complain that Delors was an unqualified politician and also sought to shift his committee assignment to another member of the Bundesbank directorate. In light of the participation of all the other central bank presidents, however, he could not in the end avoid the assignment. The only possibility remaining to him was to represent the position of the Bundesbank as aggressively as possible in the Delors Committee and so keep the hurdles high on the path to monetary union. The Delors Committee met in Basel, following on the monthly sessions of the committee of the central bank presidents. It quickly became apparent that Pöhl had ended up on the defensive. In his reservations against accelerating the movement toward monetary union, it was true that he was for the most part supported by Danish Central Bank President Erik Hoffmeyer and his Dutch colleague Wim Duisenberg. On the other side, the Italian Carlo Ciampi, the Belgian Jean Godeaux, and the Frenchman Jacques de Larosière were zealous advocates of the monetary union; Boyer and Thygesen, as members of the “Committee for the Monetary Union of Europe” that had been created by Schmidt and Giscard in late 1986, were already focused on rapid progress on monetary unification. Yet, Delors concentrated on achieving a common answer among all the members regarding the path to monetary union. Hence, he did not insist further when Pöhl characterized certain demands as non-negotiable; and the chairman also strove for the utmost civility. When an exasperated Pöhl took off his headphones during Delors’ French-language remarks, the undaunted chairman continued speaking in his poor English. Delors’ firm purposefulness and the mediation services repeatedly provided by Duisenberg worked to ensure that by 12 April 1989 a report had in fact been produced, one that was supported by all Committee members. It steered the course charted by Genscher but also contained some fuzziness, behind which lay ongoing differences of opinion. It followed the German input in describing the goal of an independent European Central Bank system, led by the directorate of the European Central Bank as well as the presidents of the national banks and committed to the goal of price stability. In this, Mitterrand had given de Larosière his blessing because he knew that the monetary union could not be achieved in any other way. In order to demonstrate the irrevocability of the setting of the exchange rates, there was also nominally to be a Community currency. In contrast, when it came to the parallel development of common economic and fiscal policy, which Delors regarded as necessary if the monetary union were to function over the long term, there was only vague talk of “macro-economic coordination, including binding rules in the budgetary field.” The explicit mention of the “transfer of decision power” to the European level con- Between France and the Bundesbank 337 tained in an early draft was struck by Delors because he thought it would not be possible to gain approval for it. Regarding the roadmap, Delors succeeded in winning approval for a process in three stages as well as the recommendation that right at the beginning of this process there be “a clear political commitment to the final stage.” Regarding a timetable, as the Schmidt-Giscard Committee had demanded, there remained only the recommendation to let the first stage begin no later than when movement of capital was freed up on 1 July 1990. Aside from that, it was not clearly stated as to which conditions needed to be fulfilled in order to move from the first to the second stage or from the second to the third, nor were any time points specified for these transitions. In the first stage, convergence was to be further promoted by economic development and economic policy; and all member states were to join the exchange-rate mechanism of the EMS. Additionally, a treaty on economic and monetary union was to be worked out. After ratification of the treaty, the second stage was to be entered upon, in which the European Central Bank system was to organize the transition to full monetary union for the third stage. As to organizing the transition in the second stage, the report of the Delors Commission likewise remained vague. Pöhl successfully fended off Larosière’s demand for the establishment of a European Monetary Fund for this transition phase, likewise the idea of creating a parallel European currency that was to be legal tender alongside the national currencies. The report only retained the provision that the European Central Bank was to have the possibility of accumulating “a certain amount of reserves” and using them for intervening in the foreign-exchange markets. The bandwidths among the national currencies were to be narrowed to the extent allowed by circumstances and by progress toward convergence. Additionally, precise rules were to be agreed upon for the size and financing of budget deficits; these were not yet to be binding, however. “Guidelines” for macro-economic development were to be passed by majority vote; at the same time, “ultimate responsibility” for political decisions in this phase was still to rest at the national level.10 10 “Bericht zur Wirtschafts- und Währungsunion der EG,” in: Europa-Archiv 44 (1989), D283-D304; Krägenau and Wetter, Europäische Währungsunion, 33–40. On the negotiations in the Delors Committee, Dyson and Featherstone, Road, 342– 350 and 713–720; Delors, Erinnerungen, 385–389; Harold James, Making the European Monetary Union. The Role of the Committee of Central Bank Governors and the Origins of the European Central Bank, Cambridge, Mass.: Belknap Press, 2012, 234– 261. Wilfried Loth 338 It was true that the Bundesbank’s fundamental essentials regarding the shape of the future monetary union were thereby retained and that the tempo of its realization remained unclear. Nevertheless, with the recommendation for an immediate launch along with simultaneous commitment to the final goal, a strong impetus had now been given for further developing the monetary system into a monetary union. Immediately after the publication of the report on 17 April, Pöhl began to distance himself from its contents and to warn against a “hasty” realization of the recommended steps. New West German Finance Minister Theo Waigel reacted by publicly affirming the “crown theory”; he clearly rejected acceleration on the path to monetary union. The Academic Advisory Board of the West German Economic Ministry went further by speaking out against binding budgetary rules at the European level. In a letter to Economic Minister Helmut Haussmann, this body warned against beginning treaty negotiations on the basis of the Three-Step-Plan.11 Against this, Mitterrand, Delors, and Genscher pushed for approval of the report of the Delors Commission at the next Council meeting in Madrid and also for approval of a government conference to draft the treaty that was necessary for stage two. The fact that it had been possible to get all the central bank presidents to commit themselves to a common program had to be made use of—the iron had to be struck while it was hot. Therefore, Mitterrand spontaneously shoved aside the reservations of French Finance Minister Pierre Bérégovoy regarding the lack of economicand fiscal-policy taxing authority for the projected union. During a conversation at the Élysée Palace on 11 May, the president made it clear that the risks entailed by France in allowing the free movement of capital were more than outweighed by the advantages of the monetary union.12 With the pressure that the advocates of the monetary union were putting on him, Kohl once again found himself facing a dilemma: On the one hand, he shared their analysis of the situation and the conclusions they drew from it; on the other hand, it was exactly at that time that he needed to act with particular caution in regard to domestic politics. The criticism of his leadership had escalated, and his own general secretary, Heiner Geißler, was about to have him removed. Therefore, he simply could not afford to deceive Finance Minister Waigel, who had succeeded Franz-Josef 11 Letter of June 5, 1989, Krägenau/Wetter, Währungsunion, 213ff. Cf. Hans Stark, Kohl, l’Allemagne et l’Europe. La politique d’intégration européenne de la République fédérale 1982–1998, Paris: Éditions l’ Harmattan, 2004, 90ff.; Dyson and Featherstone, Road348ff. 12 Ibid., 188. Between France and the Bundesbank 339 Strauss as chairman of the Bavarian CSU and who was supporting the chancellor against the criticism within the party. In cabinet discussions, Genscher did succeed in gaining government support the adoption of the Delors Report as well as the start of the first stage on 1 July 1990. However, Waigel and Tietmeyer—whose expertise the new finance minister greatly valued—argued that before a determination had been made on beginning the government conference, there was still a series of “technical issues” that had to be resolved. Kohl did not dare to contradict them.13 In Madrid, where the heads of state and of government gathered on 26 and 27 June, it was thus not possible to decide anything more. Kohl made use of Thatcher’s opposition to a new treaty to present himself as a mediator and then worked toward a result that would again give him some time: The report of the Delors Commission was hailed as an indispensable basis for the preparations for the monetary union, and the start of the first stage was set for 1 July 1990. The government conference was only to meet after the responsible entities—that is, the General Council, the Finance Ministers Council, the Commission, the Committee of the Central Bank Governors, and the Monetary Committee—had completed the necessary preparations. Under no circumstances was the government conference to begin before the start of the first stage. Additionally, the Council explicitly approved the West German proposal to set unambiguous convergence criteria; it also rejected the French plan for a European Reserve Fund.14 Mitterrand’s pressure Mitterrand then sought to make use of his European Council presidency in the second half of 1989 to give decisive impetus to the preparations for the government conference and to wring from the Germans a binding date for its start. It was at least to begin before the end of 1990. The decisions necessary for it were to be made at the next Council meeting in December in Strasbourg; these were to be prepared by a work group made up of representatives of all foreign and finance ministries under the leadership of Mitterrand’s European advisor, Elisabeth Guigou. As Mitterrand said to Thatcher during a lightning visit on 4 September, his intention was “to put the train on its wheels”; and it should not be impeded by “one or two 13 Ibid., 350–354. 14 Europa-Archiv 44 (1989), D406ff. Wilfried Loth 340 states.”15 In other words, France was prepared to start moving on the monetary union even if Britain would not immediately join in. In pressing to have a government council summoned, Mitterrand was helped by circumstances: The prospects for overcoming the division of Europe and thereby also the division of Germany—which were becoming more clear over the course of the summer and autumn of 1989—generated wider support for the understanding of strategic necessities that drove Mitterrand and Genscher. In light of the opening of Hungary’s border with Austria and the formation of an all-party government in Poland, both Bérégovoy and Waigel began to realize that regardless of their different conceptions as to how it was to be accomplished, the monetary union had to be implemented quickly. At their first encounter within the framework of the Franco-German Economic Commission (at Tegnersee on 24 and 25 August), the two men came to trust one another. Their two agencies no longer worked secretly against the monetary union but now worked constructively toward it. Even Pöhl now became convinced that for political reasons the monetary union had to come. Added to this was the fact that Kohl was able to prevail in the intraparty power struggle of the CDU at the Bremen party congress during the second week of September. With new self-confidence, he now spoke for the Germans of the GDR too. He also perceived the necessity of making timely gestures so as to counter possible irritation among his allies regarding a new special German path of development away from the Community. On 13 October, European advisor Joachim Bitterlich informed his French colleague Guigou that at the upcoming December Council meeting in Strasbourg, the chancellor would make an appeal for an agreement on the meeting of the government conference. It would open before the end of 1990. Negotiations were to lead to a treaty by the end of 1991, and ratification was then to follow over the course of 1992.16 Mitterrand understood that these negotiations should begin only after the German elections of December 1990 so as to keep the issue of the monetary union out of the election campaign. 15 AN, 5AG4, 88 EG d.1, quoted from Jean-Marie Palayret, “La voie française vers l’Union économique et monétaire durant la négociation du traité de Maastricht (1988–1992),” in: Martial Libera and Birte Wassenberg (eds.), L’Europe au cœur. Études pour Marie-Thérèse Bitsch, Brussels: Émile Bruylant, 2009, 197–221, here. 209. 16 Guigou to Mitterrand, 13 October 1989, AN, 5AG4, 6874; cf. also Attali, Verbatim III, 321. Between France and the Bundesbank 341 Despite the fact that Kohl had backed down, nothing had actually been decided yet, although Mitterrand thought otherwise. Rather, with the upheavals in Hungary and Poland as well as the visible decay of the SED regime in East Germany, the chancellor drew the conclusion that along with economic and monetary integration, the political unification of Europe had to be accelerated. This seemed necessary to him, firstly, in order to create a strong framework for the process of German reunification; secondly, he also saw new tasks for the Community in overcoming the legacies of Communism in Eastern Europe. Eleven days after the message that Bitterlich had communicated, Kohl himself flew to Paris to say this to Mitterrand. As Attali noted during a dinner shared by the two leaders on 24 October, “it would be necessary to take up a political European project after the economic one.” The chancellor also made it clear that such an initiative was urgent in his view: “The summit in Strasbourg must send a clear message to the East.” It did not escape Mitterrand that his guest reacted evasively to his question about the date for the government conference: “One can’t decide anything before seeing what happens in Strasbourg.” That made the French president mistrustful. Attali concluded his notes on this “headspinning” meeting with the observation that “I feel for the first time that the chancellor is not confiding in us everything that he knows and that he wants.”17 This mistrust grew into great anxiety when Kohl specified his ideas in a letter to Mitterrand on 27 November: In Strasbourg, the finance ministers and central bank presidents should be commissioned to prepare the government conference; and the conference should not only concern itself with the economic and monetary union but also, in a second phase from the end of 1991 onward, deal with the other institutional reforms, especially with the strengthening of the position of the European Parliament. The “political decision for implementing the government conference on the economic and monetary union” should be made only in the middle of December 1990, and the negotiations should first begin in early 1991. Both parts of the negotiations should be wrapped up over the course of 1992, “in December at the latest.” As was emphasized in the conclusion 17 Attali, Verbatim III, 325–327. On this and the following, also Hanns Jürgen Küsters, “La controverse entre le Chancelier Helmut Kohl et le Président François Mitterrand à propos de la réforme institutionnelle de la Communauté européenne (1989/1990),” in: Marie-Thérèse Bitsch, Le couple France-Allemagne et les institutions européennes, Brussels: Émile Bruylant, 2001, 487–516, here 491–496; Dyson and Featherstone, Road, 363–366. Wilfried Loth 342 of the document, the ratification could then take place promptly before the next elections to the European Parliament in May and June of 1994.18 This announcement of postponing the political decision on the monetary union for another year, along with its incorporation into a more comprehensive reform project containing many pitfalls, was perceived in Paris as a covert rejection. “If that really is the position of the chancellor,” Attali commented, “then it means that he’s been swayed by the British arguments. And that everything is buried. German problems will sweep across the European construction.”19 It was not only the project of the monetary union that threatened to fail at exactly the moment when, in the French view, it was especially urgent but also the incorporation of Germany altogether. This was after all an essential motif of policy on Europe – and not only of French policy. The final crisis Up to this point, Mitterrand viewed German-policy developments much more calmly. True, he was worried that an uncontrolled unification movement among the Germans could possibly lead to the fall of Gorbachev and thereby possibly even to a major war between East and West. Yet, at the same time, he—unlike Thatcher—had a conception for a peaceful solution of the German question; and he had strong hopes that Kohl would help him realize this European option. He was therefore all the more alarmed when on 27 November, the chancellor for all practical purposes withdrew his approval for the summoning of a government conference on monetary union. The anxiety increased when the very next day Kohl made public a ten-point reunification plan without having informed his partners in advance. Even if the announced path via “confederative structures” left much unclear—not least of all the timeframe of the unification process—it was unmistakably clear that the chancellor had put political reunification on the international agenda. This meant for Mitterrand, as he explained to Gorbachev on 6 December at a meeting in Kiev, that Kohl was prioritizing German unification over the deepening of European unity and the creation of a European peace order.20 18 Kohl to Mitterrand, 27 Nov. 1989, in: Deutsche Einheit. Sonderedition aus den Akten des Bundeskanzleramtes 1989/90, Munich: Oldenbourg, 1998, 565–567. 19 Attali, Verbatim III, 349. 20 Attali, Verbatim III, 364. Between France and the Bundesbank 343 The president now did his utmost to convince the chancellor to offer binding approval for the summoning of a government conference on the monetary union at the upcoming Strasbourg Council meeting. As welcome as an understanding on negotiations for a Political Union would be in principle, it was to be deferred so as not to endanger the breakthrough on the monetary issue. On the afternoon of 28 November, Mitterrand got on the phone to threaten Kohl that France would only approve his reunification plan if Bonn made three distinct commitments beforehand: beginning of negotiations on the monetary union, definitive recognition of the border with Poland, and confirmation of the Federal Republic’s renunciation of nuclear weapons. He spoke still more darkly to Genscher, who had sought him out on 30 November in order to smooth the waves that Kohl’s solo initiative had generated: “If German unity is achieved before European unity, you’ll have the Triple Alliance (France, Great Britain, and the USSR) against you, exactly as in 1913 and 1939. […] You’ll be encircled, and that’ll end in a war in which all Europeans will ally against the Germans once again. Is that what you want? Conversely, if German unity is achieved after there’s been progress on the unity of Europe, then we’ll help you.”21 No later than when Genscher reported this conversation to Kohl, it must have become clear to the chancellor that his engagement for a Political Union was not sufficient to win France’s support for the reunification process. It followed from this that he did after all need to take a bigger domestic-policy risk if he wanted to retain the necessary maneuvering room for the shaping of the reunification process without at the same time endangering the European construct. Nor was it possible to exclude the danger that if the monetary union continued to be blocked, he could lose the initiative to Genscher in the one question as well as the other. Taken together, all that led him to give in on the issue of committing to the monetary union. Shortly before the opening of the Council meeting on 8 December, the chancellor’s office let the Élysée know that Kohl was now willing to set the date for the opening of the government conference in December of 1990.22 21 Attali, Mitterrand, 320–323; on Genscher’s visit, also Attali, Verbatim III, 353ff. and Genscher, Erinnerungen, 390 and 677–680. 22 Frédéric Bozo, Mitterrand, la fin de la guerre froide et l’unifiaction allemande. De Yalta à Maastricht, Paris: Ediions Odile Jacob, 2005, 152; on the following, ibid., 152– 156; Thilo Schabert, Wie Weltgeschichte gemacht wird. Frankreich und die deutsche Einheit, Stuttgart: Klett-Cotta Verlag, 2002, 425–428; Ulrich Lappenküper, Mitter- Wilfried Loth 344 The Strasbourg Council meeting then began in a relatively relaxed atmosphere. As early as the opening luncheon, Kohl declared that a clear roadmap was necessary “in order to demonstrate our will to achieve progress.” As Council president, Mitterrand was able to confirm “that the necessary majority exists for the summoning of a government conference in accordance with Article 236 of the treaty. The government conference will meet before the end of 1990 at the invitation of the Italian government.” No decisions were made regarding the Political Union; it was only determined “that the economic and monetary union [was to] take the democratic requirement fully into account.” Against the vote of Margaret Thatcher, the “Community Charter on Social Rights of Workers” was adopted, a move for which Mitterrand and Delors had long fought. Lastly, the Twelve also approved the establishment of the “European Bank for Reconstruction and Development.” Mitterrand only had to concede to Thatcher that “the other OECD member states”—that is, especially the US —would also be invited to participate in it.23 In return for his concession on the monetary issue, Kohl wanted to receive explicit support for his reunification policy. This proved difficult because he was still not prepared to commit himself to the Oder-Neisse border as the future eastern frontier of a reunified Germany; this was out of concern for votes from the conservative camp. In the preparatory group, there was thus no agreement on the exact wording of a declaration; and at dinner on 8 December, Kohl was once against subjected to severe attacks from Thatcher. This time, she was joined by Giulio Andreotti and Ruud Lubbers; only Felipe Gonzalez supported the chancellor. Mitterrand finally commissioned Dumas and Genscher to find a compromise formulation. The text, ready the next morning, was closer to Kohl’s position than that of his opponents: The Twelve pledged support for the “strengthening of the state of peace in Europe in which the German people in free self-determination achieves its unity.” As conditions for this process, however, the document specified only the “preservation of the agreements and treaties as well as all the principles laid down in the Helsinki Final Act” and embedding that process “in the prospect of European integration.”24 It was rather unclearly formulated regarding the recognition of the western border of Poland, which the Federal Republic had made in the Treaties of rand und Deutschland. Die enträtselte Sphinx, Munich: Oldenbourg, 20011, 269– 271. 23 “Schlussfolgerung des Vorsitzes der Straßburger Ratstagung 8./9.12.1989,” Jahrbuch der Europäischen Integration 1989/90, 421–438. 24 Ibid., 431. Between France and the Bundesbank 345 Moscow and Warsaw; it was however rather clear on making reunification possible along with the simultaneous strengthening of the European Community. With the definitive commitment to the monetary union, Kohl had been able to secure fundamental support for the process of reunification. However, this did not mean that giving up the D-mark and the comfortable position in the European Monetary System that the Federal Republic had in the meantime attained was the price that had to be paid for reunification, as the magazine Der Spiegel later asserted.25 Kohl had only recognized that, regardless of the reservations of those seeking to protect the currency and the associated domestic political risks, the step to monetary union had to be taken now if the growing together of the two German states—in whatever form and at whatever tempo—was not to endanger the continued existence or the deepening of the European Community. On the basis of shared worry over the European project, he could come to agreement with Mitterrand on a formula for German unity within a European perspective. 25 “Dunkelste Stunden,” in: Der Spiegel (18), 27 April 1998, 108–112. Wilfried Loth 346 Part IV: Enlargements and Neighborhoods The European Community’s Struggle with the agro-budgetary Problem: Its Impact on the Spanish Accession Negotiations, 1979–1985 Marta Alorda1 No one can deny the political significance of the Spanish accession into the European Communities (EC). After approximately 40 years of political isolationism under the Francoist regime, the Spaniards perceived their entry into the EC as a way to consolidate a new democratic system, as well as to retrieve an international status. Many scholars argue that experiences under the Franco’s dictatorship led Spanish politicians and public opinion to conceive of Europe – understood as West Europe and the EC’s political and economic institutions – as a symbol of democracy.2 The European Community itself, on the other side, as well as its member states, assumed its democratising role and used the EC membership as a way to boost political stability not only in Spain but also in Greece and Portugal, which could prove crucial for the wider Cold War context.3 Nevertheless, whereas in the Greek accession the democratic rhetoric and the candidate’s Cold War role laid at the heart of the successful materialisation of the enlargement, in the case of Spain such a rhetoric did not overcome the real problems to accommodate the country in the European Communities. The size of the Spanish economy, in comparison with the other Southern European candidates, constituted a genuine challenge that 1 This piece of paper is a small part of a Ph.D dissertation in progress at the Department of History and Civilization at the European University Institute (EUI), Florence (Italy). It summarises some provisional findings of one chapter. This work is supported by the fellowship Salvador de Madariaga (Ministerio de Educación, Cultura y Deporte). 2 Cf., among many of them, for example Carlos Closa / Paul M. Heywood, Spain and the European Union, New York: Palgrave Macmillan, 2004, 15–16; Julio Crespo MacLennan, Spain and the process of European integration, 1957–85. Basingstoke / New York: Palgrave, 2000, 14. 3 Antonio Varsori, “Crisis and Stabilization in Southern Europe during the 1970s: Western Strategy, European Instruments”, in: Journal of European Integration History, no. 1, 2009, 5–14; David Clark, The Enlargement and Integration of the European Union: Issues and Strategies, Hoboken: Taylor and Francis, 2006. 349 member states could not afford to disregard. While Portugal was only 1 % of the GDP of the EC, Spanish GDP represented 8 % and, additionally, with the entry of Spain the EC population increased by 18 %. Moreover, Spanish accession posed a challenge for some economic sectors, which threatened the established market balances within the Community. This became evident when accession negotiations started on 5 February 1979 and the focus was immediately put on the foreseen economic consequences of the Spanish enlargement. This fragment of a speech given by Douglas Hurd, the British Minister of State for Europe from 1979 to 1983, to the Centre for European Government studies in Edinburgh in May 1981 perfectly outlines this idea: “EC is predominantly an economic organisation. EC treaties speak about economic and social progress through Customs Union, Common Trade Policy, Common Agricultural Policy, etc. Political Cooperation is growing in importance, but is extra to the treaties. Negotiations with the applicants are about alignment of the economic provisions of the treaties. European Union a long way off. EC is not a defence organisation, not designed to replace NA- TO. […] Political consequences depend largely on economic effects”.4 However, the Spanish accession also offered several opportunities for the developing of the EC, as well as for its member states, institutions and policies. It was precisely the candidate’s size and its consequent economic challenges that made the entry of Spain, to a certain extent, a driving force behind some EC economic and political achievements, which took place during the second half of the 1980s. The prospect of the Spanish enlargement forced the EC and its member states to adapt and create some economic policies in order to avoid an important economic disturbance and an increase of integration costs. In turn, it provided them with an opportunity to bind the Spanish accession to global issues of the Community agenda at that moment. It is worth mentioning some highlighted areas on which Spanish accession impacted in some way. Firstly, it was an impulse to reform and implement two common policies of the EC: The Common Agriculture Policy (CAP) and the Common 4 The National Archives of the UK (henceforth: TNA), Records of the Foreign and Commonwealth Office (henceforth: FCO), division 9 – Southern European Department, file 3291 (henceforth: FCO number division/file; here, FCO 9/3291) number 7, report entitled "Notes for speech. Seminar on the political consequences of enlargement, 1 May, University of Edinburgh" attached to the letter sent by Sophia Lambert, Head of the European Community Department (External), to Mr Hurd, 27 April 1981, paragraph 8. Marta Alorda 350 Fisheries Policy (CFP). On one side, the incorporation of Spanish agriculture into the Community market exacerbated internal EC agriculture and budgetary difficulties, which made a reform of the CAP even more necessary. On the other, the prospect of the integration of the Spain’s large fishing fleet – the world’s third largest after the Soviet Union and Japan – into the Community resulted in the creation of the CFP in 1983. Secondly, the entry of Spain together with Greece and Portugal threatened to obstruct the EC institutions and decision-making procedures which were already prone to blockages in the Europe of Nine. To overcome this issue, the Single European Act signed in 1985 and ratified in 1986 established the introduction of Qualified Majority Voting. Lastly, in the context of negotiations on Single European Act and the Single European Market, the opening of the Spanish industrial market, highly protected despite the Commercial Agreement between the EC and Spain signed in 1970, represented an opportunity for the Community market expansion and for foreign investment, which would result in a new economic growth potential for a European Community increasingly liberal. This is a remarkable facet of Spanish accession because, unlike other impact areas previously mentioned, economic benefit would go to the private sector of the member states’ economies. All these matters affected in one way or another the negotiating process of Spanish accession. They influenced the member countries’ positions and their bilateral relations with Spain, as well non-state actors’ pressures on their governments. This paper intends to portray how the European Community and its member states coped with the impact of Spain’s entry and what shaped the dynamics of accession negotiations. It looks at a specific negotiating dossier, which, despite not being fully representative of the whole specific process, provides a case study to illustrate how Spain’s accession became involved in one of the most problematic Community issues of the 1980s: the agro-budgetary question and the reform of the CAP. The Common Agriculture Policy was born as a redistributive social policy which aimed at sustaining the farmers’ standard of living and protect them from external competition. In the Treaty of Rome, the EC member states mentioned the basic principles and objectives of the CAP, which were developed years after the signature of this Treaty.5 Since its very origins, the CAP has had conflicting objectives, which have generated signifi- 5 For more details on technical aspects of the creation and evolution of the CAP, cf. Wyn Grant, The Common Agricultural Policy, Basingstoke: Macmillan, 1997; it is also worth paying attention the work of Ann-Christina L. Knudsen, Farmers on wel- The European Community’s Struggle with the agro-budgetary Problem 351 cant imbalances in European agriculture. Whilst it tried ‘to ensure a fair standard of living for the agricultural community’, it also aimed ‘to ensure reasonable prices for consumers’.6 These competing principles resulted in a dual support system which provided aids for both consumers and producers. This support mechanism (based on various support and regulatory mechanisms: a price-fixing mechanism; an aid system for producers; the Community Preference; and a common external tariff) was one of the factors that made the CAP a very expensive policy. In the 1970s, on the eve of the Spanish membership request of June 1977, the CAP was in a critical situation in terms of market balance and finance. In the light of this, the integration of the Spanish agriculture into the Community markets would seriously threaten to exacerbate this internal crisis and, consequently, it would force member states to discuss necessary reforms of the CAP before Spanish accession materialised. In this context, the potential disturbances deriving from Spain’s agricultural accession got entangled with other specific problems arising from the crisis of the CAP. In this connection, three problematic aspects were identified: surpluses, regional imbalances and increase of costs. First, a combination of technical progress in agriculture and the growth of prices set by the Community institutions resulted in an increase in production which led to high levels of self-sufficiency by the mid-1970s, threatening the balance of the market. In 1978, for example, some productions – like milk, sugar or wine – had exceeded the 100 % of self-supply; many other sectors had a rate of self-supply over 80 %.7 The entry of Spanish agriculture would add more pressure on surpluses, especially in three key Mediterranean products -olive oil, wine and fruit and vegetables8 –, and on costs involved. Considering that Spain already had a surplus of these Mediterranean products and, in addition, lower prices, the adoption of the CAP’s mechanisms – higher prices, guarantees and aids – would boost investment and production, leading in turn to further surpluses. fare: the making of Europe’s common agricultural policy, Ithaca: Cornell University Press, 2009; see also Edmund Neville-Rolfe, The politics of agriculture in the European Community, London: European Centre for Political Studies, 1984. 6 Article 39.1 of the Rome Treaty. 7 Loukas Tsoukalis, The European Community and Its Mediterranean Enlargement, London: Allen & Unwin, 1981, 227 (Table 5.14). 8 For more details on these three Mediterranean products, see Lorena Ruano, Institutions, the Common Agricultural Policy, and the European Community’s Enlargement to Spain, 1977–1986, Ph.D Dissertation, University of Oxford, 2001, 191–218. Marta Alorda 352 Second, Spain’s accession would increase regional economic disparities in the Community. Italy’s Mezzogiorno and France’s southern regions were the poorest regions of the Community with essentially agricultural economies, in which the major part of their resources was bound to Mediterranean agricultural production. At this juncture, the incorporation of Spanish agriculture into the CAP would increase competition against Italian and French products, deteriorating their economic position with consequences for Italian and French farmers’ incomes. To complicate matters further, Spanish enlargement would accentuate the existing imbalance between Northern and Southern products in the CAP. The regimes of Mediterranean products – olive oil, fruit and vegetables and wine – received a lower degree of financial support than the Northern products – meat, milk and sugar –, which absorbed most of the resources.9 In this context, without a proper reform of the CAP, Spain’s accession would widen even further the funding and economic development gap between Northern and Southern agricultural regions. Finally, the third challenge to be overcome (directly related to the two aforementioned problems) was the high budgetary cost of the CAP. Since the beginning of the 1970s, the Community expenditure on agricultural market-support began to grow considerably through the ‘Guarantee’ section of the European Agriculture Guidance and Guarantee Fund (EAG- GF). EAGGF guarantee expenditure increased from ECU 1,755 million in 1971 to ECU 8,679 million in 1978, when amounted to 68 % of Community spending.10 The growth of agriculture prices and surpluses lay behind this expenditure increase. In the framework of the price fixing system, the Commission sent price proposals to the Council and the latter made the final decision. In the early 1970s, the Commission’s price proposals became increasingly generous and, for its part, the Council increased price levels even further, setting them artificially high in comparison with world market prices.11 The result of this continuous growth of prices was twofold: an increase in budgetary costs in order to maintain high levels of aids, and a stimulation of production, which brought an increase of surpluses. Likewise, such surpluses added more pressure on the Community 9 Tsoukalis, The European Community, 213–222 (Table 5.14). 10 Daniel Strasser, The finances of Europe: the budgetary and financial law of the European Communities. Luxembourg: Office for Official Publications of the European Communities, 1992 (3rd edition), appendices. 11 For more details on the working of the CAP institutions and its decision-making process is worth reading Chapter 4 of Ruano, Institutions, the Common Agricultural Policy, 101–140. The European Community’s Struggle with the agro-budgetary Problem 353 budget in two ways: first, according to the CAP’s legislation, the Community was bound to purchase surpluses from producers at a lower market price, and second, if the Community intended to introduce those surpluses in world markets, high export subsidies should be paid in order to match foreign competitors’ prices. Furthermore, another factor that complicated the Community’s budgetary position was the issue of the United Kingdom’s budgetary contribution. Due to its small agricultural sector, the United Kingdom was one of the largest contributors to the EC budget, since the British imported much more from non-Community countries and received much less CAP subsidies than other member states.12 The claim by the UK for a financial compensation would considerably affect the budgetary situation of the Community and, additionally, would be very problematic within the Community policy-making. Therefore, considering that Spain’s accession would lead to additional surplus, to aids for Spanish agriculture and to regional imbalances, which would force to financially compensate most affected farmers, the prospect of enlargement further complicated the budgetary situation of a Community, which was already practically bankrupt. This challenging juncture put the EC and its member states on the ropes. It is difficult to determine whether the Community would ultimately go bankrupt irrespective of Spain’s entry and Spanish accession was only accelerating the process or, otherwise, whether it was precisely the Spanish membership what would actually trigger this crisis. What is relevant here is that the prospect of Spanish membership acted as a driving force for reforms of agriculture policy and the EC budget in the first half of the 1980s, which aimed to overcome these Community internal difficulties and, eventually, to materialise the entry of Spanish agriculture into the Community markets. Not surprisingly, intra-Community negotiations to reach an agreement with regards to the agro-budgetary question were not easy at all. One of the reasons behind that is the fact that agriculture problems to be overcome by the Community called for solutions that went in an opposite direction to each other. On one hand, the issue of high budgetary costs and the increasing trend of agriculture prices and surpluses required solutions based on the retrenchment in the CAP expenditure and financial discipline; on the other, the need for compensation for those EC farmers threatened by Spanish accession and the redress of the North-South imbal- 12 European Commission, Britain in the Community, 1973–83: The Impact of Membership. London: European Communities, 1983, 31–38. Marta Alorda 354 ance entailed a greater Community spending. Thus, also taking into consideration the redistributive nature of the CAP and the amount of the Community budget intended for this policy (68 % of the Community budget in 1978), it is not surprising that EC member states were caught in genuine political battles over how to divide the ‘cake’. Disagreements among EC member states concerning the arrangements to solve the agro-budgetary question prejudiced from the very beginning the course of the agriculture dossier in the framework of accession negotiations with Spain. One good illustration of this is the delay in the submission of the first Community’s statement on the agriculture dossier in the Conference meetings with Spain, which had to wait until 19 December 1980, almost two years after the start of formal negotiations on 5 February 1979. This delay can be explained by the nearly complete stagnation of the Community’s decision-making process at two different institutional levels, which prevented the Community’s delegation from reaching a common position of the EC member states during these two years. On one side, the issue of the British contribution to the Community budget paralysed the Community’s decision-making process at the Council of Ministers meetings, causing a serious political crisis at the heart of the European institutions. During the first months of 1980, the British government maintained its reservations at the Council meetings on agriculture concerning the fixing of agriculture prices and the reorganisation of the CAP, under the condition of the British contribution’s resolution. The height of the crisis came at the Luxembourg European Council on 27 and 28 April 1980. After long discussions between the EC’s Heads of Government, no solution could be found. While some member states made several offers to reduce the net British contribution by more than two-thirds for 1980, the British Prime Minister, Margaret Thatcher, insisted on long-term solutions, which the rest of members were unable to accept.13 The solution finally arrived at the end of May when, through a series of simultaneous Council of Ministers meetings, member states’ delegations reached an agreement on a temporary measure that reduced the British budgetary contribution until 1982. This enabled the approval of an agriculture package of measures, which included the fixing of prices and the reorganisation of some markets with a view to a future Spanish membership. 13 Presidency conclusions and statements made by member states at the Luxembourg European Council are reproduced in the Bulletin of the European Communities, n. 4, vol. 13, 1980, 1.1.1 – 1.1.31. The European Community’s Struggle with the agro-budgetary Problem 355 However, after this incident, the Community pledged itself to resolve such problems by means of structural changes by 1982. To do that, the Council gave a mandate to the Commission to be fulfilled by the end of June 1981, which should contain proposals on structural policies both for the budget and for the CAP. These proposals, according to the Council, should take into account the situations and interests of all member states in order to prevent the recurrence of unacceptable situations for any of them.14 This was what later came to be known as the ‘May mandate’, which would play a relevant role in the progress of Spanish accession negotiations on agriculture. The May mandate was not the only consequence of this political crisis within the Community. Six days later, on 5 June 1980, in front of the Permanent Assembly of Chambers of Agriculture, the President of the French Republic, Valéry Giscard d’Estaing, made controversial statements. He claimed that, considering the uncertainties and problems related to the new member states (the United Kingdom, Denmark and Ireland), it would be more convenient to finish the first Community’s enlargement before being in a position to pursue the second one.15 The Spaniards, who rapidly qualified this event as Giscardazo, reacted harshly and considered these statements as a direct veto to Spain’s accession.16 Giscard’s words had a clear political intentionality, and perfectly depicted the European political climate of the previous months. It was evident that the Community was dealing with inherited problems of the first enlargement; the May mandate proved the need for long-term solutions before a second enlargement. 14 Historical Archives of the European Union (henceforth HAEU), Florence, collection CM2 – European Economic Community (EEC) and the European Atomic Energy Community (EAEC), as defined by the Treaties of Rome, 1980 (henceforth CM2/year; here, CM2/1980), number 24.1, document 7449/80, Draft minutes of the 640th Council meeting held in Brussels on Thursday 29 and Friday 30 May 1980, Brussels, 5 June 1980, paragraph 7. 15 “Il ne m’apparaît pas possible de cumuler les problèmes et les incertitudes liés à la prolongation du premier élargissement et ceux que poseraient de nouvelles adhésions. (…) il convient que la Communauté s’attache par priorité à parachever le premier élargissement, avant d’être en état d’en entreprendre un deuxième”. Full text is reproduced in Matthieu Trouvé, L’Espagne et l’Europe : De la dictature de Franco à l’Union Européenne, Brussels: Peter Lang, 2008, 333. 16 This controversial event was heavily criticised by Spanish diplomats and politicians who, in their memoirs, have portrayed France as the main stumbling block to Spanish membership. See, for example, Leopoldo Calvo Sotelo, Memoria viva de la transición, Esplugues de Llobregat: Plaza & Janés / Cambio 16, 1990, 151; Raimundo Bassols, España en Europa; historia de la adhesión a la CE, 1957–85, Madrid: Estudios de Política Exterior, 1995, 274. Marta Alorda 356 Thus, in this context, despite the Spanish over-reaction, the statements of Giscard were far from being a veto to Spain; his speech only portrayed the evident deferral of Spanish accession negotiations on agriculture. The second institutional level concerns discussions on Spanish agriculture accession into the EC at the Committee of Permanent Representatives (COREPER) meetings, which also suffered from delays and stagnation of the decision-making process. These meetings were conducted by different ad hoc working groups specifically created to address issues of Spanish accession negotiations.17 Their purpose was to define a common position on EC-Spain accession negotiations from the discussion of a Commission’s report submitted in February 1980 on agriculture problems and proposals to solve them. The clash between different member states’ interests was the reason behind these tense, long and technical debates, which extended the report’s analysis until November 1980. From these intra-Community negotiations, it became evident that there was an abyss between the interests of two groups of EC member states. On the one side, the French and Italian delegations called for a CAP reform before accession negotiations with Spain, which would be intended to protect Mediterranean farmers from the Spanish agriculture regardless its increasing cost. The United Kingdom, on the other side, supported by the rest of member states’ delegations, claimed a spending control by reducing Mediterranean agriculture’s expenditure and anticipating the Spanish accession’s cost.18 In the light of this situation, the problem was that it would not be easy to find a solution to the complicated agro-budgetary problems that was acceptable to all the European countries concerned. Finally, after four months of discussion at the ad hoc working party, the Community delivered its first agriculture statement on 19 December 1980. In it, no further measures were brought forward. The Community just underlined the main agriculture problems of Spanish accession and advanced that, due to the need for finishing the internal Community’s work on the CAP, specific actions and the transitory period for Spanish agriculture ac- 17 For more details on how the procedure of negotiating enlargement worked, see Ruano, Institutions, the Common Agricultural Policy, and the European Community’s Enlargement to Spain, 1977–1986, 73–100. 18 In the chapter 5 of her thesis, Lorena Ruano put forward national interests regarding the agriculture chapter of the Spanish accession negotiations. Despite being a thesis finished in 2001, when historical archives were not yet available, it is still the best historiographical approximation of such member states’ national interests. See Ruano, Institutions, the Common Agricultural Policy, and the European Community’s Enlargement to Spain, 1977–1986, 141–180. The European Community’s Struggle with the agro-budgetary Problem 357 cession would be decided in the final phases of negotiations.19 This basically meant that nearly two years after the start of formal negotiations, the Community had been unable to move beyond the primarily identification of the main challenges and national interests. By analysing these internal disputes, one can see how national interests of member states regarding the agriculture dossier and the CAP reform, which emerged in intra-communitarian discussions at two institutional levels, directly affected the dynamics and the timing of agriculture’s accession talks with Spain during the first two years. This indeed was not so different in the following years, during which the intra-Community and EC- Spanish negotiations on agriculture remained stalled until the Stuttgart European Council in June 1983. After the submission of the first Community statement on agriculture at the Conference meeting with Spain, all member states agreed not to continue with their discussion until the Commission submitted the report on the May mandate at the end of June 1981, which would provide a basis for further negotiations on the CAP reform and the budgetary issue. Being conscious of the scale of the challenges ahead, the Commission presented a comprehensive package of measures which embraced a set of general problems. Regarding the agricultural issues, the Commission proposals were twofold. First, this report put forward ideas to contain the growth in CAP expenditure. The Commission came to the conclusion that it was not economically sensible nor financially sustainable to set high prices in order to maintain farm incomes and structural surplus. To fix this, this institution recommended, among other measures, ‘a price policy based on a narrowing of the gap between Community prices and prices applied by its main competitors’.20 Second, the Commission proposed long-term integrated programmes to develop the Mediterranean regions most affected by the enlargement. Moreover, the May mandate report suggested an additional budgetary transfer to the United Kingdom to compensate the British budgetary anomaly. 19 HAEU, collection CM5 – adhésion (henceforth, CM5/ADH), 42.3, document CONF-E/72/80, draft Community statement, in ‘10ème session des suppléants CEE-Espagne tenue le 19.12.1980’, Brussels, 14 January 1981. 20 "Commission report on the mandate of 30 May 1980", COM (81) 300 final, Luxembourg, 24 June 1981, 13. All COM documents cited in this paper can be freely accessed at the COM files collection available at the Historical Archives of the European Commission (in Brussels) website, ves/archisplus/arcp_central.cfm?lng=EN&page=com_recherche. Marta Alorda 358 The May mandate had a global and more political than technical approach. Perhaps that is why the first reactions from member states were far from favourable. Almost all of the Ten had reservations with regard to some facet of the proposal, which made more complicated reaching an agreement. In the plenary of the European Parliament in Strasbourg from 6 to 10 July 1981, different political group spokesmen harshly criticised the Commission’s report.21 According to some discussants, proposals were abstract and vague. In particular, the French political groups adopted a tough stance against the proposed CAP reform by arguing that it was intended to curb the necessary growth of farmers’ income. Furthermore, the French communists accused the Commission of having embraced the British theses by suggesting the need for a compensatory mechanism in favour of the British contribution to the budget. In October 1981, in an attempt to reconcile divergent positions among member states, the Commission sent to the Council two additional proposals to the May mandate concerning the reform of the Mediterranean acquis – which concerned the regimes of the three Mediterranean products – and the implementation of the Integrated Mediterranean Programmes (IMPs). In the first report on Mediterranean acquis, the Commission provided more data on its analysis, but maintained the same stance put forth in the first 30 May mandate report.22 However, regarding the IMPs, the Commission detailed new elements involved in this proposal.23 These programmes were not only based on agricultural improvements, but they also focused on broader reforms of a group of economic sectors in the Mediterranean regions most affected by the enlargement. The interesting aspect of these IMPs, though, concerned their funding. The Commission suggested the use of various resources and funds at the Community disposal; that is, not only the Guidance section of the EAGGF, but also the Social Fund, the European Regional Development Fund (ERDF) and the loans offered by the European Investment Bank, among others. It was a way to overcome the discrepancies between those countries who called for financial constraints on the CAP and, on the other hand, those Mediterranean countries that demanded solutions for their agricultural challenges. 21 Debates of the European Parliament 1981–1982 Session, Report of proceedings from 6 to 10 July 1981, n. 1–273 (annex), 14 September 1981, in Official Journal of the European Communities (OJEC). 22 "Mandate of 30 May 1980: Guidelines for European Agriculture", COM (81) 608 final, Brussels, 23 October 1981. 23 "Mandate of 30 May 1980: Mediterranean programmes, lines of action", COM (81) 637 final, Brussels, 23 October 1981. The European Community’s Struggle with the agro-budgetary Problem 359 However, the Commission proposals did little to reconcile the very contrary positions of the member states. During the sessions of the Council of Ministers on agriculture on 19 October and 16 November and the European Council meeting in London on 26 and 27 November, the ten delegations discussed these proposals, exposing very clearly their own national interests. Again, two confronting views led by the British and the French emerged during discussions, making impossible to reach common ground. While the British delegation, backed by Germany, Ireland and Denmark, opposed the increase in CAP’s expenditure, the Mediterranean countries (France, Italy and Greece) insisted on a CAP reform that protected farmers’ income through increasing subsidies and higher agricultural prices, which would inevitably increase the financial costs of the agriculture policy. Thus, at this point, it seemed that, rather than breaking the deadlock, the May mandate’s report had instead deepened it. Over this period, accession negotiations with Spain on agriculture dossier were completely stalled because of internal debates on the May mandate. Bilateral relations with Madrid worsened due to the impatience of the candidate to see some progress on this specific negotiating chapter. To calm the situation down, the British, who took the Presidency of the Council during the second half of 1981, proposed to the member states’ Ministers for Agriculture and for Foreign Affairs to submit another Community declaration on agriculture in a Conference meeting with Spain which would aim to focus on insignificant and minor agriculture issues that were not related to the May mandate. This statement aspired to satisfy the Spanish and to create the illusion that the agriculture talks progressed, while the bulk of this dossier would remain unresolved. After months of internal debate among member states, this proposal was eventually materialised on 26 October 1981 when the Community submitted an agriculture statement at the Conference meeting with Spain. As the British had already anticipated, it included elements that were far from directly affecting the main agriculture stumbling blocks.24 This deadlock situation was not substantially different if one looks at the course of intra-Community and accession negotiations throughout 1982. The agro-budgetary issues were once again at the heart of the Community debates at the Council of Ministers and the COREPER, where the two opposite views led by the British and the French prevented again 24 HAEU, CM5/ADH, 11.9, internal document No. 59 (E), Community statement, in ‘9ème session ministérielle CEE – Espagne tenue à Luxembourg le 26.10.1981’, Luxembourg, 26 October 1981. Marta Alorda 360 member states from reaching any agreement. Yet, the British delegation monopolised once again internal negotiations by mixing its budgetary demands with the agriculture price-fixing mechanism, which hindered any possibility of reaching an agreement on the May mandate in general and on the agriculture package in particular. Furthermore, no substantial progress was made in negotiations on CAP reform and Spanish agriculture’s accession during this year. Discussions on Mediterranean acquis remained central within the Councils of Ministers on agriculture, which evidenced that there were various fronts open regarding how these three Mediterranean agriculture sectors should be restructured. Broadly speaking, member states continued to advocate the national views that they had been defending the previous years. There still remained a confrontation between those countries, like the FRG and the UK, that claimed for a reduction of surpluses with a CAP expenditure retrenchment and those Mediterranean countries, like Italy, France and now also Greece, that opted for an increased protection of their farmers against the upcoming Spanish accession. Nevertheless, this was not the only conflict among different proposals. Old animosities and rivalries between France and Italy over the way to regulate agriculture ended up affecting the reform of the Mediterranean acquis. The Italians adopted a global and flexible approach by putting emphasis on structural aspects to reinforce the Community preference and protect producers against external competition while maintaining a more liberal agriculture internal market. The French, on the other hand, adopted a harder line aimed at protecting their own farmers’ from intra-Community trade. It seemed that the French used the accession negotiations as a means to claim for more internal protection against not only Spanish agriculture, but also against Italian and Greek farmers. As Lorena Ruano has well argued, this cleavage between the Italian and French purposes hindered the formation of a Mediterranean common front, which further undermined internal discussions in the Community.25 In this context, these internal dynamics resulted in a Community impasse with collateral effects on the EC-Spain negotiations’ progress and on bilateral relations with Spain. In June 1982, Spanish farmers protested against the visit of the President of the French Republic, François Mitter- 25 Ruano, Institutions, the Common Agricultural Policy, and the European Community’s Enlargement to Spain, 1977–1986, 174–175. As for this rivalry between France and Italy with regards to the reform of the CAP see also Tsoukalis, The European Community, 150–152. The European Community’s Struggle with the agro-budgetary Problem 361 rand, to Spain, due to the French policy towards the Spanish agriculture, which, as they interpreted, blocked accession negotiations.26 This Spanish perspective about the French arose gradually from several controversial events like the Giscardazo and the constant requests by France of agriculture and budgetary reforms before accession negotiations with Spain (préalables).27 Moreover, these attitudes were exacerbated by the Spanish press, which portrayed France as the main responsible for the ongoing impasse of accession negotiations on agriculture.28 The climate between the two countries further deteriorated when twelve Spanish truckloads were attacked by French farmers in Montpellier and Nîmes as a protest against the Spanish exports to Community markets.29 In the political sphere, the Spanish diplomats also expressed their unrest with the neighbouring country by asserting that accession negotiations on agriculture were suffering from a ‘bloqueo francés’, without bearing in mind other internal Community problems.30 After almost two years of complete stagnation on Community decisionmaking and accession talks with Spain, some slight progress on these issues was only possible under the German presidency in the first half of 1983. At the beginning of its presidency, the FRG adopted a more flexible stance concerning a possible increase of the Community’s own resources through the rise of the VAT ceiling of member states’ contribution, which at that moment was at 1 %. According to the Germans, increasing own resources was the only way to make progress on enlargement, especially on agriculture, which required further expenditure.31 At this point, for the FRG this step would be a small price to pay for political and economic sta- 26 “Protestas de los agricultores españoles”, El País, 24 June 1982. The articles from this newspaper all come from the digital archive accessible at 27 Due to the conflictive events regarding agriculture negotiations between Spain and France, the Spanish historiography has traditionally focused on Spanish- French relations considering them as a central issue of accession negotiations. See for example, among others, Crespo MacLennan, Spain and the process of European integration, 1957–85, 84; Trouvé, L’Espagne et l’Europe, 330–370 and 408–414. 28 "La agricultura, una discusión siempre pendiente", 4 July 1982 and "La ingenuidad española ante la CEE", 4 July 1982, both in El País. 29 "Agricultores franceses atacan doce camiones con productos españoles", El País, 21 July 1982. 30 Cf. Bassols, España en Europa, 261–265. 31 This German position was shared in two bilateral meetings with France and the UK at the beginning of the German presidency, see TNA, FCO division 98 – European Integration Department, file 1613, n. 2, letter from Brian Lee Crowe, Head of the European Community Department (External) from 1982 to 1984, to different UK governmental departments, 14 January 1983. Marta Alorda 362 bility of the European Community. It thus seemed that since the very beginning of its presidency, the FRG was offering the main solution for Community problems. For the first time during this period, Agriculture Ministers discussed on possible transitory periods for Spanish accession, while they continued with discussions on how to reform the Mediterranean acquis. Once again, EC member states showed opposing views between Northern and Mediterranean countries; in this case, these divergent stances affected discussions on fruit and vegetables and olive oil sectors. Having failed in their efforts to reach an agreement after three Councils between January and March 1983, in an attempt to find a proper solution to these issues, Agriculture Ministers of member states sent a report to the next European Council meeting on 21 and 22 March in Brussels. However, some member states, like the United Kingdom, were disappointed with this new failure and argued that it would be neither realistic nor appropriate to expect Heads of Government to discuss technical aspects of the Mediterranean acquis in detail. What was needed from the European Council, indeed, was for Heads of Government to impart the necessary political momentum to the negotiation and instruct Agriculture Ministers to complete their work. This was precisely what they tried to do when they met at the European Council in Brussels at the end of March. The Ten considered the European Council as a preparatory meeting before the next summit in Stuttgart that would take place in June, which was foreseen as a definitive step towards a common agreement. In order to be prepared before Stuttgart, the Heads of Governments requested the Agriculture Council to adopt the necessary decisions as soon as possible.32 Before the Stuttgart Summit, the Commission tried to make its contribution by submitting two further proposals to build momentum on two aspects closely related to the agriculture chapter of the Spanish accession. First, the Commission sent to the Council a detailed proposal on the implementation of the IMPs in regions of Greece, Italy and France, which suggested that the amounts allocated annually to these programmes should be entered in the Community budget in a separated chapter from the EAGGF Guidance sector to overcome the problem of an increase of expenditure.33 Second, the Commission sent a proposal to the Council and 32 Presidency conclusions on the European Council are reproduced in the Bulletin of the European Communities, n. 3, vol. 16, 1983, paragraphs 1.5.2 – 1.5.10. 33 "Integrated Mediterranean Programmes", COM (83) 24/9, Brussels, 18 February 1983. The European Community’s Struggle with the agro-budgetary Problem 363 Parliament on the future financing of the Community. In the communication to which the proposal was attached, the Commission again drew attention to the fact that, because of the rise in agricultural expenditure, the Community resources were near to running out.34 More specifically, in the preliminary draft budget for 1984, the Community expenditure took up 95.6 % of the resources available. Therefore, it considered that new own resources were needed to sustain the Community policies and, therefore, to be to be introduced. The Commission thus proposed to remove the own resources ceiling by increasing the VAT rate from 1 % to 1.4 %. When president Thorn presented this communication to Parliament on 18 May, he concluded by asserting that the Stuttgart meeting was crucial in order to prevent Europe from a crisis that would threaten its future. Finally, from 17 to 19 June 1983, the Heads of Government met at the European Council in Stuttgart, chaired by Helmut Kohl, Chancellor of the Federal Republic of Germany, to approach those elements that had been blocking the Community for several years: budgetary issues, the CAP reform and enlargement. After three days of discussion, the member states reached a political compromise based on three decisions driving the Community towards a new phase of conflict resolutions. The first remarkable aspect of this compromise is that the FRG accepted an increase of the Community own resources in order to ensure future financing of the Community. The Germans made this decision conditional upon the resolution of those dossiers, which were still paralysed in accession negotiating process with Spain and Portugal.35 With this decision, Germany, thus, became the key in resolving the Community internal dispute. Moreover, because of the increase in own resources, the European Council could approve the British refund for 1983. Lastly, the Ten signed the Solemn Declaration on European Union on the basis of the draft European Act designed to further European integration, submitted by the German and Italian governments in November 1981, known as the Genscher-Colombo plan.36 34 "The future financing of the Community – Draft decision on new own resources", COM (83) 270 final, Brussels, 6 May 1983. 35 Presidency conclusions on the European Council are reproduced in the Bulletin of the European Communities, n. 6, vol. 16, 1983, 1.5.1 – 1.5.24. 36 For more details, see Deborah Cuccia, “The Genscher-Colombo Plan: A forgotten page in the European Integration History”, in: Journal of European Integration History, vol. 24/1, 2018, 59–78. Marta Alorda 364 In short, the Stuttgart summit set out the political guidelines to ensure ‘the relaunch of the European Community’.37 In other words, it provided a solid political basis for the resolution of the main problems that had been blocking the EC internal negotiations and for a further development of the Community. No concrete agreement was reached on the British rebate and the CAP reform, which meant that the main issues had still to be negotiated. However, both issues were closely dependent on the state of the own resources; thus, the prospect of an increase on member states’ contribution paved the way for a conclusion on these aspects. Several dossiers of the Spanish accession negotiations were closed after the Stuttgart compromise; however, the agriculture dossier could not be finalised until almost two years later. The EC member states were unable to present a common position on the agriculture dossier at the negotiating table until February 1984. Despite the political intentionality portrayed in Stuttgart, which had made possible the partial progress of the bilateral relations between the EC and Spain, the two main issues related to the agriculture dossier still remained unsolved: the reform of the CAP – mainly the Mediterranean acquis – and the issue of the Community budget to fund such agriculture reform. Despite the traditional dispute between the northern and southern European countries, and the lack of understanding between France and Italy, some progress on the reform of one of the products within the Mediterranean acquis could be made in the second half of 1983. Basing the internal discussion on a further Commission proposal, on October 1983 the Council of Ministers on agriculture reached a general agreement on the adjustments for the common market organisation for the fruit and vegetables sector. This decision had two direct outcomes. First, the agreement improved the balance between the guarantees enjoyed by Mediterranean and northern products. Second, it broke the deadlock in EC-Spanish negotiations. The Community submitted its first common position on fruit and vegetables in February 1984, in which a long transitory period for the Spanish incorporation into this specific sector was put forward. However, it remained outstanding the proposals on the other two key products (wine and olive oil), which did not materialise until the end of the year. Conversely, the issue of the Community budget was not solved until the Fontainebleau Summit of June 1984 under the French presidency. In this case, the Community had to focus on the solution of two different issues: 37 On this point, see the Solemn Declaration on European Union also reproduced in the Bulletin of the European Communities, n. 6, vol. 16, 1983, 1.6.1. The European Community’s Struggle with the agro-budgetary Problem 365 the correction of budgetary imbalances, in particular the issue of the British rebate and the increase of the Community own resources in order to fund the enlargement and new policies. Moreover, to complicate matters further, a new issue was added to the internal discussion: the dismantling of the Monetary Compensatory Amounts (MCAs). The MCAs system had been introduced as a measure after the French franc devaluation by 11.22 % on 10 August 1969.38 The new parity with the Deutsche mark (DM) adversely affected German farmers leading to a loss of their income. In the light of this, the Agriculture Ministers of the six member states had agreed during the Council on 11 August 1969 to introduce this system, whose aim was to avoid sudden alterations in farm prices triggered by abrupt adjustments in exchange rates. In other words, considering that agricultural intervention prices were set in ECUs and converted into national currency terms at green rates, the MCAs system aimed to redress price differentials between member states which could influence the intra- EC trade in agricultural products. Through this system, exports from strong-currency countries were subsidised and imports were taxed in order to avoid a loss of farmers’ income from those countries; in contrast, the system subsidised imports and taxed exports from weak-currency countries. This system contributed to the increase of CAP expenditure, as currency instability accentuated, since it implied large financial flows. Despite being a provisional measure, the phasing out of the MCAs was tricky. Germany, as the main beneficiary, opposed the dismantling of such a system, as it would undermine the income of German farmers, who already were in a complicated situation. By the end of 1983, the Commission and France brought to the table the need to dismantle MCAs to fulfil the principle of budgetary discipline and retrench the CAP expenditure. After the failure of the Athens European Council on December 1983, where the Ten failed to reconcile their differences over the reform of the CAP and the Community financing, stalling any possibility of decision on revitalizing the Community, France assumed the Presidency of the Community, after the French domestic policy shifted towards Europe. The failure of the French expansionary policies of a Keynesian nature during the first year of François Mitterrand’s presidency, and the drop in the value of the franc as a consequence of poor economic performance, led the French finance minister Jacques Delors to change tack. He was convinced that the 38 For more details on the Monetary Compensatory Amounts, see Simon Harris / Alan Swinbank / Guy Wilkinson, The food and farm policies of the European community, New York: Wiley, 1983, 192–214. Marta Alorda 366 solution necessarily involved the European Community, and chose to confirm the turnaround by accepting an agreement with Germany and implementing restrictive policies (cuts in public spending and tax increases on personal consumption).39 In this context, the fact that the French government had lost part of its sovereignty in economic policy inevitably led Mitterrand to support the Europeanist cause. At this point, Mitterrand reasoned that, by pushing for greater political integration within the Community, France could regain economic and political sovereignty.40 During the press conference after the Athens European Council, Mitterrand showed himself aware of his political responsibilities in front of a major crisis in Europe, which needed a comprehensive response.41 This strategy became more apparent during the first French contacts with Spain and other member states at the beginning of the presidency. In a meeting between the French Minister of Agriculture, Michel Rocard, and his Spanish counterpart, José Carlos Romero Herrera, on 17 January 1984, the French displayed the new position regarding Spanish agricultural accession. Rocard asserted that, although the enlargement would involve the Community in extra expenditure, there was an evident conflict between those countries prepared to accept enlargement despite its cost and those, which considered the agricultural cost unacceptable and blocked enlargement; France was not in this latter group.42 Madrid welcomed this new French attitude that, after the success of Stuttgart summit, could provide the final impetus to accession negotiations in general and to the agricultural dossier in particular. At the institutional level, during the first months of the French presidency, the issues related to the Community budget and the reform of the Mediterranean acquis were again at the top of the Community agenda. The 39 See, for example, Robert Boyer, “The Current Economic Crisis Its Dynamics and its Implications for France”, in: George Ross / Stanley Hoffmann / Sylvia Malzacher (eds.), The Mitterrand experiment: continuity and change in modern France, Cambridge: Polity Press, 1987, 33–53; see also Howard Machin / Vincent Wright, Economic policy and policy-making under the Mitterrand presidency 1981– 1984, London: Pinter, 1985, 1–43. 40 A good overview of this change of the French perspective is provided by Mark Gilbert, European Integration: a Concise History, Lanham: Rowman & Littlefield Publishers, 2012, 118–121. 41 Main statements during the Council are reproduced in the Bulletin of the European Communities, n. 12, vol. 16, 1983, 1.1.2. 42 TNA, FCO 98/4786, n. 1, Telegram about "EC enlargement: Franco-Spanish relations", sent by Richard Parsons, British ambassador in Madrid, to the FCO, Madrid, 18 January 1984. The European Community’s Struggle with the agro-budgetary Problem 367 first steps towards a proper solution were taken at the Council of Agriculture Ministers meetings in March, where an overall agreement was reached regarding the CAP reform. The agreement embraced the approval of the launching of the IMPs and the gradual dismantling of the MCAs. Yet, both measures still depended on the resolution of the budgetary issue, which would enable the Community, on one hand, to fund the IMPs and, on the other, to compensate German farmers. After several Councils of Ministers and a preparatory European Council in Brussels in March, the definitive solution was ultimately found at the Fontainebleau European Council on 25 and 26 June, where the ten Heads of Government reached unanimous agreement on the amount of compensation to be granted to the United Kingdom in its contribution to the Community budget.43 This accomplishment enabled matters related to the Community financing to be unblocked, such as the measures on budgetary discipline and the increase of the VAT own resources rate. Moreover, it finally led to the dismantling of the MCAs by granting German farmers an additional aid to compensate the loss of income that this measure would entail. However, the implementation of the IMPs, which constituted a way to compensate the Southern countries for the enlargement without a large CAP reform, remained stalled due to the lack of agreement on how to finance such a measure, which would be the main stumbling block at the end of accession negotiations. Nevertheless, the set of decisions adopted at Fontainebleau completed definitively the Stuttgart package; it would ensure the sustainability of an enlarged CAP. In so doing, the way for advancement in agriculture negotiations with Spain was increasingly cleared. Thus, once these issues were resolved, the European Council could provide the necessary political impetus to the accession negotiations with the two Iberian countries by confirming that the Heads of Government’s objective was to address technical issues, especially regarding agricultural problems, within three months. Within EC-Spanish accession negotiations, the sectors of olive oil and wine still remained to be solved. These two sectors were the main obstacle to the agriculture dossier, since they perfectly represented the main problems of surplus, increasing expenditure and the North-South imbalance. The Community submitted a common statement concerning both sectors at the end of 1984, in which member states stated the need to observe a 43 Presidency conclusions on the European Council in Fontainebleau are reproduced in the Bulletin of the European Communities, n. 6, vol. 17, 1984, 1.1.9 – 1.1.10. Marta Alorda 368 transitory period of ten years from the date of accession. This did not leave the Spanish with much room for negotiating those terms if they wanted to materialise the enlargement in a short period of time. However, despite presenting a common position on the two remaining sectors, the agriculture dossier could not be completely closed due to the Greek threat to veto the enlargement unless a satisfactory agreement on the integrated Mediterranean programmes was reached. Greece drew a formal link between enlargement and the implementation of the IMPs, arguing that, given its vital interests affected in the former, a satisfactory agreement in the latter was necessary. Athens requested a firm budgetary commitment to fund these programmes and a more generous compensation by arguing again that these programmes were of vital importance for Greece, given the effects of future enlargement on the Greek economy.44 The problem of funding had existed since the Commission proposal in the framework of the May mandate in 1981 and it had been intensified until it reached its highest level of disagreement at Fontainebleau Summit in June 1984. The main conflict stemmed from the fact that Northern countries were unwilling to increase their contribution to fund structural reforms in the Mediterranean member states. The Commission’s ongoing attempts to move the IMPs from a purely agricultural approach to a broader regional development perspective, funding them by using several structural funds, had failed to yield results. At the beginning of 1985, when the Community was fighting against the clock of the enlargement, Jacques Delors, who took office as President of the Commission, appeared as willing to give the definitive boost to accession negotiations with Portugal and Spain. At his first intervention before the European Parliament, in February, Delors declared that he would assume the responsibility to find, before the forthcoming March European Council, a proper solution to the problems that were blocking the closing of the last negotiating dossiers (agriculture, fisheries and social affairs). This solution necessarily involved an agreement on the funding of the IMPs, which satisfied all parts and enabled to lift the Greek reservations. To do that, at the end of February, the European Commission adopted a communication intended to lay the foundations for a future proposal on the IMPs, considering the previous proposals made by the Commission since the May mandate. In this communication, the Commission recalled that the purpose of these programmes was to adopt a comprehensive ap- 44 The full Greek statement is reproduced in the Bulletin of the European Communities, n. 12, vol. 17, 1984, paragraph 1.2.18. The European Community’s Struggle with the agro-budgetary Problem 369 proach (not only focusing on the agricultural sector) by using additional budget resources, further to those of the existing funds. To solve the budgetary problem, the Commission proposed that, besides the envisaged structural funds, an additional source of funding should be added: lowinterest loans from the European Investment Bank (EIB).45 Moreover, Delors suggested to negotiate a joint final solution as a package of those three negotiating dossiers that remained to be solved, in order to make a political decision that eventually allowed to close the accession negotiations. The solution – known as the ‘March agreement’ – was found after a set of meetings from 17 to 22 March 1985. It was a political decision rather than a technical or economic one, which was reached through common minimum positions that allowed to move forward with accession negotiations and to close the package of conflicting dossiers. As regards the agricultural dossier, Northern member states finally supported the Commission proposal and accepted to contribute to the funding of the Integrated Mediterranean Programmes; it was a price to pay for facilitating enlargement. The IMPs enabled enlargement costs to be redistributed by other means rather than the CAP reform. Thus, by implementing the IMPs, Northern agricultural producers were not adversely affected by an alleged deep CAP reform, which was supposed to realign the North-South imbalance. Moreover, these programmes were a way to carry out structural reforms in order to reduce agricultural surpluses instead of using a formula based on price support or producer aids, which Northern countries opposed, since in the long run it would increase agricultural expenditure. To conclude, the EC-Spanish accession negotiations on agriculture only took place in the last six months before the closing of the dossier. Community internal negotiations led to a ‘take it or leave it’ situation, where the Spanish had not the opportunity to negotiate their terms or conditions. At the end, an unusual long transitory period of seven years was applied to the Spanish agriculture. For some specific products, it was established a ten-year period of which five years were a standstill; that is, no measure would be implemented to progress with sectorial integration.46 The agriculture dossier was, therefore, closed without those deep internal reforms that the Commission foresaw at the beginning of accession negotiations. Several minimum measures, namely an increase in own resources and a set 45 "Integrated Mediterranean programmes: Commission Communication to the Council", COM (85) 66 final, Brussels, 21 February 1985. 46 OJEC, Treaty of Accession into the European Communities of Spain and Portugal (signed on 12 June 1985), L 302, 15 November 1985. Marta Alorda 370 of political decisions, enabled the closing of this dossier, which had provoked a severe paralysis of the Community decision-making process. What conclusions can be drawn from this summary of the negotiating process of the agro-budgetary issues? The first and perhaps most obvious is that agriculture’s negotiations with Spain were interlinked with the Community’s internal talks. The size of Spanish agriculture and the Community internal challenges made impossible to integrate Spain into the EC without causing large regional, financial and market imbalances (especially on the three Mediterranean sectors). Thus, member states were forced to carry out necessary reforms both in agricultural policies and budgetary issues in order to redistribute the costs of enlargement. These agro-budgetary reforms became the bulk of internal negotiations during those years. The clash of interests and strategies among member states hindered any advance or possibility to reach a speedy agreement on agriculture and budgetary issues; this was at the origin of several front lines regarding different interlinked issues. Regarding agricultural matters, two opposite groups envisaged the measures to be taken in very different ways; while Mediterranean member states called for a higher protection for their farmers regardless of the expenditure involved, Northern countries demanded a reform of Mediterranean regimes which would entail a CAP retrenchment. These contrasting stances on agriculture and the British budgetary question impeded the Community from finding a minimum common ground and paralysed its decision-making process. Moreover, even among Mediterranean countries competing interests prevented the creation of a common front to tackle the Community agricultural negotiations. France and Italy had different conceptions of the degree of intracommunitarian agriculture protection the CAP should offer. The Italians, with a more liberal position, asked to reinforce the Community Preference to protect farmers against external competition while liberalising the intracommunitarian market; conversely, the French took advantage of the problems raised by Spanish accession to call for an increased protection of their farmers against other Mediterranean member states. In the end, only when member states reached an agreement on those elements related to the Community funding was it possible to overcome these internal issues and to complete Spanish accession negotiations on agriculture. The first part of the solution was the decision taken in the Fontainebleau Summit in June 1984, where member states reached an agreement on the British rebate, budgetary discipline, the increase in VAT own resources rate and the dismantling of the MCAs. These were the necessary elements to close accession negotiations on agriculture; however, the threat of the Greek veto jeopardised any agreement on this dossier. The The European Community’s Struggle with the agro-budgetary Problem 371 second and definitive step was taken under Jacques Delors’ Presidency of the Commission when a proper solution on the funding of the IMPs, which were essential in order to protect the Greek economy against a new member state, was achieved. Therefore, the second and perhaps most relevant conclusion is that the solution to close negotiations on agriculture was found in larger expenditures all round, rather than in the CAP reform. The lack of consensus among Community members on agriculture became the main stumbling block of the Community talks. Eventually, a set of purely political decisions by member states, together with an increase of their contributions both in the own resources and the IMPs, made Spain’s accession possible by agreeing on economic measures to which they had been opposing during years. If Northern member states agreed to extend their contribution to the IMPs, it was because it would compensate Mediterranean countries for enlargement’s costs without disrupting Northern farmers’ incomes with a CAP reform, which would fix the North-South imbalance. Thus, once the costs of Spanish agriculture’s accession were covered, the deep CAP reform was postponed until after the enlargement. Lastly, it is worth mentioning that the agriculture negotiating dossier, despite being relevant in the framework of accession negotiations, is not the representative and central dossier of Spanish-EC talks. In other words, negotiations on agriculture serve as a perfect example of how the internal Community problems exacerbated by the prospect of Spanish agriculture accession shaped the dynamics of membership talks. However, Spanish accession negotiations cannot be grasped by looking exclusively at agriculture, as sometimes claimed by historiography. Other dossiers like industry, fisheries or social affairs were equally or even more significant and, in turn, displayed different negotiating dynamics between Spain and the European Community. Further research will take care of this in due course. Marta Alorda 372 The least loved Policy: the EEC’s Enlargement to Portugal Alice Cunha There has been no single decade in European integration history when enlargement has not been debated but never as a top priority and often as a problematic issue. In the 1970s/80s one cannot actually speak of an enlargement policy, as such comes hand-in-hand with the end of the Cold War and the ensuing Central and Eastern enlargement round, the establishing of the Copenhagen Criteria (1993) and the creation of the Commission’s Directorate- General for Enlargement during the Romano Prodi Commission (1999– 2004). Around the same time (1990s), European Economic Community/European Union (EEC/EU) enlargement became a topic of interest – despite never having been a fashionable one in any field – and ever since a fair amount of literature has been produced.1 In Portugal, literature on European Union Studies has increased during the last few decades but historiography on European integration is still somewhat limited, and even more so if particularly devoted to enlargement and Portugal’s accession to the EEC although there are some contributions.2 1 Christopher Preston, Enlargement and Integration in the European Union, London: UACES, 1997; Graham Avery / Cameron Fraser, The Enlargement of the European Union, Sheffield: Sheffield Academic Press, 1998; Wolfram Kaiser / Jürgen Elvert (eds.), European Union Enlargement – A Comparative History, London: Routledge, 2004; Neill Nugent, European Union Enlargement, Houndmills: Palgrave Macmillan, 2004; Geoffrey Pridham, “The arrival of enlargement studies: patterns and problems”, in: CRCEES Working Paper Series, University of Glasgow, 2008; Frank Schimmelfennig / Ulrich Sedelmeier, “The politics of EU enlargement: theoretical and comparative perspectives”, in: Frank Schimmelfennig / Ulrich Sedelmeier (eds.), The Politics of European Union Enlargement: Theoretical Approaches, London: Routledge, 2009, 3–29; Christina Schneider, Negotiation and European Union Enlargement, Cambridge: Cambridge University Press, 2009; Christophe Hillion, The Creeping Nationalisation of the EU Enlargement Policy, Stockholm: Swedish Institute for European Policy Studies, Report n. 6, 2010. 2 Nuno Severiano Teixeira / António Costa Pinto (eds.), Portugal e a Integração Europeia 1945–1986 – A Perspectiva dos Actores, Lisboa: Temas e Debates, 2007; Alice Cunha, “Portugal, Espanha e Europa: entre o paralelismo das negociações de adesão e a capitalização do terceiro alargamento da Comunidade Económica Eu- 373 However, enlargement studies have become a new area of study3 and, for more than fifteen years now, solving the paradoxes of enlargement has been pointed to as the next research challenge in the field of European Integration History.4 The process of Portuguese accession to the European Economic Community in the mid 1970s to mid 1980s must be contextualized against the overarching background of the Cold War during which it was important for the EEC to guarantee stability in the Iberian Peninsula and to support the Portuguese and Spanish transition and democratisation processes, which would involve the Iberian enlargement round. But this would be negotiated in an atmosphere of Europessimism, lack of political will and the revival of intergovernmentalism at a time when the EEC itself was also being reshaped towards political, economic and monetary union. The history of the Iberian enlargement officially begins with Portugal submitting its membership application to the EEC on 28 March 1977 and ends on 1 January 1986 when both Portugal and Spain joined the EEC. Indeed, the enlargement was one of the features that shaped the EEC in the 1980s, particularly from 1984 onwards. In a context where a new dynamic in European integration politics was soon starting to flourish, the Portuguese accession negotiations (1978–1985) were, nevertheless, caught up in a series of EEC problems that had to be solved (the United Kingdom’s contribution to the budget, the reform of the Common Agricultural Policy, institutional reform, Spain’s own application) besides coping with the preferences of Member States, despite there being general political support for the Portuguese application. It was only after the Fontainebleau European Council (25–26 June 1984) that negotiations speeded up, mostly boosted by an agreement on the budget dispute and the contribution to the EEC’s budget. More than three decades after completion of the Iberian enlargement – and at a time when the enlargement policy is practically on hold – this chapter focuses on enlargement policy in general in the 1980s, how ropeia”, in: Relações Internacionais, 48, 2015, 25–41; João Rosa Lã / Alice Cunha (eds.), Memórias da Adesão. À Mesa das Negociações, Bookbuilders: Santa Cruz, 2016; Alice Cunha (ed.), Os Capítulos da Adesão, Assembleia da República: Lisboa, 2017; Alice Cunha, Dossiê Adesão. História do Alargamento da CEE a Portugal, Imprensa de Ciências Sociais: Lisboa, 2018. 3 Pridham, “The arrival of enlargement studies: patterns and problems”. 4 Fernando Guirao, “Solving the Paradoxes of Enlargement: The Next Research Challenge in our Field”, in: Journal of European Integration History, n. 2, Vol. 11, 2005, 5–9. Alice Cunha 374 different actors, such as Member States and the European institutions, coped specifically with the Portuguese accession negotiations, and what the driving forces but also the obstacles behind it were. It argues that enlargement to Portugal remained on hold for such a long period of time owing to three main interconnected motives: the lack of consensus among Member States regarding major Community issues, their individual expectations for their own gains and the problems the Spanish application posed to the EEC. Portugal and EEC Accession: a three-act History As a result of a geopolitical balance between continental pressure and the search for a maritime alternative, Portuguese foreign policy was for centuries shaped towards the Atlantic and only in the mid 20th century and through its participation in the Marshall Plan did Portugal become involved in a process of increasing external openness towards Europe. A founding member of NATO and later of EFTA, after the creation of the first European Community (ECSC), Portugal’s authoritarian government issued its reflections on the “European federation policy” in which the head of government, António de Oliveira Salazar, advocated that the idea of the federation “absolutely disgusts” Portugal and its interests as opposed to overseas expansion, which was “definitely its vocation”, and that the country’s “Atlantic feature therefore imposes limits on European collaboration”.5 This remained the official position of the Portuguese regime until it came to an end in 1974. However, despite both the self-imposed and externally imposed limits to closer European collaboration, Portugal managed to combine its maritime and continental features and, most importantly, to benefit from European integration. A clear example of this is what happened after the first accession requests were presented by the United Kingdom and other EFTA partners to the EEC in 1961. With the prospect of EFTA emptying following the departure of the UK – Portugal’s main trading partner and its oldest political ally – and three other partners, EFTA’s economic magnitude would have been reduced and Portugal would have lost commercial benefits. An exhaustive analysis of Portuguese trade determined – not without some political discontent but nevertheless without hesitation – 5 Arquivo Histórico-Diplomático, Lisboa (henceforth: AHD), PEA, M. 309, Circular Diplomática, 6 March 1953, 5, 7–8. The least loved Policy: the EEC’s Enlargement to Portugal 375 that an official request should be submitted to establish a means of collaboration between the country and the EEC, the first time in 1962 and the second in 1969.6 In the first request, the non-reference to a concrete form of relationship is neither accidental nor innocent as there had been previous indications that the request for negotiations could be formulated but not allude specifically to the intended formula, namely association or accession, which would be left for a later stage.7 The pluricontinental nature of the Portuguese State and especially its non-democratic nature did not make it feasible to request accession, not even for the most enthusiastic members of the Government, nor for the EEC to satisfy such a possible pretension. On top of that, Portugal was, by European standards, a poorly developed country whose insufficient level of economic development would constrain the fulfilment of its obligations as well as the full use of benefits arising from membership.8 At that time, the EEC was still a “club” of rich, economically highly developed states. With the possibility of membership set aside, Portugal concentrated its political and diplomatic efforts on negotiating the best trade agreement possible, which ended happily with the signing of the Agreement between Portugal and the EEC on 22 July 1972. In between the first and the second requests, one important political change occurred with Salazar being replaced by Marcello Caetano as the Head of Government. In what concerns European integration though, nothing changed since the new Head of Government’s thinking on the matter was basically the same as his predecessor’s: the least indispensable formal relation possible as a means of keeping commercial channels open and, if possible, of boosting this type of relationship only.9 The negotiations for the trade agreement officially began on 24 November 1970 and were considered from the start “a matter of major importance”10 as, in 1972, 75 % of Portuguese imports were already originating 6 Arquivo Contemporâneo do Ministério das Finanças, Lisboa (henceforth: ACMF), Fund “Gabinete do Ministro das Finanças”, serie Comunidade Económica Europeia, M. 2, letter 18 May 1962. See also AHD/EOI, M. 682, Pasta 1 a). 7 AHD/EOI M. 210, Telegram from the Embassy in Brussels, 27 April 1962, reporting a talk with Paul-Henri Spaak. 8 ACMF, Fund “Gabinete do Ministro das Finanças”, Serie_32.3.1_Comissão para a Integração Europeia, Maço 1, Relatório da Comissão de Estudos sobre a Integração Económica Europeia, 1970, 85. 9 José Manuel Tavares Castilho, A Ideia de Europa no Marcelismo (1968–1974), Lisboa: Assembleia da República/Edições Afrontamento, 2000, 120, 125. 10 AHD/EOI, M. 682 A, Pasta 1 a), Aide Memoire, 18 January 1972. Alice Cunha 376 in the EFTA-EEC countries and 69 % of its exports were destined for these countries. The 1972 Agreement made it possible for Portugal to maintain access to the markets of the United Kingdom and Denmark and to gain access to the markets of the six Member States. In the end, the Government presented the Portugal-EEC Free Trade Agreement (plus the Portugal-ECSC Agreement)11 as being a great victory for the country. In reality, this was a fundamental agreement not merely from the trade and economic perspective, but also as it was the first formal relationship between the country and the EEC not in search of international integration but of economic survival. It may also be considered as both the point of arrival of the authoritarian regime’s approach to Europe and the starting point for the future democratic regime to define its strategy towards EEC membership.12 Either way, it was the first act in the broader history of Portugal’s accession to the EEC. The second act begins with the Carnation Revolution in 1974 (known in Portugal as the 25 de Abril or 25th April), which triggered a series of events that forced both the Portuguese State and the EEC Member States and EEC institutions to redefine their respective positions regarding their mutual relationship and future developments, including the possible prospect for enlargement. But 1974 was not only an important year for Portugal as other significant changes occurred in that same year in several Member States, namely the taking up of office of Harold Wilson, Valéry Giscard dʼEstaing and Helmut Schmidt. These three changes alone in the political leadership of three Member States had consequences for European integration. The first and perhaps most important from the point of view of future concerns was the battle started by Harold Wilson for renegotiation of the British accession terms; the second was the establishment of an informal Franco-German alliance in regard to EEC affairs.13 Originally, European integration and EEC membership was not on the horizon for the authors of the April coup. In the months that followed the coup, the country’s foreign relations system became disjointed, with no Brazil or Africa. Imperial Portugal stretching “from Minho to Timor” had ended. Instead, there was an intense struggle over the major options for Portuguese foreign policy, which also contributed to the multiplication of self-entitled autonomous decision-making centres, especially the Catholic 11 JO CE n. L 301 of 31 December 1972. 12 Pedro Emanuel Mendes, Portugal e a Europa: factores de afastamento e aproximação da política externa portuguesa (1970–78), Lisboa: ISCTE, 2001, 121. 13 Desmond Dinan, Ever Closer Union – An Introduction to European Integration, Houndmills: Palgrave Macmillan, 2005, 69. The least loved Policy: the EEC’s Enlargement to Portugal 377 Church, political parties, trade unions and business associations that had their own individual agendas and contacts abroad. In the spring of 1975, the political situation worsened and it was not until 25 November that same year that a military coup would halt the advance of the left wing. The EEC paid close attention to all the events taking place in the country and was concerned about the succession of interim governments – in whose composition the participation of communist members was never well accepted by Member States – and, above all, the tendency towards a leftist regime being established, envisaging the possibility of the country heading towards communism. At the time, the EEC was not overtly the number one option for the future of the country’s foreign policy. Some other options were considered (or at least mentioned) by various players such as adoption of a model of total isolation (“Albanization”), inclusion in the bloc of Third World States, accession to the bloc of centralized economy countries (COME- CON), or creation of an economic space corresponding to Portuguesespeaking countries. Following the trade agreement, maintaining and possibly deepening relations with the EEC could have been the next natural step. However, from an domestic point of view, it was not until the end of 1975 that Europe began to strengthen its position in the context of Portuguese foreign policy, which finally became more consolidated after the first free legislative elections that took place on 25 April 1976 (a symbolic date, two years after the coup) and the First Constitutional Government, led by Mário Soares, a well-known pro-European, took office. What also contributed to this development was the financial aid the EEC granted to Portugal. This was, however, conditioned by the move towards a pluralist democracy, which meant that EEC support really depended on the evolution of the Portuguese political situation.14 The European Commission had advocated immediate and substantial aid to Portugal to help its fragile democracy despite the reticence of the governments of the Member States due to the lack of political stability and the scepticism among European leaders about the latest events in Portugal and their lack of confidence in the effect such aid could have.15 But the Commission considered it a “practical support” by the EEC while also defining 14 Historical Archives of the European Union, Firenze (henceforth: HAEU), Brussels European Council Meeting (16–17 July 1975), BAC079/1982–229. See also Archives Historiques de la Commission Européenne, Bruxelles (henceforth: AHCE), BAC 79/1982 n. 229. 15 HAEU, CPPE-000496. Alice Cunha 378 from the outset the terms of such aid: the consolidation of democracy and the defence of human rights.16 This was the first of three different financial assistance packages granted before accession, which included renegotiation of the “evolutionary clause” of the 1972 Agreement and pre-accession aid, and was considered a reward for democratization.17 The approval of the Constitution in April 1976, the legislative elections held that same month and the elections for the Presidency of the Republic in June ended the revolutionary period. After two years of continuous unrest, the major concerns were to overcome the economic and financial crisis and to ensure political stability. European integration and the EEC would be a part of the solution for both these and subsequently the brand new major project for the future of Portugal. This brought another act leading to the EEC as an end and set the stage for the final act and the toughest negotiations the country would face after democracy: the accession negotiations to join the EEC. On the bumpy Road to Brussels: Small State, Giant Obstacles Each enlargement is unique in several aspects, thus giving it its own individuality, although there are some repeated features in the various enlargement rounds such as the motivations of both candidates and Member States, the way in which this elite-led process is handled and the impact of enlargement on deepening.18 For the candidates, the motivations, with some case-by-case variations, are of economic and political origin; the same applies to the Member States, notably in terms of the advantages for expansion of the internal market, which suggests that, in the end, enlargement is based “on the converging interests of current and potential Member 16 AHCE, BAC 250/1980 n.° 378, COM (75) 287 Final. 17 JO CE n. L 266, 29 September 1976; Diário da Assembleia da República n. 236, I Série, 8 October 1976; AHCE, BAC 48/1984 n.° 563/3, 4 and 5; AHCE, BAC 48/1984 n. 564/1, 2, 3, 4 and 5; Council Regulation (EEC) n. 3323/80 of 18 December 1980 on the conclusion of the Agreement in the form of an exchange of letters between the European Economic Community and the Portuguese Republic concerning the implementation of pre-accession aid for Portugal. Geoffrey Edwards and William Wallace, A Wider European Community? – Issues and Problems of Further Enlargement, London: Federal Trust for Education and Research, 1976, 30. 18 Nugent, European Union Enlargement, 58–65. The least loved Policy: the EEC’s Enlargement to Portugal 379 States”19, the former because they consider enlargement as providing longterm economic and geopolitical benefits and the latter because membership gives them access to the largest internal market and strengthens relations with the West. The Portuguese road to Brussels was not obvious, easy, fast nor obstaclefree; in fact, it was quite the opposite since on its way to becoming an EEC Member State, and for almost a decade, the country had to deal with both domestic issues and external problems. On the 13 and 14 March 1976, a socialist congress was held in Porto under the motto “Europe [is] with us”. It included the participation of several leaders from Western European countries including Willy Brandt, François Mitterrand, Olof Palme and Felipe Gonzalez. The “socialist and democratic” Europe of the Portuguese socialists led by Mário Soares paved the way to ending the international isolation the country had suffered for decades and presented the possibility for the country to take full part in the EEC. This was not, however, simply a socialist project as it also had the support of the Social Democrats (PPD) and the Christian Democrats (CDS), and only met with opposition from the Communist Party (PCP). Before delivering Portugal’s membership application, Prime Minister Mário Soares went on a European tour (from 14 February to 12 March 1977) to the capitals of the nine Member States, starting in London (its oldest ally and the next to chair the Council’s Presidency) and finishing in Brussels.20 His clear objective was to explain the reasons for applying for membership. The major argument presented in all the capitals was one of democracy in Europe, an argument the British and Germans had suggested from the outset. This connection (between European integration and democratization) has been suggested not only in the Portuguese case but also in the Greek and Spanish cases “due to the coincidence of the accession negotiations being held at the same time as the consolidation of democracy”.21 19 Andrew Moravcsik / Anna Vachudova Milada, “Bargaining among unequals: enlargement and the future of European integration”, in: EUSA Review, No. 4, Vol. 15, 2002, 1–3; Andrew Moravcsik / Anna Vachudova Milada, “National interests, state power, and EU enlargement”, in: East European Politics and Society, n. 17, 2003, 42–57. 20 Commission. Bulletin of the European Communities. n. 3, Brussels: Commission of the European Communities, 1977, 65. 21 Geoffrey Pridham, “A integração europeia e a consolidação democrática na Europa do sul”, in: Nuno Severiano Teixeira / António Costa Pinto (eds.), A Europa do Sul e a Construção da União Europeia, 1945–2000, Lisboa: Imprensa de Ciências Sociais, 2005, 163. Alice Cunha 380 All Member States were supportive of the efforts of the Portuguese government to move towards democracy and its intention to apply to the EEC, but they showed different levels of support and concerns, mainly related to agriculture, institutional reform, EEC funds and free movement of workers. They were also worried that any future enlargement round could jeopardize the EECʼs economic accomplishments and the cohesion of the internal market. In short, as Mário Soares himself felt during those visits22, what was the price for enlargement and who was going to pay it and to what extent. Moreover, although Portugal rejected any arrangement other than membership, it was clear to Portugal that the Member States were more concerned with their own immediate economic problems than with future enlargement, and as the concrete implications of enlargement became clearer over time, national governments started to backtrack on their initial compromises.23 On 28 March 1977, the Portuguese ambassador António de Siqueira Freire delivered Portugal’s application for membership of the EEC24. This led to a process that would only be concluded eight years later with the signing of the Accession Treaty on 12 June 1985 after “endlessly tedious” talks, as Wilfred Loth calls them.25 Among the underlying motives for the Portuguese application, the most frequently mentioned were democratic consolidation, on the one hand, and economic development, on the other, which is in line with the Spanish and Greek applications, whose justifications were all “vague and cautious” about assuming that membership would strengthen democracy or the economy.26 At its meeting on 5 April 1977, the Council agreed to initiate the enlargement procedures set out in Article 237 of the Treaty of Rome by instructing the Commission to draw up an opinion on the subject. This decision demonstrates the EEC’s engagement with future enlargement but it should be noted, however, that such a commitment was made in a generic way, with no promise of deadlines or terms to be agreed, and was 22 Cf. Maria João Avillez, Soares Democracia, Lisboa: Público, 2007, 57. 23 William Wallace, “The reaction of the Community and the member governments”, in: AAVV, A Community of Twelve? The Impact of Further Enlargement on the European Communities, Bruges: De Tempel, 1978, 47. 24 HAEU, BAC 250/1980 n. 644; AHCE, BAC 79/1982 n. 248/1. 25 Wilfried Loth, Building Europe. A History of European Unification, De Gruyter: Berlin, 2015, 246. 26 Dudley Seers, “Introduction: the second enlargement in historical perspective”, in: Dudley Seers and Constantine Vaitsos, The Second Enlargement of the EEC – The Integration of Unequal Partners, New York: St. Martinʼs Press, 1982, 8. The least loved Policy: the EEC’s Enlargement to Portugal 381 not synonymous with the idea that membership was, or would be, accepted. Moreover, although enlargement was (and still is) a political matter27, the problems arising from it – namely institutional problems and economic consequences – soon started to emerge.28 Portugal was not, however, the only candidate at that time to become a Member State. Greece had also submitted its application beforehand (12 June 1975) as did Spain later (28 July 1977). In parallel with the drafting of the Opinion on Portugal, the Commission presented a communication to the Council on the problems of enlargement and its risks in an attempt to consider enlargement from a global perspective and to recommend that another round of enlargement should not be completed if it were to put the foundations and objectives of the EEC at risk.29 Economic problems topped the list, pointing to the lower level of economic development of the three candidates compared to the EEC9, which would cause an increase in the number of regions and sectors in difficulty; the industrial and social structures of the candidates were also very different from those of the EEC9, which would undermine the cohesion of the internal market and achievement of economic union. Specifically, in addition to the need to adapt the institutions, the prospect of enlargement posed a number of obstacles in several areas, including: agriculture (increased number of agricultural workers, surpluses in the amount of certain Mediterranean products, the need to improve production structures); industry (increased disparity in production conditions, the need to adapt production to new market conditions); energy (energy dependence of about 78 %-88 %); social aspects (more unemployment); and regional issues (widening disparities between regions).30 Furthermore, Portugal had the lowest per capita income of all the Member States plus Spain and Greece. The Commissionʼs Opinion on Portugal included a specific analysis of several policy areas (including agriculture and fisheries, industry, energy, competition and social affairs) and it concluded that the economic impact resulting from Portugal’s accession would be quite limited given the rela- 27 HAEU, EN-000413, Note for the attention of President Jenkins & Vice-President Natali, 13 May 1977. 28 Commission. Bulletin of the European Communities, No. 9, Brussels: Commission of the European Communities, 1977, 46. 29 COM (78) 120 final, General considerations on the problems of enlargement, in: Bulletin of the European Communities, Supplement 1/78. 30 COM (78) 120 final, General considerations on the problems of enlargement, in: Bulletin of the European Communities, Supplement 1/78, 9–12. Alice Cunha 382 tive weight of the Portuguese economy, which represented only 1 % of the EEC9’s GDP and 3 % of the population. The Portuguese economyʼs weak state of development, paradoxically, would contribute to the increase in disparities, which, in turn, would diminish cohesion and accentuate the EECʼs heterogeneity as well as rendering the decision-making process all the more difficult.31 A closer view also pinpointed that the country employed 28 % of the active population in agriculture but the sector only contributed 14 % to its GDP; the country was not self-sufficient in various products, including dairy products and meat; the country’s fishery resources were not sufficiently exploited; industry was dominated by traditional sectors and highly dependent on imports of raw materials; transport infrastructures were not adequate; and living and working conditions were greatly inferior to those of the EEC9. Still, for Commissioner Lorenzo Natali, in charge of enlargement, what was really at stake was not so much the magnitude of the Portuguese problems as their impact32 and so the Commission was supportive of starting negotiations. In the 1970s, the EEC faced a profoundly changing international economic system. It had to deal with the consequences of the first oil crisis, national protectionism and the impact of the first enlargement at a time when ʻEurosclerosisʼ and ʻEuropessimismʼ summarize the history of European integration in the mid 1970s and set the background for the forthcoming Iberian enlargement accession negotiations. The European Commission itself also reflected to some extent what was happening in the EEC as a whole. The Commission was considered weak and demoralized at the time with Roy Jenkins worn out by the budgetary dispute with Margaret Thatcher and disagreements with Giscard dʼEstaing over the Commissionʼs role and responsibilities, and later with Gaston Thorn, who was somewhat out of place and uncomfortable in Brussels, given the prospect of the Commission being only as effective as the most influential national leaders would allow.33 31 COM (78) 220 final, Opinion on Portuguese application for membership, in : Bulletin of the European Communities, Supplement 5/78; HAEU, BAC079/1982 n.º 248, Avis de la Commission au Conseil concernant la demande dʼadhésion du Portugal. 32 AHD, Telegrama n. 140, Missão de Portugal junto das Comunidades Europeias, 19 May 1978. 33 Desmond Dinan, Europe Recast: A History of European Union, Boulder: Lynne Rienner, 2004, 192. The least loved Policy: the EEC’s Enlargement to Portugal 383 The official opening of the negotiations took place on 17 October 1978 in Luxembourg during the German Council presidency and Jenkins’ Commission. Accession negotiations went through a total of fourteen Council presidencies, starting in the German and ending in the Italian, with all Member States, including newly arrived Greece, holding the Presidency and some of them more than once (Germany, Ireland, France and Italy). The official date aside, the negotiations only truly started in January 1980 during the Democratic Alliance (Aliança Democrática) government led by the social democrat Francisco Sá Carneiro. This was by then already the sixth Portuguese government after 1976. This government soon sought to start implementing reforms that would liberalize the economy and move Portugal away from socialism. In what concerns accession, the Government intended to conclude all possible chapters before the Commission ended its mandate in early 198134, and so speeding up negotiations became “the priority of priorities” of Portuguese foreign policy.35 In the third ministerial meeting (22 July 1980) of the Accession Conference, a major innovation was achieved with the granting of preaccession aid – following a proposal the Commission introduced in its reflections on enlargement and implemented for the first time ever. This aid would later be applied from 3 December 1980 to 31 December 1993 but its results and impact are yet to be determined. However, many obstacles still remained on Portugal’s path towards the EEC. Although they were not directly related to the Portuguese application but were internal matters of the EEC or its Member States, these obstacles would ultimately all have to be resolved before enlargement could take place. Negotiations with Portugal were being conducted on the same basis as those of Greece and Spain, and even of the first enlargement, but there was a common concern: the EEC should be strengthened before enlarging, taking into consideration that enlargement and deepening must be pursued in parallel and simultaneously, but the former could never be a condition for the latter.36 Thus, in parallel to the negotiations, there was a need to broaden and refocus certain Community mechanisms (especially 34 Diogo Freitas do Amaral, “Portugal e a Europa”, in: Portugal e o Alargamento das Comunidades Europeias, Lisboa: Associação Portuguesa para o Estudo da Integração Europeia, 1981, 39. 35 AHCE, BDT 147/1991 n.377, Note à lʼattention de M. David Goodchild – discours de M. Freitas do Amaral sur la politique extérieur, 18 novembre 80; Diogo Freitas do Amaral, Política Externa e Política de Defesa, Lisboa: Cognitio, 1985, 18. 36 AHCE, BAC 250/1980 n. 64, Briefing note for President Jenkins, Venice Summit meeting: enlargement – President Giscardʼs remarks, 10 June 1980. Alice Cunha 384 in the agricultural and financial areas, in regional and social funds) to ensure there would actually be a considerable transfer of resources to the EEC’s south and, in particular, that Portugal would receive all it could absorb.37 Nevertheless, in the end enlargement became not a potential opportunity for reform but rather a source of further disagreement between Member States over important political issues and an obstacle to additional changes in the Community. On top of that, there was also a series of problems, the most important of which were an agricultural policy apparently out of control and the British rebate38, which dominated the discussion in the years to come and at the summits. In fact, the most difficult part of the negotiations did not lie in meetings at ministerial or ambassador level, but in the internal discussions within the EEC itself, with accession talks becoming involved in other negotiations between Member States who, in turn, used enlargement as a bargaining chip. Last but not least, there was a final yet complicated obstacle for Portugal in these negotiations: parallelism of the negotiations with Spain. At first, it was estimated that negotiations with the candidates would be neither parallel nor joint and that they would be guided by each candidate’s own merits.39 Portugal, moreover, always refused any possibility of joint negotiations either with Greece or with Spain, arguing that they should be bilateral, individual and according to each country’s characteristics, merits and specific timetable.40 But the Member States had a somewhat different understanding of this matter. France was the first to mention a ‘Europe of 12ʼ, which included Spain, which was problematic for Portugal since the Spanish 37 AHCE, BAC 250/1980 n. 5, Note for the attention of Mr. F. Spaak, head of the enlargement delegation: Portuguese negotiations – briefing for your meeting with Mr. Natali, 12 June 1980. 38 Cf. in this volume Marko Lovec, “Too Big a Club?” and Piers N. Ludlow, "A Double-Edged Victory". 39 Address by Mr. Roy Jenkins to the European Parliament, on 14 February 1978, presenting the Commissionʼs programme for 1978, in Commission, Bulletin of the European Communities, No. 2, Brussels: Commission of the European Communities, 1978, 12; AHCE, BAC 250/1980 18, Note de dossier – réunion du Conseil du 2 mai 1978, 3 Mai 1978. 40 AHCE, BAC 250/1980 n. 653, Portugal plans early application for EC membership, 15 mars 77; António de Siqueira Freire, Os Movimentos de Cooperação e Integração Europeia no Pós-Guerra e a Participação de Portugal nesses Movimentos, Lisboa: INA, 1981, 26. The least loved Policy: the EEC’s Enlargement to Portugal 385 application presented major economic issues for the EEC.41 At the same time, Germany was opposed to a single accession – this is still the exception today and has not been the practice for the last seven enlargement rounds. Former Prime Minister (January 1981-June 1983), Francisco Pinto Balsemão, summarizes the problem very well: “I went to Bonn and the Germans said: you may join [the EEC] tomorrow, but the Spaniards also have to join. We have nothing to do with it. It is the French who do not want the Spanish to enter. So you go to Paris and tell the French to let the Spanish in. I went to Paris and the French said: we have no problem with you joining now. But convince the Germans that you may join alone, that you donʼt have to wait for the Spaniards because the issue with the Spaniards is more complicated”.42 The fact is that from the EECʼs point of view the problem with the Portuguese accession was a problem for Portugal whereas the problem with the Spanish accession was a problem for the EEC.43 Besides, from an administrative point of view, timing and geography, there was no realistic possibility for Portugal to join the EEC alone. In the end, the theory of “we applied first and we should join first”44 did not work and Portugal only managed to sign the accession treaty some hours before Spain, thus becoming the EEC’s 11th Member State. In terms of the actual negotiations, nothing significant happened until the 1980s at which point, despite some technical advancements, enlargement became entangled with the French proposal Mémorandum sur la Relance Européenne45, which, in particular, determined the French refusal to start negotiating the most sensitive chapters and to set any future date for accession. Along with an inventory of the problems posed by enlargement46, which added almost nothing new to the discussion, this was “a 41 On this topic cf. in this volume Marta Alorda Carreras, “The EC and Spanish Accession Negotations, 1979-1985”. 42 José Maria Brandão de Brito / João Ferreira do Amaral and Maria Fernanda Rollo, Portugal e a Europa – Testemunhos dos Protagonistas, Lisboa: Tinta da China, 2011, testimony of Francisco Pinto Balsemão, 138–139. 43 Interview with Diogo Freitas do Amaral, Lisboa, 21 June 2011; interview with António Martha, Lisboa, 8 August 2011. 44 HAEU, CPPE-001655, Portugal demands priority, Financial Times, 10 May 1984. 45 Mémorandum sur la relance européenne, in : Bulletin des Communautés Européennes, n. 11, Luxembourg: Office des publications officielles des Communautés Européennes, 1981. 46 AHD, EIE, Telegrama recebido da Missão CEE em Bruxelas, 1 July 1982; Commission, Bulletin des Communautés Européennes, n. 6, Bruxelles: Commission des Alice Cunha 386 way for France to transfer its own problems with enlargement to the Community as a whole”47, but ultimately it was considered by Member States as a breakthrough in the enlargement process.48 The bilateral format of the negotiations – in which it is the Member States collectively, according to a common position that negotiate with the candidate and with each candidate individually – is based on a formula that protects the Community rules and the interests of the Member States. This has resulted in a number of consequences, including the leading position of the Member States who establish the agenda and the timing and so the Community positions become virtually non-negotiable.49 This somehow makes each enlargement round similar and the negotiation process more predictable, but it also forces the candidates to make several concessions in exchange for accession.50 In 1981–1982 François Mitterrand and Helmut Kohl took office but they did not enjoy the same good relationship as their predecessors did, while in the same period there were elections in The Netherlands, Ireland, Denmark and Italy with different governments taking office. National elections end up being another reason for stalling negotiations since each government wants to secure the votes of their constituents and in one particular case (with French farmers) enlargement (particularly the Spanish application) was a sensitive topic. Moreover, the nine Member States as a whole formed a less cohesive group at the time than the six founding members. Domestically, the political situation in Portugal was stabilized whereas the economy was doing much worse. Intervention by the International Monetary Fund was eventually required as were a series of economic recovery programmes whose common denominator was the prospect of EEC accession. This would become the countryʼs development reference till today. By 1982, under the Belgian Council presidency, the first set of chapters, representing a third of the total (20), were provisionally concluded but the Communautés Européennes, 1982, 17; Inventory, on the problems posed by enlargement for Community policies and for each of the member states, in Bulletin des Communautés Européennes, Supplément 8/82, Bruxelles: Commission des Communautés Européennes, 1982. 47 Preston, Enlargement and Integration in the European Union, 77. 48 Commission, Bulletin des Communautés Européennes, n. 12, Bruxelles: Commission des Communautés Européennes, 1982, 74. 49 Lorena Ruano, “Origins and implications of the European Unionʼs enlargement negotiations procedure”, in: EUI Working Papers, RSC n. 2002/62, 2000, 5–26. 50 Moravcsik / Milada, “Bargaining among unequals: enlargement and the future of European integration”, 44. The least loved Policy: the EEC’s Enlargement to Portugal 387 most important, such as agriculture, remained.51 The Stuttgart European Council (17–19 June 1983) examined the major EEC dossiers pending, which, apart from enlargement, included Community funding and CAP reform, and it approved the “Stuttgart Mandate” for the financial problems related to the third enlargement round.52 However, by 1984 some sensitive topics such as the free movement of workers, the Portuguese contribution to the budget and access to the Exclusive Economic Zone – which would all ultimately require a political decision rather than a technical one – still remained without agreement. The major breakthrough, however, would only come a year later at the Fontainebleau European Council (25–26 June 1984) where an agreement was finally reached on the British rebate which, in turn, made the increase in the EEC’s own resources and budgetary and financial discipline possible. The Council also established that enlargement should be concluded that same year despite all the European partners knowing that it would be virtually impossible to accomplish. Nonetheless, within hours of the European Council ending, Mitterrand travelled to Lisbon and Madrid to personally give the good news about Portuguese and Spanish accession. Thrilled by the Fontainebleau success and eager to collect his laurels, Mitterrand assured Mário Soares (Prime Minister again) that the pending issues in the Portuguese dossier would be resolved by 30 September.53 Despite this key progress, negotiations remained blocked by disagreements between the Member States, who continued to see a twofold threat in enlargement – a threat to Community finances and also to some of its economic sectors, particularly agriculture and fisheries – and so budgetary issues continued to dominate the internal debate.54 The estimated impact of Portuguese membership represented little more than 1 % of the Com- 51 Arquivo das negociações da adesão de Portugal às Comunidades Europeias, Lisboa (henceforth: ANAPCE, MNE), CONF-P/19/82, 6th meeting of the conference at ministerial level, statement by Mr. L. Natali, Vice-president of the Commission of the European Communities, on the progress of the conference. 52 Commission, Bulletin des Communautés Européennes, n. 6, Bruxelles: Commission des Communautés Européennes, 1983, 19–21. 53 Comissão, Boletim das Comunidades Europeias, n. 6, Bruxelas: Comissão das Comunidades Europeias, 1984, p. 7; Comissão, Boletim das Comunidades Europeias, n.° 7/8, Bruxelas: Comissão das Comunidades Europeias, 1984, 59; HAEU, CPPE-001655, Mitterrand a porte la bonne nouvelle européenne a Mário Soares, Le Matin, 28 June 1984. 54 HAEU, CPPE-001655, Lʼouverture à lʼEspagne et au Portugal: défi historique, ou source dʼennuis?”, Le Soir, 18 de septembre de 1984; HAEU, CPPE-001656, Failure of EEC to agree stalls enlargement talks, Financial Times, 4 October 1984. Alice Cunha 388 munity budget so the argument that enlargement would only be possible if the budget were reinforced was dishonest for Portugal. Conversely, in all major aspects, the Iberian enlargement had to be seen as a whole and in that respect the substantial economic burden of enlargement was not related to Portugal but to Spain, whose impact on the EEC would be much greater. Regardless of all the postponements, at this point the irreversibility of Portuguese accession was already secure.55 Bearing this in mind, Prime Minister Mário Soares made a political move – but with the prospect of boosting his own candidacy for the presidential elections the following year as well – by addressing a letter to the governments of the Member States expressing his dissatisfaction with the slow advancement of the negotiations.56 Originally, the Portuguese Government had envisioned that negotiations would last for three years and so be in time to present accession to the EEC as an achievement of the first socialist Government and just in time for the expected legislative elections in 1980. The Prime Minister’s action led, on the Community side, to a more generic and less ambitious document – the “Constat dʼAccord” – which nevertheless confirmed the “irreversibility of Portugalʼs integration into the European Communities” and set a concrete accession date (1 January 1986).57 So, once again there was an (even more concrete) date for accession and the political will towards securing democratic states in Southern Europe remained, but in practical terms decisions kept being delayed.58 Meanwhile, a new issue emerged at the Dublin European Council (3–4 December 1984) as newcomer Greece expressed its reservation towards enlargement until adoption of the Integrated Mediterranean Programs (IMP), which were essential for the Greek economy to bear the consequences of another enlargement round.59 55 HAEU, CPPE-001656, EC backs Portugal, ignores Spain, International Herald Tribune, 23 October 1984. 56 HAEU, CPPE-001656, OʼKeeffe says progress near on entry talks, The Irish Times, 20 October 1984; HAEU, CPPE-001656, Élargissement de la C.E.E. : vers un accord des Dix, Le Figaro, 23 octobre 1984; HAEU, CPPE-001656, Une déclaration commune avec le Portugal, The Republicain Lorrain, 23 October 1984. 57 AAVV, Adesão de Portugal às Comunidades Europeias: História e Documentos, Lisboa: Parlamento Europeu/Assembleia da República/Comissão Europeia, 2001, document 76, 290. 58 HAEU, CPPE-001655, Spain, Portugal expected to entre EC by ʼ86 target but some sticky problems still wonʼt be resolved, Wall Street Journal, 26 October 1984. 59 Comissão, Boletim das Comunidades Europeias, n. 12, Bruxelas: Comissão das Comunidades Europeias, 1984, 17. The least loved Policy: the EEC’s Enlargement to Portugal 389 For Jacques Delors, who took office as President of the European Commission on 7 January 1985, enlargement was an illustration of the EEC’s problems: “The ten Member Statesʼ reservations about the next phase of the negotiations were no more than a reflection of the difficulties they were experiencing themselves”. Enlargement had revealed a tension in Europe, which was a tension between the North and the South. This came not only from financial problems but also from a lack of understanding and, in essence, a lack of solidarity.60 Negotiations could not continue indefinitely and, at that point, the new Commission already had a new goal to achieve – the completion of the internal market – which should already include Portugal and Spain. Somewhat to the surprise of the Portuguese delegation, negotiations would indeed be partially concluded soon after during the Brussels European Council (29–30 March 1985) at the 27th ministerial session, with the political approval of the terms agreed in the various chapters plus major issues in the agriculture and fisheries chapters, with just some technical issues remaining that would only be concluded five days prior to the signing of the accession treaty.61 But even at this final stage when accession seemed to be confirmed, Greeceʼs veto was again a possibility. This was only overcome with the creation of the IMP, from which not only Greece would benefit but also Italy and France, who also got compensation from the CAP reform. The creation of the IMP is just one example of how Member States shape enlargement to suit their own national interests62, use their veto capacity (since enlargement requires a unanimous vote) and how the Community method is strongly in favour of the Member States with diminished bargaining power for the candidate countries.63 Christina Schneider argues that candidates and Member States negotiate the distribution of enlargement gains and losses between them and that the 60 Commission, Programme of the Commission for 1985, in Bulletin of the European Communities, Supplement 4/85, Luxembourg: European Communities, 1985 Statement by Jacques Delors, President of the Commission, to the European Parliament and his reply to the ensuing debate, 12 March 1985, 6. 61 ANAPCE, CONF-P/28/85, 27ème session ministérielle – projet de relève des conclusions; Comissão, Boletim das Comunidades Europeias, n. 3, Bruxelas: Comissão das Comunidades Europeias, 1985, 57; AHD, t