Union, enjoying not only monetary but increasingly institutional and diplomatic ascendancy. For the first time in its history, the process of European integration is now potentially confronted with the emergence of a hegemonic power, with a widely asymmetrical capacity to affect all other member-states.
The third great change has followed from the end of Communism in the countries of the former Warsaw Pact. The restoration of capitalism east of the Elbe has further transformed the position of Germany, both by reinstating it as the continental Land der Mitte which its conservative theorists always—with reason—insisted it would once again become, and—a less noticed development—by reducing the significance of the nuclear weapons that France and Britain possessed and it lacked. Yet more significant, however, is the currently expressed desire of virtually all the East European countries, and some of the former Soviet lands, to join the EU. As things stand, the total population of these candidates is about 130 million. Their inclusion would make a Community of half a billion people, nearly twice the size of the United States. More pointedly still, it would approximately double the membership of the European Union, from fifteen to some thirty states. A completely new configuration would be at stake.
Historically, these three great changes have been interconnected. In reverse order, it was the collapse of Communism that allowed the reunification of Germany that precipitated the Treaty of Maastricht. The shock-wave moved from the east to the centre to the west of Europe. But causes and consequences remain distinct. The outcomes of these processes obey no single logic. More than this: to a greater extent than in any previous phase of European integration, the impact of each is quite uncertain. We confront a set of ex ante indeterminacies that, adopting a Kantian turn of phrase, might be called the three amphibologies of post-Maastricht politics. They pose much more dramatic dilemmas than is generally imagined.
The Treaty itself offers the first. Its origins lie in the dynamism of Delors’s leadership of the Commission. After securing passage of the Single European Act in 1986, Delors persuaded the European Council two years later to set up a committee largely composed of central bankers, but chaired by himself, to report on a single currency. Its recommendations were formally accepted by the Council in the spring of 1989. But it was the sudden tottering of East Germany that spurred Mitterrand to conclude an agreement with Kohl at the Strasbourg summit in the autumn, putting the decisive weight of the Franco-German axis behind the project. Thatcher, of course, was implacably opposed.
But she was comprehensively outmanoeuvred, not least by the continental regime she most disliked, which sat in Rome. The otherwise impregnable self-confidence of The Downing Street Years falters disarmingly whenever its heroine comes to Europe. The titles of the chapters speak for themselves. The ordinary triumphal run—‘Falklands: The Victory’—‘Disarming the Left’—‘Hat Trick’—‘Not So Much a Programme, More a Way of Life’—‘The World Turned Right Side Up’—is interrupted by a faintly woeful note. We enter the world of ‘Jeux Sans Frontières’ and ‘Babel Express’, with its ‘un-British combination of high-flown rhetoric and pork-barrel politics’, where ‘heads of government would be left discussing matters that would boggle the mind of the City’s top accountants’, and ‘the intricacies of European Community policy really test one’s intellectual ability and capacity for clear thinking’.25
The uncharacteristic hint of humility is well founded. Thatcher appears to have been somewhat out of her depth, as a persistent tone of rueful bewilderment suggests. The leitmotif is: ‘Looking back, it is now possible to see’—but ‘I can only say it did not seem like that at the time’.26 Many are the occasions that inspire this mortified hindsight. Exemplary in its comedy is the Milan summit of the European Council in 1985, which ensured the inclusion of qualified majority voting in the Single European Act. ‘Signor Craxi could not have been more sweetly reasonable’—‘I came away thinking how easy it had been to get my points across’ (sic). But lo and behold on the following day: ‘To my astonishment and anger, Signor Craxi suddenly called a vote and by a majority the council resolved to establish an IGC’.27 Five years later, the precedent set at Milan proved fatal at Rome. This time it was Andreotti who laid the ambush into which Thatcher fell head over heels, at the European summit of October 1990. ‘As always with the Italians, it was difficult throughout to distinguish confusion from guile’, she haplessly writes, ‘But even I was unprepared for the way things went’.28 Once more, a vote to convene an IGC was sprung on her at the last minute, this time on the even more provocative topic of political union. Her explosion at Andreotti’s silken trap finished her. In London, Geoffrey Howe took a dim view of her reaction, and within a month she was ejected from office. No wonder she hated her Italian colleagues so cordially, to the point of saying: ‘To put it more bluntly, if I were an Italian I might prefer rule from Brussels too’.29
Thatcher respected Delors (‘manifest intelligence, ability and integrity’), liked Mitterrand (‘I have a soft spot for French charm’) and could put up with Kohl (‘style of diplomacy even more direct than mine’). But Andreotti she feared and detested from the start. At her very first G-7 summit, within a few months of coming to power, she found that
he seemed to have positive aversion to principle, even a conviction that a man of principle was doomed to be a figure of fun. He saw politics as an eighteenth-century general saw war: a vast and elaborate set of parade-ground manoeuvres by armies that would never actually engage in conflict but instead declare victory, surrender or compromise as their apparent strength dictated in order to collaborate on the real business of sharing the spoils. A talent for striking political deals rather than a conviction of political truths might be required by Italy’s political system and it was certainly regarded as de rigueur in the Community, but I could not help but find something distasteful about those who practised it.30
Andreotti’s judgement of Thatcher was crisper. Emerging from one of the interminable European Council sessions devoted to the British rebate, he remarked that she reminded him of a landlady berating a tenant for her rent.
The increasing role of Italy as a critical third in the affairs of the Community was a significant feature of these years. The Report on Economic and Monetary Union of 1989 that laid the basis for Maastricht was drafted by an Italian, Tommaso Padoa-Schioppa, the most trenchant advocate of a single currency, and it was also the initiative of an Italian—Andreotti again—that at the last minute added an automatic deadline of 1999 into the Treaty, to the consternation of the British and of the Bundesbank. Nevertheless, the final shape of the bargain reached at Maastricht was essentially of French and German design. The central aim for Paris was a financial edifice capable of replacing the unilateral power of the Bundesbank as the de facto regulator of the fortunes of its neighbours, with a de jure central authority over the European monetary space in which German interests would no longer be privileged. In exchange Bonn received the security system of ‘convergence criteria’—in effect draconian conditions for abandonment of the deutschmark, which Italian theorists of a single currency had always rejected—and the fixtures and fittings of ‘political union’.
The diplomatic origins of the Treaty are one thing. Its economic effects, if implemented, are another. What is the social logic of the monetary union scheduled to come into force by the end of the decade? In a system of the kind envisaged at Maastricht, national macro-economic policy becomes a thing of the past: all that remains to member-states are distributive options on—necessarily reduced—expenditures within balanced budgets, at competitive levels of taxation. The historic commitments of both Social and Christian Democracy to full employment and social services of the traditional welfare state, already scaled down or cut back, would cease to have any further institutional purchase. This is a revolutionary prospect. The single obligation of the projected European Central Bank, more restrictive even than the charter of the Federal Reserve, is the maintenance of price stability. The protective and regulative functions of existing national states will be dismantled, leaving sound money as the sole regulator, as in the classical liberal model of the epoch before Keynes.
The
