Carroll Quigley - Tragedy and Hope - A History of the World in Our Time

As a result of this agreement and a number of other factors, including recognition that the rearmament of Germany was inevitable, the French Assembly in December 1954 ratified the Paris Treaties that legalized the changes in Germany’s status that France most feared. Western Germany regained its sovereign independence, obtained the right to have a national army (although without nuclear weapons), and became an equal member of NATO.

Having thus accepted much of what they did not want (an armed and sovereign Germany), it became clear to many Frenchmen that they must make a strenuous effort to get some of the things they did want (chiefly the merging of Germany into a West European system that would prevent the new German power from being used in a nationalistic aggression). Accordingly, the Six met again, at Messina in June 1955. There they decided that the next step toward West European integration must be economic rather than political. From this flowed the Rome Treaty of March 1957, which established the European Economic Community, better known as the Common Market, as well as the European Atomic Community for joint exploitation of nuclear energy for peaceful purposes (Euratom). Both agreements went into effect at the beginning of 1958.

The EEC Treaty, with 572 articles over almost 400 pages, like the treaties establishing ECSC and Euratom, looked forward to eventual political union in Europe, and sought economic integration as an essential step on the way. The project originated with the head of the French economic planning commission, Jean Monnet, whose ideas were pushed along by the energy of Foreign Minister Paul-Henri Spaak of Belgium. Within the three large nations, agreement was obtained by the efforts of the leaders of the respective Christian-Democratic parties: Adenauer, Schuman, and Alcide de Gasperi. The Catholic religious background of all three was a significant factor in their willingness to turn from nationalistic to international economic methods, while Spaak’s Socialist prestige helped to reconcile the moderate Left to the scheme. The slowing up of the process of economic recovery that had begun with the Marshall Plan in 1949 helped to win widespread acceptance of the new effort for joint economic expansion.

Briefly the Rome Treaty established the methods and time schedule by which the signatory countries, as well as other nations that might wish to join, Could integrate their economies into a single, more expansive, system. Tariffs and other restrictions on trade between them were to be abolished by stages and replaced by a common tariff against the outside world. At the same time, investment was to be directed so as to integrate their joint economy as a whole, with special attention to the industrialization of backward and underdeveloped regions such as southern Italy. Special consideration was given to agriculture, largely detaching it from the market economy to cushion the integrative process while improving the standards of living and social protection of the farming population. As part of the integrative process there was to be free movement of persons, services, and capital within the Community, with gradual development of Community citizenship for workers. This whole process was to be achieved by stages over many years. The agricultural agreement, for example, was implemented by an elaborate agreement that was signed after 140 hours of almost continuous negotiation in January 1962. By the middle of that year the internal tariffs among members had been reduced in three stages to half their 1958 levels.

The institutional organization for carrying on this process was similar to that set up for the ECSC and the abortive EDC: a European Parliamentary Assembly of supranational party blocs of Christian-Democrats, Socialists, and liberals sitting and voting together irrespective of national origins; a Council of Ministers representing the member governments directly; an executive High Commission of nine that is enjoined by law to “exercise their functions in complete independence” of their national governments; a Court of Justice with powers to interpret the treaty and settle disputes; two advisory groups (the Monetary Committee and the Social and Economic Committee); a European Investment Bank to channel funds for integrative and development purposes within the Community; the Overseas Development Fund to do the same for former colonial territories now associated indirectly with the ECC; a European Social Fund for industrial retraining and unemployment compensation; and finally the two associated Communities (ECSC and Euratom). These last two were integrated with ECC from the fact that the Parliamentary Assembly, the Court of Justice, and the Council of Ministers are shared by all three communities.

These organizations have some of the aspects of sovereignty from the fact that their decisions do not have to be unanimous, are binding on states and on citizens who have not agreed to them, and can be financed by funds that may be levied without current consent of the persons being taxed. On the whole, the supranational aspects of these institutions will be strengthened in the future from provisions in the treaties themselves. All this is very relevant to the remarks in the last chapter on the disintegration of the modern, unified sovereign state and the redistribution of its powers to multilevel hierarchical structures remotely resembling the structure of the Holy Roman Empire in the late medieval period.

The impact of these tentative steps toward an integrative Europe has been spectacular, especially in the economic sphere. In general, the economic expansion of Western Europe, especially its industrial expansion, has been at rates far higher than those of Communist-dominated eastern Europe, with the EEC rates higher than those of non-EEC Western European countries, and considerably higher than those of either Britain or the United States. By 1960 the 300 million people of Western Europe had per capita incomes over a third higher than the 260 million persons in the same area had in 1938-1939. Industrial production more than doubled over the same time span, while agricultural production was a third larger with a smaller working force. This optimistic picture was even brighter for the Six of the EEC, whose general economic growth rate was considerably over 6 percent a year during the 1950’s. This was more than double the rate of growth in the United States, which was not much different from that in Britain. If these rates are maintained, it has been estimated that the income per head in the EEC would increase from about a third of the income per head in the United States in 1960 to more than half the United States income per head in 1970.

The reasons for this relative boom in the EEC (and in Western Europe generally) in comparison with the slower economic dynamics of the English-speaking countries are of some importance. It does not seem to rest, as might appear at first glance, on a contrast between directed planning and laissez faire, because, within the EEC, the French economy is fairly rigorously planned and the West German economy is surprisingly free, yet both have had high rates of growth. The West German conditions, however, have been misleading and have arisen very largely from artificially low wage levels and thus low costs of production, especially on articles for export into the international competitive market, such as Volkswagens. These low labor costs arose from the large number of East European refugees seeking work in Germany, a condition that will be of decreasing importance in the future.

The conditions of economic growth in the EEC has been based on steady demand, high rates of investment, and liberal fiscal and financial policies. In 1961, for example, the rate of net investment in Britain was about 9 percent compared to the West German rate of about 17 percent. The high demand that spurred on this process arose from fiscal policies, but also from the large new market of about 100 million persons provided in EEC.