Keith Middlemas - Orchestrating Europe (Text Only)

Yet Mitterrand gave no direct indication which of these four should predominate. 8A substantial part of the entire project design depended on how far he could recreate a centre-left governing party at home and undermine the right, utilizing the deep divisions between Giscard’s UDC and the Gaullists. Ambiguity served also to disguise the extent to which the project required West Germany and the EC itself to be shaped according to French terms.

WEST GERMANY

From its inception, the EC had formed an essential framework for West Germany’s process of political and economic rehabilitation, until in due course it became the precondition for whatever followed. Since Adenauer’s time, federal governments, usually in coalition, had used it as part of their increasingly elaborate balancing act between Ost- and Westpolitik, between the USA and Russia, West and East Germany and between West Germany and France. On the basis that this would prevent German isolation in the future, they had developed the EC’s most technologically resilient and efficient industrial economy. That secure basis helped determine the German vision of an ideal EC: a community to ensure peace and security in Europe, an economic entity based on free trade, and a community of values and common action ( Werte-und Handlungsgemeinschaft ).

Each of these principles reinforced the more general balance of West Germany’s other external relations: whatever German unity emerged in the future was to be understood in its European dimension, not as a purely national phenomenon. Public opinion seemed benign; no anti-EC party existed, nor was there any serious questioning in public of these aims – rather, there was a consensus in West Germany that their country represented the very model of an EC state. The price, that West Germany would always be the largest contributor to EC funds, was – not always unanimously – accepted but it was extended with each new state’s accession, in 1973, 1981, and later with Spain in 1986; each time, the justification to domestic objectors being put in terms of German manufacturers’ access to these lucrative new markets.

But the Federal Republic as a whole was not notably integrationist, and suspicions existed in Bonn, and even more in some Länder such as the CSU-dominated Bavaria, about the use that Free Democrats and their leader, Genscher, made of their long hold on the Foreign Ministry. The Christian Democratic majority of ministers in Bonn did not directly take up the Genscher-Colombo initiative (see above, p. 102), as if remembering Schmidt’s phrase (in a speech in 1977) that ‘Germany did not want to be in the front row’. 9German governments went only so far as this complex web of interests dictated. Indeed, the Federal administration often acted as a brake so that, following the 1970s experience, if France were to induce Germany to follow, the deals had to be made via the Chancellery.

Germany’s tenure of the Presidency in the first half of 1983 indicated that the reactive, formal and legalistic approach to eventual European Union, based on experience of Federal government, decentralization, and citizenship rights, would continue under Helmut Kohl’s Christian Democrats. No one, least of all the Bundesbank, had forgotten Germany’s ill-fated reflation initiative, taken under American pressure in 1978–9, with its inflationary consequences. Thus the West German interpretation of Stuttgart’s ‘solemn declaration’ did not represent full endorsement of what the French government currently desired.

Any estimate of West Germany’s overall aims depends on which source is chosen: Chancellery, government, Bundesbank, Länder governments, or the conjunction of chancellor with the core of foreign, economic and agricultural ministries. As far as industrial policy was concerned, the view of the Economics Ministry (BMWi) and Bundeskartellamt (BKartA) favoured free trade, open competition, and completion of the internal market, starting preferably with deregulation in transport, energy and telecoms, in preference to a single overall initiative. Informally however, the outcome depended on an intricate process of cohabitation and bargaining between the Bonn bureaucracy, leading industrial firms, and the banking system, which was to be brokered at all levels in the Federal Republic. (So content were German companies with this system of ‘patronage government’ that few bothered to open offices in Brussels until the late 1980s.)

The Bundesbank wished monetary policy to come within the Treaties but strongly opposed EMU (as Otmar Emminger’s letter of protest had shown in 1979) even at the level of a future Treaty preamble, it being a matter for member states to safeguard their monetary sovereignty, whilst at the same time taking account of the EC’s common interest. Issues relating to foreign policy or defence which required positive responses were treated cautiously; like Schmidt before him, Kohl showed himself willing to accept a steer, either from the European Council, or from France acting in lieu.

The principal weakness of this complicated, decentralized policy-making was that it inhibited German initiatives and thus disguised Germany’s latent strength (which was, paradoxically, German politicians’ intention). It also put the onus informally on the Chancellor either to concert policy in advance with France, or simply to acquiesce in what French governments did (the case of Schmidt’s decisiveness over EMS is unusual). Finally, it tended to irritate British ministers, making any closer relationship with them unlikely, even if that had not already been excluded in the 1980s by personal antipathy between their two leaders.

BRITAIN

The case is apparently simple, especially as expounded in Margaret Thatcher’s memoir, The Downing Street Years. In fact it was ambiguous, full of nuances, and hidden passages reflected in contrasting accounts. 10In an assessment of the economic significance of membership, made in 1979, the Treasury had noted that Britain had become a European country visited by 7 million EC tourists, with 42% of its export trade to, and 44% of its exports from, Europe and 2.5 million jobs directly dependent on the EC. 11Free trade within the Community, after deducting the costs of the CAP (£250 million) and the common fisheries policy (£150 million) added a net total of £120 million to the British economy; furthermore, 59% of United States foreign direct investment went to Britain and the EC – a matter of the greatest significance also for Scotland and Northern Ireland.

By 1984, on the other hand, Britain’s post-War settlement, expressed over three decades of neo-Keynesian macroeconomic management and tripartite industrial and labour policies, had been largely replaced by a deflationary fiscal and monetary policy, and what may be called the obverse of an industrial one, concerned with privatizing the state sector and forcing flexibility into the labour market. Contested with little success by a demoralized Labour party and a trade union movement suffering rapid membership decline, the new values in politics, finance and industry contrasted sharply with EC social initiatives such as Vredeling, or the defensive industrial cartels associated with Davignon. Britain had long been hostile to the CAP and was to remain so. Whenever ‘own resources’ or institutional reforms surfaced, Thatcherite politicians tended to read the worst into Commission initiatives. 12

Assuming that the imbalance in the British budget contribution and the CAP’S iniquities represented the EC’s true face, Margaret Thatcher tended always to present herself as the purveyor of financial discipline and sound book-keeping. She publicly construed Stuttgart’s ‘solemn declaration’ as meaningless and attacked the Spinelli Report for absurd idealism. But she was determined to increase Britain’s share of world trade and financial services after decades of decline, and therefore endorsed the internal market as a free trade landmark. 13So, for more complex reasons of inward investment and new technology, did the DTI: thus the core of civil servants in Whitehall were encouraged to assist the Commission in its 1983 harmonization plan (see p) and later in preparing the government paper Europe and the Future.