Postwar

a further increase in the Community’s support payments to French farmers; between them Spain, Portugal and Greece brought an additional 58 million people into the Community, most of them poor and thus eligible for a variety of Brussels-funded programs and subsidies.[243]

Indeed, with the accession of three poor, agrarian countries, the Common Agricultural Fund took on heavy new burdens—and France ceased to be its main beneficiary. Various carefully negotiated deals had thus to be reached to compensate the French for their ‘losses’. The newcomers in turn were duly compensated for their own disadvantages and for the long ‘transition period’ which France succeeded in imposing before allowing their exports into Europe on equal terms. The ‘Integrated Mediterranean Programs’—regional subsidies in fact if not yet in name—that were provided to Spain and Portugal upon entry in 1986 had not been offered to the Greeks in 1981, and Andreas Papandreou successfully demanded their extension to his country, even threatening to take Greece out of the EC if this was denied![244]

It was in these years, then, that the European Community acquired its unflattering image as a sort of institutionalized cattle market, in which countries trade political alliances for material reward. And the rewards were real. The Spanish and Portuguese did well enough out of ‘Europe’ (though not as well as France), Spanish negotiators becoming notably adept at advancing and securing their country’s financial advantage. But it was Athens that really cleaned up: despite initially falling behind the rest of the Community in the course of the Eighties (and replacing Portugal as the Community’s poorest member by 1990), Greece profited greatly from its membership.

Indeed, it was because Greece was so poor—by 1990 half of the European Community’s poorest regions were Greek—that it did so well. For Athens, EC membership amounted to a second Marshall Plan: in the years 1985-1989 alone, Greece received $7.9 billion from EC funds, proportionately more than any other country. So long as there were no other poor countries waiting in line, this level of redistributive generosity—the price of Greek acquiescence in Community decisions—could be absorbed by the Community’s national paymasters, chiefly West Germany. But with the costly unification of Germany and the prospect of a new pool of indigent applicant-states from Eastern Europe, the generous precedents of the Mediterranean accession years would prove burdensome and controversial, as we shall see.

The bigger it grew, the harder the European Community was to manage. The unanimity required in the inter-governmental Council of Ministers ushered in interminable debates. Decisions could take years to be agreed—one directive on the definition and regulation of mineral water took eleven years to emerge from the Council chambers. Something had to be done. There was a longstanding consensus that the European ‘project’ needed an infusion of purpose and energy—a conference at The Hague back in 1969 was the first of an irregular series of meetings intended to ‘re-launch Europe’—and the personal friendship of France’s President Valery Giscard d’Estaing and German Chancellor Schmidt in the years 1975-1981 favored such an agenda.

But it was easier to advance by negative economic integration—removing tariffs and trade restrictions, subsidizing disadvantaged regions and sectors—than to agree on purposeful criteria requiring positive political action. The reason was simple enough. So long as there was sufficient cash to go around, economic cooperation could be presented as a net benefit to all parties; whereas any political move in the direction of European integration or coordination implicitly threatened nationalautonomy and restricted domestic political initiative. Only when powerful leaders of dominant states agreed for reasons of their own to work together toward some common purpose could change be brought about.

Thus it was Willy Brandt and Georges Pompidou who had launched the first system of monetary coordination, the ‘Snake’; Helmut Schmidt and Giscard d’Estaing who developed it into the European Monetary System (EMS); and Helmut Kohl and Francois Mitterrand, their respective successors, who would mastermind the Maastricht Treaty of 1992 that gave birth to the European Union. It was Giscard and Schmidt, too, who invented ‘summit diplomacy’ as a way to circumvent the impediments of a cumbersome supranational bureaucracy in Brussels—a further reminder that, as in the past, Franco-German cooperation was the necessary condition for the unification of Western Europe.

The impulse behind Franco-German moves in the Seventies was economic anxiety. The European economy was growing slowly if at all, inflation was endemic and the uncertainty resulting from the collapse of the Bretton Woods system meant that exchange rates were volatile and unpredictable. The Snake, the EMS and the ecu were a sort of second-best—because regional rather than international—response to the problem, serially substituting the Deutschmark for the dollar as the stable currency of reference for European bankers and markets. A few years later the replacement of national currencies by the euro, for all its disruptive symbolic implications, was the logical next step. The ultimate emergence of a single European currency was thus the outcome of pragmatic responses to economic problems, not a calculated strategic move on the road to a pre-determined European goal.

Nevertheless, by convincing many observers—notably hitherto skeptical Social Democrats—that economic recovery and prosperity could no longer be achieved at a national level alone, the successful monetary collaboration of Western European states served as an unexpected stepping stone to other forms of collective action. With no powerful constituency opposed in principle, the Community’s heads of state and government signed a Solemn Declaration in 1983 committing them to a future European Union. The precise shape of such a Union was then hammered out in the course of negotiations leading to a Single European Act (SEA) which was approved by the European Council in December 1985 and entered into force in July 1987.

The SEA was the first significant revision of the original Rome Treaty. Article One stated clearly enough that ‘The European Communities and European political cooperation shall have as their objective to contribute together to making concrete progress towards European unity’. And merely by replacing ‘Community’ with ‘Union’ the leaders of the twelve member nations took a decisive step forward in principle. But the signatories avoided or postponed all truly controversial business, notably the growing burden of the Union’s agricultural budget. They also stepped cautiously around the embarrassing absence of any common European policy on defense and foreign affairs. At the height of the ‘new Cold War’ of the 1980s, and on the verge of momentous developments unfolding a few dozen miles to their East, the member states of the European Union kept their eyes resolutely fixed upon the internal business of what was still primarily a common market, albeit one encompassing well over 300 million people.

What they did agree on, however, was to move purposefully towards a genuine single internal market in goods and labour (to be implemented by 1992), and to adopt a system of ‘qualified majority voting’ in the Union’s decision-making process—‘qualified’, that is, by the insistence of the bigger members (notably Britain and France) that they retain the power to block proposals deemed harmful to their national interest. These were real changes, and they could be agreed to because a single market was favored in principle by everyone from Margaret Thatcher to the Greens, albeit for rather different reasons. They facilitated and anticipated the genuine economic integration of the next decade.

A retreat from the system of national vetoes in the European Council was unavoidable if any decisions were to be taken by an increasingly cumbersome community of states that had doubled its size in just thirteen years and was already anticipating applications for membership from Sweden, Austria and elsewhere. The larger it grew, the more attractive—and somehow ‘inevitable’—the future European Union would become to those not yet inside it. To citizens of its member-states, however, the most significant feature of the European Union in these years was not the way in which it was governed (about which most of its people remained entirely ignorant), nor its leaders’ projects for closer integration, but the amount of money flowing through its coffers and the way that money was disbursed.

The original Treaty of Rome contained only one agency with a specific remit to identify regions within its member states that needed assistance and then dispense Community cash to them: the European Investment Bank, initiated at Italy’s insistence. But a generation later regional expenditures, in the form of cash subsidies, direct aid, start-up funds and other investment incentives were the leading source of budgetary expansion in Brussels and by far the most influential lever at the Community’s disposal.

The reason for this was the confluence of regionalist politics within the separate member states and growing economic disparities between the states themselves. In the initial post-WWII years, European states were still unitary, governed from the center with little regard for local variety or tradition. Only the new Italian constitution of 1948 even acknowledged the case for regional authorities; and even so, the limited local governments that it stipulated remained a dead letter for a quarter of a century. But just when local demands for autonomy became a serious factor in domestic political calculations all over Europe,