Paper No. 35
Dr Martin Holmes
Just as the early years of the Major government focused on forging a new cooperative relationship with the EU — the “heart of Europe” strategy—so the election victory of New Labour in May 1997 has rekindled the idea that British leadership in Europe can coincide with greater harmony in the pursuit of common objectives. Tony Blair has forcefully articulated his hope that Britain can lead in Europe through a policy of constructive engagement rather than reluctant semi–detachment. Addressing the 1997 Labour conference he declared that “…it is our destiny to lead in Europe. And Europe needs us. For we have a vision of Europe…a people’s Europe”.1 In his celebrated speech to the French National Assembly in March 1998 he stated that “…we have had the courage to create the European Union. We must now have the courage to reform it”.2 Similarly, writing in The Times in December 1998 he declared that, “I want Britain to be a leading partner in Europe, engaged in shaping its future …And I can deliver it…There are real debates in Europe. Do we want economic reform or corporatism? Do we want a Europe which is building bridges or barriers to the US?…And there is a genuine debate about the European Social Model”.3
But for such aspirations and hopes to be realised Mr Blair must change the way the EU has traditionally developed—through the engine of integration driven by the intimate friendship between France and Germany. Such a policy inevitably begs a number of questions. Can the UK transform the bipolar Franco–German leadership into a tripolar relationship? Is the EU amenable to British leadership while British interests often differ from those of France and Germany? Can Mr Blair forge personal relations with his France and German counterparts which transcend national policy differences? Or is the EU likely to develop as it has done hitherto around the Paris—Bonn axis? To what extent does talk of British leadership imply changing the continent to make it more like Britain, more Atlanticist, less protectionist and more deregulated with flexible labour markets?
To answer these questions it is necessary to examine in detail the nature of the Franco–German relationship and to consider whether or not its future course will conform to its recent post–World War II experience. Any prospect of a tripolar EU must therefore begin with the conventional bipolar model of integration dating back to the 1950’s.
It is axiomatic to argue that Franco–German friendship has been the driving force behind the destination of European federalism. Immediately after 1945 the genuine desire of both countries was to be the best of friends, not the worst of enemies. On both sides, there was a sincere wish to bury the hatchet and to forge the European integrationist project. The French believed that European integration would enable Germany to be bound to a process which would ensure that Europe would be peaceful, especially if an integrated supranational Europe could replace the traditional system of competing nation states operating a volatile balance of power. Similarly Germans believed that European integration and friendship with France were vital to Germany’s rehabilitation.4 Through European integration, the Germans could atone for the genocidal crimes of the Third Reich by way of distancing themselves from the Hitlerzeit. Thus each generation of Germans has proved to be user–friendly to their immediate French neighbours. Consequently, after 1945, both countries were determined that 1870, 1914 and 1939 could never happen again and they were equally determined to reconstruct Europe on a supranational basis to ensure the permanence of the peace.5 Thus, recalling a 1949 visit to Germany, American Secretary of State Dean Acheson thought that:
“Adenauer’s great concern was to integrate Germany completely into Western Europe. Indeed, he gave this end priority over the reunification of unhappily divided Germany, and could see why her neighbours might look upon it as almost a precondition to reunification He wanted Germans to be citizens of Europe, to cooperate, with France especially, in developing common interests and outlook and in burying the rivalries of the past few centuries. Their common heritage had come to them down the Rhine, as the successors of Charlemagne, who guarded European civilization when human sacrifice was still practised in eastern Germany. They must lead in the rebirth of Europe.”6
For the Germans the desire to distance themselves from the Hitlerzeit, and to seek a rehabilitation within a European context, was a genuinely cathartic feature of the Federal Republic. Every generation feels that they have to prove again their democratic credentials. This psychological transmission mechanism, in some perverse way, is similar to the transmission mechanism whereby, for 2000 years, Christians blamed the Jews for the death of Christ, a process which ultimately culminated in the holocaust; after 1945, because the rest of the world holds the Germans to account for the holocaust, each generation of Germans has to repudiate fascism. This pathway to national redemption leads through European integration to the familiar process whereby the Germans are prepared to use their colossal financial muscle to pay for the Common Agricultural Policy, the Cohesion Fund, and the cost of the new entrants, whether the Iberian countries and Greece, or most likely in the near future, central and eastern European enlargement. The Germans spend their wealth to effectively finance European integration as part of the process of re– establishing themselves as a normal, decent, civilized country that is not only respected for its financial power, but also admired and liked.7
In the immediate period of the 1950’s leading up to the Treaty of Rome and the emergence of the European Community, the French and the Germans were agreed on the three main principles on which European integration has based ever since. Firstly, the Franco/German friendship would ensure the peace to make sure conflict could not happen again. Secondly, they were agreed that the European Community’s economic superstructure would be based on an essentially customs union or mercantilist political economy. On the one hand they rejected Communism, but on the other hand they also rejected the Anglo–Saxon free market, preferring equidistance between Marx and the market. Jointly the French and Germans initiated a custom unions with overtly protectionist external tariffs rather than a free trade area or a free trade zone. As far as the French were concerned, this was uncontroversial, but the German elite debated the merits of a free trade area, which Finance Minister Ludwig Erhard preferred, versus a customs union. A political battle ensued which Adenauer, who favoured a customs union, ultimately won. Adenauer was motivated primarily by political considerations, especially friendship with France, rather than by the more technical economic analysis of Erhard who considered that a customs union would lead not to trade creation but to trade diversion.8
Thirdly, the French and Germans were agreed that European integration would be political; it would be supranational, not just international, incorporating the influence of such thinkers such as Monnet, Spinnelli, Spaak, De Gasperi and Schuman. This supranational approach laid the foundation for important political institutions; the Commission, the Council of Ministers, the European Assembly, later renamed Parliament, and the European Court of Justice. At the end of the process it was envisaged that Europe would be economically strong, politically independent, and eventually able to become the third superpower, capable of looking either the Soviets or the Americans in the eye. After all had not Jean Monnet warned in 1951 that Europe was a pawn in the battle between the superpowers? Ultimately the vision was of a superpower or a superstate which would exist at a supranational, not just an international level. Thus far the Franco/German relationship is relatively harmonious and straightforward to explain. But the return to power in France in 1958 of Charles De Gaulle had profound consequences.
De Gaulle, Germany and Europe
The conventional view of history sees De Gaulle as fundamentally opposed to European integration. Many textbooks, particularly those written by the supporters of federal integration, have demonized De Gaulle. It is very tempting, given his high political profile, and given his attacks on the European Commission as mere “technocrats,” to view De Gaulle as an out–and–out opponent of European integration. Many history books, copied from each other in an unhealthy process of inter–historian incest, have handed down to generations of readers a simplistic and distorted view of De Gaulle. But De Gaulle’s policies between 1958 and 1969 were much more sophisticated, and De Gaulle was far from a one dimensional figure opposed to European integration. For instance, as far as friendship with Germany was concerned, De Gaulle continued in the Fifth Republic the policies of the Fourth Republic. Indeed, the relationship between De Gaulle and Adenauer was probably closer than that between Adenauer and any other of the many political leaders in the Fourth Republic. De Gaulle strongly supported the friendship with Germany, which culminated in the January 1963 Elysee Treaty. He relished visiting Germany which he praised as “a great nation”, and he equally enjoyed Adenauer’s visits to France.9 De Gaulle consistently worked with the grain of Franco/German friendship.10
Similarly, De Gaulle supported the basic economics of European integration. He was neither a Marxist nor did he believe in the Adam Smith, David Ricardo, Anglo–Saxon model. In France De Gaulle followed middle way dirigiste, mercantilist economics. He even indulged in occasional limited strategic nationalisation, while viciously attacking the communists at election time, most notably in the 1968 National Assembly elections which followed the May evenements. There was no attempt by De Gaulle to dismantle the basic economic structure of European integration. He approved of the Common Agricultural Policy, and he liked even more the fact that Germans were prepared to subsidise it. The CAP went down well in rural France, where the vote was often almost equally split between the Communists and the Gaullists, enabling De Gaulle to consolidate his rural power base. He supported the European Coal and Steel Community, a rigged cartel which helped French steel by protecting it from external market penetration. Nor was De Gaulle opposed to European integration as far as the creation of a strong, powerful Europe was concerned. A Europe which would stand up to the superpowers was entirely in line with De Gaulle’s thinking. De Gaulle was often hostile to the superpowers. He enjoyed his tour of Cambodia and South East Asia where he attacked with relish the American position in Vietnam. On his visit to the Soviet Union in 1966 he probably made one of the most anti–Soviet statements ever uttered on Soviet soil by a visiting head of state by declaring that, while ideologies would come and go, Mother Russia would go on forever. This was a remarkably accurate and prescient analysis; Bolshevism is long gone, but Mother Russia has remained in defiance of Soviet claims that Communism had superceded nationalism, and that the Soviet Union was permanent. De Gaulle was not out of line with the policies he inherited as far as integration with Europe was concerned and as far as friendship with Germany was concerned.
It is only in two specific areas that De Gaulle can be portrayed as hostile to European integration. Firstly he did not believe in supranationalism. He did not appreciate the technocrats in Brussels, nor was he attracted to the idea of handing over the power which he had vested in himself in the Fifth Republic—having cleaned up the Fourth Republic—to unelected bureaucrats. In that respect, De Gaulle was noticeably similar to Margaret Thatcher who also had little time for what she saw as an arrogant, self–serving elite in Brussels with its addiction to a personal gravy train. De Gaulle could never have been a supranationalist, because he envisaged a strong Europe under French leadership. Of course, the Germans would possess the economic clout;11 of course the German economic miracle clearly outperformed the French economy. De Gaulle had no illusions about that. But he saw France as providing the political leadership on an international, not a supranational, model especially as far as relations with the superpowers were concerned. Whereas the Germans envisaged a supranational Europe standing up to the superpowers, in which the member states were mere regions or provinces, De Gaulle saw a strong international Europe standing up to the superpowers led by the French, and articulated by De Gaulle himself.
The other area where De Gaulle was opposed to European integration was his opposition to enlargement. The British discovered in the applications both in 1961, and again in 1967, that they had the support of the existing member states with the exception of France. Regarding the French veto a myth has been constructed that Britain was right to join the European Community and, indeed, should have joined earlier.12 According to this viewpoint it was a tragedy that one wretched man, De Gaulle, prevented Britain from reaching its true continental destiny. The evidence however suggests that De Gaulle’s view of Britain was far from hostile as it has often been portrayed. It is true that De Gaulle did not want Britain to join the European Community as an American “Trojan horse”, and that De Gaulle feared a process of creeping Atlanticism. But De Gaulle was not motivated by xenophobia, hatred, malice and irrationality in the way that has been described.13 In January 1963 when De Gaulle vetoed the first British application he did give specific and concrete reasons, and yet, just two weeks later in the House of Commons, Harold Macmillan claimed that his government did not know the reasons for De Gaulle’s rejection of Britain’s application.14 Especially within the Conservative party, and among informed opinion, the myth grew up that there was some kind of irrationality to De Gaulle, as if he had some secret reason why he issued the veto. What exactly De Gaulle said in January 1963 to explain his policy on enlargement, was this:
“England is, in fact, insular. She is maritime, she is linked to her exchanges, her markets, her supply lines to the most distant countries. She pursues essentially industrial and commercial activities and only slightly agricultural ones. She has, in all her doings, very marked, very original habits and traditions. In short, England’s nature, England’s structure, England’s very situation differs profoundly from those of the continentals.”15
This quotation explodes the myth that De Gaulle did not have valid reasons or that he was motivated by some kind of malice. Arguably it was in many ways a very pro–British statement. Far from being anti–British, he paid a whole series of back handed compliments. It was because the British pursued commerce and industry, rather than agriculture, that the British economy was the great success story of the 19th century, that the pound was the world’s leading trading currency, that the City of London was the great location of world finance and investment, and that the British Empire was bigger than the continental empires combined. And, of course, what De Gaulle conceded was that Britain had many global friends including the United States in the special relationship, the Commonwealth, and links with Latin America through trade which enabled Britain to become a global power both economically and politically.
Far from the hostility which federalist writers have detected, De Gaulle merely admitted that England’s situation differs profoundly from those of the continentals. He simply pointed out important differences, refusing even to claim superiority for French or continental experience. As such, De Gaulle was saying from a French perspective exactly what Ernie Bevin in the 1940s, and Churchill and Eden in the 1950s, had said about European integration from the British perspective. The British had wished the project well but declined to join because the differences were too profound for Britain ever to be absorbed in a continental customs union with an supranational, federalist dimension.16 De Gaulle, from the continental side, in effect predicted that if Britain joined the EEC it would be a marriage made in hell. Looking back at De Gaulle’s veto in 1963, he has been fully vindicated.
Post De Gaulle French Policy
Understandably much has been written about a Gaullist legacy, for instance, in keeping France out of the military structure of NATO while staying within the political structure and maintaining the force de frappe. Regarding the objectives of European integration, Gaullist policy was dropped soon afterwards, failing to survive into the 1970s and beyond. Firstly, George Pompidou reversed De Gaulle’s veto as far as the British EEC application was concerned. To be sure there was an important element of doing things differently from De Gaulle which pervaded the Pompidou presidency. (Perhaps this is the “number two” syndrome when becoming the “number one”. Thus both John Major and George Bush did things differently from Margaret Thatcher and Ronald Reagan, as if for the sake of it.) Pompidou was determined to establish himself as a strong leader. He did not want to be seen as a “number two”, a twilight political figure in De Gaulle’s shadow, which helps to explain his decision to reverse his predecessor’s veto of British EEC membership.
The second important development at a supranational level was the establishment of the Exchange Rate Mechanism, (ERM) as the key aspect of the European Monetary System which was pioneered by Schmidt and Giscard in 1978–79. This was the single most important move in a supranational direction since the signing of the Treaty of Rome in 1957, because, out of the ERM, emerged not only the concept of a European zone of monetary stability, but the transformation of the Deutschmark as its anchor currency. Thus the Delors Report of 1989 sought to transform the ERM from a mere zone of monetary stability to a full economic and monetary union, a process which will reach its climax from 1999 to 2002. Anticipating further integration both Giscard and Schmidt looked at the benefits to Europe as a whole. Franco/German friendship was crucial to the establishment of the ERM as a system designed for all the European Community currencies. Indeed Schmidt and Giscard were disappointed when British Prime Minister Jim Callaghan decided in 1979 that the pound should stay out of the system on the grounds that it would increase unemployment and reduce economic growth.17 Arguably, in the light of events, Jim Callaghan was absolutely right. But the creation of the ERM was an important development for the European Community because it established the notion of supranationalism as far as currency integration was concerned. Interestingly enough, when the rest of the world, following the breakdown of Bretton Woods, was embracing floating exchange rates, the continentals embraced the opposite belief, being convinced that intra–European trade would increase if exchange rates were fixed. Hence the attempt to recreate a European version of Bretton Woods, except this time the Deutschmark would be the anchor currency.
Thirdly the events following German unification indicated that the French political elite, including Mitterrand, had their doubts that German policy might realign towards a new Ostpolitik in which Germany would be more motivated by an economic colonisation of the countries of central and eastern Europe which had liberated themselves from Communism. When this fear was at its height the French political elite opted lock, stock, and barrel for the single European currency, embraced federalism, and ditched any Gaullist concept of Europe. As a result the French were convinced that Germany would be tied down and anchored within western Europe if the Deutschmark was abolished and that, if the price to be paid was the abolition of the franc and its replacement by the single currency, then this price was well worth paying. Arguably the French political elite was already inclined toward monetary union because of the pioneering work of Jacques Delors, the ubiquitous President of the Commission, whose Report was published in April 1989.
But by 1990, as the DDR imploded, the French accepted German unification because they no longer feared that this might dislodge German policy from its EC moorings. Chancellor Kohl confirmed the traditional integrationist policy, which culminated in the Maastricht Treaty, to French applause. France embraced monetary union, not only for economic reasons, but also for political reasons being reassured that monetary union would consolidate their relationship with a unified Germany.18
German policy was more straightforward in the decades leading up to unification. Ostpolitik was not intended to be an alternative to European integration in the west. Willy Brandt and Helmut Schmidt made it absolutely clear that Ostpolitik was understood as a function of East–West reconciliation in the era of detente. Thus, as David Marsh has argued, German policy was extremely accommodating to European integration:
When Kohl was asked in February 1989, only nine months before the Wall fell, how he envisaged reunification one day actually happening, he could think of no more original reply than that he wanted “the political unity of Europe”. The answer was illuminating only in that it was sincere. There was no national agenda for unification; Kohl was more preoccupied by Brussels than Berlin. Up to the end of the 1980s, the pattern of West Germany’s relations with the rest of Europe had left little room to pose deeper questions on what Germany was, what Germany wanted and what Germany might become. In conducting foreign policy, West Germany was required to do no more than anticipate and fulfil its neighbours’ needs for a country that was conciliatory, stable and non– belligerent.19
After German unification, however, Helmut Kohl and the German political elite were aware of French doubts.20 They were simultaneously aware of Margaret Thatcher’s reservations about unification which provoked a general debate about Germany’s future intentions.21 In order to reinforce the image of themselves as user–friendly to Europe, to further distance themselves from the Third Reich, and to assuage any fears that there might be a Deutschmark hegemony, they embraced the abolition of the Deutschmark. Thus Helmut Kohl intoned that “…European integration is in reality a question of war and peace in the 21st Century…we have no desire to return to the nation state of old…which cannot solve the problems of the 21st century”,22 and Bundesbank President Hans Tietmeyer echoed that for Monetary Union to work “…a significant and permanent political union is required”.23
At the same time that the French elite was embracing the abolition of the franc, the German elite correspondingly and symmetrically embraced the abolition of their currency. Consequently when the external shocks of the Danish ‘No’ vote and the 1992–3 ERM meltdown occurred, France and Germany never flinched. They were jointly committed to seeing the process through to conclusion and their political will was the vital factor in understanding how and why European monetary integration has proceeded in the 1990s. Not surprisingly in this era of ultra–close cooperation the concept of a “Core–Europe”, as suggested by Wolfgang Schäuble and Karl Lamers’ CDU/CSU paper in September 1994, was particularly attractive as doubts grew over the economic feasibility of the Maastricht convergence criteria following the ERM breakdown. Renewing the political will between Paris and Bonn was a top priority. Both France and Germany were aware that external shocks had derailed the Werner Report plan for monetary union in the 1970s, and both countries were determined not to be so deflected in the 1990s.24 German unification ultimately strengthened Franco–German cooperation, from which two conclusions can be drawn.
Firstly the irony of German policy is that the destruction of the Deutschmark will undermine one of the most important reasons why Germany has been a decent and civilized country since 1945. The Deutschmark is something for which most Germans have an affection and pride. It is one of the great success stories of the Federal Republic since 1949, proving that the Germans have made money not war. The abolition of the Deutschmark may well create amongst the German population, if not among the political elite, a sense of nostalgia and a feeling of regret. Unless the European single currency in the long run maintains its value as well as the Deutschmark, there will always be a lingering fear, once expressed by Bavarian Prime Minister Edmund Stoiber that the Deutschmark could be replaced by a “confetti currency”.
Secondly, by embracing a policy of political federalism, the Germans are undermining their political system which is the other cornerstone of their post–war success. The German political system, based on the 1949 constitution, has worked well providing an intelligent balance between the federal structure in Bonn and the länder. The political system intertwines with the fiscal and monetary system, with the role of the Bundesbank since 1957 having a clear political objective as well as a monetary objective. To Adenauer, and to most Germans, the Bundesbank had the function of guaranteeing low inflation to protect democracy from the hyper–inflation which paralysed the Weimar Republic. Moreover, the political culture has matured so that Germany is one of the few continental countries where fascism has made no headway since World War II. It was not the German but the Italian Employment minister who said that the problem with Wall Street is that it is run by the Jews. So called “post– fascists” have not held positions in the German government. In Germany fascist parties which are anti–immigrant and anti–Semitic have not obtained 14% of the vote as have the Front National in France. Jorg Heider is Austrian not German. German political culture has been democratic and tolerant. Notwithstanding the vagaries of its electoral system, the German model works both politically and economically. To imperil this success by European integration is a step back in German history, not a step forward. What is now in prospect is a conflict between the objective of European integration and the domestic objectives of a strong currency and an impeccably democratic political system.
Ironically, the Germans will both destroy their currency and, through the Maastricht and Amsterdam Treaties, transfer power from the democratically accountable German polity to a European polity which is clearly undemocratic. The vast majority of institutions which wield power in the European Union are neither elected nor accountable and there are no plans for them to be so, particularly the European Commission, the Court of Auditors, the Court of Justice, and the European Central Bank. To these institutions, power will be transferred from Germany, and from other member states, undermining the democratic accountability which links ballot box to statute book. As Bill Cash has argued “European integration destroys the achievements of post–war German democracy just as it destroys the fabric of all other European nations”.25 This process weakens the foundations of Germany’s stability since 1949, and if anything is likely to stir up the demons of the mid century, it is the destruction of the German currency and the weakening of representative democracy in the name of the European Union. A federal Europe, far from being dominated by Germany as is often assumed,26 will not be dominated by any one single country, nor indeed a combination of countries. The German domination fear is a function of the intergovernmental Europe from the Treaty of Rome to the Treaty of Maastricht. Post Maastricht Europe, as it becomes a federation, will transfer power to the federal political institutions so that Germany will no more be able to dominate a federal EU than California can dominate the United States, or Bavaria can dominate Germany. But this weakening of Germany does not enhance the peace of the continent.
Peace in Europe has sprung from a Germany that is prosperous and democratic, rather than from the German pursuit of European integration. Indeed, as Eurosceptics have often argued, European integration is the consequence of peace in Europe since 1945, not the cause of it. Peace in Europe was also based on the balance of terror in the Cold War culminating in the nuclear stand off between NATO and the Warsaw Pact. Moreover Germany, the power that had disturbed the peace in 1870, 1914 and 1939, was committed to NATO as well as committed to democracy. In pursuing to its logical conclusion the policies of European integration on which it has been embarked since the days of Adenauer, the Germans are making a sacrifice which is laden with risk, and possible tragedy.
The Franco/German friendship on which European integration had been based is probably stronger now than ever before. This friendship is leading to the ultimate destination that was mapped out by Jean Monnet and other federalists in the 1950s. “Neo–functionalism” is alive and well, so that through the European single currency, will develop greater political integration. Anyone in Britain who is tempted to look to France for a revival of Gaullism to derail this process, will be disappointed. The French have no intention of breaking the consensus with the Germans. Traditional Gaullism is dead. Similarly anyone in Britain who looks for salvation to the Bundesbank, or to German financial and business leaders, some of whose members have little enthusiasm for the abolition of the Deutschmark, will also be disappointed. The key decisions have already been taken by the German political and civil service elite, which is unequivocally committed to the Euro. Gerhard Schröder and Oskar Lafontaine may grumble about the exact ECB interest rate level27 which they would prefer but they are not in dispute with the principle of an independent ECB, which incidentally, is anything other than controlled by Germans. As experience from around the world indicates there is nothing uniquely German about the independence of central banks and the determination to guard their independence against political pressure.
Those British politicians who hope that France and Germany may halt or repudiate European integration, or that Britain might intervene to form a troika with France and Germany to slow down the process of European federalism are deluding themselves. In his inaugural speech to the Bundestag Gerhard Schroeder clearly stated that:–
“Because of the global financial crisis we must ensure that Europe speaks with one voice. The common currency must be a success. That means it must be, and must remain, stable. We will not question the stability orientation of European monetary policy”.28
Similarly, M. Vedrine, the French Foreign Minister, has argued that “Britain cannot play its role in Europe until it is a member of monetary union. We are very happy that the United Kingdom has a close relationship with Bonn, but this is something else. The Franco–German relationship remains the motor of the Union. Despite its weight, Great Britain cannot yet have in Europe the same role as those countries which have created the euro and will join it.”29
Equally candid Joschka Fischer, the German Foreign Minister, has suggested that “widening the Franco–German relationship into a triangle with Britain would be a disaster for Europe.” 30 Writing in the Leipziger Volkszeitung in December 1998 Herr Fischer predicted that the central task of Germany’s EU presidency, which began on January 1 1999, was political integration “…leading to a pan–European union”, an objective which is not shared by the Blair administration.31 It is not only the speed of integration but its destination which separates British aspiration from continental reality. As former Foreign Secretary Lord Owen has argued the Blair government’s policy is a vision of a Europe which Britain would like to create rather than the Europe that actually exists:–
Some in Britain dream of joining the Franco–German Alliance. It is now said that because of the SPD victory in Germany we will be able to develop a trilateral relationship with France and Germany to match the bilateral Franco–German relationship. Yet Oskar Lafontaine comes from the Saarland and is very close to France in all respects. Gerhard Schröder is more sympathetic but will find the German bureaucracy totally set on the primacy of the Franco–German Alliance. Whitehall is now beginning to adjust the language and talk of a quadrilateral relationship including Italy, but this will cause even more resentment across the EU.32
Even The Economist, a journal long associated with British integration with Europe has conceded that:
As some British diplomats acknowledge, no amount of clever new British initiatives is likely to be any match for the sheer density of Franco–German ties. Politicians and civil servants in Germany and France have simply got into the habit of close and regular consultations. By contrast, the number of senior Labour politicians with real knowledge of European politics is small. In trying to understand Europe, the Blairites often still reach for the comfort blanket of familiar categories—witness their habit of classifying German or French politicians as “New” or “Old” Labour. By contrast, the Blairites’ understanding of American politics and debates is much closer and more nuanced. For New Labour, as for the Tories, the Atlantic still often seems narrower than the Channel.33
In this sense too British hopes of exporting a deregulated, non– protectionist, flexible labour market, economic model to the continent are also doomed. European monetary union—plus the political unification which will flow therefrom—is an alternative to Anglo–Saxon economic globalisaion not a manifestation of it.34 Especially as 13 out of the 15 EU countries now boast left of centre governments the moves towards greater monetary integration will boost the concept of the European “Social” model, “Socialist” model or “Rhineland Capitalist” model which specifically rejects the Thatcherised British economic model with which the Blair revolution in Labour ideology has made peace. At the heart of the intensification of the European “Social” model are the French and German governments whose left of centre ideology will not permit any intrusion of the Anglo–Saxon free market, whether overtly Thatcherite or covertly Blairite. The economic doctrine of a federal Europe will continue to diverge from that of North America to which the British economy, after its Thatcherite reinvigoration, now conforms.35 Britain cannot “lead” Europe towards free market economics any more than it can “lead” Europe toward a non–federal loose association of nation states for whom sovereignty is respected.36
The stark truth is that the Franco/German friendship has set its compass for a federalist destination.37 If the British people want to prevent their incorporation into a suprantional, superpower Europe then they will have to do it themselves, by challenging the status quo of European Union membership.
Speech to Labour party conference 30.09.97.
Speech to French National Assembly 24.03.98.
Article in The Times, 14.12.98.
See T. Garton Ash In Europe’s name: Germany & The Divided Continent, Jonathan Cape, 1993 for a respected overall survey.
For a fascinating insight into Franco–German relations see Willy Brandt, People & Politics, Collins 1978 ch 5.
Dean Acheson, Present at the Creation, Signet Books, 1970, P446.
This does not mean that the Germans do not negotiate toughly, including the threat to withhold financial support, as part of the political trade–off process. For example the seemingly belligerent negotiating stance of Chancellor Schroeder at the 1998 Vienna EU summit, calling for a reduction in Germany’s exorbitant budgetary contributions, was designed to secure promises of faster political integration in return for the continuation of German economic aid especially to the habitual net recipient countries of Greece, Spain, Portugal and Ireland.
Erhard also had doubts about EEC political integration which he discussed with R A Butler in 1964. See Contemporary Record, Oct 95, Cabinet Papers Review, pp 462–3.
See, for example, Alexander Werth, De Gaulle, Penguin 1967 (edn) and Jean Lacouture, De Gaulle: The ruler 1945–70, Harvill/Harper Collins 1993 (edn).
For a French account of this process see Dominique Bocquet The Future of the Franco/German relationship. RIIA, Paper 71, 1997.
For an interesting account of German economic development see David Marsh, The Bundesbank: the Bank that rules Europe, Mandarin 1992.
See, for example, Roy Denman, Missed Chances, Indigo Books 1997 edition, ch Xl.
For a further consideration of British policy see Martin Holmes, The Conservative party & Europe, Bruges Group, 1994.
Hansard, 11.02.63, Vol 671.
Quoted in M. Holmes, (1994) Op Cit.
See Max Beloff, Britain and European Union, Macmillan, 1996. For an excellent account of Anthony Eden’s policy towards the EEC see David Dutton, Anthony Eden: a life and reputation, Arnold 1997.
See James Callaghan, Time & Chance, Collins 1987.
For an alternative view, arguing that French support for further integration may be weakening, see Christian Deubner, Op. Cit., RIIA paper 71, 1997.
. Marsh, Germany & Europe: the crisis of unity, Mandarin 1994, p.138.
See also A. Cole, German Politics, Vol 2, 1993, Karl Haltenhaler, West European Politics, Vol 20, No 3,1997, and AS Markovits and S Reich, The German predicament — memory and power in the New Europe, Cornell University press 1997, who quote that while in November 1989, 80% of the French public supported German unification, by the spring of 1990 this figure had slipped to 66%.
See H. James and M. Stone, When the Wall came down, Routledge 1992.
Reported in The Times 03.02.96.
Speech at Karlsruhe, 13.10.97.
See M. Holmes From Single Market to Single Currency, Bruges Group 1995.
Bill Cash, British and German National Interests, European Foundation, Sept 1998 p8.
See, for example, Brian Reading, The Fourth Reich, Weidenfeld & Nicolson, 1995, pp2–3.
See, for example, The Wall Street Journal–Europe editorial 29.10.98.
Quoted in The Times, 11.11.98.
The Times, 06.10.98.
The Times, 22.10.98.
Reported in The Daily Telegraph, 28.12.98.
Quoted in The European Journal, Dec 98, Vol 6, No 3.
The Economist 10.10.98.
See, for example, the speech of French Finance Minister Dominique Strauss Kahn, on the 15th anniversary of CEPR, London, 09.11.98.
A good example of this was the suggestion by Oskar Lafontaine of exchange rate bands for the World’s major currencies, which was forcefully rejected by US Treasury Secretary Robert Rubin and Federal Reserve Board Chairman Alan Greenspan.
For an opposing view claiming British ability to lead in Europe see Charles Grant, Can Britain lead in Europe?, Centre for European Reform, 1998, and Philip Stephens, Financial Times, 04.01.99.
This process is fully supported by the European Commission, whose President, Jacques Santer, predicted that the introduction of the euro in January 1999 would lead to an intensification of political union.